Developer's secret $250,000 gift to woo neighborhood group splinters residents


Article Courtesy of The Palm Beach Post

By Thomas R. Collins

Published November 5, 2006


WEST PALM BEACH On the eve of a city commission vote to allow more units in its 21-story luxury condo on Flagler Drive, the developer The Related Group secretly bestowed a $250,000 gift on the area's neighborhood association.

The next day, smiling residents walked to the podium in city hall and showered praise on Related and the project just before city commissioners approved Icon, granting it waivers that allowed Related to add two stories and build more units than otherwise permitted.

Three commissioners say they didn't know about the generous gift and a fourth, Jim Exline, said he'd "heard just rumors." Mayor Lois Frankel found out about it long after the initial commission votes. But she didn't tell commissioners because, she said, the city attorney told her the gift wasn't illegal.

Within months, the leaders of the homeowners group were ousted by their neighbors, who now can't figure out what happened to $30,000 of the money. The former leaders won't share the receipts.

Since then, like the story of a failed marriage, the money intended for neighborhood improvements has divided residents in the north end of town. New leaders of the Northend Coalition of Neighborhoods are trying to get access to the roughly $220,000 that's left even as they question whether the gift was proper to begin with.

New coalition President Bob Beaulieu says it's fishy.

"Because information was not forthcoming, you can't help but wonder, 'What the hell did happen?' "

Former coalition Chief Operating Officer Iangelic Batista said the cash gift "did not buy our support" for the condo.

"It doesn't mean that we were going to like their project," Batista said. "Some liked it, some didn't."

Batista wouldn't give out a copy of the agreement with Related saying, "It's private" but The Palm Beach Post obtained a copy elsewhere.

Under the agreement, Related pledges that $1 million in streetscaping will be done on roads near Icon, which was announced at a public meeting on Dec. 5. It also mentions the quarter-million-dollar gift, which was not. Normally, such gifts are disclosed, but it isn't considered illegal not to disclose them.

The agreement says the money must be spent on public safety, landscaping, lighting, advertising, hurricane supplies and other items for the neighborhood. It also says the money would be put into an escrow account for the group within 14 days of "final unappealable approvals".

Related says that, in giving the money, it was just following the advice that governments often give to developers of projects that might draw opposition: Appease your neighbors.

Barbara Salk, a Related Group vice president, said she couldn't recall another example of an undisclosed cash gift from Related to a neighborhood.

But developers often publicly provide perks for neighborhoods, such as agreeing to plant trees or support neighborhood events. And this was no different, she said.

"The city told us to work with the neighborhood and we're working with the neighborhood," she said. "I'm shocked that anyone would think that it was anything but a positive thing."

Related earned its support by having 26 meetings with neighbors and agreeing to move the building so the Intracoastal Waterway views wouldn't be blocked so much and adding landscaping and open space, she said.

The cash gift wasn't disclosed because it wasn't relevant to the project's getting its zoning approval, Salk said. Legally, city commissioners are allowed to consider only how the project fits within the city's zoning code, not gifts to neighbors.

"We really didn't think it was necessary," Salk said. "It wasn't contingent upon an approval."

But approval wasn't automatic.

Commissioners had some choices to make. They could have declared the 3.4-acre condo project to be a "residential planned development," which gives developers more latitude in design and in how much they can build. But a project has to be 10 acres or more to qualify automatically. Or they could decide that the regular zoning with a shorter tower and fewer units, but perhaps a different design was better.

In this case, they gave Related the "residential planned development" status.

Another choice was whether to limit Related to the 36 units an acre the city code permitted for a planned development or allow 40 units an acre instead. They allowed the 40 units an acre.

The city planning board recommended denial two months before, in a 4-3 vote, when the project was at 44 units an acre, but never reviewed the 40-an-acre proposal.

Commissioners also allowed Related's buildings to be closer to the road than normally allowed.

Helping make Related's case was Kieran Kilday of Kilday & Associates. At the time, Commissioner Ray Liberti was registered as a lobbyist with the firm, but never disclosed that at the time of the commission votes. He is now in federal prison, convicted of mail fraud and obstruction of justice.

Exline said his motion to approve the project on Dec. 5 was, in part, "based on public support."

And there was plenty of that.

Steve Allred, president of the coalition at the time, thanked Related at the meeting for its interaction with the residents.

"I feel like we're related, no pun intended," he said, standing at the podium. "God only knows all the e-mails and things we put you through."

"The Related Group is beyond generous," said David Romaine, a business partner of Allred. "And welcome to the neighborhood."

Some residents who opposed the plan, worried mainly about the traffic and the long shadows the building would cast, showed up Dec. 19 for the final vote. They included Rick Collette, who signed the agreement with Related. But in all, during the two meetings, comments of support outnumbered those in dissent, 25 to six.

In July and August, the project came back before city commissioners. Related had bought more land to the north, allowing the company to ask for two extra stories, which were approved. After that, the project included just under 30 units an acre. It is not yet under construction.

Frankel at first said she didn't remember when she found out about the gift.

"All I know is, when I found out about it, I was furious," she said.

Later, she said City Attorney Claudia McKenna reminded her that she had found out about it before the second set of votes in July and August. On Sept. 12, she told a city ethics panel about the gift and suggested that the panel review the possibility of a city law requiring such gifts to be disclosed.

"That's a lot of money," Frankel told the panel, which was created after Liberti was charged. "From what I could tell, there was no wrongdoing. However, quite frankly, I was a little bit taken aback because nobody we didn't know about it."

But Frankel, told by the city attorney that the gift wasn't illegal, didn't say anything about it before commissioners voted to give Related the two extra stories in July and August. She said she would have said something "if I thought it had affected the judgment of the commissioners."

Commissioners said they would have found the information important.

"I want to know who supports something because they think it's good for the neighborhood, not because of other issues," Exline said.

"On every level I think it's the wrong thing to do," Commissioner Kimberly Mitchell said, referring to the gift. "I think that kind of information is relevant and should be discussed as we make decisions."

On Aug. 17, Mitchell wrote a memo to City Administrator Ed Mitchell suggesting the city take control of the money so that it can be publicly monitored.

But what happens to the cash now is up in the air.

Salk said Related would like the neighborhood coalition to form a not-for-profit corporation, as required by the agreement, with the money doled out by a foundation of north-end residents.

She said she doesn't know how much money has been spent. Batista said it's about $30,000.

Related has asked for receipts but hasn't gotten them all, Salk said.

"I've asked them for the past few months," she said.

Batista said some money was spent on an attorney to help the group form a not-for-profit corporation, and on computer software, lawn equipment and hurricane supplies such as gas cans, tarps and flashlights that were distributed to neighborhood leaders.

In June, other residents those who helped run the coalition before Batista and Allred left under pressure staged a takeover of the group, saying Batista and Allred weren't being tough enough with the city on crime and code enforcement.

In March, Allred's business partner, Rod Tinson, sold land to the city for $1.2 million, about half of which the city had sold to Tinson six years earlier for $5,000.

The new neighborhood coaltion leaders wonder whether that deal led Allred and Batista not to press the city for better crime-prevention and code-enforcement.

Batista said that's not true. She said she and Allred simply had a friendlier approach, while the others "do nothing but criticize."

Allred, the coalition president at the time, didn't return a phone message or a written message delivered to his antique restoration shop. Tinson also didn't return a phone message.

Batista said the new group ousted her and Allred only to get control of the $250,000. And she wants the coalition to get nothing. Instead, she hopes to use the money for Can Do, another group she has started that she says would be more of a partner with the city, not a rival.

"All of a sudden, they smelled money," Batista said. "They didn't want people to succeed where they failed to succeed."

The new president, Beaulieu, accused Batista and Allred of refiling the group's paperwork with the state under new bylaws reading, "This corporation shall have no members," against the group's tradition of giving all of the coalition's neighborhood leaders a voice.

Batista said an attorney advised her that there were "way too many board members with way too much voting power" and who don't do enough work.

Now, Beaulieu wants to know where the money went.

"I received a gas can, I received a radio and that's it, nothing more and nothing less," Beaulieu said. "I would like to see the receipts and the inventory of everything that's been purchased."

But the arrangement doesn't sit well, he said. When he found out the agreement was signed the day before the vote, that sent up "some red flags."

"You just have to be transparent," he said. "When you keep things from the public, that's when things start happening."