Conflict-of-interest potential puts scare in Downtown Improvement District board members

High-rise buildings dominate the downtown Sarasota skyline from U.S. 41 along the bayfront. Photo by Normal Schimmel

A late-April letter from the city attorney to the Downtown Improvement District threw the five-member board into a tizzy.

Attorney Robert Fournier wrote, “You’ll note that DID Board members are required to be owners of commercial properties within the district. This fact simply makes it more likely that one of the two exceptions [described earlier in the letter] will apply because presumably properties within the district will benefit in some way from public improvements made within the district.”

In other words, when the DID board votes to spend money, the action could personally benefit one or more of the board members. In some eyes, that’s called “conflict of interest.”

Board Member Dr. Mark Kaufman told Fournier during the Tuesday morning, May 15, DID meeting, “Your letter was quite scary to me and many of us.”

Fournier admitted his letter was not complete and that the DID members probably did not face conflicts of interest, because no single project exclusively benefitted one member.

Ernie Ritz, chairman of the DID and owner of the Gator Club on Main Street, posed a legitimate question: “I have a financial interest in the Gator Club and we [the DID] are going to put a bulb-out in front [of the club].”

Member Pat Westerhouse added, “And [exterior areas that will be improved] could be used for outdoor seating.”

Kaufman later raised the same issue in reference to North Palm Avenue, where sidewalks are going to be widened with DID money. “My tenants tell me they are not interested in sidewalk dining, but maybe later another tenant is,” he said.

Fournier satisfied the members by saying, “There has to be some personal or private gain. And I failed to mention, you are a special district.” In his opinion, then, while the Sarasota DID falls under state conflict-of-interest statutes, its mandate is to improve and beautify a defined downtown district. The money comes from a special tax levy on commercial property within the district. The resulting revenue is used to fund improvements such as landscaping and parking areas.

Fournier tried to put the DID members at ease. “Within a special district like this, all the properties in the district are beneficiaries of the activities of the district,” he said.  “You could argue the benefits go beyond the district. Most of these actions are improvements to public property.”

Members were concerned that any member of the public could complain to the Florida Ethics Commission. Fournier explained that such a complaint would be administrative, not criminal. “The commission only finds conflicts in about 10 percent of the cases [it investigates],” he said. “If you have questions, ask us for an opinion.”

Fournier noted again that the Gator Club bulb-out and the widened sidewalks of Palm Avenue are part of a wider DID plan, and in fact part of the Downtown Master Plan. “I’m trying to reduce your level of angst,” he said.

“So nothing we’ve done so far is a conflict?” asked DID Member Thomas Mannausa.

“A lot of people are watching,” said Fournier, “and nobody’s complained yet.”

Kaufman suggested Fournier draft another letter touching on the points of his verbal presentation that morning. “Put some tranquilizers in your letter next time,” he said.