County commissioners point to applicant’s failure to comply with provisions of the County Charter
It all came down to a matter of names — or, rather, a lack thereof.
By unanimous vote on March 1, the Sarasota County Commission continued until the afternoon of April 26 a public hearing on a petition to rezone 6.9 acres the county owns on the northwest corner of Palmer Boulevard and Apex Road.
The property is under contract to be sold for the construction of a 60,000-square-foot wholesale restaurant supply warehouse.
The board’s decision came close to an hour after the staff presentation began, and it focused on what commissioners cited as a lack of transparency regarding the individuals represented by the applicant, JMDH Real Estate of Florida LLC.
A Jan. 24 memo from Deputy County Attorney Alan Roddy offered the opinion that the ownership material the applicant had provided “does not meet the disclosure requirements of Section 3.8 of the Sarasota County Charter.”
Charles D. Bailey III of the Williams Parker law firm in Sarasota — the agent for the applicant — explained that, along with two individuals, the owners include an investment firm representing the government of Abu Dhabi in the United Arab Emirates; investment funds representing the General Motors Pension Plan, as well as California public employees and teachers, among others; and three trusts whose beneficiaries are South African nationals affiliated with Restaurant Depot. The new warehouse in Sarasota County would be the company’s 11th in Florida, Bailey added.
The trusts were the focus of much of the debate.
Bailey pointed out that he had appeared before commissioners in the past in regard to applications with similar ownership structures and had not encountered a problem. “So the charter, if interpreted this narrowly — I submit it’s not correctly interpreted, respectfully — would foreclose the county, real estate investment trusts and many other applicants from seeking a real estate rezoning.”
Roddy explained that the county in the past had accepted rezoning applications involving trusts, but they were “fairly defined” groups, such as “Charlie Bailey and his direct lineal descendants.’ … When it comes to trusts,” Roddy continued, “you have to disclose beneficiaries. That’s how I looked at it,” he added in regard to his memo.
Bailey was about 12 minutes into his explanation when he pointed out that he had been transparent in identifying the entities involved in the application to make clear none is “owned by any decision-maker in Sarasota County.”
Commissioner Alan Maio then underscored the concern among members of the public: “There’s always this sneaking suspicion that somebody’s wife or son or both are somehow part … of mysterious trusts or corporations.” The reason the charter calls for full transparency, Maio added, is to ensure that no commissioner or member of his or her family will see any gain from a vote that commissioner takes on a rezoning petition.
“We have extensive, elaborate super complex ownership structures that come before us on land ownership issues,” Commissioner Mike Moran pointed out. The applicant has disclosed the ownership details to the best of its ability, Moran continued. “This conversation’s way beyond this agenda item.”
However, noting that he is not an attorney, Chair Paul Caragiulo replied, “At the end of the day, it’s very hard for me to sit up here and have [our] attorney say [this application] hasn’t met a standard, and for me to argue that it has.” He told Bailey, “I don’t doubt that you’re making a good faith effort, but that’s separate from whether it complies with what the regulation is.” The disclosure of the ownership that Bailey had provided “doesn’t meet the standard; that’s all,” Caragiulo said.
Bailey offered to delay the hearing so he and his clients could meet with Roddy to try to resolve the problems. Nonetheless, he told the board, the contract for JMDH to purchase the property for $1,280,000 also calls for a $100,000 penalty if the deal is not closed by April 21. Therefore, Commissioner Nancy Detert’s motion also called for Roddy to work with Bailey on an extension of the contract closing period.
Commissioner Charles Hines pointed out to Bailey that the board could have allowed him to proceed with the hearing that day. However, Hines said, even if the commissioners ended up feeling comfortable with the situation and approved the petition, “in all likelihood,” a legal challenge would ensue. “I think you can clear this up if your clients will allow you to,” Hines told Bailey.
“You’re absolutely right,” Bailey replied. “I appreciate that.”
With Maio having noted that the Commission Chambers held about 200 people, Hines also apologized for the inconvenience to them.
On Feb. 25, a demonstration was organized at the Celery Fields, the county’s internationally known bird-watching park, which is near the property for which the rezoning has been sought. Opponents of the restaurant supply warehouse proposal have made it clear through that event and social media that they are opposed to an industrial use near the Celery Fields. Nonetheless, the county’s planning services manager, Tate Taylor, testified at the outset of the Feb. 28 public hearing that the county’s Future Land Use map shows the intention is for the parcel at Apex Road and Palmer Boulevard — and adjacent land — to be used for Major Employment Centers.
JMDH Real Estate of Florida was seeking to rezone the property from Open Use Rural to Industrial, Light Manufacturing and Warehousing (ILW). Taylor explained that ILW zoning is the typical implementing district for a Major Employment Center.
Still, Taylor also pointed to the importance of the Celery Fields in stormwater management. He noted that in 1992, Hurricane Andrew “created significant flooding downstream from the Phillippi Creek Basin.”
Without the rezoning, Taylor added, the 6.9-acre parcel can be used only for agricultural uses, such as the growing of crops or livestock grazing.
Commissioner Hines was the first to broach the issue of Roddy’s legal opinion about the ownership issue. “Under our charter, the application must disclose … persons, not entities, who are the [applicants],” Hines said. Yet, the material provided to the board did not include all the names, especially in regard to the trusts, he continued. Should the hearing proceed?
This is not the first time the Office of the County Attorney has written such a memo, Roddy said. Staff in that office did meet with representatives of the applicant in this situation, Roddy noted. Subsequently, he believed more names were submitted to county staff.
“Mr. Bailey is able to address this from his clients’ standpoint,” Roddy told Hines. “I wouldn’t say [the situation] would forestall a public hearing. I would say it’s a matter for consideration …”
“Your memo’s a public record,” Hines replied. “Will you state today what your conclusion was and whether this applicant meets charter requirements?”
Roddy said he had not seen a breakdown of all the individual owners of the entities involved in the application. The charter does allow for nonprofits and governmental entities, for example, to refrain from disclosing all the involved parties, he pointed out. Nonetheless, he continued, “You’re supposed to break down trusts into beneficiaries and so on. … I’d have to defer to Mr. Bailey to explain it …”
“I’m not asking you what Mr. Bailey’s going to say,” Hines replied. “I’m asking you … what your legal opinion is.”
“I haven’t seen that [the application] complies yet,” Roddy responded.
“You haven’t seen that it legally complies yet,” Hines repeated the statement, drawing applause from the audience members. The exchange resulted in Chair Caragiulo’s chastisement of the audience; he explained the need for decorum in a public hearing, when a record of testimony is being kept. It was one of several occasions during the Feb. 28 hearing when Caragiulo admonished audience members to refrain from reacting to discussion.
In the past, Roddy continued, the County Commission has taken into consideration the lack of names among entities applying for a rezoning when it was holding a public hearing on a petition. “The charter provision’s written rather broadly. It is difficult for complex private entities to comply.”
“Thank you,” Hines told him.
Having dealt with many rezoning petitions, Commissioner Maio told his colleagues, “I hope Mr. Bailey really explains [this]. Without the disclosure — and there may be bona fide reasons [for the lack of it] — a good 40% of the 600 emails and 100 phone calls we got just make it appear that something strange is going on here.”
At one point, Commissioner Moran explained that the commissioners “sign under oath very elaborate financial disclosures. You can dig as deep in Ancestry.com as you want,” he added, but “I have zero interest in this conversation, and I’ll do whatever it takes … to make sure that’s clear.”
In light of the discussion, Commissioner Detert made a motion to continue the hearing “until we can have a determination of whether or not we are in compliance with the charter as to transparency.”
“Our attorney has concluded it does not [comply], from what he has seen,” Hines pointed out. “However, I think the petitioner should have an opportunity to … explain why he believes [that the application is in compliance]. … If Mr. Bailey cannot explain to our satisfaction how it meets the charter, I’m not interested in going into all the other merits of whether we should rezone this [property] or not.”
Hines suggested Bailey try to clear up the matter within the first 5 minutes of the 20 minutes he would be allotted to make his presentation during the public hearing.
“I think that’s perfectly reasonable,” Caragiulo agreed.
Detert then allowed her motion to die for lack of a second.
When he took the podium, Bailey told the board, “I submit that we have complied [with the charter].” He added, “We have identified these three trusts as owning the LLC that is the applicant, but they are not corporations or entities that have shareholders that can be disclosed.”
“Well, they can be, but you choose not to,” Hines replied, adding that it was not necessarily wrong to keep the names private. Nonetheless, Hines said, “I’m trying to mesh this with our charter …”
Pointing out that the charter was written in the 1990s and adopted by referendum, Bailey contended that it would be impossible, for example, for a real estate investment trust to apply for the rezoning of a parcel.
Roddy acknowledged that such ownership entities have become more common in the past eight to 10 years.
Bailey told the board he has known Roddy for 24 years and has learned much from him. Still, Bailey said, “Reasonable minds can disagree.”