In response to the Freedom of Information Act request I made over a month ago, I just received nearly 2000 pages of documents from the Boca Raton Beach & Parks District relating to the proposed purchase of the Ocean Breeze golf course property.

What those documents reveal is startling.

In his zeal to convince the Parks District to pay Lennar $24 million for the Ocean Breeze property and to get the City’s approval, Art Koski, the Executive Director of the Parks District:

  1.  Insisted that the results of the appraisal of the Ocean Breeze property commissioned by the Parks District be delivered only verbally;
  2. Tried, without success, to get the appraisers to justify a $24 million purchase price for Ocean Breeze;
  3. Hid the appraisal from his “bosses” — telling the Parks District’s Board on Feb. 6th that the valuation was not complete even though Mr. Koski had received the final results at least a week before;
  4. Told the City that “a variety of appraisals were performed on the Ocean Breeze property that ranged from $7 million to a high end appraisal of $33 million,” even though he knew that the only independent professional appraisal for the property (by Callaway & Price) had come in at $4.7 to $5.7 million; and
  5. Fudged the question of the availability of eminent domain by not clearly communicating his outside counsel’s conclusion that eminent domain was a viable option for acquiring the property.

The supporting information presented below in this newsletter may be dense . . . but it is much too important to ignore.

Note:  Where a document I relied on in writing this newsletter is available online, my citation to the document in the text below includes a link to the document.  A photograph of each of the other documents I relied on appears at the very bottom of this newsletter.  

The story the documents tell

On January 9, 2017, the Parks District’s Board authorized retaining Callaway & Price to prepare an appraisal of the Ocean Breeze property.

In an email on January 24, Rob Callaway, Partner/Executive Vice President of Callaway & Price, records the highly irregular fact that his firm had been retained to provide only a verbal report — so there is no formal written document documenting the results of the appraisal. [Source: January 24, 2017 email from Rob Callaway to Art Koski]. As a result, we know the results of the appraisal that the Parks District commissioned and paid for only because the results were mentioned in emails and in an opinion letter from the Parks District’s outside counsel.

On January 30, in an email to Mr. Koski, Mr. Callaway referenced his firm’s conclusion that the entire Ocean Breeze property was worth $4.7 to $5.7 million. [Source: email from Rob Callaway to Art Koski, January 30, 2017, 2:55 PM]

That email makes clear that the appraisal included the value of the portion of the property where a hotel could be located. Mr. Callaway specifically told Mr. Koski that Mr. Koski’s own estimate of the value of the hotel portion of the Ocean Breeze property ($5 to 7 million) “just makes no sense.” [Source: email from Rob Callaway to Art Koski, January 30, 2017, 2:55 PM]

Later that day, Mr. Callaway sent Mr. Koski an email with his firm’s final bill attached. That email reveals that Mr. Koski had been pushing Mr. Callaway to increase his estimate for the fair market value of Ocean Breeze to between $24 to $33 million. Mr. Callaway stated: “We are just nowhere near the $24,000,000 to $33,000,000 you were thinking and not sure that is even possible.”

The minutes from the Parks District’s February 6th Board meeting quote Mr. Koski as telling the Parks District Board: “still in the process of obtaining an independent evaluation of the property considering all factors.” [Source: minutes of the Parks District’s February 6th Board meeting] (In fact, as documented above, the appraisal commissioned by the Parks District was completed and the results communicated to Mr. Koski at least a week prior to the meeting). There is nothing in the minutes of subsequent meetings recording Mr. Koski providing the results of the appraisal to the Board.

The Parks District’s Board had a special meeting on Feb. 13th to discuss Ocean Breeze. The minutes of the meeting include Mr. Koski’s proposed responses to questions posed by the City’s Deputy Manager with regard to Ocean Breeze. Mr. Koski’s proposed responses included the following statement: “During the exchange process, a variety of appraisals were performed on the Ocean Breeze property that ranged from $7 million to a high end appraisal of $33 million.” [Source: minutes of the Parks District’s February 13th Board meeting] There is no evidence in the record that Mr. Koski ever obtained any independent appraisal other than the one that the Parks District commissioned from Callaway & Price which concluded that the Ocean Breeze property had a value of between $4.7 to $5.7 million.

In response to another of the Deputy City Manager’s questions — whether the Parks District would consider or undertake an eminent domain proceeding to acquire the Ocean Breeze property — Mr. Koski proposed to give two reasons for rejecting eminent domain. First, “the variation of the prices of the appraisal valuation” which in Mr. Koski’s telling ranged up to $33 million. Second, “outside counsel has concluded and advised that the District would not have eminent domain authority to acquire the hotel site, or the property that is appurtenant to the hotel.” [Source: minutes of the Parks District’s February 13th Board meeting]

Needless to say, Mr. Koski’s first reason for ruling out eminent domain is dependent on the existence of independent professional appraisals that have never been produced or recorded in any document.

Mr. Koski’s second reason for rejecting eminent domain is a mischaracterization of the opinion of the Parks District’s outside counsel. What outside counsel actually opined is not, as Mr. Koski’s response said, that the Parks District could not acquire the entire Ocean Breeze property by eminent domain. Rather, the outside counsel concluded that the Parks District would be able to acquire the entire Ocean Breeze property by eminent domain, but, if it did so, it might not be able to put a commercial hotel on the property.

The outside counsel’s opinion letter reads in relevant part:

“. . . it is clear that the District cannot legally acquire the subject property through eminent domain and then convey it to a private hotel developer and/or operator. We have some additional legal concerns as to whether the District’s effort to permit a private enterprise to construct and operate a hotel on the property would satisfy the public purpose element in the context of the incidental benefit limitation. However, this may, arguably, be done pursuant to a lease. It would be beneficial for the District to confirm whether the development of a hotel on the subject property is a condition of Academy’s interest in locating a facility on the property . . .

“Conclusion and Recommendation: The taking of the Ocean Breeze golf course by eminent domain is a legally available option for the District, subject to the concurrence of the City Council of the City of Boca Raton or to the approval of the District electorate by referendum, as required by the District Charter. In our opinion, the proposed taking of the golf course satisfies the public purposes and reasonable necessity elements of an action for eminent domain, subject to our stated concerns about the potential hotel option.” [Source: February 16, 2017 opinion letter of Goren Cherof Doody & Ezrol PA]

The Parks District’s Board approved Mr. Koski’s draft responses to the Deputy City Manager. With those answers in front of them, the Board also authorized Mr. Koski to request “the City’s concurrence and support for the District to purchase the Ocean Breeze property for $24 million.” [Source: minutes of the Parks District’s February 13th Board meeting]

At a joint meeting of the Parks District’s Board and the City Council on May 8th, Mr. Koski asserted that “the District does not have an appraisal for the Ocean Breeze property.” [Source: minutes of the joint City Council/Parks District’s Board May 8, 2017 meeting] Of course, as documented above, Mr. Koski had in fact obtained an appraisal by Callaway & Price of $4.7 to $5.7 million in January.

During the May 8th meeting, Mayor Susan Haynie asked for a valuation of the Ocean Breeze property. {Source: minutes of the joint City Council/Parks District’s Board May 8, 2017 meeting] To date, the Parks District has not provided it. Ironically, in a January 13th letter to the City Manager, Mr. Koski had called the then ongoing appraisal by Callaway & Price “material and relevant to the District’s response to the City.” [Source: January 13, 2017 letter from Art Koski to City Manager Leif Ahnell]

Council MUST take over the acquisition of Ocean Breeze

We are asking City Council to recognize that it can’t turn a blind eye to the tainted process that led to the Parks District’s approval of a $24 million purchase price for the Ocean Breeze property.

And, of course, neither can the City ignore the fact that paying $15 to $20 million more than the Ocean Breeze property is worth would be an inexcusable waste of taxpayer money.

The City must take over the acquisition of Ocean Breeze and acquire the property at a reasonable price (if necessary, by eminent domain).

Judy
Judith Teller Kaye
Boca Citizens for Fiscal Responsibility

Contact your public officials

The names and email addresses of the Mayor and City Councilmembers are below, as are the names and email addresses of the Parks District’s Commissoners. Please feel free to call or write them.

City of Boca Raton – 561-393-7708

Mayor Susan – Haynie shaynie@ci.boca-raton.fl.us
Deputy Mayor Jeremy Rodgers – jrodgers@ci.boca-raton.fl.us
Councilmember Andrea O’Rourke – AORourke@ci.boca-raton.fl.us
Councilmember Scott Singer – ssinger@ci.boca-raton.fl.us
Councilmember Robert Weinroth – rweinroth@ci.boca-raton.fl.us

Boca Raton Beach & Parks District – 561-417-4599

Commissioner Steve Engel – sengel@mybocaparks.org,
Commissioner Craig Ehrnst – cehrnst@mybocaparks.org
Commissioner Robert K. Rollins, Jr. – rrollins@mybocaparks.org
Commissioner Susan Vogelgesang – svogelgesang@mybocaparks.org
Commissioner Erin Wright – ewright@mybocaparks.org

I would appreciate receiving a copy of any emails you send. My email address is: Judith.Teller@Teller-Kaye.com.