CRA Lawsuit Alleges Scheme by Elected Officials. Conflict of Interest Prevails

Filed nearly 10 months ago by developers New Urban Communities (NUC), the lawsuit against the Margate Community Redevelopment Agency has made little progress toward resolve. As billable hours for counsel accumulates, the MCRA finds itself entwined by its own hand.

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The lawsuit is the result of a bad decision made by elected officials sitting as the board of the City’s Community Redevelopment Agency in July 2016 when then MCRA Chair, Frank Talerico signed a development agreement with NUC. In agreement with the deal were Lesa Peerman, Joyce Bryan, Joanne Simone and Frank Talerico. Commissioner Tommy Ruzzano was the sole dissenter.

In a perfect storm of bad government, three since have left the dais despite the ability to run for re-election – a political exodus rarely seen over a two-year period in Margate.

Notably, the same majority hastily agreed to extend the contract with NUC just prior to the 2016 election, when two new commissioners would take their seats: Anthony Caggiano and Arlene Schwartz. Both were opposed to the agreement which included the sale of $30 million of city-owned land for $10 million and for NUC to erect 1,000 apartments at the crossroads of Margate Blvd. and State Road 7 (441). The majority knew the two would join Ruzzano in opposing the deal, as both pronounced inasmuch while campaigning.

The deal included no sound plan to handle an additional 2,000 cars during peak hours between Coconut Creek Parkway and Atlantic Boulevard on 441, while promoting the sale of taxpayer-owned land downtown for a third of its market value.

Now the deal is in court and shows signs of drawn-out dispute. Come March next year the lawsuit between the MCRA and New Urban Communities will be a year old.

Heard in Broward’s 17th Judicial Court, the case alleges that elected officials in Margate conspired to derail NUC development via stifling tactics while serving dual roles as city commissioners and the board of the MCRA. The action purports that elected officials concocted a scheme against themselves in making separate, distinct decisions over housing allotments that together negatively impacted the development deal signed signed in July 2016.

“The pretexual basis for rejection [of the development agreement] was dreamt up by the CRA and City to further the CRA’s desire to evade it’s obligations under the Development Agreement," counsel for NUC, Mike Moskowitz, writes in his complaint.

The chagrin for plaintiffs may lie with laws that govern CRA boards comprised by elected officials and which compel same parties to wear different hats in respective decision-making capacities. The majority of city commissioners voted down housing units outside of the contracted development area to assuage overcrowding. This happened at a city commission meeting.

At a separate meeting of the MCRA board, elected officials found the city could no longer support density downtown as originally proposed by NUC. Apartment booms in neighboring cities turned Margate into a pass-through unable to sustain quality of life for residents or commuters if more housing is added to State Road 7. Already home to 21,000 households and an abundance of apartment and condominium complexes, Margate is a mere nine square miles in size with 6,000 residents living per square mile. (U.S. Census QuickFacts)

So far, Moskowitz has requested an overreach of pubic documents some of which exist; some of which may or may not exist; and some his firm could acquire on its own, such as meeting transcripts, audios and minutes. He has summoned testimony from Ruzzano and Schwartz and has submitted a series of interrogatories to which counsel for the MCRA objects due to 'irrelevance' and 'beyond permissible discovery.' Caggiano, Simone, Peerman, Bryan and Talerico have yet to be summoned.

Court filings imply that Ruzzano, Caggiano and Schwartz met outside of “Sunshine” at La Barone’s Pizzeria in Peppertree plaza, a popular Italian restaurant. While Florida Sunshine Laws forbid two or more commissioners to discuss pending city business outside public meetings, nothing in “Sunshine” forbids three elected officials meeting for lunch. Filings do not indicate the source of said information, but part-in-parcel may include attempts by Peerman seeking vengeance on those she dislikes, say city insiders.

Faces Behind A Bad Deal

Known for relying on alleged “experts” Frank Talerico would say when confronted with difficult decisions during his two decades in Margate office. Sitting as Chair to the MCRA, Talerico gave up on his idea of a ‘Faneuil Hall’ style market place where residents and visitors could shop year-round for necessities, gifts, food and unique items from a large variety of businesses in a single visit. The deal Talerico signed as Chair did not include a market place concept despite positive support from colleagues when discussing options for downtown.

Talerico believed that since “experts” rallied against his idea, he would lower the bar on expectations and succumb to what “experts” told him would be better: 1,000 apartments downtown. This in the face of talking to Margate residents who supported his idea. Talerico’s “expert” policy was used many a times during his tenure to shift accountability away from himself onto others.

Commissioner Joyce Bryan was in agreement with the development deal and retired from the dais after serving a single term. She believed the deal didn’t favor quality of life in Margate, but an overwhelming desire to be a “yes” woman clouded her backbone. A “unified” dais was more important to the political newbie than taking a stand for what she believed in.

Political unity was Simone’s goal too, along with relying on the advice of “experts” – a hybrid of colleagues Talerico and Bryan. The land sale conflicted with Simone’s fiscally conservative nature and flew in the face of a “hometown” feel laid out in the City’s Strategic Plan. She failed to recognize crime indigenous to apartment living and as Margate’s representative to the Metropolitan Planning Organization (MPO) favored density and urban planning tactics. Her methodology centered on growth, not sustainability, and was lesser supported in the community.

At first a mentor to Simone, former commissioner Lesa Peerman favored the deal, but an obsessive hatred of those opposing it led to sabotage. Peerman, alongside Talerico, were complicit in three attempts to find a suitable downtown developer - each time subverted by “experts” whose vision conflicted with the voices of Margate, save a few. This after developers previous to NUC expended capital to comply with the wishes of elected officials only to be turned away in the end. Peerman blames past ‘let downs’ on negotiation breakdowns, partly caused by her own meddling. Plans by one developer, Madison Marquette, were well received by a crowd of roughly 80 persons during a presentation at City Hall along with a ‘thumbs up’ from elected officials who engaged the firm. Shortly thereafter, plans were tossed when elected officials onboarded a management services firm to run the MCRA for exorbitant fees. Consequently, consultants wanted to pass the contract onto their own developers to which NUC had done previous work. The firm since has been terminated by the same elected officials who hired them for costly outsourcing and poor oversight.

Where the lawsuit goes from here is anyone’s guess. Fueling conflict further are attorneys who hail from the same law firm representing both the City of Margate and the MCRA. One is tied to past dealings with New Urban Communities and selected third-party counsel to aid in the fight. The firm of Goren, Cherof, Doody & Ezrol, PA supplies Margate with counsel in the interim while the City searches for independent counsel. Elected officials have gone out twice for a city attorney with a combined 50 applicants responding. To this end, a candidate everyone liked and hired pending background check turned the job down days after she was hired. One city official said 'somebody put something in anothers ear' which sent the aptly qualified candidate for Margate City Attorney running.

The City presently holds a $150,000 deposit from NUC, which city officials would return in settlement, as well as pay the firm for work served and legal fees to date. Moskowitz charged NUC $15,000 to file the initial complaint and billable hours continue to accumulate for both plaintiff and defendant.

Presently, NUC shows no sign of settling and wants the whole nut as originally agreed upon. (Click to View New Urban Communities Contract)

To this end, records obtained by MargateNews.net show all land titles and deeds designated for development in the possession of the Margate Community Redevelopment Agency. This means taxpayers remain owners of 36-plus city acres entangled in the lawsuit.

Alternatives to selling the land to developers include maintaining ownership of parcels and offering long term leases to qualified businesses; rezoning parcels for specific uses prior to selling plats; and utilizing land largely for public use such as a bandshell; a boardwalk with kayak/canoe amenities; a new community center; green space/play space, pedestrian walkways and the revitalization of Ace Hardware and Chevy Chase plazas.

To view Case Details visit Broward Clerk of Courts at https://www.browardclerk.org/Web2/ and enter Case No. CACE18004869