The first project, and the largest one by far, is located at Cascades Park. The CRA completed the sale of the property in October, with $4 million in funding for the project. They have completed demolition, besides the one building being preserved, and construction is anticipated to begin in 2019. The project includes an AC Hotel by Marriott that would “hopefully boost tourism” and allow for larger conventions.

The front of the building contains a public event space useable for a variety of functions. Underneath, there is space for storage and support for the amphitheater, which would in turn bring in larger performances. There are also 250 covered public parking spaces.  A plaza will be constructed with a design tied to the historical monument that is located on Jefferson Street. See picture above.

Completion of this project is planned for late 2020. There is even a second phase to the project, with planned construction of townhomes and apartments and a refurbished health facility. The completion of this phase is anticipated by 2021.

The second project, located across from Hotel Duval on 440 N Monroe, is a “companion project to the refurbishment of the Envision Credit Union” that the CRA helped to fund. It will include 224 apartments, with about 1300 square feet for retail. The developers plan to submit construction plans in early January and anticipate start of construction in mid-2019, with completion roughly two years after that.

The third large project is a LOEWS Hotel that is currently under construction behind the Leon County courthouse. Labeled the Washington Square, the redevelopment will include 18,000 square feet of meeting space and 267 rooms.

The construction, which commenced on August 6th, began with demolition and site clearance. Construction of a parking lot, footing, and foundations began at the end of November and will continue for approximately 2 years, with anticipated completion in 2020.

In a letter to CRA Board members, Proctor writes, “I ask that you fire Roxanne Manning, suspend all CRA agreements, conduct a financial audit and invite a criminal investigation by the State Attorney.”

Proctor has previously documented his concerns with Manning and sought her ouster. Back in October 2017, Commissioner Proctor sent a letter, to then City Manager Rick Fernandez, addressing concerns about the FBI investigation and the overall management of the CRA.

Proctor wrote, “Roxanne has led the City’s CRA into the largest FBI investigation of a local government in history.  This distinction is not shared by any other local administrator. It warrants her removal from the post and the senior ranks should all be sanitized.

This new request is based on recent reports addressing bribery allegations involving CRA projects and former City Commissioner Scott Maddox in 2014.

Proctor writes, “recent published reports announced that corruption, illegal shake downs and benefits for CRA members are occurring. ” Proctor added, “no public business should proceed or happen in this type of environment.  It is important that the issues related to the operation standards are cleared up and that new standards are applied.”

Proctor is also is requesting that the State Attorney to conduct a formal criminal investigation into the Tallahassee CRA.

The process will not require the CRA to advertise the properties for sale.

This recommendation comes after the CRA Citizens Advisory Committee, following a discussion, voted 3 to 0, with one member abstaining, to oppose the staff recommendation.  A summary of the CAC and audience member objections is provided below:

• The retention of the property is not consistent with the existing CRA-BBC development agreement.
• The CRA-BBC development agreement contains terms not approved by the CAC, such as providing the BBC with the right of first refusal in any future sale of the Properties and the inclusion of future use restrictions for the Properties.
• The proposed retention of the Properties benefits only BBC and not the southside community.
• BBC has not indicated what it intends to do with the Properties.
• The CAC questioned how the appraised value of the Properties dropped from $510,000 in 2015 when the block was blighted to $350,000 following the development of Care Point.
• The CAC questioned whether the BBC needed $1.5 million in assistance from the CRA in 2015, do they now have the funds to pay the CRA $510,000 to retain the Properties?
• If retained and redeveloped by the BBC the Properties will not generate any tax increment for the CRA.
• The offer of $510,000 when the July appraised value is $350,000 may indicate BBC will pay more to retain ownership of the Properties.
• Redevelopment interest and property values are increasing in the Southside, keep the property and market it when property values increase over the $510,000 offered by BBC.
• Residents of Frenchtown and Southside are losing the ability to control redevelopment in their neighborhoods, redevelopment of this site needs to be based on Southside community input.

The CRA staff stated that we “must look objectively at the issues and provide our best professional recommendation to the CRA Board. Therefore, CRA staff recommends approval of amending the development agreement to allow BBC to retain ownership of these parcels..”

Listed below are the CRA’s reasons for the recommendation:

• The GFS District will receive $510,000 in revenue that is not subject to the three-year tax increment restriction.
• The revenue from BBC essentially reduces the total CRA investment from $1.5 million to $990,000.
• The BBC offer to pay the CRA $510,000 to retain ownership of the Properties is $160,000 more than the July 2018 appraisal of the Properties prepared by Brown Bevis.
• The original CRA plan for the Properties was as a farmer’s market, but the establishment of a successful farmer’s market at Smith Williams reduces the usefulness of the Properties as a farmer’s market.
• The Properties total 1.07 acres.  Developing the site for any substantial use may be limited due to land development requirements, such as stormwater retention and setbacks.
• It will eliminate the need for the CRA to maintain and market the Properties and will help ensure future uses or redevelopment on the Properties are complimentary to the Care Point Health & Wellness Center.
• If approved by the CRA Board, the BBC payment would be evenly split over two years with the first payment of $255,000 by the end of FY 2018 (no later than September 30, 2018) and the second $255,000 payment in FY 2019.  Staff is also recommending removal of restriction Number 2 as discussed above.

Tom Lewis, the executive director of the Big Bend CDC, is also listed as a principal with DPB & Associates.

DPB & Associates, which employs Rich Buss, the brother-in law of City Commissioner Nancy Miller, has been awarded City of Tallahassee contracts through a process that has resulted in bid protests and a city audit that found an appearance of conflict.

Also, a review of state filings with Sunbiz.org shows that DPB & Associates and the Big Bend CDC share the same “Principal Address” of 421 West Georgia, Tallahassee, Fl 32301. (Shown in photo above)

In addition, the filings show that Mr. Lewis is listed as the “Manager” of the business affairs for DPB & Associates and is listed as the registered agent and “Treasurer” for the Big Bend CDC.

A recent City of Tallahassee audit of the Big Bend CDC found that as of September 2016 the organization had failed to make any payments on city of Tallahassee loans totaling $1,275,000. Some of the loans were first originated in 2002. Also, the audit documented instances of mismanagement and nepotism.

Since the audit, it has been reported that the loan balances are now $500,000.

Also, Mr. Lewis is a former employee of the city of Tallahassee who retired as Economic and Community Development Director in 2012.

The Grant Process

On May 25, 2017, the CRA Board directed staff to pursue a competitive process for allocating approximately $3 million in Tourist Development Tax funds that remained after the move to create a performing arts center ended.

Since that meeting, a competitive application process based on nine criteria was developed and adopted by the CRA Board.

On Monday, the Community Redevelopment Agency (CRA) will discuss the results of this process which recommended the allocations listed below.

LeMoyne Gallery: Arts for Always, $2,042,000

Big Bend CDC: A Community-Driven Arts, Culture, Heritage & Educational Project,  $840,885

John Gilmore Riley House Museum: Soul Voices- Frenchtown Heritage Kiosk Program, $189,000

Total Awards: $3,071,885

The CRA Board and City and County Commissions reserve the right to award the funds to a single or multiple proposals, and to allocate those funds in the manner that best meets the stated program criteria.

Also, the CRA Board, County Commission and City Commission must approve the same recommended allocations.

On Monday morning the CRA Board voted against a staff recommended $450K grant to help Proof Brewing Company renovate a recently purchased  building located on South Monroe.

After Mayor Gillum and City Commissioner Nancy Miller offered support for the project, the motion failed 3-2 with city commissioners Ziffer, Maddox and Richardson voting against the grant.

The vote followed public comment which featured speakers for and against the grant.

Original Report

The CRA staff is recommending that the CRA Board approve a $450,000 grant request from Proof Brewing Company for renovations to their new location on South Monroe Street. The Proof Brewing Company recently purchased the old Coca-Cola factory located at 1320 South Monroe street in an effort to expand their business.

Proof requested the grant when they realized the plan for renovation was $460,000 short of available bank financing.  The funding request will be provided through the taxes generated after the improvements are added to the tax roll, which is projected to happen in 2020.

The old Coca-Cola factory’s 32,000 square foot building had been vacant for a number of  years.  The estimated total cost of the project is $6.4 million. This includes the property purchase, construction, furnishings, fixtures, and equipment.

The rationale for the use of  CRA monies is that the grant will help renovate an abandoned building, improve the area, create jobs, and support a company that is involved in multiple community charities.

As part of the negotiation, Proof has agreed to partner with the City’s TEMPO (Tallahassee Engaging in Meaningful Productivity for Opportunity) by creating an apprenticeship program for program participants 21 or over in need of employment opportunities.

Also, the Citizen’s Advisory Committee advises that Proof meets Office of Economic Vitality’s Minority, Women, and Small Business Enterprise Division’s standards.

The CRA Board will vote on the recommendation at their next meeting, Monday, July 9th.

A review of public records by TR revealed that Harold Knowles, who was  indicted by a federal grand jury in the Middle District of Georgia last August, was listed as a Manager of FRP in documents filed with the state of Florida on March 6, 2018.

Mr. Knowles was also listed as the registered agent for the corporation.

It was reported on March 13, 2018 that former U.S. Attorney Pamela Marsh and James Judkins of the Ausley McMullen law firm were appearing as counsel for Knowles. Marsh also represents the city of Tallahassee in an FBI investigation of alleged corruption of Tallahassee officials.

The requested funds are for the planning stages of the redevelopment of the CRA-owned former shelter/Frenchtown Renaissance Community center and the adjacent properties located on the 400 block West Tennessee Street and West Virginia Street.

The pre-development costs include planning, appraisal services, consulting fees, management, surveying, legal work, and other miscellaneous expenses. The CRA will decide Monday whether or not to approve the grant, and will discuss terms and conditions should funding be approved.

The CRA has already invested $2.6 million in the redevelopment project in demolition and property management. This is a fraction of the project’s total estimated cost of $78 million.

With the CRA’s approval, the group is considering a development that will include housing, offices, a grocery store, and a parking garage. The group has been negotiating with vendors and contractors, but a final development proposal still needs to be drafted and approved by the CRA.

At this point, the CRA have not entered into a development agreement. While the CRA has incrementally committed to the project, the CRA’s further involvement will be determined as planning stages continue.

Funding for this request is slated to come from the 2018 fiscal year budget.

From the subpoena:

Please provide the following documents regarding Cascades Holdings LLC d/b/a Edison Restaurant (Edison) and Adam Corey:

a. Any and all City of Tallahassee audit files and reports related to reviews, examinations or audits of the project undertaken by Cascades Holdings, LLC d/b/a Edison Restaurant and Adam
Corey.

b. Certified copies of the approval documents related to Edison including any and all staff evaluations.

c. Records of any and all votes by the Tallahassee City Commission-as to applications made related to Edison.

d. Copies of all proposals, business plans and submissions to the City of Tallahassee regarding Edison.

e. All electronic or written communications including, but not limited to emails, text messages, facsimiles and letters to and from Corey, City of Tallahassee officials or employees regarding Edison.

f. Documentation regarding any and all financial transactionss between the City of Tallahassee or Tallahassee Community Redevelopment Agency and Edison or Adam Corey, i.e. funding provided to rehabilitate the site now known as Edison.

The growth in CRA personnel expenses is approximately nine times the growth rate of personnel expenses for the City of Tallahassee, which increased 7.4% during the same period.

At the end of 2017, the actual revenues and prior-year funds were $7,546,520, which included the sale of the O’Connell property and 715 West Gaines Street for $1,329,270 and the sale of $66,014 of capacity from the Coal Chute Stormwater Pond.

The actual FY 2017 CRA operating expenses for both districts was $640,758.

The final FY 2017 capital expenditures, which included project and program expenditures approved by the CRA Board and the CRA Executive Director after the budget was adopted, were $2,001,880. The actual reserves for FY 2017 totaled $3,102,964.

The CRA has been in news over the last year because of the FBI investigation and due to the approval of a number of high profile projects.

The CRA Board consists of the City of Tallahassee Mayor, the four City Commissioners and four members of the Leon County Commission.

The Washington Square project was added to a list of potential projects even though the CRA Board had previously agreed not to pursue any more projects over $2 million. However, CRA staff argued that the project was in the pipeline and was overlooked.

Between 2009 and early 2011 the developer (Washington Square Partnership and then Fairmont Investment, LLC) submitted several proposals for consideration by CRA staff and/or the CRA Board, all focused around financial assistance to help with the cost of structured parking.

On February 7, 2011, CRA staff provided the CRA Board with a memo outlining the most recent Washington Square proposal which requested the CRA purchase the property for $5.5 million with public parking to be constructed at a future date when DT District funding would be sufficient to support construction of a parking garage.

A review of the initial proposals by the DT District’s Downtown Redevelopment Commission (DRC) acknowledged the development potential of the site but indicated the proposals were beyond the current financial capacity of the DT District.

Following several exploratory meetings with staff, on August 4, 2017, the developer submitted a project update outlining changes from the original office space development proposal into the current mixed-use development proposal that includes a hotel, 24 residential condominiums, offices, meeting space, retail/restaurant uses and structured parking. The update also included a request for $9.6 million from the CRA to assist in the development of the project.

On October 20, 2017, the developer submitted an updated financial assistance request with additional supporting documentation. The developer is requesting 100 percent reimbursement of the tax increment generated once the project is completed and added to the tax rolls. The request is for up to $9.6 million in tax increment reimbursement, although the developer recognizes the anticipated tax increment refund will be closer to $6.6 million over the remaining life of the DT District.

There is no request for up-front financial assistance. The August proposal included 24 residential condominiums but that portion of the development has been determined to be financial infeasible, and has been eliminated from the proposal.

The CRA staff writes that the Washington Square project is consistent with the Downtown Community Redevelopment Plan, which recommends redevelopment of vacant and/or underutilized lots within the downtown core, providing financial incentives to attract private investment in the downtown core and supports the development of mixed-use projects in the downtown core.

The CRA will take up the project on November 9th.

Also, Mayor Andrew Gillum – who has refused to answer questions about his New York excursion with a city lobbyist and undercover FBI agents posing as CRA developers – took a swipe at critics of the Community Redevelopment Agency at Wednesday’s meeting.

Gillum said that the CRA should not be influenced by “folks spouting off at the microphone” and that “we need to be reasonable and adult-like in our decision-making.”

The remarks followed a number of speakers who supported the position that the downtown CRA should be shutdown since the CRA is supposed to serve “blighted areas” and there is nothing blighted about downtown.

One public speaker, Dr. Erwin Jackson, said that no more projects should be funded by the CRA until the FBI investigation is completed.

In a surprise move, the CRA voted 6-3 to move forward with providing financial assistance for the fifteen story, $90 million Washington Square project which includes a conference hotel, three restaurants, condos and underground parking.

The developers are asking for a $9.6 million dollar tax break.

The project was a last minute add to the agenda and many thought that since the CRA staff was recently directed by elected officials to not to bring any more large projects forward, the project would be dismissed.

That was not the case.

City Commissioners Nancy Miller, Gil Ziffer, Curtis Richardson and Mayor Andrew Gillum joined County Commissioners Mary Ann Lindley and Kristen Dozier in voting for the project.

City Commissioner Scott Maddox and County Commissioners Bill Proctor and Nick Maddox voted against the motion.

Among those elected officials that voted for the grant was Leon County Commissioner Kristin Dozier.

Less than three months later, public records show that Commissioner Dozier purchased a home located in Lafayette Park from Catherine D. Baker and John Thomas Burnette.

Mr. Burnette was listed as the Manager of IB Tallahassee, LLC, according to the state of Florida Division of Corporations in 2014 and 2015. Both Ms. Baker and Mr. Burnette were mentioned in the recent FBI subpoenas delivered to city hall related to the investigation of the CRA.

Also, TR has previously reported that Mr. Burnette is a major campaign donor to local government races.

According to property records, the purchase of the property by Commissioner Dozier took place on February 18th, 2015 in the amount of $188,600.

The prevailing ethics rules state that “No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee,..”

However, an exemption is available to an elected official if the purchase of goods or services is at a price and upon terms available to similarly situated members of the general public.

The final price of $188,600 was never advertised to the general public.

The specifics of the real estate transaction are as follows:

On May 7, 2014 the property was appraised for $280,000 by Timberlane Appraisal with the condition of adding a new roof estimated to cost approximately $10,000.

On July 19, 2014, three months after the appraisal the property, was listed on the MLS for $230,000.

On October 29, 2014 the price was reduced to $215,000.

On December 22, 2014 the price was reduced to $199,000 and on January 12, 2015, the property was removed from the MLS.

After viewing the property, Dozier told TR she discovered that the home was owned by Mr. Burnett.

After being removed from the MLS, Ms. Dozier signed a contract on January 21, 2015 and on February 18, 2015 the property was sold for $188,600.

Real estate professionals consulted by TR stated that the $91,400 drop from the initial appraisal to the final sales price leaves a lot of unanswered questions.

There was no indication of major problems with the home in the appraisal and TR confirmed there were no permits on record indicating major repairs.

Commissioner Dozier Responds

Dozier told Tallahassee Reports, “I am exceptionally careful about conflicts of interest” and  “I am confident the purchase of this home was conducted per our ethics rules.”

In addition, Dozier said the transaction was at “arms length” and that she was not personally involved in direct negotiations regarding the purchase price. Rather, the negotiations were handled by her real estate agent.

Why the difference between the appraised price and sold price? Ms. Dozier offered that the house had been used as a rental for a number of years and that the market ultimately determines prices.

The subpoenas requested communications, documents, records, bids, applications, or proposals between a number of businesses/individuals and the City of Tallahassee and the CRA from April 2012 until the present.

The businesses listed in the subpoenas included Whitley Construction, IB Tallahassee, KaiserKane, Inc., Burnette Construction and Development, Inc., Hunter & Harp LLC, Hunter & Harp Holdings, LLC, Duval Partners, LLC, SheltonDean Holdings LLC, SheltonDean, Inc., Inkbridge LLC, Inkbridge Acquisitions LLC, Governance Inc., Governance Services LLC, Sunnyland Solar RE LLC, Cascade Holdings, LLC, and The Edison Restaurant.

The individuals included John T. (“JT”) Burnette, Melissa Oglesby, Kimberly Rivers, Catherine Baker, Adam Corey, Frank Whitley, Paige Carter-Smith, and Chad Kittrell.

Based on information in the subpoenas, listed below is information about development projects the FBI could be investigating.

Visit TallahasseeReports.com to read complete stories.

The Gateway Building, February 12, 2017

Tallahassee Reports recently reported that the $1.4 million in public funds provided to the owners of the Gateway Building, home to Walgreens until February 21st, will not be completely recovered through property taxes until approximately 2040.

This finding is based on financial information provided to TR by officials at the Community Redevelopment Agency (CRA).

To date, approximately $980, 576 has been given to the owner of the building. This amount includes $537,600 in a construction grant, $328,364 in vacancy guarantees, and $114,612 in scheduled refunds of property taxes for 2016 and 2017.

The CRA project was initiated by JT Burnette and involved a number of his businesses.

Read full report here.

The Edison, August 18, 2013

In 2013 Tallahassee Reports published a story that revealed the City of Tallahassee was planning to spend $2.1 million in tax dollars to finance a Brew Pub restaurant to be located in the historic Old Electric building in Cascades Park.

In September 2011 the City Commission directed Staff to present options related to the reuse of the old electric building.  A request for proposal was subsequently released to solicit interest for a public/private partnership to implement a brew pub type establishment at the site with the City retaining ownership and leasing the use of the facility.

Proof Brewing Company of Tallahassee was the highest ranked respondent and on October 24, 2012, the City Commission authorized the City Manager to negotiate an agreement with the Company for the renovation and lease. Original funding for this purpose was identified as $1,355,714 in tax dollars with the private partner contribution of $1,548,286.

Proof Brewing Company eventually backed out the project and the opportunity transferred to Adam Corey. Corey created Cascades Holdings, LLC and soon after the Edison restaurant was completed.

Read full report here.

The Double Tree, October 28, 2014

On October 23, 2014, the Leon County Community Redevelopment Agency (CRA) voted to give the new owner of the downtown Double Tree Hotel $883,000 in tax dollars to help with the hotel renovation.

The CRA is comprised of nine members, including the five City of Tallahassee Commissioners along with four of the seven Leon County Commissioners, selected by the Leon County Commission.

According to the City’s website, the CRA projects must serve a public purpose and must address concerns raised in the adopted redevelopment plans for each area.

The owner of the Doubletree, John Burnette, was the top political donor to local campaigns during the 2014 cycle with approximately $24,000 in donations through approximately 20 different businesses.

Read full report here.