Alert: Bad deals for taxpayers on Tuesday’s Board of County Commissioners’ Agenda

Local attorney and civic activist Virginia Sherlock provides alerts to bad deals for residents on Tuesday’s Board of County Commissioners’ Agenda:

Item 8E1, pre-set for 11:15 a.m., is a proposal to provide “partial sponsorship” of a Customs Facility at Witham Field, with a newly established limited liability company offering to pay a small amount toward operating expense shortfalls in the first three years. The unidentified members of the LLC are completely shielded from any liability or responsibility for the promised payment in a proposed contract that is illusory, unenforceable, and a very bad deal for Martin County taxpayers.

Item 8B1 is an update on the Pitchford’s Landing project in Jensen Beach, where residents were targeted in a SLAPP suit filed by the Pitchford’s property owners to punish them for opposing the development project. The property was rescued from foreclosure this week as owners Bill and Nancy Reily and Reily Enterprises, LLC obtained a $2.83 million loan to regain ownership of the property, which was cited for violating County Code requirements relating to shoreline protection along the Indian River Lagoon.

The customs facility proposal raises a concern about whether local government should allow residents (and non-residents) with money to control how our community grows. Elected officials who base a decision to build a Customs Facility on the promise of a few wealthy (but unidentified) persons to pay a portion of the operating costs are abdicating their duties to ensure fiscal responsibility and development that is beneficial to the entire community.

What if a group of wealthy people wanted a bridge or a road or a park to be built on public property for their friends and families to use? If an LLC were set up to pay a portion of excess operating costs — at least for the first three years — would the BCC use public funds (including state and federal grants) to build that bridge or road or park for those wealthy residents who agree to “partially sponsor” the facility? What happens when the sponsorship ends? County taxpayers will be left with an expensive “toy” to pay for.

What do we tell citizens who can’t afford to “sponsor” a project? Are elderly or disabled users of the Community Coach or poor children who rely on the public library system to be told the County won’t provide these services unless the users set up an LLC to pay for them?

Customs supporters have engaged in intense lobbying efforts to persuade commissioners that there is broad community support for the facility. Please let commissioners know there are many opponents in the community who do not want our tax dollars used for this project (especially since Commissioners are planning to levy a sales tax surcharge in order to pay for repairs and improvements to existing projects that we do not have funds to support).

The contract prepared for the Customs supporters by the County Attorney’s Office is a bad deal for Martin County taxpayers.

It fails to identify the members of the LLC, relieving them from any obligation to actually pay what the LLC is promising to pay. A limited liability company, like a corporation, is established for the purpose of hiding the identities of members and shielding them from liability for the promises they make (hence the term “limited liability” company).

The proposed agreement requires payment of no more than $50,000 a year for just three years. If Customs supporters believe the facility will be self-sustaining, why don’t they agree to pay 100% of operating expense shortfalls? And why shouldn’t the term of the agreement coincide with the 20- or 25-year below-market leases the Fixed Base Operators enjoy, so that as long as FBO leases are in effect, the contract for payment of excess operating expenses for the Customs Facility will be in effect as well?

The Martin Marine-Aviation Alliance, LLC was established in November 2013 as a “manager managed” limited liability company (not a “member managed” company). Managers are not necessarily members of a manager managed LLC. The managers of MMAA are David Smith of Galaxy Aviation, Dan Capen of Stuart Jet Center, and Volney P. Bayley, Jr., of Sailfish Marina. There is no way to determine who the members are. They may be individuals or business entities but, in any event, members have no personal liability for the LLC’s promise to pay.

In fact, the agreement waives the County’s right to collect funds from the members. The County can collect funds only from the LLC. If the members fail to contribute to the LLC, the LLC will have no funds and the members (whoever they are) have no obligation to pay. The agreement says the members of the LLC will contribute “certain amounts determined by each member’s respective ability to contribute.” There is, in other words, no obligation on the part of the members (whoever they are) to pay anything at all. They only “contribute” funds in whatever amount they choose.

The Pitchford’s Landing update is as illusory as the customs proposal. It is difficult to ascertain from the staff report exactly what the status of the project is and even more difficult to understand the status of the shoreline restoration the County previously ordered (after the property owners stripped the native vegetation from a portion of the shoreline and hauled in unauthorized fill to create a phony beach for restaurant patrons).

Hopefully, the Commission will insist on a full discussion of the issues, including the woefully inadequate shoreline restoration efforts.

(The staff report notes that I raised questions about the property and the project last year and implies that my questions were addressed by e-mail and in a meeting that Howard and I had with the staff. This is misleading at best and is entirely incorrect. Our questions have not been answered, and our repeated requests for updates were stonewalled.)

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