Breaking Down the Haynie-Batmasian Story

The Haynie-Batmasian connection

Over the weekend, The Palm Beach Post ran a story headlined: “Secret financial ties between Boca mayor, Batmasian revealed.” The article has set up a potentially combustible city council meeting on Monday.

First, let’s break down the story.

The headline speaks of a “secret” financial relationship. In fact, I wrote just before the city election last March that the property management company—Community Reliance—owned by Mayor Susan Haynie (pictured above, photo by Eduardo Schneider) and her husband, Neil, had a $12,000 annual contract with the master association at the Tivoli condo community in Deerfield Beach. James and Marta Batmasian, Boca Raton’s largest private property owners, also own 1,400 of the 1,600 units in Tivoli.

I learned about the contract from BocaWatch Publisher Al Zucaro, who was running against Haynie. Helping Zucaro spread the story was Frank Chapman, who ran unsuccessfully for city council in 2012 and 2015. Chapman donated $1,000 to Zucaro’s campaign. Marta Batmasian donated $1,000 to Haynie’s campaign. Doug Mummaw, the Batmasians’ architect, gave Hayne $500.

When I asked Haynie about the contract eight months ago, she referred me to the Palm Beach County Commission on Ethics opinion that found “an insufficient nexus” between the condo association, Batmasian and Haynie’s role as an elected official to preclude her from voting on issues involving the Batmasians or their company, Investments Limited.

Haynie sought the opinion in October 2011, a year after Community Reliance won the contract. She announced that she was seeking the opinion while recusing herself from a vote regarding property that Batmasian owned. Haynie did not specify the potential conflict, though the paperwork she filled out listed “a contractual relationship with the applicant.” It was Batmasian.

Haynie said no other votes involving Batmasian-owned property came before the council after her recusal and the approval of the opinion in August 2013. The Post, however, noted an April 2012 vote regarding a Batmasian property on North Federal Highway. Two fast-food restaurants were allowed to replace a Pet Supermarket. Haynie voted in favor.

The key allegation in the Post article is that, despite the opinion, Haynie should have abstained from votes related to Batmasian because they fell outside of what Ethics Commission Director Mark Bannon told me Tuesday is a “very narrow” ruling.

The opinion does not specifically name Haynie or Batmasian. BocaWatch reported this year that there had been exchanges between ethics commission staff members and the city’s legal department over the opinion. The commission was ready to rule that Haynie could not vote, but City Attorney Diana Grub Frieser submitted revised language, and the commission eventually agreed.

One point of discussion was whether Batmasian is a “developer” or an “investor.” The opinion describes him as an investor. As the article noted, the opinion was problematic. The five-member ethics commission must approve advisory opinions. Attorney Manuel Farach, who chairs the commission, said of the Community Reliance contract, “There’s a possibility of a corrupt misuse of office. Obviously, we’re not saying that there is, but we don’t know.”

Farach added, “I think the city attorney did herself and her council no favors” by not saying that the people in question were Haynie and Batmasian”

When he communicated with me in March, Chapman could cite only one vote by Haynie—on the Tower 155 condo—that he claimed had benefited Batmasian since Community Reliance got the contract. But Chapman got Haynie’s vote on Tower 155 wrong.

He thought that she had voted against the project, which supposedly could have allowed Batmasian to build his own project nearby. In fact, Haynie voted for Tower 155 but against the change that allowed the condo to be taller. After that, I heard nothing more from him or Zucaro on the matter of Haynie and Batmasian.

In addition to that 2012 approval for changes at the North Federal Highway property, Post reporter Lulu Ramadan cited 11 other votes Haynie has cast on issues related to Batmasian since Community Reliance has had the contract. The article details four of them.

One was in favor of an eight-unit apartment building on land Batmasian owned. Two others concerned Plum Plaza on 20th Street, which Batmasian owns. In the fourth, Batmasian had appealed the community appearance board’s rejection of a shopping plaza sign on East Yamato Road. The board ruled that the sign had too many bright colors.

As The Post noted, Haynie did cast the deciding vote to grant the appeal and allow the sign. It was the only one of the 12 votes that wasn’t unanimous. This, however, was the least significant vote. One sign hardly matters in the Batmasian empire. Interestingly, the council has debated whether the staff—not the council—should have the final word on such minor sign issues.

On the other three votes, the planning and zoning board and city staff had recommended approval. Indeed, the only mildly controversial vote was on that sign.

The two Plum Plaza votes—in December 2015 and June of this year—allowed a wider range of uses on the roughly eight-acre site. It’s just east of Florida Atlantic University, and the votes weren’t controversial because the changes aligned with the council’s goal of creating a student-friendly district in that area. According to the property appraiser’s office, the market value of the site increased by $1.5 million between 2016 and 2017.

The apartment vote came in October 2015. Batmasian wanted to build eight townhouses on a roughly one-acre lot just west of the City Hall complex. The blighted apartment complex on the site had been demolished.

Some neighbors raised safety concerns. Haynie proposed a condition that required the developer to install speed-reduction devices and extra signs. The council approved the amendment. The Post noted correctly that Batmasian sold the property 10 months later for $1.55 million, having bought it in June 2012 for $737,000.

The article reports that Haynie failed to list income from Community Reliance on her financial disclosure forms. Haynie said she didn’t include it because “I derive no income” from the company and there is no place to list spousal income. The forms are notoriously complicated, but that could have been a mistake.

In practical terms, there is no evidence that Haynie— as a council member or as mayor—has used her office to give the Batmasians something they might not have otherwise obtained. As noted, 11 of the 12 votes were unanimous and in line with recommendations from advisory board and the staff.

In political terms, however, the article presents a serious problem for Haynie. She won all six of her races in Boca Raton, and is running for county commissioner next year based on her four-decades-long involvement with the city and her civic reputation.

One could take from the article that Batmasian has control over Haynie through the Community Reliance contract. Chapman has asked the state attorney’s public corruption unit to investigate. There could be a separate complaint filed with the state ethics commission.

“I followed the legal process,” Haynie said Monday of all her dealings on the Community Reliance matter, again citing the 2013 opinion. The outcome of this controversy may come down to a legal interpretation of the ethics commission opinion.

If the facts as presented to obtain a favorable advisory opinion change, Bannon said, “the opinion no longer applies.” The commission doesn’t investigate whether officials are abiding by opinions, but someone could file a complaint about Haynie’s votes and the commission then could investigate.

Haynie said Tuesday that the opinion applies only to the condo association at Tivoli because that is the “contractual relationship” she noted in 2011. Unless the association itself comes before the council, Haynie said, she has no voting conflict.

The city council meets Monday as the community redevelopment agency. Zucaro has called for “an investigation” of Haynie. Councilwoman Andrea O’Rourke, Zucaro’s political ally, has asked that the Post article be on the agenda for discussion.

And O’Rourke?

One topic in that Monday discussion could be an opinion O’Rourke sought for herself. That opinion also concerns Batmasian.

George O’Rourke, the councilman’s husband, is a financial advisor in Boca Raton for Merrill Lynch. One of his clients is Batmasian. It’s common knowledge around town, and O’Rourke asked for the opinion after recusing herself from that vote last June on Plum Plaza.

The opinion allowing Andrea O’Rourke to vote on Batmasian-related matters states that no benefit could come directly to George O’Rourke or to Merrill Lynch. One could argue, of course, that Batmasian could find a different money manager (Boca Raton has plenty of them) if Andrea O’Rourke’s votes annoyed him.

I’m fine with the ruling, which does name O’Rourke but does not name Batmasian. Elected officials are urged to vote whenever possible, to avoid ties on big issues or otherwise reduce their ability to participate.

The distinction between the two cases likely has to do with income going directly to a spouse-owned company and income going to a spouse’s employer. But in terms of perception, one also could raise a question about this Batmasian connection to the council.

And that million-dollar inference

Interestingly, the Post article does not include the most salacious Batmasian allegation from the campaign.

Just before the election, a letter went out to Boca Raton voters from Anthony Majhess, the former council member who lost to Haynie when she first ran for mayor in 2014. Majhess stated that “Haynie and her husband have been in business for years with the biggest property owner and developer in Boca Raton. And at least $1.4 million in transfers flowed through that organization.”

Actually, the “transfers” were condo payments that Community Reliance processed in its role for the master association at the Tivoli community. The letter, of course, intended to make voters believe that the Haynies had received more than $1 million directly from “the biggest property owner and developer in Boca Raton.”

Downtown traffic ideas

The Boca Raton City Council had an animated discussion last month about a $50 million program to improve downtown traffic.

The program would make Dixie Highway one-way southbound and Federal Highway one-way northbound. There might be an “urban flyover” at Dixie and Camino Real. Though downtown growth is one factor behind increased traffic, the bigger problems are delays at train crossings and traffic lights and non-Boca Raton commuters driving through the city.

Delray special-events policy

One leftover for new Delray Beach City Manager Mark Lauzier is the city’s special events policy.

After complaints from residents about too many downtown festivals bringing too many outsiders, the city commissioners limited the use of Old School Square and raised what the city charged. Some organizers claim that the charges remain prohibitively high.

Mayor Cary Glickstein said the goal was to “change the process, which was a convoluted mess. The changes at this point will be to ensure events are fairly priced—both in estimate and final bills, and that in producing those costs we will continue to prioritize public safety. The costs for that may push events away, which I can live with.”

And Shirley Johnson weighs in

Last week, I wrote about what city commissioners believe should be Lauzier’s first priorities. I didn’t hear from Commissioner Shirley Ervin Johnson in time for that post. She need Lauzier needs to “settle his family into their new home, introduce himself to the community of Delray Beach, the city staff and all departments and its employees, and identify areas he considers need most immediate attention and work quickly to address and resolve them.

“The rest will take care of itself.”