Shelly Petrolia targeted Old School Square for the Arts as soon as she became Delray Beach’s mayor in March 2018.
That’s the main allegation in the lawsuit Old School Square filed last week. The document alleges a plot that culminated three months ago, when Petrolia and city commissioners Juli Casale and Shirley Johnson terminated the lease under which Old School Square for 32 years has operated the downtown cultural complex.
Petrolia’s first step, according to the lawsuit, was to have the commission take over the Community Redevelopment Agency (CRA). The CRA controls the grants that provide roughly 25 percent of Old School Square’s operating budget. The takeover happened during Petrolia’s first meeting as mayor—without advance notice.
Three months later, Old School Square alleges, Petrolia—by then the CRA chairwoman—summoned the group’s representatives to a meeting with her and then-CRA Director Jeff Costello. At that meeting, according to the lawsuit, Petrolia said the city was “not afraid” to take over Old School Square’s profitable activities if the group didn’t ask for less public money. Old School Square considered Petrolia’s comment a threat.
In November 2018, Petrolia orchestrated the forced resignation of City Attorney Max Lohman. The item was not on the agenda for the meeting. Lohman’s departure led to the promotion of Lynn Gelin, who had been on the city’s legal staff, to city attorney.
Fast forward to April of this year. Joy Howell resigned as chairwoman of Old School Square’s board. Casale appointed Howell to the planning and zoning board, one of the city’s principal advisory panels. Petrolia recruited Casale to run for the commission in 2019. Casale is Petrolia’s most reliable commission ally.
Before Howell resigned, she wrote a six-page memo outlining what she considered Old School Square’s management weaknesses. On June 14, Howell emailed Shannon Eadon, who had resigned as Old School Square’s executive director seven months earlier, to ask if “OSS bullets”—talking points—had gotten to Johnson.
One month later, Johnson, Casale and Petrolia claimed during a meeting that Old School Square failed to obtain permission from the city for renovations to the Crest Theater, which is part of Old School Square. The commission allowed the work to continue, but Petrolia, Casale and Johnson criticized Old School Square, despite apologies from Frances Bourque, the group’s founder.
Another month later, Petrolia, Casale and Johnson voted to end the lease without cause, effective Feb. 9. As with the CRA takeover and Lohman, the item was not on the agenda. The commission took no public comment.
That evening, Eadon sent a text message noting the termination and asking for pledges toward a new group to manage the complex. The goal is $10 million.
After leaving the Old School Square board, the lawsuit alleges, Howell began “colluding behind the scenes with Eadon, Johnson, Petrolia and Casale, as well as potentially other individuals” to terminate the lease “so that a new organization favorable to Johnson and/or Petrolia and their agenda could replace it.”
Howell helped in this effort, the lawsuit claims, by sharing “proprietary” information about Old School Square. That information, Old School Square says, went to Johnson, Petrolia, Casale, Eadon and perhaps others.
Litigation against cities normally mentions all elected officials. It’s the standard format. It’s unusual to single out individual officials and more unusual to link them with residents. It’s even more unusual to include the city attorney in such an allegation.
According to Old School Square, however, Gelin played a key role in the run-up to the termination and what has happened since.
Old School Square obtained a permit for the Crest Theater renovations. Under the lease, that permit amounted to city approval. The commission didn’t need to vote.
According to the lawsuit, however, two city officials told Old School Square that Gelin had found “a clerical error” on the permit application. Therefore, Gelin said, the city had not agreed to the work.
Gelin, the lawsuit alleges, was “rewriting the lease and imposing a new requirement.” Old School Square calls the permit “a fabricated issue.” Four years ago, according to the lawsuit, Old School Square did not need commission approval for similar renovations. Gelin was not the city attorney in 2017.
As for Johnson, Old School Square invited her to tour the theater and learn about the renovations and plans for programming. Johnson had become chairwoman of the CRA board. That tour happened on June 29.
One day later, the city told Old School Square to stop work on the project. “Petrolia, Casale and/or Johnson,” the lawsuit states, “worked in conjunction with Gelin to fabricate the storyline that OSS was renovating city property without the city’s consent.”
Though Johnson took the lead on the discussion to end the lease, the lawsuit puts Petrolia at the center of the campaign. Once Johnson raised the issue during the Aug. 10 meeting, Petrolia quickly backed her up.
With the “assistance and urging” of Petrolia, the lawsuit states, Johnson “used her pulpit to lash out against OSS.” At the meeting one week later, Petrolia took the lead by making clear that the vote was final.
The lawsuit also accuses Gelin of “actions under cover of law,” meaning that she went beyond her authority. The most notable incident occurred on Oct. 1.
Old School Square had been removing its property from the premises. A city employee asked Holland Ryan, Old School Square’s chief operating officer, to meet him at the loading dock.
When Holland arrived, the lawsuit alleges, he found Police Chief Javaro Sims, who “demanded” that Ryan open the vehicles and allow Sims to make a “photographic inventory.” The chief “informed Ryan that he was instructed to inspect the vehicles at Gelin’s instruction.”
Sims had no search warrant. Gelin said the city had authority to look because Old School Square had defaulted on the lease and might not own the property it was removing. Old School Square contends that the city had not served the group a notice of default.
That’s the political aspect of the lawsuit. It leads to the key legal point.
Petrolia, Casale and Johnson made multiple allegations that Old School Square had failed to submit financial documents that the lease requires. Old School Square denies the allegations.
The point is, though, that after stating those reasons, Petrolia, Casale and Johnson terminated the lease without cause. Had they cited a cause, the city would have had to give Old School Square time to fix the problems.
Old School Square claims that Petrolia thus accomplished her long-sought goal of ending the lease and putting the city in a position to take over the complex or to choose a preferred management company.
With the lawsuit, Old School Square hopes for a restart. The group wants a judge to prevent Delray Beach from seeking a new operator. The clock is ticking.