The Producers

The gist of "The Producers" plot is as follows - New York, 1959. Max Bialystock was once the king of Broadway, but now all his shows close on opening night. Things turn around when he's visited by the neurotic accountant Leo Bloom, who proposes a scheme tailor-made for producers who can only make flops: raise far more money than you need, then make sure the show is despised. No one will be interested in it, so you can pocket the surplus investor money.

If one examines the many "closing nights" for commercial developments on Longboat Key, compared to the overwhelming success of dozens and dozens of high-end residential homes, one wonders why investors would ever choose to put their money into commercial speculations on this island.

The reality of commercial development includes "the developer", quite similar to the producers, in that both use other people's money and have no "skin in the game", to use a Warren Buffett term. Other than maintaining a track record, neither the developer or the producer suffers any real lose if his/her efforts turn out to be failures.

The following is a list of commercial developments that are no longer here: Avenue of the Flowers, Mattison's Restaurant, Whitney Plaza, Holiday Inn, Buccaneer, Far Horizon, numerous small tourist facilities, 2 gas stations, bank building at north end, the commercial property adjoining the Center Shoppes property, and L'Auberge Restaurant.

Fortunately, for every failed commercial venture on Longboat Key, five to ten luxury homes have been constructed. No one can deny that a new mansion increases surrounding property values, whereas failing small retail shops in poorly maintained strip malls do little, if anything, to improve our community's image or property values.

Avenue of the Flowers and Whitney Plaza cast a pall over the entire community. They have for years. For the past few years the commission has been guilty of benign neglect in these areas. It's time to do something that should have been managed years ago, instead of treating these eyesores as cherished locations for commercial tourism expansion. We are all getting older and poorer while we wait for the commissioner's "vision" to come true, if ever.

Publix has begun a revitalization of what was Avenue of the Flowers. The town needs to aggregate other social amenities around the Publix project. We don't need more doomed retail experiments and wasted years. We need to have more fun.

It's time to stop coddling developers, and follow a more proven direction for revitalizing our community, by attracting residents who want to build mansions instead of motels and busloads of tourists.

The town needs to be active in resolving the visual blight at Whitney Plaza that is pulling down property values in the surrounding neighborhood. Too many years have passed where the town has allowed a developer to hold the north end property owners hostage, while he waits, hoping for a financial miracle. Job one for the commission is to preserve and improve property values on Longboat Key. For the past few years the commission has done nothing to resolve the Whitney Plaza blight. Has the commission bothered to find out what is really happening at Whitney Plaza? North end residents are tired of hearing "check's in the mail", "Mercedes is in the shop", "Whitney Plaza will be booming next month".

If one examines what has actually been occurring on Longboat Key since the referendum permitting 250 replacement tourists units was passed 7 or 8 years ago, the answer is absolutely nothing in the commercial sector of the island's economy, and a robust proliferation of high-end single family homes up and down the island. As Al Green said in a previous article, the "market" is driving our economy, and that market has been exclusively private residential up-sizing. The commissioners would do well to support this process, rather than fighting it, as they are doing at present.

Commercial developers have had a poor track record on Longboat Key. Perhaps so many commercial developments have failed due to the strong market trending towards Longboat Key becoming an exclusive seasonal retirement community. The commissioners need to promote this trend rather than talk about commercial development that is years away at best, and a probable failed blight a few years later, if one looks at the history of commercial development on our island for the past 20 years.

If the commissioners insisted that a commercial developer have a large financial stake in a proposed project, as recommended by Warren Buffett, I doubt we would ever see an expansion of tourism on Longboat Key. Perhaps then the developers would put their money into exclusive residential development where the odds of financial success are far greater.

No Free Lunch

What is occuring on Longboat Key involving the Key Club litigation, could be a very costly zero-sum-game. Since the commissioners have once again unanimously decided to adhere to their stance on the Key Club expansion proposal, they have created a situation where a developer stands to gain tens of millions of dollars from government sponsored added value, to what is currently golf course acreage. By doing so, the town government has inadvertantly placed a huge financial burden on some residents, as they are now in the position of having to protect the value of their property.


From reading the recent town lawyer's letter to the commission listing nine active legal actions against the town by residents, it would appear that IPOC is not alone in their grievences against the commission and thus the town. All these residents are so dissatisfied with the town that they are willing to spend their time and money to fight against what they feel to be unjust treatment. The more oppressive, rigid, and developer-friendly the commission becomes, the more lawsuits are launched against them and the town.  Monitarily, this appears to be a beneficial situation for the attorneys, quite the opposite for the town and the taxpayers.

On Monday night, the commission unanimously agreed to allow the town lawyer to proceed with a costly and lengthy appeal of a recent court decision which had slammed the commissioners on their high-handed abuse of resident's property rights. The court decision cited seven issues with the commission's passage of ordinances 2009-25 and 2010-16. Since there was no meaningful discussion about the morality and advisability of appealing such a strong court ruling, one must assume that each commissioner had throughly weighed the wisdom of their decision prior to the commission meeting.

Nowhere in the commissioners' non-discussion was there any question of possibly being wrong. All that was said by our lawyer was that the commissioners needed to somehow overturn the court ruling. What if the court was right?

Given that their separate decisions had to be made without group communications with the town lawyer, their confidence in this legal matter is significant. The commissioners are surely aware that if the town lawyer had communications with each commissioner in "rapid succession" prior to Monday night's commission meeting, that could constitute a violation of the sunshine law. In a December 3rd article in the Herald Tribune newspaper, the possiblity of abuse of the sunshine law in this manner was discussed in reference to the actions of the Bradenton School Board. If communications and agreements were made "behind closed doors" so to speak, coming forward when the town lawyer asked whether any violations of the sunshine law took place would have been the right thing to do to be fair to all the residents involved in the Key Club expansion litigation.

During the Monday night commission meeting, when the town lawyer was politicking to get permission to appeal his most recent pending land-use litigation defeat, the lawyer stated that the commission had always stepped up to defend their actions. I recall that previously the Klauber lawsuit appeal request made by Mr. Persson was wisely denied by the commission. This time Mr. Lesser is supposedly paying all the legal and staff expenses, as the commissioners try to reverse all seven of the adverse rulings made by the court.

Now for the no free lunch. We all know that courts can be unpredictable, as evidenced by the recent Key Club ruling against the town commission. The commissioners, in their appearant haste to appeal that ruling, did not take any time to discuss what could befall Longboat Key taxpayers if the town loses its appeal. Under Florida statutes it may be possile for property owners to sue the town for losses to property values as a direct result of illegal actions by the town commission. If that happens, Loeb Partners will most likely run away from the town. The taxpayers would end up having to pay for expensive lawyers. If the property owners prevail, the taxpayers could be stuck with a huge settlement that would be levied against the town. This is exactly what happened in the Klauber suit. Don't think it can't happen again.

Florida Statutes : 70.001 f.s.
Abstract: (2) When a specific action of a governmental entity has inordinately burdened an existing use of real property or a vested right to a specific use of real property, the property owner of that real property is entitled to relief, which may include compensation for the actual loss to the fair market value of the real property caused by the action of government, as provided in this section. (d) The term “action of a governmental entity” means a specific action of a governmental …

The commissioners are playing for high stakes, though they may not know it. By not seeking some sort of compromise between Loeb Partners and the property owners of Islandside, the commissioners are now exposing the taxpayers to possble liabilities that will adverasely affect the future of our community.

There is a distinct feeling of unfairness in the dogged efforts of the commissioners to assist Loeb Partners' efforts to add value to their golf course. By not seeking compromise, the commissioners have created a very costly zero-sum-game, where someone wins financially and someone loses. By appealing rather than demanding a workable expansion plan from the Key Club, the commissioners have prolonged the start of anything positive at the Key Club for another year at least according to the town lawyer.


Worse yet is the possibly tenuous and greatly increased financial exposure of the entire community to  losing an appeal of a fairly severe court ruling. This is foolhardy. I am amazed that the commissioners spent hours rangling over ten feet of parking space at the Publix hearing, and fewer than six minutes on the largest lawsuit on the island since the Klauber suit, which went terribly wrong for the taxpayers.

Moral Compass

Florida Circuit Court Judge Charles Roberts called the entire effort by the Longboat Key town commission, including ignoring existing building codes and the town's Comprehensive Plan, "a miscarriage of justice".  He is right.  The commission did this in order to grant Loeb Partners the right to expand onto protected PUD land (Planned Unit Development), and thus abridge the property rights of Islandside property owners for Loeb Partners' exclusive profit.

I predict that this judicial chastisement will have little affect on the zeal of the current commission to vindicate their actions, and continue to work to fulfil their pledge to make more millions for British retirement funds and Mr. Lesser, who does not even live here.

These commissioners do not seem to understand that while aiding and abetting Loeb Partners to compromise the covenant that exists between Islandside property owners and their shared PUD for Loeb's profit, they may, at the same time, be financially harming hundreds of taxpayers. It is a risky zero-sum game they play.

Have we as a community lost our moral compass? Are we willing to condone the commission harming someone to help someone else make a buck? Have we reached a place where we are willing to believe that someone needs to suffer for all the rest of us to get ahead financially?

What the commission did was illegal, and many property owners may have been financially harmed as a result. The Longboat Key real estate market has been stalled because many Islandside buyers do not want to invest in an unstable community. Discriminating private property investors will avoid a community that is on a fast-track to expand commercial tourism.

Sure the commission can further erode the protections afforded our residents under our current codes and charter to favor commercial developers. That does not make it morally right. If there are those that are more interested in winning; if there are those that do not care about what means are used to achieve some political or financial goal, and if we refuse to hold our commissioners accountable, then we are probably in for a long period of constant court battles, law suites and community divisiveness. We all lose.

The commission and the town lawyers would have been able to commit "a miscarriage of justice", possibly damaging the home values of hundreds of residents, had it not been for the members of IPOC.

Legally wrong is legally wrong and the commission was willfully so. To take actions that are known to be unjust, and hope no one notices, further diminishes peoples' trust in their government.

If you are tired of watching your commission take the side of developers over the interests of the taxpaying residents, then speak up. Otherwise do not complain when some developer is legally able build a nuclear reactor next door to you as a result of your commission removing all the protections that once insured that Longboat Key would remain a low density exclusive community.

There are those, including several commissioners and business people, who cast people who do not agree with the commission's all or nothing KC expansion stance as "against the Key Club". One could argue that every Longboat resident wants the Key Club to thrive, just not at taxpayers' and property-owners' expense. Why not work within our time-proven codes and avoid further litigious delays.

From the beginning I have advocated a process that produces results in the shortest time and with the least adverse impact. For as long as it takes our commission to come up with a "legal" and community friendly agreement with Loed Partners, that is how long that our real estate market is going to be held hostage. The ill-advised actions of the majority of the current commission have delayed this process by years. If the commission continues to operate outside the confines of the law, then we will see more years wasted and a continuation of a crippled real estate market.

The residents of Islandside have been demonized for buying already existing high-rise condominiums that were created by previous town commissions and Arvida decades ago. All the current residents did was to purchase part of  a PUD with all its supposed stability. Judge Roberts pointed out that the composition of  PUD cannot be altered by one party in just the same way that changes to condominium association property cannot be changed without legal consent of at least a majority of the stakeholders.

Does Longboat Key still have a moral compass? Does Might Make Right?

Condo-Tels - what's in it for you?

 

As we look at the future of Longboat Key there are clearly two directions we can take. The one favored by the current commission appears to be towards more development, that is, high-rise condo-tels and tourist towers similar to what has befallen other Florida beach communities. The other direction points towards a community similar to Casey Key, which is predominately private residences.

The residents of Longboat Key have to make a choice, or the decision will be made for them by a town commission with several commissioners who were appointed rather than elected. The coming election could be looked at as a referendum on which direction you want to take.

What does each approach offer to property owners on Longboat Key?

If the commission is successful in removing height and density restrictions presently in our building codes and Comprehensive Plan, then we can expect that sooner or later developers will convert many of the current two story beach structures into multi-story buildings that make them the most money. Any developer would probably do the same.

What happens to residential property values when the community is divided into towers along the beach, with far greater numbers of people on the beach and a greatly expanded tourism and rental population, and neighborhoods of older homes?  Typically, the older homes lose value.

What happens to residential property values if older beach homes are converted instead into larger exclusive homes similar to Palm Beach?  Typically, the older homes increase in value.  There is an old real estate investment saying - buy the least expensive home in the most expensive neighborhood.

A friend of mine owns a not so well situated rental home in the Hamptons on Long Island. His property appeals to New Yorkers who want the Hamptons without the high cost of being in the Hamptons. My friend is riding on the coattails of his wealthy neighbors and exclusivity. I doubt we will see codes relaxed in the Hamptons or Palm Beach or numerous other communities that thrive on their low density and exclusivity.

 

There is little doubt that much of Longboat Key's largess is derived from the general perception that we are an exclusive community. Much of this perception is due to Islandside / Key Club and the Bay Isles gated community. People like being where there are few other people, the beaches are clean and relatively unpopulated, and the level of public safety makes people feel comfortable.

Inceases in tourism and the number of rental units have not been the reason for the great success of Longboat Key as an exclusive seasonal retirement community, since both have been steadily declining for the past two decades. What has increased is the number of million dollar properties that have been built and continue to be built on our island.

Ask yourself if you would like Longboat Key as much if it looked like Boca Raton or Fort Lauderdale Beach. Ask yourself if you believe the value of your home will increase if our community has increasingly more high-rise buildings lining the beach.

I grew up in a community that has changed little in the past eighty years. The same houses are still there. The little shopping districts are still the same. There are no hotels or motels of high-rise condo-tels. The only things that are taller are the trees. We should all hope that our property values fare as well as they have in that small New York City suburban town.

Let me be clear, the majority of our current commissioners favor changing our codes to allow considerably more density and the removal of height restrictions for buildings. This is also the case with the current members of the planning and zoning board, who are appointed by the commissioners.   Density restrictions and height restrictions have protected Longboat from developers who wanted to build high-rises. These two aspects of our code are quietly in the process of being changed - they haven't been changed yet, but are in the process of being changed by our current commission.  

If you do not register your views, then government must operate in a vacuum. We cannot blame the commission for adopting a pro-development policy if the community as a whole remains silent. Currently much of the island is zoned for low density two-story residential units. This can change. Remaining silent is the same as affirming the current direction that is being rapidly adopted by our commissioners. If you care and you are concerned then you need to make your views known. VOTE!

We can go either way. The one thing we cannot do is stand still and let the world pass us by.

A tale of two towns

Contrary to the constant incantations coming from the commission and the chamber of commerce, the residents residing in the northern reaches of our community really would rather not rely on commercial developers or academics to tell us what we will or will not do with our real estate. When I read that the town does not have the money to include the residents in any north end development study, I think of the half million the town just spent for a lot adjacent to Bayfront Park. The current commissioners seldom use the word resident, preferring instead to dwell on commercial interests. Who pays the taxes?

In 1998 or 1999, the then commission commissioned a community overlay project at the north end of Longboat Key. The express purpose of the project was to have the residents in the area decide their own destiny. The then town planner, Marty Black, did a masterful job of including a large segment of the community in a lengthy and democratic process of defining an overlay for the future development at the north end. The current commission could dust-off that community overlay plan and use it as their template for any future efforts to redevelop the north end. There is no need for an undergraduate exercise. The residents have already spoken. It is the duty of the commissioners to adhere to public policy.

It seems we now have two towns. The one that exists and is doing well as an exclusive, low density seasonal retirement community, and the one envisioned by the current developer-friendly commission that calls for vague but sweeping changes to our building codes and comprehensive plan. If the current commission did not have big plans for commercial development on Longboat Key, there would be little or no need to gut density and height restrictions. It is a typical tactic of developers to first takeover the local government, and then quietly destroy the resident's property protections. The north end overlay plan was created expressly to prevent unwanted over-development and to protect a way of life that attracts hundreds of homeowners. The north-end residents have already created a development overlay and they expect our town government to honor their wishes.

The current commission has falsely traded on the global economic downturn as a rational for reshaping our codes and comprehensive plan so as to allow unimpeded development in the near future. If you are looking for an analogous situation, one has only to look at the tragedy of Panama City Beach or Atlantic City, where residential property values plummeted after a wall of high rise hotels and condo-tels were constructed for miles along the beach. The flavor of the communities were destroyed so that a few could make millions.

Promoting a schizophrenic community atmosphere, where perspective home buyers are uncertain if they are buying into what they see or what is threatened by a developer-activist town government. This schism is undoubtedly affecting home sales. Stable communities surrounding us are experiencing much more robust property sales.

The direction we take as a community, in the next year or two, could very well be decisive in the future values of our homes. Most everybody already knows that the Loeb Partners are actively trying to sell the Key Club; there are apparently several interested buyers. As usual the asking price is unrealistic. I wonder how long the British retirement funds can hold out before they will have to sell. What happens to the proposed Key Club development when the property is sold without any definite court ruling on the legality of the proposed expansion. Since the Key Club is mostly comprised of raw land, its greatest value lies in high-density high-rise development on both sides of GMD. It seems likely that the residents of Bay Isles will be presented with a similar, if not larger, scenario for their community as now confronts the property owners at Islandside.

It seems that it would be more advantageous to head in the other direction, towards a low density completely residential community. Let's face it, the mom-and-pop resorts are slowly being sold. Tourism is declining. The Key Cub doesn't even have a hotel and they are too penurious to have wifi in the rooms at the Inn on the Beach. Wouldn't it be better for our community, as a whole, to see these properties turned into exclusive homes, similar to what is happening along GMD right now. If more land was available for residential development, I am sure more large homes would be built. Casey Key is an example of a thriving completely residential island community. Instead of electing and supporting commissioners that seem to want to make way for high-density high-rise condo-tels, that do nothing to increase residential land values, we might do better electing commissioners that use the word "resident" more often than the word "development".

The coming election gives the residents an opportunity to tell the town government they want a low-density exclusive residential community.. Contrary to their claims, I believe the current commission has not been positive for home sales and home values. People do not move to a community like Longboat Key for the tourism and the conventions. Longboat Key needs to redefine itself in the 21st century. Our strong points are are low density and our exclusivity. Let's not spoil it.

My meetings with the town manager

I hope my initial impressions of Longboat Key's new town manager are more prescient than Commissioner Brenner's previous evaluation of our town government. So far Commission Brenner's positive evaluations have been shown, by later events, to have been somewhat premature. To date Bruce St. Denis and Monica Simpson have been fired. I sincerely hope that our finance and utilities directors fare better. For the two former town employees Commissioner Brenner's positive evaluations have been oscvlvm mortis (the kiss of death).

I have had two lengthy meetings with Dave Bullock. I am impressed.

My first meeting with Mr. Bullock occurred soon after he took over as the town manager. The meeting was both friendly and professional. I was immediately struck with his obvious smarts and professional experience. If anything, I came away from my first meeting with the town manager feeling that I had gained a better understanding of the technical aspects of town management as a result of our talk. The two of us discussed current issues confronting Longboat Key, along with the political, legal and financial hurtles associated with getting things done in municipal government. It was apparent to me that Dave Bullock is an expert on the philosophy of government and its intricacies.

Mr. Bullock expressed his belief that he intended to approach every challenge from an informed perspective. However, he also stated that be believed that there was a counter-balancing need to act in a timely manner, as opposed to endlessly discussing an issue. He and I may disagree about the point in the process where action is appropriate and discussion ends. As town manager that is his prerogative, since his success will be measured by his effectiveness.

I believe that Longboat Key, and most especially the commission, will welcome a consummate professional guiding the town towards our future. When I was a commissioner I complained about the then town manager giving the commission inadequate information and his agenda of choices, thus preventing the commission from making well-informed decisions. I hope those days are behind us and we will witness a government process without agendas and inadequate information.

My second meeting with Mr. Bullock took place last week and was more focused. I specifically wanted to address town communications policy and beach management. To my surprise Mr. Bullock was not only up to speed in many aspects of these two areas, he was ahead of the curve in analysing various cost/benefits scenarios for any discussions about community wifi. What a pleasant surprise!

The two of us discussed alternative beach management technologies. I found the discussion to be open with the added input from a seasoned municipal government manager who understands the challenges of the state permitting process and state agency agendas. We talked about who should pay for what. I like debating with someone who enters the discussion as a professional, interested in positive outcomes and not afraid to look down the road with a realistic yet positive attitude.

In short I could find nothing about Mr. Bullock that was disconcerting. I see an intelligent hard working quick learner with little or no political agenda. What a refreshing change. I hope the commissioners will avail themselves of his professionalism and open their eyes to what he presents to them for their consideration.

And you thought I didn't know how to tell a happy story.

Goin Down the Road Feelin Bad

This week I am using this column to reprint an article by Richard Russell, who has predicted every "Bear Market" for the past 30 years. Recently Russell has repeatedly expressed confusion about the world economy. However, this article articulates basic economic realities that we all might do well to understand.

"Take the pain." That's what American population and pols have been unwilling to do. To undo 60 years of inflation, they refuse to take the pain. We've refused to take the pain ever since WWII. A great group of bubbles has been created since WWII. But they are starting to pop one by one. The biggest bubble of all, the debt of the US. That debt must be addressed. To address that debt and all of the debt that has enveloped the US we must absolutely take the pain. Which is why I label this site, "Take the pain."

That's what nobody wants to do, and the politicians serve the people by keeping money flowing to avoid the pain. Question: Why is it that you never see compounding and debt mentioned in the same sentence? Answer: Because it is a poisonous combination due to the new trillions that have been pumped into the US economy. Based on the massive amount of money pumped into the US economy inflation should start to appear in 1-2 years. With inflation comes higher interest rates. Rates are synthetically low today but by 2013 they will be rising along with inflation. This is when the compounding of the debt starts. 

The US National debt is at 16 trillion, 40 percent of the debt matures in one year or less. The average maturity of all US debt is 4.3 years. All this debt has been rolled over at historically low interest rates. This is going to change. As inflation accelerates, rates move higher. The entire tax-take of the US is now 2 trillion. This is a tiny amount compared to the cost of interest on the national debt. In other words, the US will have to borrow huge amounts of money in order to stay solvent. The national deficit is increasing annually by more than 1.5 trillion per year. Thus the tax-take doesn't begin to cover the interest on the debt. Within a few years a massive amount of money that is pumped into the economy by the Feds will set off inflation. With inflation, interest rates will rise. 

Remember the entire federal debt must be rolled over every few years. It will roll over and compound with rising interest rates, a death knell for the US economy and the dollar. As the process continues, the exploding and compounding national debt will crush everything in its path. The dollar will collapse, and the US will no longer be able to borrow the money needed to cover its interest and expenses. The stock market is not going to wait for these events to materialize. It will start discounting the trouble way before it happens. I see any rallies (as the one we're seeing today) as oversold bounces and they should be sold into. 

The preferred position is no stocks, gold, and 10 ounce silver bars with some cash for practical purposes. We are headed for uncharted waters and in time all central bank created currencies will be crushed. Gold is the only currency that is not someone else's liability, and it should be accumulated. 

In the end, the problem is neither the US population nor its politicians are willing to take the pain. There are no free lunches, and there are no corrections with out pain. The pain is set in stone. It's appearing now in unemployment and loss of purchasing power and spreading poverty.

Richard Russell