042700 Mayfair County Club Executive Session 1
1 BEFORE THE SANFORD CITY COMMISSION
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In re : Mayfair County Club - Executive Session
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REPORT OF PROCEEDINGS before the City of
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Sanford, Florida, City Commission, on Thursday,
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April 27, 2000, City Manager' s Conference Room,
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Sanford City Hall, 300 North Park Avenue, Sanford,
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Seminole County, Florida, commencing at or about
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3 : 15 p. m. ,pursuant to Notice herein, The Honorable
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LARRY A. DALE, Mayor, presiding.
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Commissioners present : HERBERT "WHITEY"
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ECKSTEIN, VELMA WILLIAMS and BRADY LESSARD.
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APPEARANCES :
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WILLIAM L. COLBERT, Esquire, City Attorney and
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CATHERINE D. REISCHMANN, Esquire, Assistant City
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Attorney.
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Also present : TONY VAN DER WORP, City Manager.
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25 ORIGINAL
C. B. Ellerbe&Associates
P.O.Box 1422
Sanford,FL 32772-1422
• 2
1 (Thereupon the following proceedings were had in
2 public forum: )
3 MAYOR DALE: Let ' s start with the public
4 portion of the meeting. We' re going to talk in the
5 public session about this thing.
6 We ' ll call the meeting to order. This is the
7 public portion of the meeting. We are discussing
8 the County Club, Seminole Club, I guess . And this
9 meeting now is open to the public, and Tony, I
10 think, will maybe go over a few things in the public
11 portion.
12 MR. COLBERT: Let me make just a couple of
13 comments first, and then the City Manager can speak.
14 And then whenever you-all are ready we ' ll go into
15 the private portion.
16 MAYOR DALE: All right .
17 MR. COLBERT: But for the record, I want to
18 remind the Commissioners that I did request this
19 meeting about two meetings back, in a public
20 meeting. This concerns the Mayfair County Club, the
21 pending litigation we have concerning that .
22 And my desire was to have an Attorney-Client
23 Session with the Members of the City Commission to
24 discuss the posture of the case, potential ways to
25 settle it .
C. B. Ellerbe&Associates
P.O.Box 1422
Sanford,FL 32772-1422
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1 We 've got mediation coming up, so I wanted to 3
2 discuss with you in the private portion some
3 strategy ideas and ways perhaps to control
4 litigation expenses .
5 But I wanted to get your input regarding that .
6 Mrs . Reischmann is here with me . And the City
7 Manager is here, and those are the ones permitted by
8 law to be here .
9 And those are the only ones who can be here . I
10 would estimate it would take us an hour, perhaps a
11 little longer.
12 We won' t be talking that whole time, but by the
13 time we discuss the status and then get input from
14 you I think it will take us probably a good hour or
15 so to do this .
16 So that ' s all the preliminary comments I need
17 to make .
18 MAYOR DALE : Okay. Thank you. Tony?
19 MR. VAN DER WORP: Well, I would like to bring
20 this other item up during the closed portion of the
21 meeting.
22 MAYOR DALE : Okay.
23 COMMISSIONER ECKSTEIN: Can the Assistant City
24 Manager be here?
25 I was just wondering about that coming down
110 C.B. Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
• 1 here . 4
2 MR. COLBERT: Unfortunately, not .
3 COMMISSIONER ECKSTEIN: I thought any city
4 official or top administrative official could be
5 present .
6 MR. COLBERT: Not unless he was designated
7 Acting City Manager and the City Manager wasn' t
8 here .
9 COMMISSIONER ECKSTEIN: I got you.
10 MR. COLBERT: When the law was originally
11 passed some of us believed that there was room in
12 the law to say that if you had consultants or if you
13 had other top staff that the City needed for
14 purposes of strategy that that would be permissible
15 under the law, because the law says the purpose of
16 it is to discuss strategy.
17 Not long after that there was a test case and
18 the Court said No, that ' s not what it meant; and
19 the only persons that could be present are the
20 actual attorneys who are litigating the case and the
21 chief executive officer of the city, the elected
22 officials and a court reporter; and no one else .
23 And I think it should be broader, but the
24 courts say just these people
25 COMMISSIONER ECKSTEIN: No, no, I was just
• C.B. Ellerbe&Associates
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1 curious, on the way down here, Bill . 5
2 MR. COLBERT: Yes .
3 COMMISSIONER ECKSTEIN: That ' s all .
4 MAYOR DALE : Well, let ' s close the door and go
5 into Executive Session.
6 (Thereupon the following proceedings were had
7 in Attorney-Client Session: )
8 MR. COLBERT: Now that we ' re in the Attorney-
9 Client Session, I want to remind you Gentlemen and
10 Lady, for the record. . . .we 've done this before . . .but
11 this is a meeting in which the Court Reporter will
12 do a transcript .
13 So this is, at best, a delayed broadcast . It
14 is not a meeting outside the Sunshine or in the
15 shade, as some people call it, which I prefer not to
16 look at it that way.
17 So, each of you should remember it is a public
18 meeting. A verbatim transcript will be prepared.
19 And the public will have a right to read that
20 verbatim transcript at the conclusion of this
21 litigation.
22 So, anything that you say should be treated
23 just as if you were saying it at a public meeting.
24 What I would like to do for a few minutes would
25 be to kind of go over the status of the case, tell
C. B. Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
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1 you what I think a few options are and get your
2 input .
3 I think the City Manager also has some things
4 he wants to talk about . And they also relate, as I
5 understand it, to the pending litigation and some of
6 the issues in that .
7 So I think it is appropriate that they be
8 discussed here as well .
9 This case goes back to 1998 . And if you
10 recall, Mayfair filed a two-count complaint against
11 the City of Sanford back in 1998 .
12 They have posted a two-hundred-and-fifty-five-
• 13 thousand-dollar check which the City alleges was
14 rent .
15 And they paid that under protest; and they
16 filed a suit to get their deposit back or their
17 payment back.
18 They are also seeking, asking the Court to give
19 them a two-hundred-and-twenty-three-thousand-dollar
20 credit for, quotes, improvements that they have made
21 to the course over the years .
22 That was improvements they say are between 1992
23 and 1997 .
24 Mayfair has alleged that the City' s conduct
25 over twenty years leading up to that acts as what we
C.B.Ellerbe&Associates
P.O.Box 1422
Sanford,FL 32772-1422
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1 Attorneys call an estoppel .
2 That means that . . .that legal term means that if
3 parties engage in a course of conduct over a period
4 of time it is allegedly unfair and improper for a
5 court later to disavow that conduct that the parties
6 have conducted themselves with. . . in this case, over
7 twenty years .
8 The City filed a counter-claim later. And in
9 our claim we ' re seeking damages against Mayfair for
10 breach of the lease, failure to pay rent under the
11 lease, failure to maintain the golf course in an
12 acceptable condition.
411 13 Failure to make capital improvements and
14 failure to document any capital improvements as
15 credits against rents .
16 And they are also asking the Court to declare
17 the lease null and void, alleging that there has
18 been, as the lease has progressed, that there has
19 been no real benefit to the City from the lease .
20 That it is one-sided.
21 We also, at that time, included a count based
22 on fraud and deceit, that the City has been misled
23 by their conduct over the years .
24 We have also asked the Court to declare the
25 irrigation agreement void.
C.B. Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
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1 And we have also sought attorney' s fees,
2 reimbursement of City Attorney' s fees under the
3 lease .
4 So, that is what we call the pleadings in the
5 case . I 've told you what they said and I 've told
6 you what we've asked for.
7 A case is divided into generally three
8 sections . And one is the pleading stage, the other
9 or another is the discovery stage .
10 And the final section is the mediation and/or
11 trial stage .
12 And right now we ' re coming to the close of the
S 13 discovery stage .
14 The pleadings have already been closed. This
15 is set for mediation May eleventh. And it is set
16 for trial in August if it is not resolved in
17 mediation.
18 There are a number of depositions that have
19 been taken.
20 There are some more depositions to be taken.
21 The depositions taken so far include Robert Keeler,
22 who was an employee of Mr. Daniels at one time . He
23 is a former employee .
24 Bill Simmons ' deposition and Donna Watts, Tony
25 Van Der Worp ' s, Mayor Dale, Larry Smith, Lon Howell
S C.B.Ellerbe&Associates
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1 and Kim Townsend (All names spelled phonetically. )
2 Those depositions have all been taken. There
3 are depositions yet to be taken; and they will
4 occur in the next couple of weeks .
5 Tom Riley, Jack Daniels, Richard Cleary and
6 Doug Madascalko. Madascalko is Mayfair' s CPA. Tom
7 Riley is the City' s CPA.
8 There was an Offer of Judgment that was filed
9 in this case right about the time Mayfair filed the
10 case . Some of you-all, I 'm sure you-all remember
11 that .
12 They offered the City about sixty six thousand
• 13 dollars . And the City was at that time asking for
14 two hundred and fifty five thousand dollars .
15 That Offer of Judgment does have some legal
16 implication; and I want you to understand the
17 implication of it .
18 If this case is not settled at mediation and if
19 it goes to trial ; and if the City does not recover
20 at least seventy five percent of what that offer was
21 or about fifty thousand dollars, the City would be
22 exposed to paying their attorney' s fees and court
23 costs .
24 MAYOR DALE : Didn' t that offer have some
25 strings attached to it other than--
C.B. Ellerbe&Associates
P.O.Box 1422
Sanford, FL 32772-1422
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1 out in a related case . 11
2 I think you-all know that Mr. Daniels was
3 involved in litigation with the Department of
4 Revenue of the State of Florida.
5 The Department of Revenue alleged that he owed
6 some taxes to the State, based on the fair value of
7 the lease that he had with the City.
8 And Mr. Daniels took the position in that case
9 that he didn' t have to pay the City any rent; and
10 that there was ultimately no value on which taxes
11 should be paid.
12 That was his argument in that case .
13 Interestingly, he won in the lower court .
14 And he, at least in my editorial opinion, he
15 became a little more difficult for us to deal with
16 in the litigation when he won in the lower court .
17 But that case was appealed by the State of
18 Florida to the Fifth District Court of Appeal .
19 And the Fifth District Court of Appeal reversed
20 it .
21 And Mr. Daniels was exposed to the payment of
22 taxes, based on some value in the lease .
23 And what we ' re saying is that he and Mr.
24 Knowles and some others testified in that case that
25 there was in effect no value to the lease .
C. B. Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
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1 And that they shouldn' t be able to take that
2 position and argue that position under oath in Case
3 A; and then over in Case B reverse themselves and
4 argue the other way.
5 There are cases that say that you can' t do
6 that . There are also some other cases that say that
7 each case stands on its own.
8 So I 'm not suggesting to you that we have
9 painted them into a box, that it ' s a slam-dunk.
10 It is certainly something subject to legal
11 argument . And it is subject to a judge deciding
12 what to do.
• 13 Judges are reluctant to declare a lease void,
14 particularly after it has run some twenty years or
15 so.
16 But we feel that it is something that we can in
17 good faith argue to the Court . And we believe that
18 it would further the City' s position to at least
19 educate the Judge .
20 If we have to try it, he will have the benefit
21 of having heard these arguments if he doesn' t grant
22 the Motion.
23 It also should give Mr. Daniels and his
24 Attorney something to think about as we get ready
25 for mediation.
411 C. B.Ellerbe&Associates
P.O.Box 1422
Sanford,FL 32772-1422
1 And we hope they will consider that as we get 13
2 ready for mediation.
3 And come to the mediation ready to be serious
4 and not come to the mediation not convinced of the
5 righteousness of their entire claim.
6 As to some of the things alleged, I did
7 indicate to you that one of the counts was based on
8 fraud and deceit .
9 Now that we 've taken the majority of those
10 depositions I can tell you that we haven' t been able
11 to find proof of fraud and deceit .
12 That keeps coming up as a question that is
• 13 asked in the depositions .
14 Bill Simmons, Mayor Dale, Donna Watt, Tony Van
15 Der Worp, Tom Riley, Larry Smith, all of their
16 depositions have been taken.
17 There has been no smoking gun, I guess, of
18 fraud and deceit .
19 This is a difficult case . We can all ride by
20 the golf course and see that it ' s not in good
21 condition.
22 But lately we heard Mr. Daniels say part of
23 that reason is the lack of irrigation.
24 And we ' ll probably hear that again at
25 mediation. And we ' ll probably hear that again in
• C. B. Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
• 1 trial . 14
2 That doesn' t tell us why the course wasn' t in
3 all that good a condition before the last couple of
4 months or so .
5 And we ' ll be arguing those things as we come to
6 that point .
7 We have asked the City' s experts what their
8 opinions are about where the case should go from
9 here .
10 And Mr. Riley and Mr. Smith both recommend that
11 we try to settle it at mediation.
12 And, of course, that is always a goal, to get a
III13 case settled.
14 Mr. Riley says that in his opinion there were
15 many years that the City didn' t pay a great deal of
16 attention to what went on at the golf course .
17 And that--this will be a jury trial . He
18 believes that the accounting issues and the legal
19 issues will be hard for a jury to really understand,
20 when we ' re talking about some of the depreciation
21 and capital improvements and some of those things .
22 Although he is a good witness . I 'm not putting
23 him down. I 'm telling you that he believes that it
24 will be a very complicated case for a jury to
25 understand.
• C.B.Ellerbe&Associates
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1 And he also believes that Mr. Daniels will come
2 across as a poor old business man being picked on by
3 a unit of government .
4 And that there may be some sympathy for him.
5 And he encourages us, as Attorneys, to see about
6 getting the case settled if it can be settled.
7 Mr. Smith, Larry Smith, is an expert that the
8 City has hired. And he is an expert in maintenance
9 of golf courses and things like that .
10 And he says that it is difficult for him to
11 opine that some of those improvements that we don' t
12 think were done years ago, that it is difficult to
• 13 opine that they were not in fact done .
14 Because he says that maintenance on a golf
15 course for the most part is a biological system.
16 And it can change drastically over a period of
17 months or a year or two .
18 And that the course, he believes, is improving
19 lately. He thinks it can improve a lot more .
20 I think he suggested to Katie at one point that
21 the expenditure of sixty or seventy thousand dollars
22 out there on the golf course--and with a little bit
23 of time and a little bit of effort, would make it
24 look a lot different than it does today.
25 But he suggests that settlement is also
• C. B. Ellerbe&Associates
P.O. Box 1422
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1 appropriate in this case .
2 And that if we can, to bring some type of
3 settlement forward that the City could live with.
4 Settlement possibilities? I don' t know what
5 frame of mind Mr. Daniels and his Attorney will come
6 in with; but whatever you do in mediation, you' re
7 supposed to come and deal in good faith and try to
8 resolve issues .
9 We are trying to up that ante by filing the
10 motion for Summary Judgment, to give them something
11 to think about .
12 Also, before the mediation we will be sending
• 13 them a letter that . . . that will let them know that if
14 their position is inconsistent and if they prevail
15 in the litigation against the City, that that goes
16 contrary to some things that they have argued
17 otherwise .
18 And that perhaps they would owe some back taxes
19 to the federal government because of that .
20 So, we plan on doing both of those with the
21 idea that when they come to mediation they come
22 ready to discuss meaningful settlement .
23 One of the things that the City has discussed
24 in the past . . .and it seemed for a time that Mr.
25 Daniels was willing to do it, and then he backed
• C. B. Ellerbe&Associates
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Sanford, FL 32772-1422
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1 away from it . . . in my opinion, that was about the
2 time he won his case with the State of Florida at
3 the lower court level ; and the court was reversed.
4 But there was the figure of a hundred thousand
5 dollars to the City, from around--back previously
6 and the payment of costs to date, when the costs
7 were a lot less than they are now.
8 That is something, if the condition were
9 amenable, that we could discuss in settlement .
10 Some other issues that are out there that have
11 been difficult in this case is a lack of a real good
12 definition of capital improvements .
III13 One area of settlement that we need to try to
14 work out is better definitions than what we
15 currently have regarding capital improvements .
16 Better standards or definitions in the lease
17 regarding the reworking of tees and greens .
18 Another possibility to discuss in settlement
19 would be getting away from the net revenue thing and
20 go to some percentage of gross revenues .
21 In other words, two, three, four, five percent
22 of gross revenues, where there are no deductions
23 taken from that, versus even dealing with the issue
24 of net revenue and capital improvements and those
25 kinds of things .
• C.B. Ellerbe&Associates
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Sanford,FL 32772-1422
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1 What we need to do, as your Attorneys, and what
2 the City Manager, I think, would need to know as we
3 get ready for mediation, Is the City interested in a
4 mediated resolution?
5 And I think we should be . And if so, what
6 areas are we willing to consider, realizing that
7 once we get there we ' ll just have to react to it .
8 And we will have to factor in what we believe
9 the Commissions ' s consensus is, if there is one .
10 And then bring it back to you in a proposal and
11 let you vote it up or down after the mediation
12 anyway.
• 13 So, we ' re not asking for any decisions today.
14 But we ' re asking for your input . And if you have
15 questions, we would like to answer your questions
16 and be comfortable today that you know where we are
17 in the case .
18 That you know what we see as the strengths and
19 weaknesses ; and that we have some understanding of
20 what we would like to accomplish for mediation and
21 an understanding of what the consequences of going
22 to trial may be .
23 That ' s about all I have by way of introduction
24 to you about where we are headed.
25 MAYOR DALE : Well, through all of this we have
• C. B.Ellerbe&Associates
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Sanford,FL 32772-1422
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1 continued to have serious discussions with potential
2 buyers for this lease .
3 And, you know, there is no doubt that he
4 intends to get out of this thing. So I would hope
5 that he would be interested in settling this thing.
6 The first question that I have was, when you
7 were talking about the liability that we have on his
8 offer to settle, offer of settlement, we did make
9 him an offer of a hundred thousand dollars .
10 That came about when Lon said he was
11 representing him in the infamous meeting that I had
12 that was taped by the FDLE, you know, I brought that
13 back to the Commission.
14 The Commission did make him a formal offer to
15 settle for a hundred thousand dollars .
16 Does he have any exposure to that though?
17 MR. COLBERT: I recall--
18 MAYOR DALE : There were no strings attached to
19 it, other than he drop the lawsuit .
20 MR. COLBERT: I think my answer is-- I would
21 have to go back and look--I recall that, that back-
22 and-forth.
23 I 'm not . . . . I 'm not certain that the Commission
24 made an absolute final offer.
25 MAYOR DALE : It did.
C. B. Ellerbe&Associates
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1 MR. COLBERT: And if it did, we need to take a
2 look at it . And it ' s a good point .
3 I can' t answer definitively what you' re saying;
4 but we ' ll make a note and go back and check and see
5 where we are on that .
6 MAYOR DALE : Okay.
7 MAYOR DALE : I think we did.
8 MR. COLBERT: Okay.
9 MAYOR DALE : The next one is Has he paid his ad
10 valorem taxes? do we know?
11 MR. COLBERT: Do we know if he has paid the ad
12 valorem taxes? Because he hadn' t paid them in the
• 13 past--
14 MAYOR DALE : If he doesn' t pay those in a
15 timely period, thirty days, I think, then he is
16 clearly in breach of the lease .
17 I can' t imagine he would be foolish enough to
18 do that, but he didn' t pay them--And, now, the lease
19 said--the original lease is pretty good on this
20 matter--It said that if he didn' t pay taxes by the
21 time they became delinquent it was a breach of the
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22 lease .
23 And it said whether we notified him in writing
24 or not ; that we didn' t have to notify him.
25 MR. COLBERT: We did notify him.
C. B.Ellerbe&Associates
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1 MAYOR DALE : Unfortunately, we did notify him.
2 I wish we hadn' t but we did.
3 But as far as my knowledge . . .my sources at the
4 Tax Collector' s Office, he still has not paid those
5 taxes .
6 Now, if he doesn' t pay those by May the first,
7 which is next week, we may be in a completely new
8 ball game .
9 MR. COLBERT: Well, legally we have more
10 ammunition to argue if he does not pay it by May
11 first .
12 MAYOR DALE : Right . I would think he would pay
• 13 it--
14 MR. COLBERT: It is not a slam-dunk; but it is
15 better ammunition to argue .
16 MAYOR DALE : Why would it not be a slam-dunk?
17 The lease is clear on that point .
18 MR. COLBERT: I understand. But a judge would
19 have to determine--
20 MAYOR DALE : Oh, yes--
21 MR. COLBERT: --that that was a basis for
22 forfeiture .
23 MAYOR DALE : Did he pay the State Sales Tax he
24 owed? Do we know that?
25 MS . REISCHMANN: They' ve been negotiating the
• C.B. Ellerbe&Associates
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Sanford, FL 32772-1422
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1 amount; but I don' t know for sure if he ' s paid it .
2 MAYOR DALE : As far as fraud and deceit, I
3 know we haven' t been able to get a handle on it . I
4 know there are some people that could come forward
5 if they would.
6 But I know also that Jack has been able to
7 get with those folks . But there are some matters of
8 fraud and deceit here that may not play big in the
9 issue; but the fact that he allowed people to play
10 for free out there, when ours is based on a
11 percentage of gross, that is fraud and deceit .
12 And I mean, and you know, when they deposed me,
• 13 took my deposition, you know, the Attorney for Mr.
14 Daniels said, "Well , then, don' t you think it is
15 customary for pros to let pros play for free?"
16 I said, "Well, probably so; but in that case
17 Jack Daniels should be paying into the kitty for
18 it . "
19 Now, if he wants to let them play for free,
20 that ' s at his expense, not the taxpayers ' expense .
21 So at least that is fraud and deceit . And we
22 have proof of that . I don' t know how deep it goes,
23 but I know--and we could get more proof of it .
24 So he has defrauded us by letting people play
25 for free and making deals on playing for free .
411 C.B. Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
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1 And he also did the same thing by tearing down
2 the swimming pool, without even notifying the City,
3 when the lease clearly said he must maintain it in
4 good condition.
5 Now, we were stupid by not noticing that he
6 tore the pool down. But still, is there estoppel
7 there on time, I mean I didn' t know he had torn it
8 down until we got into the thing.
9 And he clearly had never gotten permission or
10 even notified the City that he tore it down.
11 MR. COLBERT: The answer to your question: Is
12 there estoppel? Estoppel in something like that
13 would begin to run when the City knew or should have
14 known.
15 MAYOR DALE : Well, again, that ' s the key. When
16 should we have known about it .
17 MR. COLBERT: Yes . And it ' s something---
18 MAYOR DALE : I don' t even know when he tore it
19 down. Do we know when he tore it down?
20 MRS . REISCHMANN: 1987 .
21 MAYOR DALE : A long time ago.
22 MR. COLBERT: 1987 .
23 MRS . REISCHMANN: Well, actually you've got
24 more than estoppel, you've got fraud, you've also
25 got the Statute of Limitations .
C. B.Ellerbe&Associates
P.O.Box 1422
Sanford,FL 32772-1422
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1 When I talked about that, you don' t like that
2 statutory limitation, but--
3 MAYOR DALE : Well , I don' t clearly understand
4 it . I know if I loaned you ten thousand dollars and
5 you signed a note for me and then you quit paying
6 me, the fact that I didn' t enforce that note now
7 doesn' t mean that ten years down the road I still
8 can' t enforce it .
9 MS . REISCHMANN: Well, the reason for the
10 Statute of Limitations is that people die and
11 evidence gets old, and you don' t want to allow
12 somebody to just sit around and wait twenty years,
• 13 you know, as the City has done here; and then come
14 back in--
15 MAYOR DALE : Yes, but in the case of fraud,
16 does the Statute of Limitations still apply?
17 MS . REISCHMANN; Yes .
18 MAYOR DALE : I thought in the case of fraud
19 there was no Statute of Limitations .
20 MS . REISCHMANN: Well, if there ' s certain kinds
21 of fraud where you. . .where you conceal the breach of
22 the lease .
23 For instance, if he tore down the swimming pool
24 and he put up a big fence and he made some profit
25 off of it or something.
• C. B.Ellerbe&Associates
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Sanford, FL 32772-1422
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1 MAYOR DALE : The problem is, and this is where
2 it ' s hard to get a handle on fraud, part of this
3 problem was brought about by the fact that those
4 that were involved in the City at the time had free
5 play and free--
6 MS . REISCHMANN: Yes .
7 MAYOR DALE : --it was their club . And they
8 didn' t care what he did. And I 'm finding it hard
9 to accept the fact that we let him get by with so
10 much crap that we never called him on.
11 MR. COLBERT: If we go to trial and--
12 MAYOR DALE : I mean like that--and tear the
13 pool down. Why in the world--Did you even know he
14 had done the pool that way?
15 I didn' t know it .
16 COMMISSIONER ECKSTEIN: Nobody in the City
17 played for free .
18 MAYOR DALE : Oh, yes, they did. Oh, yes, they
19 did.
20 COMMISSIONER ECKSTEIN: Not when Jack owned
21 it .
22 MAYOR DALE : No, not when Jack owned it, that ' s
23 right .
24 COMMISSIONER ECKSTEIN: I mean Howard did
25 things for free . Some of the City Commissioners
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2 MAYOR DALE : A lot .
3 COMMISSIONER ECKSTEIN: I know, but not--
4 MAYOR DALE : Well , I don' t know that none of
5 them paid the fees . And they may have continued to
6 play for free after that . I know he offered a lot
7 of free play.
8 He took a lot of work done and offered free
9 play in exchange for work at the expense of the
10 taxpayers .
11 All of those things, to me, are fraud and
12 deceit . And I understand what Larry Smith said
• 13 about as far as---to determine whether the
14 improvements, money spent on improvements for
15 maintenance of the golf course and those things .
16 It would be hard to prove things related to
17 that . But did we ever go back--and, I mean to me,
18 you would think it would be fairly easy to prove
19 that he didn' t spend money on things like the
20 clubhouse and the pro shop that he was required
21 under the lease to do.
22 But I understand that he never spent anything;
23 or if he did he certainly didn' t do much with--his
24 money didn' t go very far in any improvements he did.
25 And we were going to have somebody look at
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1 that .
2 MR. VAN DER WORP : We did an appraisal on the
3 building and documented the state of disrepair and
4 lack of maintenance .
5 And we also have under contract a Certified
6 Building Official and General Contractor to go
7 through the buildings and determine whether or not
8 the improvements that he listed for a number of
9 years actually were done .
10 By physical inspection and by a request for
11 receipts, I believe, is the other part of that . I 'm
12 not sure .
• 13 MS . REISCHMANN: I think we have part of them.
14 MR. VAN DER WORP: I haven' t gotten that far.
15 But we have under contract a person that is out
16 there looking to see whether or not in fact any
17 expenditures were even done or--
18 MAYOR DALE : The people that have played there
19 for a long time and been around the City a long time
20 tell me he didn' t do diddle squat at that clubhouse;
21 nor did he landscape--The lease also required that
22 he spend so much money on landscaping and interest--
23 nor did he ever do that .
24 MS . REISCHMANN: I agree .
25 MAYOR DALE : So that is fraud and deceit and a
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1 breach of the lease .
2 MS . REISCHMANN: If we can prove it .
3 MAYOR DALE; Well, let ' s work on it .
4 COMMISSIONER ECKSTEIN: How long have we had--
5 We 've been waiting for those receipts for the
6 clubhouse and all of those things . I saw that
7 months ago.
8 Where is that information? How can you go to
9 mediation if you don' t have half of the information?
10 MAYOR DALE: Do we have them?
11 MS . REISCHMANN: We ' ve had them for months and
12 months ; and our Accountant put down--The only thing
• 13 we don' t have is anything, absolutely anything for
14 1992 .
15 He has destroyed everything.
16 MAYOR DALE : Well, then, that raises doubts
17 right there . Why did he destroy them?
18 We need to raise that in the minds of the jury.
19 MS . REISCHMANN: We can do that .
20 COMMISSIONER ECKSTEIN: Katie, when you take a
21 look at the improvements that he made, okay?
22 Can' t--You' re supposed to match them with the
23 expenditures .
24 That ' s what I thought your firm or the person
25 you hired was doing.
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1 MS . REISCHMANN: He spent hours doing that .
2 His bill is eight thousand dollars .
3 COMMISSIONER ECKSTEIN: Okay. Well, what--
4 MAYOR DALE : What was the outcome of it?
5 COMMISSIONER ECKSTEIN: What is the outcome of
6 it? Are they matching up?
7 MS . REISCHMANN: No, they don' t match up. And
8 we 've had depositions set where I 've asked him to
9 bring the documents that were missing with him so we
10 can verify that he doesn' t have those .
11 MAYOR DALE : Well , we ought to have all of that
12 for the building improvements .
13 MR. COLBERT: And we ' ll be taking Jack' s
14 deposition. You know, it ' s one that we 've yet to
15 take .
16 When you take depositions in a case, normally
17 you take depositions of kind of peripheral things;
18 and then the closer you get to trial the more you
19 narrow it on the party that you are seeking to
20 charge .
21 And so Jack is going to be one of the last
22 ones .
23 MAYOR DALE : Well, I think we should. But if
24 we 've got an expert . . .We 've got an appraisal , and
25 we ' ve got an expert that, you know, can testify,
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• 1 "No, these improvements weren' t done . " 30
2 And then he can' t, you know, lo and behold he
3 can' t produce the records, we can cast great doubt,
4 I would think, in the minds of the jury and the
5 Judge that he didn' t do these things .
6 Now, you' re talking about fraud and deceit, if
7 he defrauded us and said, "I spent this money" and
8 he didn' t, that is fraud.
9 And we ought to hammer on it .
10 MR. COLBERT: I think Mr. Riley will be able to
11 help us in some of the areas of that, particularly
12 on the buildings .
13 I think it ' s going to be difficult in what he
14 and Mr. Smith talk about, the biological system.
15 MAYOR DALE : Yes, well, I think you ' re right .
16 MR. COLBERT: Yes .
17 MAYOR DALE: And the other thing that he did
18 was a lack of programs that he was supposed to do.
19 He just didn' t do those programs .
20 He just didn' t, he didn' t do them.
21 MR. COLBERT: Yes .
22 MAYOR DALE: Now, is that where the Statute of
23 Fraud--I mean the Statute of Limitation comes in,
24 too? The fact that--
25 MR. COLBERT: Well, the estoppel argument and
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the Statute of Limitations are arguments that we ll
2 hear on that .
3 Again, the theory is if you let somebody do it
4 for long enough you can' t go back later and say,
5 "Even though we let you do it, now we ' re going to
6 cancel your lease as a result of it . "
7 Those are the arguments that they will present .
8 MS . REISCHMANN: One of the things we forgot
9 here, regarding the backup documents, you haven' t
10 required a backup document .
11 MAYOR DALE : Well, I could kick ourselves in
12 the butt for not doing it . I can' t imagine why we
• 13 didn' t do that .
14 MR. COLBERT: Well, some of the people who will
15 testify for them, we expect Mr. Knowles to testify
16 at a trial .
17 MAYOR DALE : Well , they ought to be able to
18 cast aspersions on him, because he, he negotiated
19 the lease .
20 MR. COLBERT: Yes .
21 MAYOR DALE : And he was in cahoots with him
22 when they did the lease . And was one of the guys
23 that let this stuff go without being--He ' s the one
24 that didn' t require all of these things .
25 And I mean we ought to be able to cast great
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1 doubt and aspersions on him.
2 MR. COLBERT: And we expect Mr. Lee Moore to
3 testify; and we ' ll be trying to do the same thing
4 there .
5 But I want you-all to understand, those are
6 former City Officials .
7 MAYOR DALE : I understand. And they' re the
8 former City Officials that did not oversee the lease
9 properly.
10 MR. COLBERT: And it makes it a two-edge sword,
11 though. So, they will argue, based on the testimony
12 of Mr. Moore and Mr. Knowles, that the City knew
13 what it was doing in negotiating the lease .
14 And knew what it was getting and what it wasn' t
15 getting; and the City got what it bargained for.
16 MAYOR DALE : Then why didn' t we require him to
17 do those things in the lease that he was supposed to
18 do, like keep the pool up?
19 "Mr. Knowles, why did you not do your job and
20 require that to be done?"
21 " Is it because maybe, you know, you knew you
22 were going to be working for him later?"
23 I mean we ought to do those--we ought to drive
24 that hard, "Look, you were the guys that were
25 responsible . If you knew what you were getting
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1 into, why didn' t you at least enforce the things
2 that the taxpayers had in the lease?"
3 MR. COLBERT: And we will be doing that .
4 MAYOR DALE : And I would be hammering hard on
5 that .
6 MR. COLBERT: We will be doing that . I 'm
7 trying to give you-all the big picture--
, 8 MAYOR DALE : And he ' s the reason that Statute
9 of Limitations has caught up on us, Pete Knowles is .
10 COMMISSIONER ECKSTEIN: Remember, there are
11 major breaches and there are minor breaches of a
12 contract . And--
13 MAYOR DALE : Well, tearing a pool down is a
14 major breach.
15 COMMISSIONER ECKSTEIN: It depends on. . .No, I
16 don' t think it is .
17 MAYOR DALE : I think it is .
18 COMMISSIONER ECKSTEIN: And I think--
19 MAYOR DALE : If we had called him on it at the
20 time I think it would have been a major breach.
21 COMMISSIONER ECKSTEIN: Well, that wasn' t done
22 under Pete Knowles ' watch, though, it was done
23 under--
24 MAYOR DALE : He said it- -
25 COMMISSIONER ECKSTEIN: Frank Faisson' s
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2 MAYOR DALE : Was Frank Faisson City Manager in
3 1986?
4 COMMISSIONER ECKSTEIN: Umm-hmm, and he was on
5 the City Commission. Now, these minor breaches that
6 you have, and I think we spent twenty five hundred
7 dollars in 1989 to Bill ' s firm.
8 And that is the conclusion that he came back
9 with, saying that things like lessons and stuff can
10 be valued; and, therefore, did not constitute a
11 breach.
12 MAYOR DALE: It had to be a breach.
• 13 COMMISSIONER ECKSTEIN: Well, the next--that
14 summer Jack Daniels had some lessons out on
15 the . . .put a pro out there and said they were going
16 to have some lessons out there .
17 And whatever, it was decided---it was a Band
18 Aid approach to the minor breaches .
19 And that was, you know, that is what you told
20 Mercer and I and other--and Betty and--
21 MR. COLBERT: He did enough to satisfy the
22 Commission at the time .
23 COMMISSIONER ECKSTEIN: Where they would not--
24 Right .
25 MAYOR DALE : Yes, but you-all also looked at
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1 that, now, and the fact that he had taken money, had
2 gotten improvements that in the lease he could not
3 pay him, it was in addition to all of the other
4 things .
5 COMMISSIONER ECKSTEIN: Well, on the biological
6 things, it ' s awfully hard to prove how much
7 fertilizer you put down or how--
8 MAYOR DALE : I 'm talking about . . . he took
9 credit for the folks, the four-hundred-something-
10 thousand dollars he was supposed to put in that
11 clubhouse and all this and that and the other, that
12 was in addition--Now, he was not supposed to get
13 credit for that .
14 But he took it anyway.
15 COMMISSIONER ECKSTEIN: Well, there was a
16 question of really what capital improvements were--
17 MAYOR DALE : It doesn' t matter. This said it
18 was in addition to all of those other things . He
19 didn' t get a credit for that type of thing.
20 COMMISSIONER ECKSTEIN: Well, what I 'm saying
21 to you-all is, I think we' re not even at the end of
22 discovery yet .
23 You brought up various points that I think
24 we ' re entitled to have an answer to.
25 I think those receipts should match whatever
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2 MAYOR DALE : Well , I think we ought to cast as
3 much doubt as we can on why they all of a sudden,
4 they come in, "I mean you keep such great records,
5 Mr. Daniels, how come . . . " unless he comes in
6 claiming, "Well, I 'm just a bad businessman, you
7 know. I lost everything. "
8 COMMISSIONER ECKSTEIN: Well, you know, you can
9 do things in-house with your friends--
10 MAYOR DALE : We can cast a lot of doubt on why
11 those records are lost .
12 COMMISSIONER ECKSTEIN: It ' s in the state of
• 13 mind. If I . . . I can bring Brady over to my house and
14 say, "Brady, I have damage to my roof . Would you
15 put a new roof on?"
16 And he says, "Sure . I 'm going to charge you X
17 amount a square . "
18 And Brady gives me a bill for six thousand
19 dollars, and I pay him three thousand; and I get
20 six thousand from the insurance company, I mean a
21 lot of these improvements, you know, what you see
22 and what you pay, they' re two different things .
23 MAYOR DALE : Well , that ' s where we are right
24 now.
25 COMMISSIONER ECKSTEIN: That ' s what I 'm saying,
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37
2 to, for all his work, should be able to look at that
3 and see very clearly--
4 MAYOR DALE : Along with those other gentlemen
5 that advised us .
6 COMMISSIONER LESSARD: Whitey, would you still
7
ten-ninety-nine for the full six grand?
8 MAYOR DALE : Sure he would. Now--Go ahead
9 Velma .
10 COMMISSIONER WILLIAMS : Can I ask, do you think
11 that the Judge, in view of the testimony of former
12 City Officials, would have a lot of credibility,
• 13 giving credence to the support for them?
14 And looking at it in terms of two different
15 philosophies in terms of expectations?
16 MR. COLBERT: Yes? This is going to be a jury
17 trial . And--as opposed to a judge making all of
18 the determinations, it ' s going to be a jury trial .
19 And they have asked for one and they' re
20 entitled to one .
21 Many times judges are better able to see
22 through some of the things than juries .
23 That is not that I 'm against juries or
24 whatever; but, you know, a judge can give a jury
25 instructions on what to pay attention to and what
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2 And then when they go back in the room and make
3 a decision they do not always follow the judge' s
4 rulings or instructions .
5 Mr. Riley, at least, believes that Mr. Daniels
6 will make a pretty good witness . And he believes
7 and has told us that he believes that there is going
8 to be come credibility to him and some lack of
9 credibility for the City for letting it go on so
10 long.
11 And if Mr. Knowles and Mr. Moore take the stand
12 we will certainly go after their credibility.
• 13 But we ' ll be attacking the people who used to
14 be in charge of the City. And it is a two-edge
15 sword.
16 And what the jury is going to say when they get
17 back there and start weighing it I can' t tell you.
18 I can tell you what the arguments are . And I
19 can tell you there is some risk associated with it .
20 And I can tell you that if we can get a
21 mediated settlement acceptable to the City and
22 acceptable to Mr. Daniels we won' t have that
23 exposure .
24 MAYOR DALE : Well, that ' s certainly the way to
25 go.
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1 MR. COLBERT: Yes .
2 COMMISSIONER WILLIAMS : Excuse me .
3 But if I were sitting on the jury, you know, just
4 saying. . . I might say Well, why are you faulting Mr.
5 Daniels?
6 "You should be faulting the City Officials who
7 permitted it to happen. " As a juror, you know, I 'm
8 just asking, really.
9 Because that ' s what I was thinking about .
10 MAYOR DALE : Well, Daniels set up--
11 COMMISSIONER WILLIAMS : I 'm not saying that is
12 the way to go.
13 MAYOR DALE : Daniels certainly took advantage
14 of us .
15 COMMISSIONER WILLIAMS : Surely.
16 COMMISSIONER ECKSTEIN: When Mike Welch just
17 sold a course for four hundred and fifty thousand
18 dollars to John Pierce, Howard McNulty and George
19 Phillips, who had a ten percent insurance, okay?
20 The City at that time, and I think people will
21 tell you, Mr. Knowles will testify they really had
22 no interest .
23 The lease was secondary. They wrote a lease .
24 However, they never really intended, you know, to
25 enforce that lease .
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•
1 Because, you know, Bill was one of--a former
2 City Attorney, who is the Airport Authority
3 Attorney.
4 You know, it was a good old system--Boy System.
5 And I knew those guys .
6 And I was a member out there at the time . And
7 I played out there until , you know--accounting
8 practices was something that was, you know, it was
9 salutary neglect, I guess, is the right word.
10 And then when Daniels saw that . . . I mean that ' s
11 why he paid six hundred and fifty thousand dollars,
12 because I 'm sure Howard and John Pierce . . .John
13 Pierce, who is an Attorney, graduated from Duke,
14 okay?
15 But became disbarred and ran the golf course--
16 He ' s a smart guy; said, Hey, you know, you've got a
17 gold mine here .
18 And so, you know, all of a sudden Daniels comes
19 in. Now, what Daniels . . .where Daniels got into
20 trouble is that he drove a lot of those same people
21 that were friends at Mayfair to join other clubs
22 because of his personality.
23 He was not friendly to the clientele . Had he
24 been, we would, you know, we would still have
25 business as usual .
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1 And the estoppel that you were talking about, I
2 mean it would go on and on.
3 And it was, you know, Jack' s attitude towards
4 people in the City, his recalcitrance on various
5 things has brought out, you know, anger on the part
6 of City Commissioners that have been petitioned by
7 their constituents to come here and to try to do
8 something about it .
9 And so, what was the only thing that we could
10 do to Jack Daniels?
11 Well, to attack him through his breaches in the
12 lease . And, yes, you all--I mean everything Mayor
• 13 Dale said is absolutely correct .
14 But, you know, that . . . I think that Jack Daniels
15 would be a good witness on his own behalf .
16 He ' s a smart guy. And. . .and he could always
17 say, like, if the Mayor says Well, you know,
you let
18 these pros play for nothing.
19 Jack would say "Well , I didn' t let them play
20 for nothing. It ' s costing me . I 'm charging thirty
21 dollars to cart and greens fee, you know; the City
22 gets five percent of that, it ' s a dollar fifty, I 'm
23 losing twenty-eight-fifty. I 'm the one losing the
24 money. "
25 You know, that is how he would put it . And he
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1 would say Okay, how much do I owe you for the pros
2 that I lost?
3 He says All right, I let a hundred pros play.
4 Three thousand dollars ' worth. All right . I ' ll
5 write you a check for a hundred and fifty dollars,
6 case closed.
7 You know? And that ' s his thinking, you know.
8 That that five percent, he doesn' t even care--
9 MAYOR DALE: But he has never done it .
10 COMMISSIONER ECKSTEIN: Exactly. But he has
11 said that he would do that on these little, little
12 things, you know, now, trading, and you' re right,
II13 trading, for example putting an air conditioning
14 system in, trading it out for a membership or
15 something like that .
16 That is very real . And I 'm surprised that, you
17 know, we haven' t uncovered more .
18 Now, you said that Jack had gotten to some of
19 the witnesses and what-not .
20 But that ' s the way, you know, things are done,
21 you know. I think there are people out there right
22 now that don' t pay greens fees .
23 His doctor, for example . But you know, that ' s
24 the way it . . . the way it is . And--
25 MAYOR DALE : Have we audited his books?
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1 MS . REISCHMANN: Well, not officially audited;
2 but we have looked at everything that we could.
3 And we ' re asking him for more, to bring more to his
4 deposition.
5 And certainly the numbers that he claims as
6 capital improvements don' t match up against the
7 receipts from the checks, you know.
8 MAYOR DALE : Well, there are still other things
9 that he ' s not doing today that we at least ought to
10 hold his feet into the fire on.
11 He is not maintaining those buildings . And the
12 lease clearly states he is to maintain them in good
• 13 order.
14 We just got a letter. Tony, it was addressed
15 to you, from a businessman. Who was that?
16 MR. VAN DER WORP: A gentleman regarding
17 the . . . that plays on the golf course, regarding the
18 condition of the rest rooms and the buildings .
19 MAYOR DALE : Yes . And this lady wouldn' t even
20 use the rest room they are so filthy and in
21 disrepair.
22 MR. VAN DER WORP: And I was going to suggest
23 that we do send a letter saying that, "You' re in
24 breach of the lease . "
25 MAYOR DALE : Not only should we send him a
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1
letter, we should go, we should have a regular
2 inspection of all of those facilities out there and
3 hold his feet to the fire .
4 COMMISSIONER WILLIAMS : Well, the videos, all--
5 the bathrooms, the wells and everything?
6 MR. VAN DER WORP: We did an appraisal of
7 everything.
8 MAYOR DALE : Right, the sheds and everything.
9 They are terrible . He hasn' t maintained them at
10 all . And, you know, shame on us for not making him
11 do the things he is supposed to do. Because he has
12 proved that he is not going to do it .
• 13 He is going to spend that money on himself
14 rather than on that course .
15 MR. VAN DER WORP: Is there a cure period? I
16 mean we sent him a letter on- -
17 MS . REISCHMANN: Yes, we sent him a letter.
18 And we have already, well , we already sent him a
19 letter back in 1999 saying that he is in breach of
20 the lease for failing to maintain the golf course .
21 And we looked at all of those different
22
breaches--
23 MAYOR DALE : And he still isn' t maintaining
24 it .
25 MS . REISCHMANN: That is why we were sending
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1 Locklin (spelled phonetically) , I mean--
2 MAYOR DALE : And we need to harp real
3 strong. . .we need to have some experts on this that,
4 because I see clearly what he ' s trying to do on this
5 irrigation and why he came to this public meeting
6 and brought Richard Perry (spelled phonetically)
7 with him.
8 That agreement clearly says he is to use his
9 backup well when we can' t provide it and fill that
10 holding pond.
11 He didn' t do it .
12 COMMISSIONER ECKSTEIN: He told me that .
• 13 MAYOR DALE : Right . And he claimed, though,
14 that that was, you know--but I went back and read
15 the lease and I was right .
16 COMMISSIONER ECKSTEIN: I knew you were when
17 you said it at that meeting.
18 MAYOR DALE: So we, you know, we need to not
19 let him get a foothold on that .
20 It is his fault that that golf course is in
21 such bad shape, not ours .
22 MR. COLBERT: Right . I agree with Eunice, and
23 why he came to the meeting. Right now the
24 irrigation is not part of the pleadings .
25 And technically the pleadings are closed. And
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1 I think we ' ll hear him talking about that at 46
2 mediation.
3 And we will, you know, point out to the
4 mediator that that is not part of the pleadings and
5 not one of the issues before the Court .
6 He may try to amend the pleadings before the
7 trial ; but right now he couldn' t just automatically
8 bring that particular issue up.
9 MAYOR DALE : He didn' t even try to fill that
10 holding pond itself .
11 And he is, you know, he is deliberately doing
12 these things to try to put it back on our back.
• 13 And we need to cut that off .
14 COMMISSIONER ECKSTEIN: Well , there are two
15 things I would like to know.
16 First of all, I think one thing is . . . what will
17 be accomplished is that we will have a better golf
18 course one way or the other.
19 And that maybe some better definitions of
20 capital improvements would be beneficial .
21 MAYOR DALE : Oh, he ' s going to settle it for
22 sure, yes .
23 COMMISSIONER ECKSTEIN: Number two, what I
24 would like to know, and you mentioned and I wrote
25 that down: I would like to know what our costs are,
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1 going into mediation.
2 How much exactly--and I 'm talking about all the
3 costs, the Court Reporters, the Expert Witnesses,
4 even what you had to pay on copying materials .
5 I think that is something we need to know,
6 because I sure as heck don' t want to go into
7 mediation and the taxpayers take a bath on the
8 amount of money spent .
9 I don' t know how the rest of the Commission
10 feels, but--
11 MAYOR DALE : No, we need to know what the costs
12 are . Yes .
13 MR. COLBERT: Right now, through the end of
14 March, we ' re in the neighborhood of seventy thousand
15 dollars in those expenses that you talked about .
16 Right now there is about, in round figures,
17 fifty five in Attorneys ' fees, going back to what?
18 1996?
19 MS . REISCHMANN: Yes .
20 MR. COLBERT: And about twenty hundred dollars
21 for Larry Smith.
22 About eight thousand, two hundred and fifty for
23 Mr. Riley.
24 A thousand for HCF' s, five hundred on an
25 appraisal--Which appraisal is that?
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1 MS . REISCHMANN: That ' s on the building.
2 MR. COLBERT: The appraisal on the building.
3 You-all authorized at the last Commission meeting
4 another appraisal ; and that would be several
5 thousand dollars .
6 We don' t know what that would be . So, right
7 now--and that doesn' t include copies and Court
8 Reporters and stuff .
9 MAYOR DALE : Right .
10 MR. COLBERT: But figures,
right now in round fi
g g
11 we ' re at about the seventy-thousand-dollar mark.
12 Mediation will occur in just a couple of weeks .
• 13 If we get through mediation and get it resolved, the
14 expenses will stop about that point .
15 If we go through mediation unresolved for a
16 trial , I think we ' re easily looking at another
17 thirty thousand dollars, plus, to get ready for
18 trial .
19 COMMISSIONER ECKSTEIN: And we had a meeting in
20 your office individually. And Larry is right .
21 We did make--the Commission made an offer on
22 the hundred thousand dollars .
23 MAYOR DALE : Absolutely.
24 COMMISSIONER ECKSTEIN: And it was rejected by
25 Mr. Daniels and he countered with--
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• 1 MAYOR DALE : Sixty-six thousand dollars . 49
2 COMMISSIONER ECKSTEIN: --sixty six thousand
3 dollars . So, we had made that offer already.
4 MAYOR DALE: His offer was a counter-offer to
5 that .
6 COMMISSIONER ECKSTEIN: Yes .
7 MR. COLBERT: We ' ll go back and revisit that .
8 COMMISSIONER ECKSTEIN: How much would you say-
9 --Now, we put a two-hundred-and-fifty-five-thousand-
' 10 dollar monetary value on what he owed us .
11 MR. COLBERT: Yes .
12 COMMISSIONER ECKSTEIN: And in going through
• 13 all of your records, can you come up with some kind
14 of figure of what really. . . that we could actually
15 prove that he did not pay us and we could use that
16 somewhat in mediation?
17 We ' re not going to hit a homerun with this
18 thing.
19 MAYOR DALE : No, of course not . We ' re going to
20 use this mediation as a compromise .
21 COMMISSIONER ECKSTEIN: Right . Is that two
22 hundred and fifty--can we prove that?
23 MAYOR DALE: No.
24 COMMISSIONER ECKSTEIN: We can' t, okay.
25 MAYOR DALE : Can we prove any figure?
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1 COMMISSIONER ECKSTEIN: Yes, that ' s my next
2 question. What can we prove?
3 MR. COLBERT: Help me a little bit on that .
4 MS . REISCHMANN: Tom Riley has said around a
5 hundred thousand.
6 MR. COLBERT: Yes, that ' s the figure that I
7 think--
8 MS . REISCHMANN: If the Judge accepts about the
9 chemical program, that it should not be considered a
10 capital improvement .
11 MAYOR DALE : How can he not?
12 MS . REISCHMANN: He should. But I 'm just
• 13 saying that over the years, you know, Jack, since
14 1981 has been, "Chemical program, chemical program,
15 chemical program. "
16 MAYOR DALE : And we allowed it?
17 MS . REISCHMANN: We allowed it--Well, I mean we
18 didn' t allow it in our--There are no--Where it says
19 Disallowed, disallowed?
20 But we don' t have any proof that that was ever
21 communicated to Jack.
22 Nobody knows . Nobody is here that knows
23 anything right now.
24 MAYOR DALE : Can we send him a letter saying
25 that he ' s in breach because of the shape of the golf
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2 MS . REISCHMANN: Yes .
3 MAYOR DALE : Okay. Then we should--Answer his
4 letter strongly enough, the letter from Pete Knowles
5 and his contention at the public meeting, that it is
6 our fault .
7 Can we answer that strongly enough, "No, it ' s
8 your fault, and we expect you to maintain this golf
9 course"? That you are in breach, and we are not
10 going to put up with it?
11 MR. COLBERT: That has been done .
12 MAYOR DALE : Strongly enough?
• 13 MR. VAN DER WORP: Well, I believe that we can
14 follow that up with just a real clear statement
15 about breach on the golf course side .
16 And we sent a clear one on breach on the
17 building already.
18 MS . REISCHMANN: Umm-hmm.
19 MR. VAN DER WORP: And we sent a clear one
20 about our position on the reclaimed water and the
21 maintenance of the system.
22 And his requirements under the lease . . . I don' t
23 recall on that irrigation letter whether or not we
24 turned it around and just said All right, you' re
25 supposed to do all of this stuff ; and you are in
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1 breach of the lease .
2 MAYOR DALE : I don' t recall seeing that, that
3 is why I 'm bringing it up.
4 It didn' t appear to be strong enough by saying
5 You are clearly in breach.
6 "You are not to put this on our back. It is
7 clearly your responsibility. And use your backup
8 well if we have these problems . It is in the
9 Agreement . You failed to do it . You fertilized
10 knowing that you weren' t going to have this . You've
11 got to use common sense . You are not maintaining
12 this thing. You are in breach of the lease . "
13 And you guys ought to draft that letter for
14 Tony' s signature . Or mine if you want to.
15 MS . REISCHMANN: We can do that . We did
16 attend the deposition of Larry Spencer (spelled
17 phonetically) and he indicated that the golf course
18 was in much improved condition. I think he feels
19 like it happened--
20 MAYOR DALE : It may be much improved, but it ' s
21 still terrible . And I see it every day.
22 MR. VAN DER WORP: To follow that question, it
23 deals with some of these breach issues . You know,
24 we have the tax situation.
25 So we ' ll wait until Monday and see what ' s up.
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• 1 But that one clearly doesn' t require us to do 53
2 anything except as provided under the lease .
3 MAYOR DALE: I think we 've got him by the
4 short hair if he has failed to pay those taxes .
5 MS . REISCHMANN: Well, that ' s a matter of
6 interpretation. I think you' re looking at the word
7 "Levy, " and--
8 MAYOR DALE : Well, I didn' t look at the word
9 "Levy. " It says after they become delinquent .
10 So they are delinquent March thirty first--
11 After April first they are delinquent .
12 And it says there, "Delinquent . '
411 13 COMMISSIONER ECKSTEIN: Well, May first is
14 Monday, right?
15 COMMISSIONER LESSARD: He ' s going to pay them.
16 The man came up with two hundred and fifty thousand
17 dollars; and we didn' t expect that . He ' ll pay.
18 MAYOR DALE : Well, people do stupid things
19 sometimes .
20 COMMISSIONER LESSARD: Well, you' re right .
21 MAYOR DALE : He ' s done some stupid things, too.
22 I would never--If I was trying to sell that golf
23 course I would have worked this thing out long ago.
24 So he ain' t the brightest guy in the world.
25 COMMISSIONER ECKSTEIN: Who isn' t?
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1 MAYOR DALE : Well, Jack. 54
2 COMMISSIONER ECKSTEIN: He isn' t?
3 MAYOR DALE : He is more stubborn than he is
4 bright .
5 COMMISSIONER ECKSTEIN: Well , he is very
6 bright .
7
MAYOR DALE: If you had an opportunity to sell
8 the g olf course for what I know he had the
9 opportunity to sell it for and you didn' t do it at
10 the time, would you be in this fight?
11 Is that bright, in your mind?
12 COMMISSIONER ECKSTEIN: No, but--
..
13 MAYOR DALE : It ' s not bright, in my mind.
14 COMMISSIONER ECKSTEIN: Well, I ' ll tell you--
15 MAYOR DALE : I know he is brilliant . I know
16 he has high, a--he has high intelligent . I didn' t
17 say he was stupid. I said he ' s not very bright .
18 COMMISSIONER ECKSTEIN: Okay.
19 MAYOR DALE : I would not be in this light were
20 I him and could sell it for what I know he can sell
21 it for.
22 I just wouldn' t do it .
23 COMMISSIONER LESSARD: This is one of those fun
24 days to be a City Commissioner, Larry.
25 COMMISSIONER ECKSTEIN: Jack. . .Jack, if you
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1 know all the aspects--
2 MAYOR DALE : I don' t know the aspects . I 'm
3 just saying that it ' s not bright to be in this fight
4 other than just plain stubbornness .
5 COMMISSIONER ECKSTEIN: And Jack, you know, he
6 is . . .He is an adversary. And, you know, the reason
7 he has that golf course is maybe not necessarily to
8 make money like, you know, maybe, you know, it is
9 his own little--
10 MAYOR DALE : Jack clearly won' t lose a dime .
11 COMMISSIONER ECKSTEIN: Well , now, you know,
12 he ' s sixty five years old. Yes, but he has had many
• 13 chances to sell that course .
14 He could have doubled and tripled his money
15 several times .
16 MAYOR DALE : He ' s going to sell it . He will
17 sell it . He will sell it .
18 COMMISSIONER ECKSTEIN: Yes, you' re right .
19 MAYOR DALE : And I think maybe he might be in
20 position to mediate .
21 Let ' s talk about what we will do in mediation.
22 COMMISSIONER ECKSTEIN: Yes .
23 COMMISSIONER LESSARD: Well, can I just pitch
24 in real quick? This is, I mean it seems like we ' re
25 kind of gathering. . .with Ray and Jerry. . .and we' re
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1 going to have a tough time hitting a homerun and all
2 that .
3 And I can hear that coming. I wanted a jury
4 trial all along. With a jury, remember, we ' re going
5 to have twelve folks or six folks, depending on how
6 many folks we 've got on that jury that are all
7 taxpayers .
8 And the more times you reiterate, we have a
9 six-million-dollar asset that the taxpayers have not
10 received a dime on.
11 MAYOR DALE : They' re not all going to be
12 Sanford taxpayers .
13 COMMISSIONER LESSARD: But they' ll be
14 taxpayers .
15 MAYOR DALE : They come from a Seminole County
16 pool .
17 COMMISSIONER LESSARD: But all I 'm saying is,
18 before we kind of raise up, you know, our fears
19 here, let ' s . . . I still think we ' re fighting a good
20 fight here .
21 And--
22 MAYOR DALE : So do I . I think we 've got a good
23 case based on the sales tax case, that this thing
24 may be just booted out . Of course, you just never
25 know.
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57
1 COMMISSIONER LESSARD: Well, you don' t ever
2 know. And I think we should go in with good faith
3 into this mediation.
4 But--
5 MR. COLBERT: Well, we want you-all to be part
6 of the decision of where we go from here . And
7 that ' s why we ' re here .
8 MAYOR DALE : Well, I think we ought to mediate
9 in strength, not go in there thinking we ' re just
10 going to just give the farm away.
11 But come to a fair mediated agreement, you
12 know. That maybe, you know, he will sell to one of
• 13 these people such as LaSalle (spelled phonetically) ,
14 because, quite frankly, I think that would be in the
15 taxpayers ' best interest .
16 To get somebody fresh in here who doesn' t have
17 all of this history and all of this stuff .
18 To get a---He and I--I would still settle, you
19 know, for maybe a hundred, hundred and fifty
20 thousand dollars .
21 And with some other provisos like, Okay, you
22 need to sell this and retire, Jack, and let ' s get
23 somebody in here that is going to put in a fresh
24 amount of capital .
25 Because I know some people who negotiated with
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• 5
1 him who are willing to spend millions of dollars on
2 that course to bring it up to par.
3 And that can' t be anything but good for the
4 taxpayers .
5 COMMISSIONER LESSARD: And how are we going to
6 do this mediation?
7 Is this going to be like the last time, where
8 only one of us goes and it is all--You know, how
9 does that work?
10 Or is it going to be all of us this time
11 around? You know, I really think we should put in
12 there that the citizens of Sanford get some sort of
13 reduction of greens fees .
14 I mean, let me tell you, to an operator or
15 future operator, Larry, you know if you look at the
16 demographics of Mayfair I bet you the majority of
17 the folks, when you improve that course, won' t even
18 be Sanford residents that play there . I mean
19 that . . . that is something I, you know, I remember
20 when we were talking about it a long time ago, you
21 know, reduction of greens fees, small amount of
22 money, when that, when this whole flack first
23 started, because, you know, the current lease . . . the
24 City of Sanford residents will still get no benefits
25 from the golf course, except the fact that it ' s in
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1 the city limits .
2 CHAIRMAN DALE : Well, that is something we can
3 certainly talk about . I mean I don' t know if that ' s
4 a do-able thing, but if it is, I mean a couple of
5 people that have talked to Jack about that have told
6 me it was do-able .
7 Some of them have told me it wasn' t do-able;
8 but if we just get it to the point where the
9 taxpayers are getting a return on their money and
10 the golf course is in good shape so it can give them
11 a return.
12 That is a good start for mediation.
• 13 COMMISSIONER LESSARD: Well , see, what I 'm
14 saying, if we settle this at mediation, are we going
15 to start getting rent? I mean if word gets
16 out . . .you know, they' re going to keep saying that
17 these capital improvements--
18 MAYOR DALE: I would not personally be willing
19 to settle it unless we start getting some kind of
20 returns . I agree .
21 MS . REISCHMANN: He has ninety percent
22 sometimes--
23 MR. VAN DER WORP: Well, part of the reason
24 we ' re in this situation we are is because we had all
25 kinds of credits and all kinds of conditions and
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1 gross-versus-net issues that we needed to address,
2 that we didn' t address because of the way it was
3 written.
4 So I believe that if we go to mediation, in
5 addition to whatever dollar amount, that lease needs
6 to be rewritten so it is very clear--
7 MAYOR DALE : If I were going to teach a class
8 on how to screw a lease up and writing the dumbest
9 lease in the world, I ' d use this as an example .
10 This is clearly the dumbest, worst, most
11 confusing one-sided-slanted lease I have ever seen
12 in my life .
• 13 And it begs for confusion. And that is what
14 we 've got .
15 I would want to, like I say, I don' t know, I
16 guess on mediation we can talk about a lot of
17 things .
18 One of the things I would want to do is say
19 Okay, Jack, you said you wanted to retire . Now, go
20 ahead and do it and sell it to somebody that is
21 going to sink a couple of million dollars in this
22 thing; and move on. Can we say that?
23 COMMISSIONER WILLIAMS : Not exactly like that .
24 MS . REISCHMANN: We don' t want to bring up his
25 age .
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1 MAYOR DALE : Well, that ' s why I asked.
2 MR. COLBERT: We can- -
3 MR. VAN DER WORP : We can request that some
4 money gets pumped into it . We don' t have to say
5 retire and sell it to do that, but we could--
6 MAYOR DALE : Well, he has offered to me, he has
7 told me he wanted to retire, himself .
8 I would just be repeating what he said. I--
9 MR. COLBERT: I think we would have potential
10 problems if we were taking the position that we were
11 trying to make him retire and sell the course .
12 MAYOR DALE : Well, it ' s my understanding, in
• 13 mediation, now, that they can' t use anything we say
14 in mediation against us in court .
15 MR. COLBERT: Yes, but I wouldn' t want the City
16 to be the agent and talk about things which arguably
17 are contrary to the federal statutes .
18 MAYOR DALE : Is that contrary to federal
19 statutes?
20 MR. COLBERT: Well, arguably you can' t
21 discriminate on someone ' s age .
22 MAYOR DALE : I wouldn' t be saying that . I
23 wouldn' t be demanding, I would just be saying,
24 "Jack, you told me you wanted to retire . And you
25 wanted to sell it . "
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• 1 MR. COLBERT: Let me finish. Anyone over age
2 fifty is in a protective category.
3 And you can say things to someone under the age
4 of the protective category with impunity.
5 You can say things to someone in a protective
6 category and the burden shifts to you to prove
7 basically that you weren' t trying to discriminate
8 based on age .
9 I have an ESC Complaint--
10 MAYOR DALE : Forget the retirement part .
11 "Jack, I 'm willing to mediate this thing and
12 negotiate this thing, " just say that . Can we say
13 that?
14 MR. COLBERT: We could say that . I think--
15 MAYOR DALE : You be frank with me . You tell me
16 what we shouldn' t do here, Counsel . I can tell you
17 that- -
18 MR. COLBERT: Some of the things that I think
19 are do-able, I think the City wants some cash out of
20 it .
21 I think we want some amended definitions out of
22 it . We want some benefits to the citizens of
23 Sanford out of it .
24 And one of those benefits, at least as far as
25 Commissioner Lessard is concerned, would be a
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0 1 citizens ' discount on greens fees . 63
2 All of those types of things that I 'm hearing,
3 I ' ve very comfortable that we can discuss those .
4 I don' t know if all or any of those would be
5 agreeable . But if we start getting some of those
6 things; and if we get a mediated settlement that is
7 agreeable to you-all and to Jack, I don' t think the
8 current administration is going to be lackadaisical
9 in its monitoring of Jack.
10 I think that the more scrutiny that course is
11 under the more incentive Jack has of selling anyway.
12 And we would probably get where you want to be
III13 if we could get through mediation, get the lease
14 cleaned up some, have a new day--have a new day and
15 a new level of involvement .
16 And get there from here without saying We want
17 you to retire or We want you to sell the golf
18 course . Do you follow what I 'm saying?
19 MAYOR DALE : Yes . Well , you know, my thinking
20 was, and maybe we ought not to do this thing, listen
21 to you.
22 "Well, look, you brought us a potential buyer.
23 there have been several more, I guess . Bring him
24 back as part of this settlement .
25 MR. COLBERT: Okay.
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• 1 MAYOR DALE : Can we say that? 64
2 MR. COLBERT: Potentially. I think we can ask
3 in mediation Are there other potential buyers out
4 there? Are there any of them that are willing to
5 immediately, before this is over, come to the City
6 with some discussion about time tables and those
7 types of things? and see what the answer is .
8 If the answer is There aren' t any right now, we
9 would probably want to go on some of these other
10 issues .
11 MAYOR DALE: I know for a fact that there are .
12 MR. VAN DER WORP: And we were in a similar
• 13 position earlier when Jack approached me and said
14 Well, let ' s work out a lease with this guy.
15 "And if it works out okay then I ' ll sell to
16 them and we ' ll deal . "
17 "Well , what will we deal with, Jack?"
18 "I don' t know until you work out a new lease
19 with this guy. "
20 You know, so, I mean he said that all along
21 when we tried to get together.
22 And Pete Knowles wrote all of those letters
23 back, "Why don' t you guys just sit down at the table
24 and work this out? "
25 Well , we couldn' t work it out because he
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1 wanted, he was using us as a wedge to get a
2 favorable lease with this Oxford (spelled
3 phonetically) gentleman.
4 "Well, what do you mean? "
5 He couldn' t let us know what he was going to do
6 until later.
7 And there is no--We told him repeatedly, "We
8 can' t work this out with Oxford if we ' re in a
9 lawsuit with you. "
10 MAYOR DALE : Well , how hard can we crack down
11 on him? Can we send a guy out there every day,
12 every week?
• 13 MS . REISCHMANN: Well, golf course experts are
14 very expensive . Jack doesn' t really care about the
15 loss, I mean he ' s a millionaire .
16 And he doesn' t care about the money matter.
17 What he cares about is people breathing down his
18 neck.
19 That is what really--
20 MAYOR DALE: Then let ' s breathe down his neck
21 as hard as we can.
22 MS . REISCHMANN: --and he is out there--
23 MAYOR DALE : There are plenty of things we can
24 breathe down his neck: "Look, Jack, you didn' t fix
25 the toilets . We told you to fix them. Now, your
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1 lease says you've got to fix them. Now, if you
2 don' t fix them in thirty days your lease is void. "
3 "Fix the golf course . The golf course is in a
4 mess . These buildings that we sent you pictures of
5 and told you that you were in breach of the lease on
6 that . They still haven' t been fixed. "
7 Have they been fixed?
8 MR. VAN DER WORP : No.
9 MAYOR DALE : Well , we ' ll send a man out there
10 very day. When are you going to start fixing those
11 things?
12 He hasn' t fixed them. "Now, look, Jack, we' re
• 13 serious here . You are in serious breach here . You
14 need to fix these buildings . You need to maintain
15 them; and you need to do it now. And you need--
16 COMMISSIONER LESSARD: Do we have the right by
17 the lease to fix things ourselves?
18 MR. VAN DER WORP : I think that ' s a point I 'm
19 going to bring up on the irrigation.
20 COMMISSIONER LESSARD: " If those things aren' t
21 done in thirty days we ' ll do them ourselves . "
22 MAYOR DALE : Right .
23 MR. VAN DER WORP: Also, if we ' re in a lawsuit
24 at the end of the cure period, whatever cure period
25 they have, we can' t terminate the lease, can we?
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• 1 If we ' re in a lawsuit? 67
2 MS . REISCHMANN: Well, we can' t terminate the
3 lease without the Court saying--
4 MAYOR DALE : Right . We can call him in breach
5 again.
6 MS . REISCHMANN: He just . . .he filed a suit .
7 MR. VAN DER WORP: In effect we are in one
8 right now, so why--
9 MAYOR DALE : Well, let ' s do it again.
10 MS . REISCHMANN: We already sent--
11 MAYOR DALE : Let ' s send him a letter of breach
12 every month, every week that that golf course is not
• 13 in shape, let ' s send them a letter.
14 And let ' s send a person out there . Not Howard,
15 he is too nice .
16 MR. VAN DER WORP : I understand.
17 MAYOR DALE : Let ' s send somebody out there .
18 I ' ll go out there. "Jack, I told you to fix this
19 leak, this building. You haven' t fixed it . "
20 COMMISSIONER WILLIAMS : No, that will probably
21 foul up processing the revenue- -
22 COMMISSIONER LESSARD: I don' t think he can get
23 to--
24 MAYOR DALE : No, maybe Dan Floria (spelled
25 phonetically. )
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• 1 MR. VAN DER WORP: Well , we ' ll be sending out
2 certified experts to do this for us, because they
3 are all employed. They are out there anyway.
4 MR. COLBERT: Like I say, if you' re looking at
5 building problems, send somebody who is certified to
6 do that .
7 MR. VAN DER WORP: We already have these
8 people . So we know what, we know how to do that .
9 MAYOR DALE : But let ' s send them out more
10 often, Tony.
11 COMMISSIONER ECKSTEIN: Well, make sure he ' s
12 not taking a two-month trip to China.
• 13 COMMISSIONER WILLIAMS : I believe we should
14 send them often.
15 MR. COLBERT: You've also got Mr. --
16 COMMISSIONER LESSARD: Yes, right .
17 COMMISSIONER ECKSTEIN: He does do that .
18 MS . REISCHMANN: We retained Mr. Smith to go
19 out monthly. And all of these capital improvements
20 submittals . . . and to ask him, "What have you done
21 this month in furtherance of your maintenance
22 schedule that you provided the City at the end of
23 the year?"
24 MAYOR DALE: Yes, I 'm a little bit perplexed
25 over that . And I 'm sorry I got a phone call when
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• 1 Tony was talking to you . . . about the letter that you
2 got from us, saying that he needs to maintain a
3 workable relationship with Jack.
4 How is it worded? Do you have that letter?
5 MR. VAN DER WORP : Not with me .
6 MAYOR DALE : It bothered me how it was worded.
7 It was like, you know, Look, I need to be able to
8 get along with Jack here .
9 MS . REISCHMANN: Well, it is trying to
10 persuade Jack to implement the maintenance policies
11 that he himself has come up with.
12 So he wants to be able to have influence over
• 13 Jack.
14 MAYOR DALE : He does not . You can' t persuade
15 Jack to do anything.
16 MS . REISCHMANN: Jack adores Larry just right
17 now. He is taking all of his programs and
18 implementing them.
19 I mean he is appreciating the help, I think.
20 MAYOR DALE : He is not implementing the part
21 about filling the holding tanks with his well .
22 MS . REISCHMANN: What are you going to do?
23 You ' ve got him--
24 COMMISSIONER WILLIAMS : Can I just ask one
25 question?
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1 I would like to ask one question in reference
2 to that, a bottom-line figure .
3 What are we . . . can we get a consensus on, I
4 guess the bottom-line, maximum figure that we would
5 be willing to consider so we all know during the
6 mediation?
7 MAYOR DALE: I don' t know if we need a
8 consensus exactly on a figure . I think--
9 COMMISSIONER ECKSTEIN: A range .
10 MAYOR DALE: We could have a range .
11 COMMISSIONER WILLIAMS : Yes .
12 MAYOR DALE: You know, I think that will give
• 13 Bill something to work with.
14 And I would say the range would be between what
15 we already offered of a hundred thousand to a
16 hundred and seventy five thousand. Do you think so?
17 Do we have a consensus on that?
18 COMMISSIONER LESSARD: And are you going to
19 put the caveat of the sale to reduce greens fees or
20 something like that?
21 COMMISSIONER WILLIAMS : Oh, yes, that would be-
22
23 MAYOR DALE : She was just talking about a--
24 COMMISSIONER WILLIAMS : As a condition of the
25 sale would be--
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P.O. Box 1422
Sanford, FL 32772-1422
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1 MAYOR DALE : I still think we ought to have a
2 caveat on what benefits we can give to the citizens,
3 that own the golf course .
4 And certainly we want some income coming in.
5 And no more credits for things that he is supposed
6 to do anyway. And I think we would want to cancel
7 that irrigation thing as part of the mediation.
8 COMMISSIONER ECKSTEIN: You know what Howard
9 Welch' s dad paid--not Howard, Mike Welch' s dad paid
10 for that golf course, for the lease?
11 COMMISSIONER WILLIAMS : No.
12 COMMISSIONER ECKSTEIN: Thirty thousand, thirty
• 13 five thousand.
14 MAYOR DALE : Of course, things have changed a
15 lot since back then.
16 MR. COLBERT: T. Welchel--
17 MAYOR DALE : I bet you when we get this
18 appraisal back--that ' s one reason I want to know
19 what that is . . .with the new interchange and the
20 four-laning of that and just the location, and me
21 being in the real estate business, I ' ll bet you that
22 property is close to a hundred thousand dollars an
23 acre .
24 That is a major asset that this City has .
25 COMMISSIONER LESSARD: How many acres is it?
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P.O.Box 1422
Sanford, FL 32772-1422
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COMMISSIONER ECKSTEIN: A hundred and fifteen--
2 MAYOR DALE : It ' s a hundred and fifty acres .
3 COMMISSIONER ECKSTEIN: No, fifteen.
4 MAYOR DALE : No, it ' s a hundred and fifty--a
5 hundred and forty nine or something. . . .and change .
6 So, it ' s a hundred-and-fifty-acre piece of
7 property.
8 But the property that sold two years ago down
9 there across from the Hills of Lake Mary went for a
10 hundred thousand dollars an acre . Property there is
11 expensive .
12 COMMISSIONER ECKSTEIN: Well, I think the golf
411 13 course itself is a hundred and fifteen acres . It ' s
14 the only property--
15 MAYOR DALE : Yes, I 'm talking about the total
16 property.
17 COMMISSIONER ECKSTEIN: Oh, okay.
18 MS . REISCHMANN: Could I ask you how you want
19 to change the lease to have money coming in?
20 MAYOR DALE : Probably a percentage of gross
21 that has no credits .
22 You know, I don' t know, whatever the gross is,
23 we get a percentage of it .
24 MR. COLBERT: I think the Commission would
25 rather have a percentage of gross . As to amending
C.B. Ellerbe&Associates
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1 definitions and tightening up- -
2 MAYOR DALE: Well, and there would be no
3 credit for capital improvements .
4 MR. COLBERT: That ' s what I 'm saying.
5 MAYOR DALE: You don' t need to worry about a
6 definition of capital improvement .
7 There just would be no. . . there would be no
8 deductions . Gross is gross .
9 Whatever income you took in, from whatever
10 source that we get to audit and stay on top of we
11 get a percentage of it .
12 COMMISSIONER ECKSTEIN: Well, the carts are a
13 separate corporation.
14 MAYOR DALE : It shouldn' t be . That should
15 count as gross .
16 COMMISSIONER ECKSTEIN: That ' s what I 'm just
17 saying.
18 MAYOR DALE : Whatever that, whatever is
19 generated out of there is gross and we get a
20 percentage of it .
21 Now, we can talk about a range of percentage in
22 the mediation, you know.
23 One percent to five percent . Well, two
24 percent to five percent .
25 MR. VAN DER WORP: That would be a fairly
C. B.Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
4
1 simple lease situation, as compared to what kind of
2 a lease we have structured right now, with the
3 standard conditions regarding breaches and
4 modifications and so forth.
5 MAYOR DALE : Now, see, when we get these
6 appraisals, they' re going to be two different
7 animals .
8 Appraising that as a golf course is not going
9 to be as high as appraising it for market value of
10 that land.
11 Well , the market--You could not pay market
12 value for that land and put that golf course on it,
• 13 without having, you know, these properties that you
14 could then get some income off of it .
15 MR. COLBERT: Well, the only way to do that
16 would be to--
17 MAYOR DALE : Develop it .
18 MR. COLBERT: --develop it with commercial and
19 residential around--
20 MAYOR DALE : Yes, yes . So they are going to be
21 two different figures, you know; the appraisal we
22 get as it being a golf course is not going to be as
23 high, I don' t think.
24 COMMISSIONER LESSARD: How much do you think
25 that will be?
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P.O.Box 1422
Sanford,FL 32772-1422
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1 MAYOR DALE: Well, I don' t have any idea,
2 because I don' t run the company and I don' t do that
3 as a living. I don' t know.
4 But I would suspect it would probably, I mean
5 it wouldn' t be hard to do that . There are
6 appraisals out there for golf courses .
7 You could probably get a pretty good figure
8 from the backup data that Bill Suber has on the ad
9 valorem taxes .
10 MS . REISCHMANN: Would the Commission be
11 willing to talk about just a flat percentage, as
12 opposed to any kind of dollar amount?
13 Because I 'm thinking that what we really want
14 out of this is a better lease .
15 Just some return every year, not just a little
16 bit of money right now.
17 I mean is that an alternative, a consensus that
18 if we were able to negotiate a percentage that maybe
19 some of the other, you know, just getting money
20 right now would take a back seat, perhaps?
21 I 'm thinking that in a trial you' re not going
22 to come out with a new lease unless you ' re lucky
23 enough to have it forfeited. You' re going to come
24 up with a little bit of money.
25 MAYOR DALE : Oh, yes, I agree with you there .
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1 Yes, you' re not going to get a new lease unless it ' s
2 done in mediation. You know, the Judge is not going
3 to order a new lease .
4 If he ' s going to be ruling that the lease is
5 still valid, then, you know, it ' s valid.
6 He ' s not going to order that it be done .
7 COMMISSIONER ECKSTEIN: Well , what does the
8 golf course do? a million-two a year? Even at
9 five percent is sixty thousand a year.
10 MAYOR DALE : With his figures it does that . It
11 probably does a whole lot more than that .
12 COMMISSIONER ECKSTEIN: The amount of money we
• 13 spend out there--
14 MAYOR DALE : Oh, gee, we spend sixty or seventy
15 thousand dollars a year just on the irrigation.
16 COMMISSIONER ECKSTEIN: Oh, okay.
17 MR. VAN DER WORP : Let alone the value of the
18 irrigation water.
19 MAYOR DALE : And they won' t get any benefit
20 out of that . So, yes, you know, I think we ought to
21 get . . . I mean I still think a hundred thousand
22 dollars is a good offer.
23 Because that just covers our time and
24 aggravation to fence it .
25 That ' s why I said in the range of a hundred to
• C.B. Ellerbe&Associates
P.O. Box 1422
Sanford, FL 32772-1422
1 a hundred and seventy five thousand, you know; we
2 can negotiate after that .
3 COMMISSIONER ECKSTEIN: No, I would have to--He
4 doesn' t pay any legal fees .
5 There was some dispute in the contract . We
6 would pay the legal fees out of that hundred
7 thousand dollars .
8 MAYOR DALE : Well, basically each party would
9 be responsible for their own legal fees .
10 COMMISSIONER ECKSTEIN: Unless there were a
11 winner or a loser in a trial .
12 MAYOR DALE: Exactly. But I would be
• 13 interested to have the answer to that offer that we
14 made to him.
15 And I clearly remember that we did. I hope we
16 did it in the fashion that I remember, because that
17 was clearly our intent .
18 MR. COLBERT: We ' ll go back and review it .
19 COMMISSIONER WILLIAMS : I know we met
20 individually with the Attorney.
21 MAYOR DALE : We did that, too .
22 COMMISSIONER WILLIAMS : And then came back, and
23 I thought we did it .
24 COMMISSIONER ECKSTEIN: Well, one thing we are
25 doing, accomplishing here, is that--and I think
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P.O.Box 1422
Sanford,FL 32772-1422
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1 Larry is on the right track, is that this Commission
2 is trying to protect its assets that we have out
3 there .
4 And that eventually they will come back to us .
5 But in the meantime the best service we can do for
6 our citizens is to get that course in as good a
7 shape as we can.
8 MAYOR DALE : I agree .
9 COMMISSIONER WILLIAMS : I do, too.
10 COMMISSIONER ECKSTEIN: And I think that is
11 what this Commission is doing.
12 As far as anything else, we are going to have
IP13 to wait until it is sold and we can negotiate a
14 lease that is fair, that both parties would agree
15 to, that would include our citizens .
16 And, you know, with a discount or whatever
17 and--
18 MAYOR DALE : That ' s why in the mediation I
19 would like to find a way to say, you know, "Jack,
20 you said you wanted to sell this thing. "
21 Don' t mention the time or age or anything.
22 "Now, you told me you wanted to sell this thing.
23 If you still want to sell it, you know, I know of at
24 least one buyer that is willing to improve this
25 course . "
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P.O. Box 1422
Sanford,FL 32772-1422
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1 "And if you bring him into this deal we can 79
2 settle this thing now. " You know, we can say that .
3 MS . REISCHMANN: He can sell so much better
4 with the lease that he has . But if we get him to
5 rewrite the lease now--
6 MAYOR DALE : Yes, but these buyers that are out
7 there that are real are willing to rewrite it .
8 They' re willing to rewrite .
9 MS . REISCHMANN: Well, they are willing to
10 rewrite . That ' s what I 'm saying.
11 MAYOR DALE : Right .
12 MS . REISCHMANN: They want to be part of it .
• 13 MAYOR DALE : Right . And they' re willing to
14 sink the money in it to fix that golf course up to
15 where it ' s beautiful .
16 Because they know the value that it has out
17 there . The location alone, you know, if that thing
18 was in good shape we would get a lot of play on that
19 thing.
20 MR. COLBERT: If we get into the mediation and
21 find in discussions at mediation that there is a
22 buyer out there, we don' t . . . there is nothing that
23 requires us to finish the mediation on that day.
24 If there is a bona fide buyer out there, one
25 option would be to continue it .
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P.O. Box 1422
Sanford,FL 32772-1422
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1 MAYOR DALE : Yes .
2 MR. COLBERT: And try to have that buyer
3 brought in and have some negotiations and then solve
4 it in one ball of wax. I mean that is an option if
5 it goes that way.
6 COMMISSIONER ECKSTEIN: Any of you
7 Representative from this body, this Commission--I
8 have no problem with you doing that .
9 MR. COLBERT: But we can' t have more than one
10 elected official .
11 COMMISSIONER ECKSTEIN: I understand that .
12 MR. COLBERT: But it would be good to have one
• 13 there . And, of course, the City Manager.
14 COMMISSIONER ECKSTEIN: Well, I don' t have any
15 problem with that--Velma?
16 MR. COLBERT: We would have to bring any type
17 of mediated settlement to the Commission for final
18 approval .
19 So we can' t go there and cut a deal .
20 COMMISSIONER ECKSTEIN: Yes, of course .
21 MR. COLBERT: And not bring it back to you.
22 The best thing we can do today is kind of see where
23 you-all are and get some ideas, which I 've been
24 writing and listening to you.
25 And we will get ready and go forward and see
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Sanford, FL 32772-1422
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1 what we can do and then all get back together again.
2 MAYOR DALE : Tony, did you want to go over
3 some issues there?
4 MR. VAN DER WORP: Yes, I ' ll be writing a
5 letter to Mr. Daniels regarding breach for failure
6 to do the things that he was to do, like filling the
7 pond and then the irrigation.
8 I would also suggest that we go in--We 've
9 already notified him that it ' s his responsibility to
10 help maintain those sprinkler heads out there.
11 And I would like direction to go ahead, for us
12 to just go and have our guy maintain it and bill him
13 for it .
14 I don' t want to see the golf course, as an
15 asset, deteriorating.
16 MAYOR DALE : That ' s what I said. You-all got
17 any objections to that?
18 MR. VAN DER WORP: Well--
19 COMMISSIONER LESSARD: Well, what are you
20 going to tell our sprinkler guy? I mean what if
21 Jack comes out and says, "Hey, you need to beat it .
22 It ' s my course, " you know--I mean I don' t know if
23 he will welcome him--
24 MR. VAN DER WORP: No, this is the guy that ' s
25 out there maintaining it .
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P.O.Box 1422
Sanford,FL 32772-1422
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1 COMMISSIONER LESSARD: Okay.
2 MAYOR DALE : He can' t do that .
3 MR. VAN DER WORP: We ' re not now maintaining
4 it because it was costing us too much.
5 MAYOR DALE : We have an easement over that for
6 utility purposes . And I think course
7 maintenance . . . so he can' t run them off .
8 MR. VAN DER WORP: Okay. And then I
9 also. . . .dealing with the issue regarding that letter
10 I received regarding conditions of the toilets . I
11 received that--
12 MAYOR DALE: Call him in breach of the lease
• 13 again.
14 MR. VAN DER WORP: Okay. That ' s all I have .
15 MR. COLBERT: Mrs . Reischmann just asked me to
16 mention that Mr. Riley is in the process of getting
17 a report .
18 It is twenty five or thirty pages or so; and
19 you-all will get a copy of that report shortly.
20 It will address--
21 MRS . REISCHMANN: It is very thorough.
22 MR. COLBERT: --some of the details of what he
23 has found and what he hasn' t found.
24 But he is a good witness .
25 MRS . REISCHMANN: Yes .
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• 83
1 MR. COLBERT: I 'm not trying to paint gloom and
2 doom here; but I 'm trying to be sure that I have
3 clients who are--
4 MAYOR DALE: Know what the basis is, sure, yes .
5 MR. COLBERT: --apprised of the situation. I
6 mean this is not a silk purse . And if you would
7 like for me to--
8 MAYOR DALE : Well, no jury trials are that I
9 know of .
10 COMMISSIONER WILLIAMS : Does your office have
11 pictures to present to the Judge and the jury?
12 MR. VAN DER WORP: We have had some
411 13 communication--
14 MR. COLBERT: I think we have some
15 documentation. And what we ' re doing right now is,
16 we are preparing for the trial .
17 But we are more finishing up the discovery and
18 trying to launch into the mediation.
19 If that settles, then it will be a relaxing
20 summer. If that doesn' t settle, then we would go to
21 the final preparation of trial, where exhibits are
22 prepared.
23 Where there are photographs and financial data
24 and charts and graphs and witness preparation and
25 those types of things .
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P.O.Box 1422
Sanford, FL 32772-1422
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1 It will be a busy summer if there is not a
2 mediated settlement .
3 MAYOR DALE: Well, let ' s go in it with good
4 faith and mediate; but let ' s don' t go in it, you
5 know, let ' s go into it with an attitude not to lose
6 it .
7 We would rather mediate it and save everybody' s
8 time, but we are prepared to mediate .
9 And let ' s let him understand, even though he ' s
10 a millionaire? So is this City.
11 MR. COLBERT: Yes, I think we want him to
12 understand--
• 13 MAYOR DALE: And we have the potential to be
14 worth more than it is today.
15 MR. COLBERT: I think we want him to understand
16 that we are prepared to litigate it .
17 We are willing to negotiate in good faith. But
18 not only are we prepared to litigate it; we' re
19 prepared to appeal it .
20 Because he ' s had a case in the appellate
21 courts .
22 COMMISSIONER LESSARD: And I just wanted us to
23 note, you know, he may not be really excited about
24 it .
25 COMMISSIONER ECKSTEIN: And we' re prepared to
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P.O. Box 1422
Sanford,FL 32772-1422
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1 make our Lawyers millionaires, too.
2 MAYOR DALE: We 've done that . We 've done that .
3 We ' ve got a whole house full of them.
4 MR. COLBERT: Imagine that .
5 MAYOR DALE : We 've got a whole house full of
6 them over there . And it ' s appropriate that their
7 office is in a bank building.
8 MR. COLBERT: That ' s right .
9 MAYOR DALE : And that is a good Law Office .
10 Okay. Are we done with the Executive Session?
11 MR. COLBERT: I think so.
12 MAYOR DALE : Then let ' s open the doors and open
• 13 it back up to Public Session.
14 (Thereupon the following proceedings were had
15 in Public Session: )
16 MAYOR DALE : We are back in Public Session.
17 Mr Colbert, you can wrap it up.
18 MR. COLBERT: Yes, sir. Mayor and
19 Commissioners, I would like to thank you for your
20 time and attention.
21 We have spent approximately an hour and a half
22 in the Attorney Client Session.
23 I found the discussion productive . I
24 appreciate your attention to it . I think we have a
25 better idea of how to handle some of the mediation
1111 C. B.Ellerbe&Associates
P.O. Box 1422
Sanford,FL 32772-1422
0 86
1 issues and hopefully some cost-containment ideas on
2 this .
3 We will go to the mediation scheduled for May
4 eleventh with the City Manager and Mayor in
5 attendance .
6 We will be finishing up some depositions prior
7 to that time .
8 After the mediation I may well ask you for
9 another Attorney Client Session so we can see where
10 to go from there .
11 At this time this is all I have for us, unless
12 you have something you would like to ask me .
III13 MAYOR DALE: Any questions?
14 We appreciate it .
15 MR. COLBERT: All right, sir.
16 MAYOR DALE : We are done .
17 (Thereupon the hearing was concluded. )
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IllC. B.Ellerbe&Associates
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Sanford, FL 32772-1422
• 87
1 CERTIFICATE OF REPORTER
2 STATE OF FLORIDA )
3 SS .
4 COUNTY OF SEMINOLE )
5 I, C. B. Ellerbe, CP, CSR and Notary Public,
6 State of Florida at Large, do hereby certify that I
7 was authorized to and did report the proceedings in
8 the foregoing cause, Pages 1 through 86 .
9 I further certify that said transcription is a
10 true and correct record of my stenographic report of
11 said cause .
12 IN WITNESS WHEREOF I have hereunto affixed my
13 hand and official seals this the 17th day of May, A.
14 D. , 2000 .
15
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(SEALS)
C. ELLERBE, CP, CSR
17
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P.O. Box 1422
Sanford, FL 32772-1422