By Lulu Ramadan

Palm Beach Post staff writer

Nov. 3, 2017

Data reporters Mike Stucka and Mahima Singh, staff researcher Melanie Mena,
and digital editor Michele Kelley contributed to this story.

Boca Raton Mayor Susan Haynie’s business for years has quietly collected thousands in paychecks from a company controlled by the largest commercial property owners in the city, James and Marta Batmasian.

Despite her financial ties, she has voted at least a dozen times on proposals that increased the Batmasians’ property value, a Palm Beach Post investigation has found.

Haynie, a Republican running for the powerful post of county commissioner, has never reported on her financial disclosure forms her company’s work for the controversial real estate moguls, saying she didn’t make the money, her husband did.

Haynie’s attorney, Mark Herron, conceded Thursday that state agencies are reviewing this issue and “we are cooperating fully with the reviews.” He did not identify the agencies. While the Palm Beach County State Attorney’s Office would not comment on whether it is investigating, officials have spoken with a political opponent of Haynie’s who filed a complaint about the business relationship.

As Haynie voted, the Batmasians benefited. After one vote, the Batmasians sold a property for twice what they paid for it. In another, Haynie was one of three council members who voted for a Batmasian proposal, while two others opposed it. Had she recused herself, a tie vote would have killed it.

The most recent vote came in June and was one of two that raised the value of an 8-acre parcel owned by James Batmasian in an area where Haynie has championed a major revitalization effort.

Haynie says a 2013 county ethics commission opinion that she sought allows her to vote on proposals by Batmasian, one of the county’s biggest taxpayers. But the narrowly worded opinion does not apply to any of the votes she took, The Post has found. And she voted at least once on a Batmasian proposal before she asked for the opinion.

Despite their approval, ethics commissioners were deeply troubled by the relationship and the idea of her voting. They said the scenario lent itself to “the possibility of corrupt misuse of office” and raised the “appearance of impropriety.” The commissioners didn’t know they were talking about Haynie and the Batmasians, who were anonymous.

“We believe the facts will speak for themselves to clear up these matters,” Herron said.

Haynie said she hasn’t done anything wrong.

“I have hidden nothing,” Haynie said. “This is not a big, deep dark secret.”

Work for Haynies in Deerfield

At the center of Haynie’s conflict: Her property management firm, Community Reliance, oversees Tivoli Park, a 1,600-unit apartment complex in Deerfield Beach. The Batmasians own 1,400 units and have majority control over the board of directors and its finances. Five of the six Tivoli board members work for the Batmasians’ company, Investments Limited.

Community Reliance has earned $12,000 a year since 2010 from the association that operates Tivoli Park. That was recently increased to about $14,000 a year, the Batmasians told The Post.

“It was the lowest cost,” Marta Batmasian said about why Community Reliance was chosen, adding she isn’t sure how Susan Haynie’s husband, Neil, is able to do the work at “below minimum wage.” She went on to say, however: “We had no involvement in retaining Reliance. We didn’t even know who Reliance was.”

Community Reliance’s paychecks don’t come directly from the Batmasians, but instead from the Tivoli Park Master Association, which has an annual budget of about $200,000.

That’s one reason Haynie and Boca Raton city attorneys have argued that she doesn’t work for the Batmasians and can vote on their projects.

However, the association president who cuts the checks to pay Community Reliance — Ann Waller — works for the Batmasians, the couple said. Waller, an Investments Limited employee, is the only one of the five Batmasian workers who lives at Tivoli Park, the Batmasians said.

Susan Haynie owned Community Reliance with her husband from 2007 to 2015, but her name was dropped from the company’s annual reports last year.

Six of the 12 votes Haynie took happened after her name was removed. The county’s ethics code, however, prohibits an official from taking a vote that benefits her spouse.

The votes

Sign in Boca Raton on Oct. 30, 2017. (Allen Eyestone / The Palm Beach Post)

Countless black-and-yellow signs reading Investments Limited, the Batmasians’ company, line plazas throughout Boca Raton, marking the couple’s real estate empire. They own hundreds of properties, a roster that includes the 15-acre Royal Palm Place near Mizner Park downtown.

The couple’s properties often appear on the Boca Raton City Council’s agenda in the form of requests to construct buildings, renovate plazas and erect signs. Haynie has voted on all but one proposal, records show.

She recused herself in 2011 on a Batmasian project — pitched as a “one-of-a-kind” 7-Eleven on the city’s barrier island.

She never described her conflict, not even on paperwork that must be filed when an elected official abstains from a vote. City attorney Diana Frieser said at the time that they would discuss the possibility of a conflict with lawyers at the Palm Beach County Commission on Ethics.

The city attorney waited two years to ask for a formal opinion. In the meantime, Haynie voted in 2012 to allow fast-food chains at one of Batmasian’s plazas on Federal Highway south of Northwest 20th Street.

Some of the votes Haynie took transformed James Batmasian’s properties into far more lucrative ventures.

In February 2013, he submitted plans to the City Council for a day care center on one of his properties. Two years before, a nonprofit had sought a day care on the same site, but the City Council, including Haynie, rejected it.

Batmasian’s day care plan never came to fruition. But in October 2015, Batmasian got the City Council to lift development restrictions so he could build townhomes there. Haynie voted in favor of that proposal, too.

Batmasian never built the townhomes.

Instead, he sold the property a year later for $1.5 million — more than twice what he paid for it.

In January, the board split 3-2 over Batmasian’s proposal to put up a sign more colorful than Boca’s codes allowed at one of his strip centers. Haynie voted in favor. A tie would have blocked the sign.

The 20th Street Corridor

The largest and most far-reaching Batmasian project Haynie has voted on is a commercial plaza in the Northwest 20th Street Corridor, an area just east of Florida Atlantic University slated for revitalization. Haynie is an important voice in the effort to transform it.

James Batmasian bought the 8-acre parcel for $6 million in July 2013. The plaza sits outside a 160-unit student housing complex built in 2012.

In December 2015, the City Council unanimously approved a Batmasian proposal for a steakhouse named after former FAU football Coach Howard Schnellenberger. Haynie voted in favor of the plan, which eventually fell through.

This year, the council voted to allow stores, fast-food and other restaurants at the plaza. Included was a plan to erect a sixth building. Haynie voted in favor.

The secret

Elected city officials must fill out a state financial disclosure form every year to reveal potential conflicts to the public. The form asks officials to list their sources of income, stocks and bonds, properties they own and debts. It does not require them to specify amounts.

Susan Haynie has never listed her company, Community Reliance, on her forms, state records show.

Haynie has listed only one source of income since her firm became involved with the Batmasians: a contracting job with Stanley Steemer, a carpet cleaning company.

Public officials are required by state law to disclose sources of income greater than $2,500 or 5 percent of their gross income.

The $12,000 qualifies, income figures provided to The Post by Haynie show.

But she maintains she did not have to disclose Community Reliance because the money goes to her husband even though her name was on corporate records until last year.

Records submitted to the ethics commission say she and her husband “are both managing members and receive compensation for services rendered,” reads a footnote in a 2013 ethics opinion.

Haynie and her husband have separate bank accounts, Haynie said, although they file taxes jointly each year. They also share their home’s mortgage.

Haynie said she is not trying to hide the connection to the Batmasians and said many people know about it.

But the purpose of the financial disclosure form, experts say, is to be upfront about possible conflicts.

“This suggests,” said Ben Wilcox, research director for the government watchdog Integrity Florida, “the council member is wanting to hide that source of income so as to avoid being questioned.”

Started as traffic planner

Haynie, 62, has been elected to Boca Raton office seven times in 17 years. She established Community Reliance with her husband in 2007 while she was off the council briefly.

The Lynn University graduate began her career as a traffic planner in a city where traffic is always an issue. In the interim, she’s risen to become chair of the powerful agency that determines which major roads get built in Palm Beach County and when.

Haynie, first elected to the Boca council in 2000, was forced out by term limits in 2006 and returned in 2008.

After two more council terms, Haynie was elected mayor in 2014, and again in 2017, when she defeated former West Palm Beach Commissioner Al Zucaro.

She created Community Reliance, she said, to keep busy.

For two years, Haynie said she was fully engaged in the company’s business, managing two properties herself.

“I probably had nothing to do with the company from 2009 onward,” Haynie said.

In 2010, Community Reliance took on a new client — the association that manages Batmasian’s Tivoli Park.

Philanthropist and felon

James Batmasian, 70, a Harvard-educated attorney, is a major philanthropist and founder of several charities. His wife, Marta, 60, takes an active role in the company’s businesses.

But there’s another side to James Batmasian, who has been a fixture in Boca Raton for four decades. He served eight months in federal prison in 2008 for failing to pay the IRS about $250,000 in withholding taxes from his employees.

In a pending lawsuit, a former employee accuses James Batmasian of leasing commercial space to people involved in the sex trade so he could demand sexual favors from them.

A privately settled lawsuit filed by a Boca Raton condominium association alleged that James Batmasian and his wife get favors from top Boca administrators. In emails included in the lawsuit, one city employee said he wanted to avoid a reputation for being Batmasian’s “bitch.”

The couple say they don’t get special treatment from the city.

“I wish we had preferential treatment,” Marta Batmasian told The Post.

James Batmasian said he and Marta have a relationship with the Haynies that goes beyond social gatherings but is far from intimate.

“Have we gone out to dinner in the last year, or met some place? Sure,” he said. “Do they come over to my house for dinner and we sit and talk? No. I don’t have that kind of relationship with them.”

The Batmasians say they’re often misunderstood but they care about Boca.

“We’ve dumped everything we have into this city,” James Batmasian said. “We enjoy what we do. We give back to the community.”

Did Batmasians run Tivoli?

Though the Batmasians own five of the six groups of buildings at Tivoli Park, they assert that they have no part of the association that oversees them and hired Haynie’s company.

Marta Batmasian says the couple “never attended a meeting, never made a decision unless it was a major thing that was asked. The association manager basically follows the orders of the board of directors.”

However, lawsuits filed by former employees of the Batmasians portray the couple as micromanagers.

Stacey Blake, a property manager who oversaw Tivoli Park’s finances for six months three years ago, told The Post that Marta Batmasian handled most of the property’s management.

“Ms. Batmasian oversaw every dime,” Blake said, adding that two Investments Limited employees brought in companies for landscaping, maintenance and other needs. One is on the board of the association.

Blake said that while he worked on Tivoli Park’s finances, he never encountered Community Reliance or the association.

Blake is suing James and Marta Batmasian over overtime pay.

In another business link, Community Reliance installed security cameras at the Batmasians’ Royal Palm Place, according to a video on the property management firm’s website.

Haynie said her husband didn’t earn any money on that job.

“It was just one of those, you know, ‘Come over and assist us,’” Haynie said.

The website was taken down shortly after The Post asked Haynie about it.

James Batmasian told The Post that he never speaks with Neil Haynie about Community Reliance’s work.

But during The Post interview, he briefly stepped out of the room — to call Neil Haynie. He said he needed to clarify a point.

The ethics ruling

Boca Raton city attorneys sought a Palm Beach County Commission on Ethics opinion for Susan Haynie in April 2013. It took five months of negotiation, a rejection and then a change of wording before Haynie got permission to vote on Batmasian projects.

The entire time, no report or discussion mentioned the names Haynie or Batmasian. They maintained complete anonymity.

Boca city attorneys sent the request the day after Susan Haynie filed to run for mayor.

The initial pitch: Boca Raton attorneys asked whether a “city official” could vote on an upcoming project by a “developer,” who owns about 80 percent of a residential community. The city official’s property management firm works for the association that runs it.

Ethics staff members recommended the city official recuse herself from voting.

A day later, City Attorney Diana Frieser and her staff in an email tried again, making legal arguments that voting is actually the “appropriate course of action.”

On May 2, the ethics commission voted to adopt the staff recommendation.

“There is an issue of an appearance of impropriety,” an ethics staff attorney wrote. “For this reason, we recommend that the official abstain from voting and not participate on this matter.”

The commissioners themselves went further.

“I believe that it’s not a question of the appearance of impropriety,” said Commissioner Patricia Archer. “It is impropriety.”

Said Commissioner Ron Harbison: “To completely ignore the fact that this developer owns 80 percent of this homeowners association, and the homeowners association is a client of the city (council member) I think would bereckless and irresponsible.”

Kept on trying

But the Boca city attorneys didn’t give up.

They continued to exchange emails with ethics officials. As May wore on, a revised opinion meant to be presented to the ethics board on June 6 was passed around. It went further than the first one, concluding the city official “must abstain and not participate in the matter.”

But a week before the meeting, the vote was postponed. Around the same time, James Batmasian withdrew his application to build the day care at the site where he would later double his original investment.

While Boca Raton attorneys never identified the upcoming project in 2013, a city spokeswoman told The Post the ethics question referenced the day care project, among other Batmasian proposals.

The ethics commission discussed the Boca conflict issue yet again in July 2013.

Megan Rogers, attorney for the ethics board at the time, said the county ethics code — all of 12 pages — did not address the situation, so the Boca Raton city official was allowed to vote.

This developer owns a majority of these units. This developer is calling all the shots.

Most commissioners still were not convinced.

“I think it helps a developer to have a contract with a sitting official when that developer comes before the city official in another capacity,” Commissioner Robin Fiore said. “That’s so plain to me.”

“Having been involved with this kind of a situation in real life, I see a benefit,” said Archer, a former Delray Beach commissioner.

Boca Raton city attorneys tried a third time in August and were successful.

Frieser requested the ethics commission swap the word “developer” for the word “investor,” as it was a “more accurate” description.

The ethics board asked Rogers at its meeting whether the Tivoli Park board — five of six work for Batmasian — was “unassociated” with the Boca investor — Batmasian. She said they were not associated.

That’s hard to believe, said Robert Jarvis, a law and ethics professor at Nova Southeastern University. “This developer owns a majority of these units. This developer is calling all the shots,” Jarvis said.

The final opinion

Before the ethics board approved the opinion, three of the four commissioners warned that the situation is ripe for abuse.

“There’s a possibility of a corrupt misuse of office,” said Manny Farach, a local attorney and the board chairman. “Obviously, we’re not saying that there is, but we don’t know.”

The final wording said Haynie had no voting conflict as long as Batmasian was neither the applicant nor the developer before the council.

But in the dozen votes by Haynie, James Batmasian was the applicant, developer or both, The Post found.

Asked whether the votes were improper, Haynie replied, “Not when I’ve got a ruling from the Palm Beach County Commission on Ethics that says I do not have a voting conflict.”

In defense of her votes involving Batmasian’s Northwest 20th Street property, Haynie said it wasn’t Batmasian appearing before the council but Doug Mummaw, the Batmasians’ architect.

“Well, Mr. Mummaw was the applicant,” Haynie said.

However, on the application, Batmasian is the applicant and Mummaw acts as his agent.

Facts matter, the ethics lawyer, Rogers, said in a recent interview.

“If the facts are different,” she said, “that opinion does not apply.”

A developer or an investor?

In lengthy interviews with The Post, Haynie and the Batmasians didn’t address specifics of the ruling. Instead they parroted one another in saying the Batmasians could not be considered developers.

They all said the Batmasians haven’t built anything major since Royal Palm Place in 2001.

“A developer is someone who develops property on a regular basis. Mr. Batmasian is not a developer. He is an investor. He owns a lot of real estate holdings,” Haynie said.

“We’re not developers at all. A developer is someone who builds something usually typically and sells it,” James Batmasian said.

But the Batmasians built a 10-story, 185 unit apartment complex, Royal Palm Place apartments, in 2005. They built the 7-Eleven on the barrier island. The June vote gave James Batmasian the OK to construct another building at his Northwest 20th Street plaza.

They’ve done multiple facade improvements and small-scale building renovations to the many properties they own.

And the Batmasians submitted plans in August to build another high-rise condominium at Royal Palm Place.

“We’re not developers by the way,” Marta Batmasian said. “We’re property owners.”

‘Opinion shopping’

Of the five voting conflict questions posed to the ethics commission in 2013, Susan Haynie’s was the only one that didn’t identify the city official and businesses.

The commission rarely got questions that kept elected officials anonymous, Farach, the former board member, told The Post.

“I think the city attorney did herself and her council no favors by doing it (anonymously),” Farach said. For that reason, he said, the ethics inquiry received more scrutiny.

The commission now requires city officials to identify themselves, said Christie Kelley, its current attorney.

It’s normal for an official to go back-and-forth with ethics commission to clarify and provide evidence, experts say.

But it isn’t proper to present different facts until you generate a favorable ruling, an action Jarvis, the ethics professor, calls “opinion shopping.”

“One would wonder how a city attorney would not be able to phrase the question correctly and provide the correct facts the first time out,” he said.

The ethics commission was created in 2010 after four county commissioners — Jeff Koons, Tony Masilotti, Mary McCarty and Warren Newell — were charged with felonies, a sweeping takedown that brought national attention to “Corruption County.” All but Koons served prison time.

Haynie now is campaigning for the County Commission seat held by term-limited Steven Abrams, a former Boca mayor appointed to complete McCarty’s term after she resigned from her seat.

The reviews

The penalty for failing to disclose information on state financial disclosure forms ranges from reprimand, to civil penalty, to removal from office, said Kerrie Stillman, spokeswoman for the Florida Commission on Ethics. Removal from office is rare, however.

“The way the commission finds that out is if people file complaints,” Stillman said. The commission investigates and recommends punishment to the governor.

Rick Scott, a two-term governor expected to run for U.S. Senate in 2018 and a fellow Republican, often is greeted by Haynie when he visits Boca Raton, which he’s done twice this year. A photo of James and Marta Batmasian with Scott hangs in the lobby of the couple’s Boca Raton office.

Stillman could not say whether anyone had complained about Haynie because complaints aren’t made public until the investigation concludes.

It took a federal investigation to put county commissioners in prison a decade ago and one FBI investigator was “speechless” when he heard about Haynie’s votes.

I would be drilling down on this if I was still a supervisor here.

Boca Raton attorney Frank Chapman, aligned with Haynie’s mayoral opponent Zucaro, provided The Post with copies of a complaint he sent the state attorney in March.

Investigators met with Chapman, he said, in late August, five months after he first contacted them. He feels it’s vital that they investigate thoroughly.

“(The state attorney) needs to make sure everything is on the up-and-up and that we don’t have city officials who are being paid off,” he said.

Haynie stands firm in her belief that she acted properly.

“I have always believed my votes have no conflicts and in 2013 I took the extra measure to get an opinion that confirmed I have no voting conflicts on these matters,” Haynie said. “My votes on these measures were guided by the analysis and conclusions of the opinion.”