Sunday, July 29, 2007

07/29 - Jekyll developer incentive stirs mud

Jekyll developer incentive stirs mud

By Dan Chapman
The Atlanta Journal-Constitution
Published on: 07/29/07

Uproar over the Jekyll Island Authority's decision to grant a $10 million rent break to one of the nation's largest developers intensified last week as some state officials, government watchdogs and island residents called for the incentives to be rescinded and the board chairman to resign.

A resident filed a state ethics complaint against Chairman Ben Porter, claiming "serious malfeasance" in the awarding of incentives to Trammell Crow Co., the Texas developer planning a $90 million hotel and condo project along the state park's shoreline.
An authority board member called Porter "a liar" and asked that he step down. A state senator wants a legislative oversight committee to review the deal.

Critics also asked Gov. Sonny Perdue, who appoints board members, to investigate whether the rent break was justified and whether the board acted in the best interests of Georgia's residents.

While local and state governments routinely give incentives to spur development, critics question why Jekyll —- a state park/barrier island with some of the East Coast's most untrammeled beachfront property —- needs to entice developers with rent abatements.
Roughly $200 million in hotel redevelopment is planned.

"We didn't treat it as rent abatement, but as an incentive to get a major developer to get going as quickly as possible," Porter said Friday. "We are absolutely committed to having a full range of affordable facilities and accommodations on the island for all prices ranges and all economic levels of the citizens of Georgia."

Meanwhile, board members spent the week excoriating each other via e-mails and guest editorials in The Atlanta Journal-Constitution.
'Liars' or self-promotion

Ed Boshears, a board member and critic of fellow board members Porter and Steve Croy, both coastal developers, said the rent deal should be rescinded. He lambasted board members for misrepresenting the need for incentives.

"These people are the most shameless liars I have ever seen in my entire life," Boshears, a Brunswick attorney and former Republican state senator, said Wednesday. "They don't want Jekyll to [remain] as it has for the last 50 years —- a place for average people of this state to come and stay, go to conventions or bring children to the beach. They want to rebuild Jekyll as an upscale resort."

Porter said "he was disappointed in Mr. Boshears' actions." Croy didn't return phone calls seeking comment.

The hullabaloo revolves around $10 million in rent abatements for Trammell Crow and partners through 2020, according to an analysis by the authority's staff.

Trammell Crow plans to build a minimum 300-room hotel with 120 two-room condos, a restaurant and a spa on 9.7 oceanfront acres where the run-down Buccaneer Beach Resort now sits.

In addition, Trammell Crow and a handful of other developers are angling to be chosen the island's "master" development partner.

Preliminary plans highlight $3 billion in new hotels, condos, shops, restaurants and convention amenities.

The state bought Jekyll in 1947 and designated "a state park for the plain people of Georgia." By law, 65 percent of the island must remain undeveloped. Porter and other authority members say some future accommodations will remain affordable.

But state Sen. Jeff Chapman (R-Brunswick), whose district includes Jekyll, is troubled that the deal with Trammell Crow does not include any language guaranteeing "moderately priced" rooms. A Trammell Crow official has said rooms during the summer would run $250 a night.

"The question remains, why did they have to give the $10 million incentive?" asked Chapman, who wants the island's legislative oversight committee to review the deal. "The location is very attractive to everyone who enjoys a visit to the ocean. It's not a remote location. It's close to a major interstate. I imagine that people would be very interested in having the opportunity to place a hotel there."

An AJC article on July 23 describing what Boshears labeled a "sweetheart deal" prompted a flurry of angry e-mails and name-calling among board members.

Croy sent a note Monday to all board members castigating Boshears for "shameless self-promotion."

Croy also said Boshears "distorts the truth for nothing more than pushing forward a personal agenda at the expense of the other members of this board."

On Wednesday, Porter penned an op-ed that said only "one disgruntled, publicity-seeking board member and a few island residents" oppose redevelopment of Jekyll. All board members, except Boshears, approved the column, Porter said.

On Friday, Boshears responded in an AJC op-ed of his own: "What Porter is really unhappy about is that I will not conspire with him to conceal the true facts from the people of Georgia."
Ethics complaint

The State Ethics Commission received a complaint Friday from island resident Joe Iannicelli claiming a "systematic series of ethical violations" by Porter.

Porter "rammed through a proposal to grant an undisclosed amount of concessions" to Trammell Crow," wrote Iannicelli, a former Glynn County school board chairman. "This extraordinary giveaway of Jekyll Island revenues . . . suggests serious malfeasance on the part of Mr. Ben Porter."

Rick Thompson, executive secretary of the State Ethics Commission, said his agency will determine this week whether the complaint will be investigated.

Most Jekyll board members didn't learn of the Trammell Crow deal until the morning of June 18 when they were asked to vote on it. The board unanimously approved the deal, including the $10 million incentives package.

Porter, in his op-ed piece, said the authority will reap $15.6 million more in revenues from Trammell Crow's project than it would if the Buccanneer were to continue operating the next 15 years.

Critics, however, say the comparison is not relevant because nobody expects the Buccanneer to remain open.
Boshears and another board member, after reading the Project Development Agreement between the Jekyll Island Authority and

Trammell Crow the afternoon of June 18, complained about the incentives and the lack of time to review the deal before the vote.

"I sincerely apologize for rushing this decision and assure you that I will make an effort to avoid this kind of problem in the future," Porter wrote board members June 28.

Neill Herring, a lobbyist for Sierra Club of Georgia, said Porter shouldn't get another opportunity.

"He should resign," Herring said. "He's obviously unqualified to run that authority. The idea that a motel operator for a beachfront motel needs a subsidy is absurd."

Herring, Boshears, Iannicelli, Chapman, the government watchdog Common Cause Georgia and others want the governor to review the authority's actions.

"If the governor were really on top of this issue he would not be too happy that his name and his credibility are associated with a board behaving the way this one is," said David Egan, co-director of the nonprofit Initiative to Protect Jekyll Island.

Perdue, in a statement Thursday, expressed "confidence" in Porter.
"Any kind of economic incentive to encourage development should be weighed carefully, on a case-by-case basis," Perdue added. "I will continue to review additional details of this agreement to see the business case for granting inducements."