City of Palm Coast Manhandles another Developer

City Council denied a developer’s appeal of an Engineering and Storm Water Department ruling. After the smoke cleared from the sham hearing, the city’s motive became clear.

Palm Coast, Florida – March 18, 2009 – The results of yesterday’s 6-hour marathon hearing (part of the City of Palm Coast City Council meeting) over whether or not Palm Coast "drop lots" are included in the city’s storm water management system should worry all Palm Coast property owners. It was a clear case of abuse of power by the city staff, abetted by four council members who were either co-conspirators or clueless and inept. Property owners’ rights were trammeled and a cloud was put on hundreds of building lots in the City. Once again, the city is positioning itself to strong-arm concessions from a developer.
The city put a "hold" on Port Equities’ building permit for 6 LLovera Place, stating that the city’s storm water management system design was based on the lot being vacant with no impervious structures (house, driveway, etc.). They claim the system was not designed for the additional runoff that would be created by a structure. A permit would be issued only if the plan design could accommodate on-site the additional runoff from a 100-yr. flood event (12" in 24 hours) or if the developer could mitigate the additional runoff in some other way acceptable to the city. The first option (a retention pond on a 10,000 square foot lot) is not practical, forcing the developer to a negotiated solution where the city holds all the cards.
[6 Llovera is one of over 1,000 drop lots. Port Equities bought 682 of them in 2005. The only thing that differentiates drop lots from other lots is that at one time, ITT (the original developer of Palm Coast) decided to temporarily drop them from their current sales offering list. Hence, they have been saddled with the designation "drop lots." Some were wetland at the time but have reverted after drainage canals were dug. Some did not have roads and sewer installed at the time. Some still do not. All were subsequently sold.]
First, the city had to prove that their claim about the storm water system was valid. The evidence to the contrary was overwhelming. City staff was ill prepared to present their case, stumbling on the answers to simple questions. Their evidence and statements were often contrived or incorrect, intended to mislead pliant council members. City Manager Jim Landon’s summary on behalf of the city exaggerated and distorted facts. For instance, he emphasized that we weren’t talking about the additional storm water runoff created if just one drop lot was developed, but of more than 1,000 drop lots, a total of approximately 250 acres. He failed to mention the new city land development code which recently increased the allowable impervious lot coverage from 35% to 70%. Assuming about 9,000 vacant building lots in the city (exclusive of drop lots), this move alone increases the potential additional runoff to the storm water management system by 9 times the amount of ALL drop lots, should they be developed.
In the end, the developer’s appeal was denied by a 4 to 1 vote. Only Councilman Meeker supported the appeal. He said, "It is inconceivable that the master storm water management system did not include 6 Llovera Place – ridiculous." Meeker, by the way, is the only member of the city council with a strong permitting and water management background.
Comments by Council members, DeStephano, Moorman, and Lewis evidenced a lack of understanding, both of the evidence and of the consequences of their decision. Mayor Netts was clearly an informed co-conspirator.
What are the consequences of council’s decision? Port Equities could sue the city. They have a lot of case law on their side. The city’s legal bills will be significant. (Could this be the reason the firm providing legal representation to the city had two attorneys present at the meeting to assure the desired outcome?) And, of course, the taxpayers will pick up the tab. Total exposure, including legal fees, could rival the cost of a new city hall.
Far more ominous is the cloud placed over every other drop lot in the city. City staff testified that owners of drop lots will find out if they have a "buildable lot" only upon application for a building permit, making it difficult to sell and impossible to make an informed buying decision. No other drop lot had previously been refused a building permit over the storm water issue. The city’s action was arbitrary and capricious. It’s government practicing revisionism; changing the rules in the middle of the game with no regard to property owners’ rights.
Port Equities owns a 98-acre undeveloped parcel which is probably the city’s target for their mitigation extortion. Owners of other drop lots do not likely have other property with which to pay off the city, leaving their lots "unbuildable" forever, even though they are still "part of the storm water management system" as a 100% pervious undeveloped lot and must pay the same storm water management fees as all other undeveloped lots.
And it gets worse yet. Is your vacant lot a drop lot? The city can’t tell you because they have no master list. They can’t even tell you how many there are. The total number is "probably more than 1,000" and "could be over 1,500." At least 98 already have homes on them. They also are unable to provide a definition of a drop lot.
Clearly, the attorneys representing the city dropped the ball when they failed to alert council members of the city’s potential liability to future lawsuits.
Editorial Comment:  You’ve all heard people wonder how something like Hitler’s Germany could possibly happen in today’s world. Perhaps it started with the gradual accumulation of seemingly small incidents such as the one I witnessed yesterday.
17 replies
  1. Patrick Williams
    Patrick Williams says:

    Toby or not Toby


    I love reading your newsletters and the usually unbiased commenting you do, but this was over the top. Even if you are right, you sounded very reactionary and the HItler comment was way out of line,….. this is small change compared to what our Federal goverment has done the last 8 years that was more alarming. Bring us your opinion but do not over do it

  2. Herb
    Herb says:

    Not the way I heard it

    Your comments hit the issue spot on. I did hear something differently than you did and will listen to the online playback version to verify what I think I heard, but my ears played that the City staff says NO lot is buildable until a building permit is issued. NO lot includes all unbuilt lots in Palm Coast not just these.
    If I am incorrect I apologize, but I believe I heard this and a local attorney, familiar with the City, verified my understanding

  3. rockslide
    rockslide says:

    right on the money!!

    Describing the PC staff & officials as "…either co-conspirators or clueless and inept" is surely covering all bases AND giving them the benefit of the doubt in the process! That a developer in these economic times should venture out and seek to invest EVEN MORE money into the Palm Coast community to provide jobs and generate tax revenues is an act that should be punished and severely! How dare these dangerous developers consider risking their capital for such purposes!! When the muck settles, it’s the current/future resident/taxpayer who loses – – – again!

  4. Herb
    Herb says:

    I listened

    I replayed the City meeting again. At 2hours 13 mins, 09 secs (2:13:09 Mr Tyner begins the discussion and goes for about 5 minutes explaining how the City issuance of a permit is the determinate of whether a lot is buildable, not the 1977 Lessinger agreement between the State Planning Agency and ITT. A pure taking of property rights from every vacant lot owner in the community!!!!

  5. Carl
    Carl says:


    The two attorneys obiviously are watching out for their future payroll by not counseling the council members on their decision. Didn’t we just go through this before and the city lost or do I have alzheimers. The only correction for thiese conspirators is called election and voting them out. Get out and vote is the solution to this regime of nazi-like government. It seems funny that only one councilman has any justifiable experience. Tar and feathers sounds like a good one…

  6. Dan Bozza
    Dan Bozza says:

    I didn’t know Chicago came south.


    This kind of behaviour sounds like it’s being orchestrated by a bunch of Chicago thugs. It’s the kind of situation that sets up government by "special" favor, if you know the right people, bribery and graft.

    Once the rule of law and justice no longer prevails, the people loose all confidence in the elected and the community begins the long spiral down to just another corrupt place NOT to live.

  7. George Edward Chuddy
    George Edward Chuddy says:

    Wouldn’t the Exchange Priviledge be more practicab

    ITT Levitt Development Corporation
    Palm Coast
    AD70LB657 PCSA-7.5M-1/71-1030A
    1. Basic Agreement: The Corporation agrees to sell to this Purchaser the residential property described in this Purchase Agreement. The Purchaser agrees to buy the property from the Corporation and to make the Payments in the amount and on the dates provided in this Agreement. Payments shall be applied first to earned interest, and then as reduction of the unpaid balance.
    2. Improvements: The Corporation agrees to provide paved streets adjacent to the purchaser’s property, drainage in accordance with the plat and furnish central water facilities to purchaser’s property on or before the Improvement completion date. A water connection fee will be assessed as described in the Florida public offering statement.
    6. Possession: The Purchaser may not take possession of, use or make Improvements to the property until all amounts due the Corporation have been paid and the Purchaser’s Deed has been recorded.
    7. Purchasers Rights: The parties agree that completion of the Improvements guaranteed by the Corporation in this Agreement are an integral part of the Agreement and that the Corporation shall not be required to deliver the deed nor the Purchaser to accept the deed until such improvement have been completed. If, because of engineering difficulties or for any other reason, the Corporation fails to complete the Improvements by the Improvement Completion Date or otherwise to comply with this Agreement and provided the Purchaser is not otherwise in Default, the Purchaser’s remedies shall be either to exercise the Exchange Prilege or receive liquidated damages in an amount equal to all payments made under this Agreement by the Purchaser ( including payments of interest) together with interest at the rate of 6% per annum on all such payments from the date of payment. When the Corporation tenders that amount to the Purchaser or when it irrevocably deposits that amount with any bank or trust company for Purchaser’s account and notifies the Purchaser of the deposit , this Agreement shall be terminated and ( except as provided in paragraph 11) all rights and obligations of both the Purchaser and the Corporation shall cease.
    14. Statutory Requirements: If Purchaser has not received the property report ( i.e. public offering statement) as prescribed by the Office of Interstate Land Sales Registration and Florida Law in advance of or at the same time of his signing this Agreement, this Agreement is voidable at the option of the Purchaser. If Purchaser has received the property
    report as prescribed by the office of Interstate Land Sales Registration and Florida Law less than 48 hours before he signs this Agreement, then the Purchaser may revoke this Agreement within 48 hours after signing it.
    (an excerpt)

  8. ruth
    ruth says:

    Thanks Toby for caring about the issues

    Port Equities is made up of a great bunch of men fighting to do the right things with their investment for the right reasons. They have continued to explore options to develop their lots in ways that would meet the needs of our community and help with all of our tax burdens. They just need their property rights to be able to do so.

  9. Lindsay
    Lindsay says:

    Vested right

    I sat through the entire meeting only in the end to witness councils abuse of power or should I say the misunderstanding of the city’s own planned development code. The city referenced the "bible" the CLUP vol 3 written in 1977. This is 2009 and things change. In 1977 Town Center was conservation land today it is fast becoming the center of the future Palm Coast which will one day have a city hall. The biggest issue is over "drop lots" Lots dropped from ITT sales list for future sale. Storm water was designed for all 49,000 acres of development for which we are not close. We all pay into storm water fund which is to maintain current and future runoffs Question where is the fund? Our own city increased non pervious space from 35% to 70% on buildable space that will have a major impact on future storm water. 400 plus homes exsist on "drop lots" Do you own one and how would you know. Do you own a vacant lot and do you know if you can build on it? Scary the ramifications for all citizens.

  10. BB
    BB says:

    Question for George

    George, who do you think they are going to exchange lots with? ITT is no longer around and I doubt anyone who owns a non-"drop lot" would be willing to make that trade. I appreciate your positive feedback, but sometimes it seems like you think of things like they were when PC was first formed.

  11. mike brown
    mike brown says:

    City of Palm Coast/ITT

    I had a similar thought to the Chuddy comment — is the City hiding anything else about this — did they inherit the same obligations as ITT had in the earlier years??? MB

  12. MJ
    MJ says:

    The Ultimate Scam

    After hearing the closing comments from Mr. Landon, Mayor Netts and the attorneys, I don’t see why we have a need for our LDC or Comp Plan. All three of them chose not to follow the same rules they put in place to protect the citizens of Palm Coast. It seems like the attorneys are just puppets. They manipulate everything to get the city what they want.
    Do Mr. Landon and Mayor Netts both realize that their final comments could set them up personally for a lawsuit (they were under oath). I viewed their comments as slanderous as well as Councilman Lewis’s final comments. I don’t know why our blow hard Mayor Netts needs to add his unnecessary final comments (stories). I hope this one comes back to bite him. Then he will know what it is like to be on the defensive.
    We cannot allow Mayor Netts and Mr. Landon to continue to run this city the way they are. They only discourage commercial and residential development by acting the way they do. This will result in higher taxes for all of us because of the lack of new tax revenue.
    Every property owner should go and listen to the meeting and go to 6hrs 53min and listen to what the attorney says. She states that the city is not bound by any building permit that is approved by staff because it wasn’t approved by council. How many loopholes does the city think they have?
    Port Equities got scammed by City Council (except from Frank Meeker). But at our expense, they will prosper in a lawsuit against this city that will put a further burden on this city’s taxpayers.
    Everyone should do what they can to get Mayor Netts and Mr. Landon removed from their positions. Otherwise this lawsuit will just be one of many.

  13. George Edward Chuddy
    George Edward Chuddy says:


    1. International Telephone and Telegraph, 933(pp), Docket # C-2854 , Findings, Opinions, and Orders, July 1, 1976 – December 1, l976 Volume88, Federal Trade Commission Decisions. 15 yr. report, 5 yr. report, Orders.
    2a. Florida Public Offering Statements -ITT Levitts’ Property Reports -Prospectus/ Maps/ H.U.D.;
    2b. Florida Public Offering Statement filed by ITT Community Development Corporation, 28 West Flagler Street, Miami, Florida 33130 for 13,501 homesite lots, typically 80 feet x 125 feet, platted of record in Flagler County, Florida Designated As PALM COAST, Sections 1 through 19 Effective Date: July 30, 1971.
    3. Official Record Book 119, Pages 0641 0659, Flagler County, Florida
    4. Environmental Affairs, Volume 2, Number 1, Spring 1972. An Approach to a New City: Palm Coast, Norman Young and Stanley Dea
    Pls. pardon the brevity; we’re late for meeting friends for drinks at the Palm Harbor G.C. Clubhouse –

  14. MM
    MM says:

    City Manager and Official’s Liability

    Toby, I wonder if any of your readers can shed light on whether the city manager and council members created city or personal liability for their defamatory statements made at the hearing? Also, how would the developer find out about the city’s insurance coverage because this one sure looks like it’s heading to court real fast…

  15. Jerry G
    Jerry G says:

    What are these people doing?

    I don’t understand what the city is thinking. I have spoken to a number of realtors and they are up in arms about what the city staff has said/done. How does this effect my property?

  16. Toby
    Toby says:

    Reply to Patrick

    I know it is a strong statement, but this is not a small change issue. Port Equities says they have over $20 million at risk here, not to mention the impact on the market for and value of the remaining drop lots.

  17. Toby
    Toby says:

    Reply to Jerry

    If you own a drop lot, the value of your property is vastly reduced. In the larger picture, the city’s actions demonstrate arrogance and a lack of understanding of business principles and individual rights that can have a longstanding effect on the future of our city, to everyone’s detriment.

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