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The small parcel that scuttled a $10M deal

How an ounce of marijuana mailed to Greece altered the fate of St. Petersburg's Mahaffey Theater.

By STEPHEN NOHLGREN, VALERIE PANOU and CARRIE JOHNSON
Published August 14, 2005


ATHENS - Just a month after the 2004 Summer Olympics, security remained tight at Athens' glitzy new Eleftherios Venizelos airport. Police and soldiers, some armed with rifles, guarded corridors like sentries.

In airport customs, a small UPS package arrived with a St. Petersburg return address. It was headed for an $800,000-a-week yacht cruising the Mediterranean. But a drug-sniffing dog zeroed in.

At that moment, a $10-million civic venture 6,000 miles away began to unravel.

* * *

For years, St. Petersburg's Bayfront Center hosted Ringling's clowns and tigers, valedictory addresses and Broadway musicals. But with age and weather taking a toll, city officials wanted to demolish the center's antiquated arena and refurbish its 2,000-seat Mahaffey Theater.

At a City Council workshop last Sept. 20, Mayor Rick Baker announced he had quietly negotiated a deal with a private citizen who offered to pay half of the $20-million price tag.

Businessman William L. Edwards would kick in up to $10.35-million. In exchange, he would control Mahaffey bookings for five years and keep all the revenues. The city would add $1.47-million a year toward upkeep and build a waterfront park next door, where Edwards could hold outdoor concerts.

Before the negotiations, Baker knew Edwards primarily as CEO and president of Mortgage Investors Corp., the nation's largest VA mortgage lender. Edwards also had contributed to community life, including generous donations to the Florida Orchestra and a Midtown sound studio for Boys and Girls Clubs.

Edwards was in the music business himself, with sound studios, an up-and-coming record label and artists under contract.

The Mahaffey deal seemed a natural fit.

As a precaution, Baker asked St. Petersburg police to run a criminal background check on Edwards, which revealed only a few traffic offenses. Business evaluator Dun & Bradstreet showed that Mortgage Investors was fiscally sound.

City Council members also reacted with caution, directing the legal staff to draft a tentative contract so they could see it in writing. They talked of having a final vote in November.

Edwards boarded his private Gulfstream jet and headed to Greece for a vacation cruise.

Three weeks later, with little public explanation, the deal was dead.

Trouble in Athens

On Oct. 1, a UPS package containing an ounce of marijuana arrived at the Athens airport, according to Greek court documents. The return address was 6090 Central Avenue, St. Petersburg, headquarters for Mortgage Investors.

The package contained 21 marijuana cigarettes and 4.6 grams of loose marijuana. It was addressed to a person named Molly at the King George II hotel in bustling downtown Athens.

From hotel employees, law enforcement officials determined that Molly Lynn Godoy, a flight attendant on Edwards' private jet, was expecting a UPS package from the United States. Authorities delivered the package to the hotel a few days later and detained Godoy when she tried to claim it.

Godoy, according to court records, told officers she did not know what the package contained, but that an employee in Edwards' office had called to say it was on its way. Godoy said she was supposed to forward the package to Edwards.

Edwards had been cruising the Greek islands with friends and business associates aboard the Annaliesse, a luxury yacht nearly as long as a football field. Its amenities "rival those of a world-class spa," according to a yacht broker's Web site, including five decks, marble Jacuzzis, a gym, wine cellar, helipad and two speedboats for waterskiing. A crew of 34 serves up to 36 passengers at a weekly rate starting at $800,000.

On Oct. 5, the Annaliesse was anchored at Athens' Faliro marina. With a spectacular view framed by mountains, Faliro is a favorite of tourists and locals. A pedestrian walkway snakes along the waterfront, alive with bars, cafes and loud music.

That's where Greek authorities found Edwards.

He told officers he was a businessman with 3,000 employees and had never been in trouble with the law, according to court documents.

Edwards said the marijuana was his and that he planned to smoke two or three marijuana cigarettes a day for his remaining 15 days in Greece. He said he had smoked marijuana off and on for years to relieve "unbearable" back pain from a war injury. Military records indicate he received a Purple Heart while serving in Vietnam.

He said medicinal use of marijuana is not prosecuted in Florida and he did not know it was a serious offense in Greece. In fact, possession of an ounce of marijuana in Florida is a third-degree felony punishable by up to five years in prison. The law makes no exception for medicinal use.

Edwards was arrested that day and charged with possessing a narcotic substance for his own use, a misdemeanor in Greece, court records show. Edwards, 60, did not respond to telephone and written requests to comment for this story.

Under Greek law, defendants facing minor charges have a trial as quickly as possible. The next day, Edwards went to court, accompanied by a lawyer from one of Athens' top law firms.

He told the court he did not know the package contained marijuana and said he was expecting medicine connected to heart surgery. Edwards also testified that he had smoked marijuana in the past to alleviate pain, but "now I am not using." He said if he wanted marijuana, he could have bought it in Greece and it would have been foolish to have it shipped from the United States.

Judge Irini Anastasiadou acquitted Godoy, the flight attendant, saying "she did not know the contents of the parcel." Godoy declined to comment for this story.

But the judge convicted Edwards, saying the package "was sent upon his order."

"The defendant's allegation that he did not know what the parcel contained is not found believable but it was supported by him in order to avoid the consequences of his act," she said.

Anastasiadou sentenced Edwards to 10 months in prison, then converted the prison sentence to a fine, a common practice in such cases. His punishment: 4.4 euros a day for each day of the sentence, or about $1,700.

Edwards filed an appeal, which has not been resolved.

The public arena

Unaware of events in Greece, St. Petersburg City Council members debated whether to turn control of the Mahaffey over to Edwards. Baker urged them to settle renovation plans by November, when the arena was to be demolished.

"I don't think there's time to do anything now," Baker said when council members asked about alternatives. "And I doubt sincerely we're going to get another offer like this one."

Changes to St. Petersburg's waterfront tend to unsettle voters, and some council members complained of insufficient detail.

"This is really one of the best-kept secrets," said council member John Bryan. "I know the city staff is negotiating (with Edwards), but I don't know any of the outcomes."

In fact, development administrator Rick Mussett was trying to chase down a troubling tip.

It started the day after Edwards was convicted. An anonymous tipster left a brief message on the voice mail of the St. Petersburg Times' city hall reporter:

Edwards had just been arrested in Greece, the tipster said, giving no other detail.

With Edwards still in Greece, the reporter contacted Mussett. But neither he nor Baker knew anything.

In an interview this month, Mussett and Baker said they asked St. Petersburg police to look into the tip.

"You want to know what it's about before you . . . have a contractual relationship with somebody on a long-term basis," Baker said. "It's the same reason you do background checks."

But investigators said they could not get information about an arrest outside the United States. Mussett said he then made a half-dozen or so telephone calls to an Edwards representative, St. Petersburg attorney Steven Dupre.

Dupre declined to comment for this story. But according to Mussett, Dupre said that whatever happened in Greece was a personal matter. Mussett said he repeatedly conveyed Baker's instruction that the city would kill the deal unless Edwards provided full details.

"I kept stressing this is a high-profile public issue," Mussett said. "I can't stress too much how strongly we were advocating to Bill's representatives that . . . they make it public - whatever it was."

Three weeks after the conviction in Greece, Edwards withdrew his offer.

Making no mention of the arrest or its aftermath, he blamed the Times, which had written about his role in Treasure Island political controversies and litigation between his company and the U.S. Department of Veterans Affairs.

"The Times intends to derail my proposal before it even gets out of the blocks, using an approach that is unfair to my company, my family and me," Edwards wrote in a letter to Baker.

He then pledged $2-million to support the Mahaffey, no strings attached.

Mussett and Baker said they stopped pressing for details about Greece after Edwards withdrew because the issue was moot. Nor did they tell council members or the public about it.

Had the arrest become public, council members say now, they would have rejected any contract with Edwards.

Beyond drug use, council member Bill Foster said, the allegations raise questions of judgment.

"Transporting through the mail? That bothers me. Doing it in a foreign city? That shows you're not thinking. The quantity bothers me, too."

Council member Virginia Littrell said the city should have followed a more traditional route to find a Mahaffey manager, including soliciting bids.

"When you open up a market, fair's fair for the best service provider," Littrell said. "I would have always preferred that the city have a full scope of options."

That's what the city ended up doing.

Philadelphia-based SMG, one of the nation's largest arena booking and management firms, submitted the winning bid and will run the Mahaffey.

The city will repair water damage, expand the lobby and add an outdoor plaza and covered walkway.

To pay for it, the city extended the life of a special taxing district and took $5-million from a general capital improvement budget.

True to his word, Edwards contributed $2-million, which the city already has spent on overhauling the Mahaffey.

- Times researcher Caryn Baird contributed to this report.

[Last modified August 14, 2005, 00:54:16]


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