School officials ask for criminal inquiry into land deals
The request comes after a St. Petersburg Times investigation into land deals involving the Hillsborough County School District.
By JEFF TESTERMAN and MELANIE AVE
Published March 13, 2006
TAMPA - The Hillsborough County School District is asking law enforcement officials to investigate instances of property flipping involving a real estate broker and two land trusts that sold property for Middleton High School.
School Board attorney Tom Gonzalez said Monday he has contacted State Attorney Mark Ober and the Florida Department of Law Enforcement about land deals involving broker Fred Edmister, one of four real estate agents who have helped the fast-growing district find school sites and negotiate purchases.
A St. Petersburg Times investigation found Edmister, along with two land trusts, assembled five parcels for Middleton in the late 1990s at a price of $28,165, then sold them to the school district for $123,800. A story about the flipping and the school district's land acquisition process was published Sunday.
Exactly who profited from the transactions is unclear. After Edmister signed contracts to buy the properties, they were placed in land trusts whose beneficiaries are secret.
Lawrence E. Fuentes, a real estate attorney who acted as trustee for the trusts, said he was legally restrained from identifying the beneficiaries.
The Times discovered that properties were flipped for big profits during an examination of more than 100 property transfers for Middleton, a $46-million school that opened in East Tampa in 2002.
Edmister was paid sales commissions totaling $9,200 for the properties. The district paid $4,200 and the land trusts the rest, according to district records.
Edmister did not return calls or respond to written questions before publication of the Times story. He did not return another call to his Ybor City office Monday.
Gonzalez said he isn't sure if any criminal activity occurred in the transaction. But if the broker flipped the property after being hired by the district to find land, a criminal offense may have occurred, he said.
"I think it at least is something that needs to be looked into," he said.
Gonzalez said he is compiling records related to the properties the district bought from the 2606 East Caracus Land Trust and the 2610 East Caracus Land Trust so he can give them to the FDLE.
Landowners who signed contracts to sell their land to Edmister said the broker misrepresented himself. They said he claimed he was a developer of low-income homes and never disclosed he was acquiring land that would be resold to the school district.
"It all seemed on the up and up," said Sexton Valenti Jr., whose family signed contracts to sell two Middleton parcels to Edmister. "He said he was friends of my cousins from high school. I felt comfortable about it. We took his offer.
"The next thing you know he's flipping the property. It's not fair. It's a shame this happened."
The Valenti family sold two properties for $5,000. A third property, bought for back taxes for $3,165, was added. Then all three were sold by a land trust to the school district for $70,000.
No one at the school district appears to have known about any of it until informed by the Times.
Once a criminal investigation is complete, Gonzalez said, the district may pursue damages against the broker.
Gonzalez said he also spoke with Ober, the state attorney, who referred him to law enforcement.
The school district is now changing the way it works with private real estate brokers.
For years, school officials have hand-picked a small number of brokers who work on verbal contracts while helping locate land for new schools. The brokers have been paid hundreds of thousands of dollars in commissions.
But the work was never advertised despite a School Board policy requiring the district to advertise for any professional service worth more than $25,000.
Last week, after reporters interviewed superintendent MaryEllen Elia about the district's use of brokers, school officials posted an advertisement for brokerage services on the district's Web site. A committee will rank the proposals and forward them to the School Board for approval in May.
On Wednesday, the district will discuss the new procedures with interested brokerage firms.
Jeff Testerman can be reached at 813 226-3422, or by e-mail at email@example.com
[Last modified March 13, 2006, 17:56:03]
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