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The attorney investigating Steve LaBrake's real estate deals was once involved in one with him.
By JEFF TESTERMAN and CHRISTOPHER GOFFARD
© St. Petersburg Times, published August 9, 2001
TAMPA -- City officials spoke last week about getting to the bottom of a real estate deal that resulted in the girlfriend of city official Steve LaBrake getting a sweet price on a new home in South Tampa.
Mayor Dick Greco asked City Attorney James Palermo to investigate whether city ethics codes or conflict-of-interest rules were violated.
Not mentioned was that Palermo was involved in a real estate transaction with LaBrake two years ago. A review of property records by the St. Petersburg Times shows Palermo worked for a company that sold LaBrake a lot on Davis Islands.
Asked whether that posed a conflict, Palermo said Wednesday that his involvement in the Davis Islands deal would not prevent him from pursuing a fair and complete investigation.
"I guarantee it will not affect my judgment," Palermo said.
City Council member Bob Buckhorn thinks the property deal is a problem.
"It creates a perception of coziness, of incestuousness," Buckhorn said. "I think the whole thing smells, and the perception of insider trading is prevalent. Seemingly everybody's scratching each other's backs."
LaBrake, 50, the city's $105,000-a-year director of business and community services, acted as his own general contractor on the Davis Islands lot, using a $175,000 mortgage to build a two-story, 2,600-square-foot home at 419 Chippewa Ave.
LaBrake and his estranged wife, Barbara, sold the home last November for $319,900.
Palermo said the $75,000 price LaBrake paid for the lot was a fair market value. But just 15 months after the sale, Palermo told the Hillsborough Property Appraiser's Office that if the lot were for sale then, it "would probably be listed for about $125,000."
Asked about the sale of the lot Wednesday, Palermo said, "In hindsight, I got myself into a situation that I didn't want to be in the middle of."
The contractor who put the roof trusses on the Davis Islands home for LaBrake was Ryan Construction, the contractor building a 4,200-square-foot home with a pool and spa for Lynne McCarter in South Tampa.
McCarter, 31, is a top aide and girlfriend to LaBrake who has advanced rapidly under his supervision and now is paid $55,723 a year. Earlier this year, LaBrake listed McCarter as his "fiance" on a city personnel form that made her his beneficiary for certain benefits.
Ryan is building McCarter's new home at 3608 W Corona St. for $120,000, or about $30 per square foot. That's less than a third of what is charged by contractors for similar new homes in the area. LaBrake has said the cost of the lot and Ryan's charges and extras will add up to about $321,000, but the cost of comparable homes in the neighborhood approaches $500,000.
The use of Ryan Construction by LaBrake on the Davis Islands home in 1999 came just three years after an examination of Ryan's relationship with LaBrake's department. News reports in 1996 revealed that Ryan's construction company had received several city-related contracts to renovate low-income homes without bidding for the work.
In recent years, Ryan has received more than $1-million in city contracts involving low-income housing.
The FBI and Florida Department of Law Enforcement have opened investigations into the building of McCarter's home on Corona Street. Palermo's office is investigating the ethics of the deal.
The ethics code for the city of Tampa prohibits employees from having any personal financial dealings that conflict with the proper discharge of their duties.
Wednesday, LaBrake said he paid Ryan $12,000 for the roof work on his Davis Islands home. LaBrake said other contractors are cheaper, but Ryan "was available."
The Davis Islands lot was sold to LaBrake by Titan Homes, whose president was Anthony Castellano, a Tampa businessman and longtime friend of Palermo's who died in August 1997.
Titan bought adjoining lots on Chippewa Avenue from Tampa Electric Co. for $115,000 in January 1997, then took out a $400,000 construction loan to build a home on each lot. Palermo said he reviewed legal papers for Titan and co-signed for the mortgage loan.
After one home was built and sold, Titan decided to sell the other lot. Palermo said the lot was never listed for sale and negotiations eventually ensued with LaBrake.
Palermo said a real estate agent told him $75,000 was a fair price.
In 2000, the office of Hillsborough Property Appraiser Rob Turner questioned the sale, and called Palermo for details. Palermo said Titan was "interested in recouping their investment, not concerned with (making a) profit," according to assessment records.