Community Leader Discusses Fair and Transparent Development Practices for Fort Myers Beach Recovery

By Richard Luthmann

Last week, we wrote an Op/Ed for Sun Bay Paper about fair and transparent development practices for Fort Myers Beach recovery. The piece is entitled Wrecking Ball Hits Fort Myers Beach: Can the Town Turn the Page? The thesis of the piece is that FMB must embrace fair, transparent, and inclusive development practices to recover and rebuild its economy after Hurricane Ian.

OP-ED – Wrecking Ball Hits Fort Myers Beach: Can the Town Turn the Page?

The Town’s current approach, marked by allegations of preferential treatment and inconsistent regulation enforcement, is deterring potential investors and hindering economic recovery. We argued that FMB’s leadership must support all businesses equally and collaborate with developers and local businesses to ensure a prosperous future for the community.

In response to the Op/Ed, we received an email from an FMB Community Leader who disagreed with the editorial position. This person said that there were “glaring inaccuracies.”

As a media outlet, we welcome vigorous debate and respect the privacy of our readers and commenters.

We have published the community leader’s email [edited for confidentiality], and our response follows. Interspersed are links and pictures of FMB Community Leaders – one of whom may or may not be the author of the email.

On 05-27-2024 02:20 PM, [FMB Community Leader] wrote:

…[Y]our May 24th Editorial had some glaring inaccuracies. 

You stated that, ” Developer Jesse Schmid wanted to settle $1.25 Million in fines, but the Town Council demanded $250,000 despite Schmid having a letter stating he owed nothing.”.

Wrecking Ball Warning: Schmid Threatens Lawsuit to Topple FMB Town Council’s ‘EXIT TAX’

On May 6 Schmid’s Attorney came before the Council offering a $15,000 settlement on the liens. The Council did not accept that settlement offer. Schmid’s Attorney requested the Council offer a number for settlement. [They] took the total of the liens, which was less than $1.25 Million, and divided by 4. That came to a little over $297,000. [They then] subtracted the $50,000 from a check copy [they] were given (even though there was a different property address written in the check memo stating it was a partial release). That came to a little over $247,000. [They] rounded down to $247,000 and offered that as a settlement. That offer was declined.

As for the letter that allegedly shows Schmid owes nothing. That letter was never presented to Council during the May 6 meeting. It was also never previously presented to the Special Magistrate at the hearing on February 12.

White Sands Lawyer Presents Smoking Gun Zoning Verification Letter to FMB Town Council

Your Editorial also stated, “The Council’s decision to levy an additional $250,000 fine…”. Again, $250,000 (actually $247,000). was not an additional fine, but a settlement offered.

Ask yourself if you owe nothing, why would you seek a settlement of $15,000? Or a settlement in any amount for that matter?

In addition, Mr. Schmid’s Attorney attended the May 20 Council meeting. There he mentioned the letter allegedly stating the property was in compliance as of November 2020. The Attorney then stated the fines should have been approximately $420,000. That’s a far cry from owing nothing.

Lastly, you state, “The town must embrace fairness and transparency in its dealings with all businesses.”. In lieu of the facts we were presented, I believe this Council has acted in a fair and transparent manor. 

All the best,

FMB Community Leader

Richard Luthmann responded directly to the Community Leader. Here is his full response, edited to maintain the promised confidentiality:

FMB Community Leader,

I respect your position. I will incorporate your statements (without identifying you as you have requested) into a follow-up article to provide a fair perspective on the issues.

Note that the piece you referred to was an Editorial, so it was an opinion piece first and foremost.

Second, I do not believe anything was “glaringly inaccurate.” To wit:

• You stated, “Developer Jesse Schmid wanted to settle $1.25 Million in fines, but the Town Council demanded $250,000 despite Schmid having a letter stating he owed nothing.”
  • Schmid came to the Council to resolve the matter.
  • The November 18, 2020, “Smoking Gun” Letter says, “There are no active Code Enforcement cases on [the 80 E Street] property.” To the observer, that appears (and I personally believe, given the facts I have seen) that the fines at issue were covered off.
  • The reconstructed narrative and timeline I have is that Roger Hernstadt, on behalf of FMB, made a deal with Schmid and Joe Orlandini to clear violations and remove liens. The full agreed-upon amount was paid – Schmid says he paid his end and produced the $50,000 check that Becky Vose acknowledged on the record. Orlandini says he paid his end (@$12,500), and the Smoking Gun Letter confirmed it. To my investigation, there was a solid deal backed by payment – and the deal involved several of Orlandini’s properties, 80 Avenue E was specifically one of them.
  • Further investigation shows that Roger and/or Attorney John Herin failed to remove the lien on the 80 Avenue E property based on the deal.
  • From this perspective, the upwards of $1.25 million in fines looks questionable at best and possibly wholly erroneous. FMB has already been erroneous in this matter with both the receipt of payment and proper crediting of the settlement matter.
  • The Council came up with a $250,000 demand for settlement.

• You stated, “On May 6 Schmid’s Attorney came before the Council offering a $15,000 settlement on the liens. The Council did not accept that settlement offer. Schmid’s Attorney requested the Council offer a number for settlement. [They] took the total of the liens, which was less than $1.25 Million, and divided by 4. That came to a little over $297,000. [They] subtracted the $50,000 from a check copy we were given (even though there was a different property address written in the check memo stating it was a partial release). That came to a little over $247,000. [They] rounded down to $247,000 and offered that as a settlement. That offer was declined.”
  • All parties dealt with less-than-perfect information, and that is problematic. While Schmid is at fault for not clearly stating his case, the Town is at fault for not having all the information reasonably available on the issue.
  • [FMB Community Leader], I’m not disputing [the Town Council’s] actions or methodology. Given the information available, it appears [the Town Council] acted in a prudent manner. However, the assumptions were clearly erroneous. That’s not [any single Town Council Member’s] fault personally, but the Town bears some responsibility.
  • Thomas Jefferson said: “It is error alone which needs the support of government. Truth can stand by itself.“
  • From my perspective—and this is just my opinion—the Town has an obligation to determine the truth and then exercise judgment. The truth-finding function was lacking – in large part because the matter didn’t first go to the Town Manager for review as per the rules.

• “As for the letter that allegedly shows Schmid owes nothing. That letter was never presented to the Council during the May 6 meeting. It was also never previously presented to the Special Magistrate at the hearing on February 12.”
  • Again, a Town Manager review would have allowed for clarification of these issues. But assume for a moment that Schmid is right…

• Your Editorial also stated, “The Council’s decision to levy an additional $250,000 fine…”. Again, $250,000 (actually $247,000). was not an additional fine, but a settlement offered.
  • The offer was a settlement offer. If the violations are unfounded, they are legally “null and void.” Then the question is, what is being settled if the underlying claims are null and void?
  •  Schmid calls it an “Exit Tax.” I called it a “fine” because that’s what it looks like to me – an unspecified fine unrelated to the matters that appeared to have been settled and erroneously formed the predicate for the initial levy.

• Ask yourself if you owe nothing, why would you seek a settlement of $15,000? Or a settlement in any amount for that matter?
  • Several reasons. The first is the desire for finality. As the Florida Courts have stated, “The importance of finality in any justice system . . . cannot be understated. It has long been recognized that, for several reasons, litigation must, at some point, come to an end.” (quoting Witt v. State, 387 So. 2d 922, 925 (Fla. 1980).
  • In many cases, the first offer in a lawsuit is “the cost of the defense.” Even if you’re right, it might be better to pay the other side $15,000, $50,000, or $500,000 if that’s what it’s going to cost you to prove your case.
  • Schmid wants to be done. He said it on the record. My two cents is that he’s a businessman and would have gone up to $50,000 to walk out the door and be done. If the Town’s records aren’t in order, that’s a windfall, and everyone is happy.
  • The other side of the coin is that Schmid could be right. He claims slander of title and slander of credit. Does the Town know for sure what Roger’s deal was or why Herin didn’t remove the lien? If the lien stayed on erroneously, Schmid may have a case. There may be legal exposure to the Town.
  • The larger issue raised here is that the Town does not know what happened during the Roger / Herin years. Jesse Schmid has now become the impetus for dredging up those issues. 

• In addition, Mr. Schmid’s Attorney attended the May 20 Council meeting. There he mentioned the letter allegedly stating the property was in compliance as of November 2020. The Attorney then stated the fines should have been approximately $420,000. That’s a far cry from owing nothing.
  • I spoke with the attorney, Mr. Ramunni. He has represented municipalities throughout the state and has been on the other side of this. He knows the game and, in my opinion, can get Jesse Schmid to the table and resolve this matter.
  • Other members of the Council have intimated that the May 20 statements were just that—statements made during an open portion of the meeting. 
  • Assuming that Attorney Ramunni is right, then by your methodology, the number should be $420,000 divided by 4 equals $105,000 – minus the $50,000 equals $55,000.
  • I think there are two points here. First, if the Town Council was wrong in its assumptions, then the matter should be reconsidered – no questions asked. The issue is one of good government and welcoming FMB as a place where real estate investment is welcome and workable.
  • Second, I think Schmid would be compelled to take a $55,000 number. FMB cashes the check and moves along.
  • The alternative is no $55,000 for FMB plus much more than $55,000, leaving the Town’s coffers for continuing legal fees.

• Lastly, you state, ‘The town must embrace fairness and transparency in its dealings with all businesses.’ In lieu of the facts we were presented, I believe this Council has acted in a fair and transparent [manner].
  • [FMB Community Leader], you have acted fairly and transparently, there’s no question. But I’m not sure whether the Town has.
  • Do we know what happened in 2017 when Roger and John Herin were at the helm? No.
  • Can we know? The audit committee has recommended against forensic accounting. The relevant documents from that period, including emails and correspondences, were purportedly on a destroyed server. So, every time the Town Council considers a matter, they do not have the full universe of documents for any transactions in the Roger Hernstadt era.
  • Town Council members are fiduciaries. The Town owns these materials and has a right to them. Plus, [Town Council Members] should be given the best possible information when making a decision.
  • I ask you this question: why hasn’t there been any move to reconstruct the “lost” files? It’s not a hard thing to do. Becky Vose, the Town Attorney, could send a request to John Herin, Jr., at Fox Rothschild LLP, requesting ALL FILES related to the representation of the Town of FMB. Fox Rothschild LLP is a large and well-respected Florida law firm. They have the files and could deliver them to the current Town Council. Of course there are privileged communications, but there are also non-privileged communications that are part of the public record AND communications between Roger and Herin that could clarify what actually happened in situations just like these. I would bet dollars to donuts that there is something in those records that would inform the Town Council about what had actually happened.
  • Put it this way, if Fox Rothschild LLP‘s servers were “lost in a flood,” they would miraculously re-appear after one phone call to the State Bar in Tallahassee. Why hasn’t the Town requisitioned these documents? Particularly, why haven’t [Town Council Members who ran on anti-Roger Hernstadt platforms] at least brought this issue up in Town Council?
  • My conversations with the Mayor lead me to believe he intends to follow the Audit Committee’s recommendations and leave the Roger years “buried.” How can this strategy be tenable if Jesse Schmidt (and others yet unknown) will seek to dredge these issues up in litigation?
  • I double down on my point: The Town must embrace fairness and transparency in its dealings with all businesses. The Town has de facto stated that it is not transparent because it doesn’t have all the records. How is it that fair? How can the government render any judgment while it admits that it is not transparent and doesn’t have all the facts. 
  • I also double down on my Jefferson: “It is error alone which needs the support of government. Truth can stand by itself.“

I hope this helps you to understand the optics of the situation from my perspective.

Again, I will publish a follow-up raising your valid concerns and protecting you as a trusted source.

Regards,

Richard Luthmann
Editor-in-Chief
Sun Bay Paper
www.sunbaypaper.com

NOTE: Stay tuned for additional follow-up.