AVE MARIA - Editor's note: Second of a three-part series
Money was on the minds of Ave Maria's founders not only when planning their development, but also when they began discussing their town's future government.
A July 2003 memo from town co-developer Barron Collier Cos. shows the calendar.
Finish a draft of the law establishing the government by mid-September and share it with Barron Collier Cos.'s partner, former Domino's Pizza magnate Tom Monaghan. Get Collier County approval by November, state legislative approval by May and have Gov. Jeb Bush sign it by June 2004.
The government's board, chosen entirely by the town's developers, would set up a financing plan. By Dec. 24, 2004, the town's first phase would be financed using tax-free municipal bonds.
"Merry Christmas," the memo reads next to that date.
It would be two years after the memo predicted before Ave Maria sold bonds - $52 million with another $768 million authorized for future sale - but the memo shows municipal bond financing was integral to the developers' decision to seek an Ave Maria town government.
For Monaghan and Barron Collier Cos., the incentive is clear. Governments pay lower interest rates than private companies on their bond issues because the bonds are considered in the public interest.
The partnership between Monaghan and Barron Collier Cos., known as Ave Maria Development, could save millions in borrowing costs by financing its plans through a government it controlled. Ave Maria Development could save even more money by charging town residents to help pay back the bonds come property tax time.
But the type of government Ave Maria Development formed bucked Florida legal precedent.
Ave Maria's founders rejected a 24-year-old, Supreme Court-tested government structure known as a community development district. In a community development district, Ave Maria Development would have had absolute control for up to the first 10 years of the district's existence. That includes the ability to issue bonds and charge residents like any city or county in the state.
Ave Maria Development wanted more.
A tailor-made law
When Ave Maria's developers began investigating a government for their town, they turned to a man called "the preacher."
Ken van Assenderp, a Tallahassee attorney who has worked for major developers across the state, co-wrote the law that created community development districts in 1980 and defended developer control over them before the Supreme Court five years later.
His passion earned van Assenderp his nickname and others like "the boomer."
Ave Maria Development asked van Assenderp for a community development district with extra "boom." Among other issues, the company wanted to control its government, known generally as a special district, longer than 10 years, the time when community development districts must phase in elections by registered voters.
No developer had built a community in almost a quarter century using the type of government Ave Maria Development requested. Van Assenderp was undaunted. From his first discussions with the company, van Assenderp believed he could make it happen, internal memos said.
The question became: How? An issue like extended developer control over the government was sure to receive substantial scrutiny.
Van Assenderp found a solution. The answer did not reveal the law's implications to the legions of special interest groups, media, government staff members and politicians who reviewed it.
Ave Maria's tailor-made law would copy verbatim the turnover procedure from an existing state law, the one on special districts generally. That law, unlike community development district law, said registered voters took power from landowners after a certain percentage of land within the government's boundaries became developed.
Now van Assenderp could lobby legislators and answer questions about voter turnover by arguing Ave Maria complied with established state law.
But that language left Ave Maria's developers with an opening.
The opening was clear
Internal Barron Collier Cos. memos from September 2003, one month before Ave Maria Development presented the law to Collier County leaders for review, tell the story.
High-ranking Barron Collier Cos. officials and company consultants were asked to prepare a list of pros and cons to Barron Collier Cos. CEO Paul Marinelli on the district's size. (Click here to read memo)
Should it be roughly 5,000 acres or 10,000 acres?
Plans called for the town of Ave Maria to be 5,000 acres. But Ave Maria Development owned more than 10,000 acres in and around the town.
The way van Assenderp wrote the law, majority control of the district passed from landowners to registered voters once half the land in the district was developed. That linked developer control to the district's size, wrote Tom Sansbury, a Barron Collier Cos. vice president, in his pro-and-con memo to Marinelli.
"I believe we are all in agreement that the major decision factor on the size of the district is the control issue," Sansbury wrote to Marinelli and copied to van Assenderp and seven other Barron Collier Cos. employees or consultants. "At what point do the residents (electors) have the power to control the decisions of the board and affect the value of the undeveloped land?"
The opening was clear.
If Ave Maria Development owned more than half the acres it planned to develop within the district's borders, as it would in a 10,000-acre district, it never had to relinquish its control.
"With the control language Ken has placed in the act the original landowner will control the board for a very long period of time and with the preserve areas and university votes we could control it in perpetuity," Sansbury wrote as a "pro" for the larger district.
Sansbury recommended the larger district. His opinion won the day.
At an Ave Maria Development meeting that month attended by both Barron Collier Cos. representatives and Monaghan and his associates, the partnership approved the larger district size. Final development plans call for a 5,027-acre town controlled by a 10,805-acre district.
The town is 47 percent of the district's size, 376 acres below the threshold where registered voters would control the district at the town's completion.
Ave Maria Development's decision to make the district's size more than double the town effectively disenfranchised the town's future residents from having a determining voice in their local government.
Ave Maria Development put it in writing.
"As more units are sold and residents increase there may be a feeling of taxation without representation at some point," Sansbury wrote in his memo to Marinelli. "Whether that would be in 5, 10, 25 years or ever we do not know. A well-managed program of disclosure and a well-operated district that keeps the resident informed of operations should minimize this potential opposition."
Few questions, fewer answers
With Ave Maria Development's decision made, van Assenderp went to work. He praised Ave Maria's turnover procedure before every public body.
In a March 2004 memo to Florida House legislative staff, van Assenderp argued Ave Maria's procedure was more democratic than other methods. Residents, he wrote, had an easy path to earn seats on the district board.
It appears no county or state politician or staff member pushed to determine when Ave Maria Development would give up control of the district. If anyone did, the matter never arose during a public hearing.
The law sailed through the Collier County Commission and the 2004 legislative session.
Bush signed Ave Maria's government, known as the Ave Maria Stewardship Community District, into law that June.
In October 2003, Ave Maria Development issued a press release explaining the district's size, a version of which remains on the district's Web site. The release listed six bulleted reasons such as better management of preserve land. Nowhere was longer developer control mentioned, even though one month earlier Sansbury's internal memo called that issue "the major decision factor" on the district's size.
Barron Collier Cos., as the managing partner in Ave Maria Development, took the lead in writing the law. Monaghan's team now contends, and it is supported by documents, that it was unaware of what Barron Collier Cos. had done. But during that September 2003 meeting, both sides of the partnership signed off on the district's size.
Paul Roney, the university's CFO, is on Ave Maria Development's executive committee and approved the district's size. He also is on the five-member district board.
Asked about the district in a recent interview, Roney replied he was familiar with its general function, but left specifics to Barron Collier Cos. The same was true about the decision on the district's size.
"Barron Collier came forward with a suggestion at our meeting as to why," Roney said. "It was probably a 15-minute discussion, and we said let's move forward with it."
Unclear, uncertain and untested in court
Less than a year after Ave Maria's government became law, Victoria Weber sat down and tried to make sense of it all.
An attorney with a well-known Tallahassee firm, Hopping, Green & Sams, Weber had a client who wanted what Ave Maria Development got - its own government over a huge swath of land.
Weber was writing what would become the law over a development 120 miles northwest of Ave Maria. The development, called Lakewood Ranch, is planned over 23,000 acres in Sarasota and Manatee counties.
Like Ave Maria, Lakewood Ranch's developer expected to control the government longer than the 10 years community development districts allow.
She looked at Ave Maria's procedure for ceding control to registered voters and the state law van Assenderp had copied.
"I read that statute for hours one day and I'm like, I cannot understand how this works," Weber said in a recent interview.
She called van Assenderp and other lawyers but still couldn't figure it out.
Weber decided to write a turnover procedure based on the population of registered voters in Lakewood Ranch. Development plans predicted it would take 24 years before registered voters would control the majority three seats on the district board.
A House legislative staff analyst flagged this issue. The analyst wondered why Lakewood Ranch rejected Ave Maria's turnover procedure when it appeared Ave Maria had followed existing state law to the letter. The analyst included in her report a brief interview she conducted with Weber.
Why didn't you use Ave Maria's turnover procedure? the analyst asked.
Because their procedure is unclear, uncertain and untested in court, Weber replied.
"The Lakewood Ranch opted for a more certain, and arguably less contentious turnover provision," Weber continued in the report.
Weber couldn't recommend to her client what Ave Maria did.
"To me, I couldn't explain to a client how that provision would actually function," she said. "And it looked like there was a whole bunch of potential litigation."