MARGATE – The Board of Commissioners Thursday, Sept. 20 released minutes from three executive session meetings held in 2015 detailing discussions about extending the lease for Lucy the Elephant.
Executive session minutes are usually held confidential until the topic being discussed is resolved.
City Solicitor John Scott Abbott said the minutes were being released at this time because “there hasn’t been any action” on approving a new lease for Lucy the Elephant for quite a while.
“The city wants to wrap it up and get it done,” he said in a telephone interview Friday, Sept 28.
The minutes reveal the city’s concerns at that time about personal spending on a Lucy business credit card, a $10,000 “bonus” given to Save Lucy Committee Executive Director Rich Helfant and past debts owed to the city by the non-profit organization. One of the meetings included discussion about the committee’s request to extend Lucy’s lease for 99 years.
The meetings were held on Sept. 3, Oct. 8 and Dec. 16 in 2015. In the December meeting, representatives of the Save Lucy Committee and the city discussed a system of “checks and balances” to prevent “any blemishes on the Save Lucy Committee.”
An OPRA request filed by Downbeach.com revealed correspondence about the Save Lucy Committee’s repayment to the city of more than $17,000 in lease payments, and an additional $9,375 in electric and telephone charges for Lucy and the Lucy Beach Grill, which is located next to the elephant.
All funds owed to the city have been repaid, Margate Chief Financial Officer Lisa McLaughlin said.
The Beach Grill
The Lucy Beach Grill was built to raise revenue to support Lucy’s ongoing maintenance and restoration. Construction was funded with a $110,000 loan to the city from Green Acres, which Helfant said the committee reimbursed with interest.
“So, in essence, we paid to build the snack bar because we paid back the loan,” he said in a telephone interview on Wednesday, Oct. 3.
In 2013, the Save Lucy Committee entered a lease agreement with Ventura’s Greenhouse to operate the grill through Dec. 31, 2017, with a two-year extension at $29,000 a year, according to financial records.
Helfant said Lou DiVentura recently informed him that he does not want to lease the grill for the 2019 season. However, there may be interest from another local restaurant owner, he said.
The Save Lucy Committee was formed in 1970 by a concerned group of citizens who raised the money needed to move the derelict structure to the city-owned property at Decatur Avenue and Atlantic Avenue. It was designated a National Historic Landmark six years later.
The federal government provided the city with a $61,750 grant “for the purpose of repairing, restoring and maintaining the ‘elephant,’ which has been named an historic structure.”
The first lease on file dated May 28, 1992 called for the committee to pay a nominal rental fee of $1 a year for 5 years, with the right to renew it for an additional 10 years, provided the committee supplied the city with an annual report of activities, revenue and expenses. The lease represented that the city is the owner of the “premises known as Lucy the Elephant,” and that it had the right to lease it to the committee.
An addendum to the lease was approved Dec. 30, 1993 after the city provided the committee with a loan to repair the structure. It required the committee to pay $11,000 a year starting Sept. 15, 1994 for 15 years, after which time the lease amount would revert to $1 a year.
A second addendum dated Feb. 16, 1995 extended the lease period to Dec. 31, 2019 and amended the $11,000 annual payback from Sept. 15, 1995 to Sept. 15, 2010, with the remaining nine years at $1 per year.
In a third addendum dated Oct.4, 2007, the city revised the loan principal from $110,000 to $96,094.05 and the interest rate from 5.56 percent to 4.5 percent and added an additional seven payments of $5,680.80 starting Sept. 15, 2007.
“The deed says that Margate owns the land and general real estate law says if a leased property has an improvement that is permanently affixed it runs with the land,” Abbott said.
“That’s funny. When Scott Abbott was our corporate counsel, he was under the legal opinion that the non-profit owned the structure,” Helfant said.
Helfant said he believes Lucy is not a permanent structure, because it was not built at the site. It was moved there in 1971, he said.
Helfant said Green Acres will be required to sign off on a new lease, and that the state agency normally does not approve leases for longer than five years.
“I went to Green Acres and they agreed that because of Lucy’s unique nature, they would approve a 25-year lease with the option to renew it for another 25 years,” he said.
According to the minutes of the Oct. 8, 2015 meeting, Commissioner John Amodeo questioned the $10,000 bonus paid to Helfant and personal charges to the Lucy credit card.
Helfant said the bonus was approved by the committee after he did not receive a salary “during lean years,” he said.
Helfant assured the commissioners that all personal expenditures on the credit card were paid back at the end of each billing cycle.
“There is no longer a Lucy credit card,” Helfant said on Wednesday.
The committee agreed to conduct an audit, repay its debt over a five-year period, meet with commissioners once a year and that the length of the lease should coincide with the Green Acres agreement.
During the Dec. 16, 2015 executive session, the minutes reflect that Commissioner Blumberg spoke about cooperation between the two boards, but the city should not be involved in day-to-day operations of Lucy.
Amodeo said he “doesn’t want blemishes on the Save Lucy Committee,” but would like a system of checks and balances. He said the city did not want to manage Lucy, but the commission had not seen any compromise on the part of the Save Lucy Committee.
The financial analysis conducted by an independent accountant Wagner, Shields & Jennings, PC of Linwood, for 2014 and 2015 revealed that there were “no material modifications that should be made” to comply with generally-accepted accounting principles.
The city also requested that the committee forward an electronic copy of its QuickBooks file, however, Helfant stated the file contained confidential personnel information, including Social Security numbers, that should not be sent over the Internet.
Helfant said he welcomed city representatives to review the QuickBooks file on the computer at the Lucy office, but no one ever did.
The Board of Trustees
Abbott said the city does not want the structure moved.
“We can lay to rest once and for all that they cannot move the elephant. The city took historical funds for making improvements on more than one occasion,” he said.
However, the city made it clear that it wants some “control” over the make-up of the board, which, according to the Lucy bylaws, states that trustees are nominated and voted on by the general membership in November.
Helfant said members in good standing could also be appointed as trustees. The city currently has only one representative on the Save Lucy Committee – Mayor Michael Becker, who has only attended one meeting, Helfant said.
“The mayor wants control over the Board of Trustees. I can tell you, that will never happen. We will never relinquish control,” Helfant said.
Amodeo said the city would like to appoint half of the committee’s membership, plus one.
In an April 28, 2016 letter to Abbott, Save Lucy Committee attorney Christopher J. Stanchina of Linwood said, “Though not required to do so, the Board of Trustees is fine with recommending a change to the bylaws so as to fix the number of trustees to a total of 11 and granting the city an additional two appointees, which would give the city a total of three representatives on the 11-person board.”
“The commissioners wanted to appoint people to the Board of Trustees, because the city has no control over Lucy at this time,” Abbott said.
Helfant said that in May, he provided Amodeo with the names of several city residents who could be the city’s representatives on the board, but he has not heard back about those appointments.
Helfant said he recently provided the city with several dates when the trustees could meet with city officials to hammer out a new lease. He is waiting for a response, he said.
Abbott said the committee has done a great job maintaining their beloved Lucy.
“She is in fantastic shape. It’s quite a chore to keep her that way, and no one questions Mr. Helfant’s love of Lucy and his ability to maintain the elephant,” Abbott said.
The Public Works Department provides maintenance for the park, such as weeding and replacing decking, but does no work on the monument, Helfant said.
“Public Works helps us like they help the Margate Business Association with all their events,” Helfant said.
The Hotel Overlay
“The relationship has been good this year, but all this chatter about the boutique hotel and moving Lucy is nonsense,” Abbott said. “The city has no desire to move her or sell her.”
Helfant agreed that the “nonsense” created by the rumor mill has “opened the door of public sentiment that is very much in Lucy’s favor,” he said.
“The Save Lucy Committee has turned an old, rusty and decrepit monument into an international treasure. Lucy put Margate on the map. They should be capitalizing on her brand,” Helfant said.
Yet he still has concerns about Lucy’s permanency at the Decatur Avenue location, because Lucy was not mentioned in the city’s most recent Master Plan review, the land she sits on was included in the proposed, but now squashed, boutique overlay zone, and the lack of a lease agreement after six years of asking.
“It still might be in the back of their minds,” he said.