ZEPHYRHILLS — A state investigation of circumstances surrounding a partnership between the city and a company affiliated with City Council member Lance Smith to build a spec building has ended with no arrests.
A report released by the Florida Department of Law Enforcement said prosecutors could find no evidence of a crime after reviewing the agency's findings.
"I'm certainly glad it's over," said Smith, who won with 68 percent of the vote on April 9 despite claims by his opponent, former council member Manny Funes, of wrongdoing. Smith, who said he was considering filing a defamation lawsuit against Funes when he made the investigation a campaign issue, said he wasn't sure now whether he would follow through on those plans.
"You have to ask yourself, 'Is it worth it?' " he said.
Funes said he had not seen a copy of the report yet so he didn't want to comment on FDLE's efforts. However, he said he believes that taxpayers were "taken advantage of" by city officials.
"In my extensive experience in law enforcement and life, this is a classic case of cronyism," said Funes, a former FDLE agent.
The case centered on a 50,000-square-foot speculative building that the city wanted to build to lure business to the airport industrial park. It was to have been started with a $400,000 no-interest loan from Progress Energy. Smith, a Realtor and building contractor, put in a $2 million bid for the project with two partners, and they won over another company. Smith was on the city Planning Commission at the time.
An agreement said the city and the company, CLS LLC, would split the costs.
But the economy soured, and the building never got off the ground. The City Council reimbursed Progress Energy for the loan amount. City Council members then voted in 2011 to forgive CLS for its half of the amount that had been spent, about $45,000. Members said that the city would benefit by keeping the site plans and other work product in case it ever revived the project. It also meant that the city could pursue the project without CLS if it chose to do so.
Funes, who had lost his spot on the council earlier in 2011, urged members to postpone the vote to pick up CLS's tab. Smith, who had won a council term after the project began, abstained and left the dais when the vote was taken.
Funes then questioned what he said was a lack of records on how the money was spent. He examined records and found that Smith and his partners had created a second company, LCS LLC, that was dealing with contractors. He tracked down several vendors that had worked on the project and found that their bills did not match what CLS was submitting to the city.
Funes then asked his former employer, FDLE, to investigate the disparity.
Agents spent more than a year on the investigation, which included questioning city officials, reviewing city files and subpoenaing bank records.
They found that while one partner, Steffen Aziz, did claim amounts over and beyond what was billed, it was for expenses.
"Mr. Aziz stated that the amounts invoiced included an increase in the invoiced amounts which covered the developer's time and expenses, he specifically listed fuel, insurance, man-hours in the project among other items," the FDLE report said. "Mr. Aziz stated that these expenses were legitimate costs in any development as no one can expect the developer to absorb all expenses and that the recordkeeping for each individual expense would be prohibitive."
City attorney Joseph Poblick, who filed several public records requests regarding the investigation and questioned the length of time it was taking, said he was glad it was over.
"We can close this chapter and move on," he said.