An Opinion By Jean Veasey

Published August 27, 2013

Have you ever wondered how a hostile illegal takeover could happen?  Well, in my opinion, it is happening today in Panama City Beach, Florida, at the Fontainebleau Terrace, Co-op:

leases or bought units with paid land leases should not have been assessed.

Also, during this time (1999), the owners of the land lease immediately knocked down the little restaurant on the property at a cost of $90,000, instead of selling it for $50,000.  Moreover, this same group of owners closed and filled-in the scenic elevator, claiming it had been condemned; yet, it is known that repairs would have cost only $18,000.  But, worst of all, because the scenic elevator was closed and filled-in, the Fontainebleau Terrace can never be listed on the Historical Society Register.

In July, 2006, a former Board President came back, coerced, and intimidated the elected board members to resign.  Then, he created a hand-picked, illegal board, went into the Co-op’s office, took the keys from the employees, and made himself a Community Association Manager (CAM).  As such, he managed for seven months without a license, which is a criminal offense. 

In spite of several complaints filed with the DBPR, during 2006 – 2009, no ruling appeared until April 2010, two months after the CAM resigned February 2010 (speedy ruling from DBPR?).  However, the ruling did state that the CAM was in violation of operating as a CAM without a license from July 2006 to January 27, 2007.  And, a fine of $5,000 was placed upon him; but, with a caveat: if he did not have the money, he could get it anyway possible.  Owners’ maintenance fees, perhaps?  Did he or anyone pay the fine?  Sadly, owners have no way of knowing. 

Adding insult to injury, the illegal CAM, his board, and his bookkeeper left owners with at least $70,000 in unpaid utility bills.  Leaving owners the additional burden of paying utility deposits because of the poor paying record was another slap in the face. 

Bill paying is the responsibility of the bookkeeper.  Surely, this individual was aware of what was not being paid, and the “hand-picked” board members should have known what was going on; however, no one did anything to protect the owners. 

Owners tried to protect themselves and stop the madness in 2007, by attempting a recall of the CAM’s board members.  Owners went so far as to hire a security guard, making sure only owners would attend the recall meeting.  But, the CAM, who, in my opinion, knew he would be fired if the recall took place, called two Panama City Beach Policemen.  They ignored the security guard, busted up the meeting, handcuffed an owner, hauled him off to jail, and caused two ladies to be hurt.

NOTE:  This fiasco was reported in detail on Jan Bergemann’s Website (www.ccfj.net),

by the Panama City NEWS HERALD, the WMBB News 13, and by Jerry Brown, an investigative reporter with ABC News. 

Because these news agencies are not returning phone calls, it is my opinion that they will never report on Fontainebleau Terrace again.  Thus, the ongoing complete neglect of the co-op, and other violations, being supported by two management teams and the board (July 2006 to present) continue unreported.  Requests for pictures of the damage caused by time, salt water, sea air, and cement damage, which is Suite Hospitality Resort Management’s efforts to make the building look “worse,” have fallen on deaf ears at the news agencies.

NOTE: Board members hired Suite Hospitality Management in February, 2010.

   
Even after the CAM took over in July 2006, owners found themselves facing more damages, costs, and depleted funds.  When the former president took over, in my opinion, owners had approximately $100,000, in the Reserve account, money in the Escrow and the Maintenance Account.  But, at this time, all accounts were being depleted at an alarming rate! 

Owners were illegally assessed $1,000 per unit ($1,000 x 124 = $124,000).  And, under the illegal CAM’s leadership, and with the board’s blessing, 1st Choice Paint Company received $82,000 to pressure wash, rust proof, and professionally paint the buildings.  However, the paint company did not pressure wash, rust proof, or use the correct paint for seaside buildings.  More importantly, this company did not possess the required insurance, equipment (could not reach the 7^th floor), or have the manpower to complete the job.  And, once again, adding insult to injury, the board president’s $1,000 check was not deposited, and $41,000 vanished without a trace.   

Though the local Better Business Bureau (BBB) had complaints on 1^st Choice Paint Company, the Department of Business and Professional Regulation (DBPR), owners’ CAM, and board members did nothing.  In fact, one owner who lived there at the time was told that only a board member or the CAM had a right to report anything.

Another illegal assessment of $125 x 124=$15,500, evolved in 2007.  This assessment paid the first of many legal fees to Attorney Ray Newman and his associate, Angela Clark, of Becker and Poliakoff.  These legal fees arose because the CAM and the president, backed by the other board members, did not allow committees to solve problems.  The CAM, board members, and some owners blamed the Pouliots for causing the excessive legal fees that went as high as $35,000, and still climbing.  Needless to say, some hard feelings exist amongst some of the owners.

Fontainebleau Terrace Bookkeeper, CAM, President, Co-President, and others hung on thephone for hours which ran up the legal fees. 

Until 2007, owners had less than $3,000 in legal fees a year!  Why? Because we had committees to work on and resolve issues: the president and CAM from 2007 to 2011 would not allow committees.

Again, in 2007, another illegal assessment of $300 x 124 = $37,200 was done under the guise that it was the first installment for insurance.  Not true!  In fact, it was to carry the co-op into 2008: we were broke. 

In 2010, an owner questioned the co-op secretary about the money; and, at first, she claimed it was never collected.  However, when owners show their canceled checks, she retracted, stating that it was collected for 2009, which was recorded in the Board Meeting Minutes in 2010.  So, where’s the $37,200; did it vanish without a trace? 

Several times after I saw the 2008 Budget, which does state that the money was to carry us over into 2008, I asked the CAM what it was collected for, and he said, “The first insurance installment.”  Not one Board Member ever corrected him. 

Later, I was told by an owner that during a meeting I could not attend, he stated: “It was assessed because it was needed to carry us over into 2008.”  One owner became so upset by his confession that she asked for her money back.  Did that happen?  In my opinion, it didn’t.

Also, of concern to this owner, is the co-op rental management situation.  When I asked the Chamber of Commerce what rental website is given to prospective guests when they call, I was told www.fbcondos.net and www.fbcondos.com.  These are rental websites that Stan Layton owned, and a Co-op Board Member said that they did not cost us anything.  However, once again, it does cost us: at least $300 a month; plus, most of our prospects are sent to other condos.  Of the units listed on these websites, there are 32 units on .com and about 26 on .net, with duplicate units on both.
  

Being able to rent their units has always been the selling point for owners at the Fontainebleau Terrace.  If you own one or more units, you can rent your unit(s) in the busy seasons, which leaves owners plenty of times to enjoy the beach.  However, when the management refuses to rent a unit or units, before long, owners find themselves in financial distress, possibly facing a lien on their unit(s); and, before they know it, their investment is gone.  Owners cannot depend on SHRMC to help them protect their unit(s).
  
Suite Hospitality Resort Management Company (SHRMC) was going to furnish all terry, linen, housekeeping, and so much more.  When they discovered that co-ops charge for cleaning, they really hurt Fontainebleau Terrance’s rental business:  SHRMC charged $40 instead of $30 per cleaning and did not tell the guests until their departure.  Plus, they charged $100 per year for linen and terry per unit.  And, even though a number of owners paid for new terry and linens, SHRMC placed well-worn linens and terry within the rental units. 

Owners were told that SHRMC and the rental companies are their own entities. They just came in and occupied the Fontainebleau Terrace. 

It was the owners’ understanding that SHRMC and the rental companies would each pay $500 a month for all of their office space. Now, owners know that some received free rent and did not pay for their utilities. Thus, the owners who pay end up paying for everything! However, the rental companies were not satisfactory because they did not keep regular office hours, which, in my opinion, was all part of the plan to keep renters away.
  

To further support that point, owners had mail cubbies in the office, and one SHRMC employee said that he “…was not a postman…” and threw a long-term renter’s medicine under the counter where it stayed for several days.  Then, the management required owners to rent P.O. Boxes, and they had about 30 installed, which was not satisfactory either.  The co-op has 124 units, and the mail cubbies always worked for the co-op; but, here again, SHRMC found another way to cost owners more money, knowing that everyone could not afford them.  Today, cubbies are not allowed!  Does any owner know why it is now illegal?
  
An additional rise in cost came when SHRMC and the co-op member board changed from A T& T to Comcast phone and cable service.  Comcast is much more expensive; and, again, all owners cannot afford the extra expense.  As a result, many units do not have phone service. 

NOTE: All the other SHRMC condos have free local phone service and free wireless; but, as with the other new services brought to Fontainebleau Terrace, it is more expensive: there is a surcharge at the Fontainebleau Terrace for wireless.
  

Without a doubt, one of the most incomprehensible issues owners deal with at the Fontainebleau Terrance Co-op is the maintenance and building deterioration:

According to SHRMC, the maintenance men cannot do anything in our units unless the owner is on the rental program; most owners are not allowed on it.  If owners are not allowed on the rental program, they have no rights.  More importantly, three (3) different CAMs said they did “…not go into the units to check on anything…”.
   
In 2009, an owner called the fire department about the emergency fire stairs, which are rusted to the bone.  The fire chief never returned one phone call to the owner.  The stairs continue to deteriorate; and, even though SHRMC took over in 2010, nothing has been done by the fire chief about the stairs at Fontainebleau Terrance.  I

NOTE:  Today, owners still call the fire chief, but no one returns their calls.
  
Owners have called the building inspector and asked why the building has not been inspected every three (3) years, as required for a building over three stories high.  The support columns on the back of the building are deteriorating. 

Even more frightening, SHRMC knocks off cement and leaves rebar exposed.  One time during the night, they started knocking off more stucco and perfectly good cement.  Later, they boldly knocked off perfectly good cement on the second floor, beachside, the fourth floor, near the street, and in other places.  All of this destruction caused the rebar to be exposed to the salt water and air.  But, one of our co-op board members told us that “…it would not rust if a certain coating…” was applied, and “…it was not too late to do so...”  Strangely, he had to leave, and the described work did not get done by SHRMC.
    
Though there are severe issues outside the building, some threaten owners’ health within the building.  For example, one owner quit coming to the co-op meetings because of the mold, forming because of the roof leaking for years, and the chase ways are not properly vented.

At this point, in my opinion, I was warned to be quiet about the building deterioration. I was told that the Code Inspector had met with the Member Board President and two other board members; and, that if owners did not stop calling, “they” would shut us down.  Owners were asked by the Building Inspector, “What do you want me to do?  Shut the place down and put the people out on the street?”  No, owners do not want that to happen.  But, they do want the building repaired, and the managers and board members should be responsible and not assess owners thousands of dollars.  In my opinion, if all the money that has disappeared and money that has not been paid was collected, owners would not need assessments to bring the building up to code.  Besides, the main problems are the support columns and the leaking roof.
   
The last big rain caused a flood -- not from the ground, but from the roof.  It took many pails to try and catch the water from the roof.  Now SHRMC is going to remove the mold just from the bathrooms, saying that mold is coming from the chase ways.  That is true because the chase ways are not vented correctly.  They also claim that the mold in the units is coming from the AC unit not being on.  That is not true!  And, more importantly, they are still not discussing re-roofing the building, which would solve the long-term leak problem. 

Bottom Line: SHRMC has not done one thing to improve Fontainebleau Terrance until recently, and it has done very little.
    
And, as in any organization, political/management structure determines everything:

The elections are always stressful and illegal.  During last year’s election, all three SHRMC employees were present, and four owners were counting the ballots.  However, they did not count the ballots and compare them with the owners’ list.  One board member tried to get the SHRMC President to have the employees do it right, but he yelled, “I’m not going to do it!”  Knowing that he had no right to make decisions about the election, the board members remained silent.
  
Owners have been told by the Secretary of State, the Attorney General’s office, and the FBI that the State Attorney, Glenn Hess, is supposed to help us, but he refuses to talk to owners.  We are always told to hire a private lawyer, and we have, but they will not work for owners.  Now, owners cannot even hire a lawyer because they want to work for CAMs and board members.
   
It would take a book to cover what has happened at the Fontainebleau Terrace over the years; and, who knows, maybe, I will write the book “In My Opinion.”  And, I am sure that there are other unit owners all over Florida who could write a similar book and live in a worse situation, but thank goodness, we all may express our own opinions!

* The pictures above were taken during the years 2011 - 2012.

This Co-Op has a long history of outrageous events. See:

THIS IS A CONDO BUST -- NOT A DRUG BUST!