Details Emerging About How CA Developer Robbins Got $3.6M From Commerce, Raimondo
Friday, October 07, 2016
GoLocalProv.com has learned from multiple sources that Rhode Island Commerce Corporation board members -- and Board Chair, Governor Gina Raimondo -- were not fully briefed on the past track record of California developer Lance Robbins, when they were asked to vote on $3.6 million in tax credits at the Board meeting on September 26.
In fact, only two documents were handed out to the Board prior to the vote, according to Commerce -- a GoLocalProv.com article, and what was presented as an "internal review" -- which proved to be from the grant recipient, Urban Smart Growth.
The documents were a GoLocalProv story about the relationship between a candidate for the House of Representatives -- Michael Gazdacko -- relating to his effort to unseat Representative Anastasia Williams in the Democratic primary; and a two page memo from Aaron Iskowitz, who is the Regional CFO at Urban Smart Growth, according to his LinkedIn account.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIskowitz claimed in the memo, "The 26+ years of development has not been without its challenges and legal hurdles." But he also refuted allegations outlined by elected officials in Los Angeles, as well as prosecutors, and housing advocates as reported by GoLocal.
He wrote in the memo, "The City has been found to use its housing enforcement procedures unlawfully for political purposes. The allegation against Robbins on slumlord charges occurred right before a mayoral election of James Hahn. The charges were ultimately thrown out of court 60 days after the election." Hahn is the only person to serve as Prosecutor, Mayor of Los Angeles and is now a sitting Judge in California.
Iskowitz did not address the many other legal issues that Robbins faced in California during the 15 plus year period, which included convictions and his losing his real estate license according to press reports.
Robbins and Controversy
Robbins has had a highly controversial thirty-year track record, starting in Los Angeles, CA in which he was known as the city’s most “notorious slumlord” to his ownership of the Hope Artiste Mill, where a growing number of former shop owners call him everything from “the lowest of the low” to “morally bankrupt.”
The state's deal with Robbins was overseen by Commerce RI’s Darin Early, and according to multiple sources, beyond the two memos, he failed to disclose any of the past or present controversies that Robbins has been embroiled in — issues previously reported in dozens of articles in the Los Angeles Times over a 15 year period, and ones that have been unveiled by a GoLocal investigation.
GoLocal has received confirmation that besides the initial article by GoLocal about the House race and the memo from the member of Gazdacko's team, no independent review was conducted by Early or his team.
No Commerce staff members conducted any independent review nor did they contact officials in Los Angeles or in other communities in which Robbins faced controversies.
Early's Role in Tourism and now Robbins
Early, who oversaw the selection of the vendors for the failed RI tourism campaign, earns $175,000 a year plus benefits as President and Chief Operating Officer at Commerce.
Elected officials and state leaders are calling for this project to be halted and are questioning why Rhode Island would go into business with someone with a track record like Robbins.
On Thursday night, GoLocalProv received a statement from Michael F. McNally, Chairman of the Commerce Corporation’s Investment Committee.
“The Investment Committee of the Commerce Corporation Board reviews projects applying for tax credits. Our committee was made aware of two things: the importance of the Hope Artiste Village project by members of the community, and allegations against Urban Smart Growth in California. This information was also disclosed to the full board," said McNally. He is a retired Member of Skanska’s senior executive team.
Behind on Taxes
According to those with firsthand knowledge of the briefings, there was limited disclosure that Robbin’s Rhode Island properties, which had often been significantly behind in taxes, both in Pawtucket and Central Falls, but no disclosure of other issues legal issues, convictions or penalties.
According to a 2014 article by the late-Bill Malinowski, “Hope Artiste Village Proprietor LLC, and the owners of a mill complex referred to as The Thread Factory on more than 12 acres straddling the Pawtucket-Central Falls line owe the cities a total of $776,306 in unpaid property taxes. It breaks down to $410,000 owed to Central Falls and $366,306 to Pawtucket."
In addition, Malinowski wrote that Robbin’s 'Hope Artiste Village' owed Pawtucket $124,690 for that current tax year during that period. In total, Robbins owed Pawtucket and Central Falls over $900,000 in taxes.
Both Central Falls and Pawtucket Mayor's offices tell GoLocal that Robbins paid up his taxes in order to be eligible for Rhode Island tax credits.
Members of the Board of Commerce RI are less than pleased with the staff work on the Robbins project and are concerned that other projects may have issues.
Controversies Across the Country Include:
Los Angles, CA
- Robbins was cited with 105 health and building-code violations, piled up 32 convictions, paid a $1 million settlement, just to name a few of his legal problems, according to press reports.
“Residents of a dilapidated building who say they regularly fight off armies of giant rats, swarms of cockroaches and youth gangs that roam their hallways have sued the building's owner for $10 million,” wrote the Associated Press in a 1986 article.
For more than 15 years, housing advocates, consumer groups and government attorneys took dozens of legal actions against Robbins and his companies. After years of legal battles, he pleaded to some crimes, and paid more than a million dollars in fines.
One of the top advocacy lawyers in the country, Lauren Saunders, told GoLocalProv.com following the announcement on Tuesday, “Robbins was one of the most dishonest and unscrupulous people I have come across in my career working for vulnerable tenants and consumers. I cannot imagine entrusting any (public) money to him.”
As early as the mid- 1980's Robbins was being prosecuted by housing code violations. As the LA Times reported, "He was fined $500 for a misdemeanor health code violation, in the first of eight convictions he would receive over the years for health and safety violations that included rat and cockroach infestations. He was sentenced to a 30-day jail term in 1987 after pleading no contest in two slum cases and admitting that he violated parole in an earlier one. Robbins agreed to donate $5,000 to the nonprofit Children of the Night in connection with another violation. He pleaded no contest to three fire code violations at a 63-unit building he runs and was ordered to serve 18 months probation."
Former Business Partner
Frank Gamwell, a former business partner of Lance Robbins of Urban Smart Growth (USG), said that he would "never do business with him again" after suing Robbins for $28 million and ultimately receiving the amount in arbitration.
Now, Gamwell is warning that Rhode Island should be doing its "due diligence" in dealing with Robbins.
North Carolina
Urban Smart Growth (USG), was sued by the Town of Belville, North Carolina, in 2015 for backing out of a project, GoLocal has learned.
Not only did the project never come to fruition, press reports show that USG engaged in discussions with the adjacent town of Leland to annex Belville's downtown and undertake the project with them instead.
"We need to bring [Robbins] to light. It's really a shame-- he goes and buys up cheap property and tries and hoodwinks the local city councils to fund this kind of development," said Peter Schardien, who is the husband of Belville Commissioner Donna Schardien, of Robbins. "He's an attorney, or he used to be, and he knows how to get around things. He's no good."
Rhode Island
Blaze:
Phyllis Arffa, the originator and owner of the restaurant Blaze, said that Lance Robbins of Urban Smart Growth threatened to bankrupt her when her business was struggling at Hope Artiste Village.
Arffa, who owned and operated Blaze on Hope Street in Providence before moving to Hope Artist Village in 2015, said that she has had to go back to working in a kitchen to pay back $70,000 in debt that she accrued while trying to make Blaze work under Robbins, which she said she ultimately had to step away from due to financial and health reasons.
Nosh:
A fourth former business owner in Hope Artiste Village has come forward to tell her story of a failed business venture under developer Lance Robbins -- who she says is "lower than low."
Lee Forbes told GoLocal on Tuesday of how she opened Nosh in 2014, but by 2015 was fighting Robbins to try and stay in the mill space, despite having always paid rent on time, she claims.
"[Commerce] didn't do their due diligence. Were there meetings open to public input on this? If so I would have been present," said Forbes of Governor Gina Raimondo and Commerce awarding the tax credits. "This guy is as low as they go."
Rosinha's:
A former restaurant owner at Hope Artiste Village said that she "wished she had sued" Urban Smart Growth (USG), the management company that was awarded $3.6 million in tax credits from the RI Commerce Corporation this week.
Rosinha Benros, who had opened and owned the restaurant "Rosinha" at Hope Artiste Village, said she had a number of issues with USG -- including having had gas being turned off due to USG not having paid their National Grid bill.
"I opened that space, I created that place," Benros told GoLocal on last Thursday, of the restaurant she ran for over three years. "I can't even drive by, I loved that place so much. It just breaks my heart."
Metropolitan Public Safety:
A former security services vendor for Hope Artiste Village is claiming that owner Urban Smart Growth (USG) never paid them $23,583 for services in a six-month span starting in 2013.
On Monday, USG, whose CEO and principal is controversial developer Lance Robbins, was awarded $3.6 million in state tax credits from Governor Gina Raimondo and the RI Commerce Corporation.
“We started services on December 13, 2013 and ended services on June 21, 2014. They paid a total of six invoices during our services,” said Karen Voisard with Metropolitan Public Safety, who provided the check stubs from USG. “As of current standing with the company we are owed $23,583.00 for eighteen overdue invoices.That doesn't include any of the late charges as stated in our contract.”
Voisard provided copies of the eighteen overdue invoices along with the contract in place.
Related Slideshow: Growing Chorus of RI Leaders Call For Review of $3.6M to Controversial Developer
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- RI Security Firm Says Developer Robbins of USG Won’t Pay $23K Bill
- “This Just Isn’t Fair,” Says Restaurant Owner About Developer Robbins Getting $3.6M RI Tax Credit
- Former Business Partner of Robbins of USG Sued and Received $28M - and Warns RI
- Chippendale Calls for Halt to $3.6M in Tax Credits Awarded to Robbins from Raimondo, Commerce
- Closed Baker Says Robbins is “Morally Bankrupt” and Opposes Raimondo Giving Him $3.6M
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