A GoLocal investigation has found that Governor Gina Raimondo’s gubernatorial campaign in 2014 failed to properly report at least one campaign gift from California developer Lance Robbins.
Raimondo held a major campaign event at Robbins’ property — her gubernatorial campaign kick-off event — and did not report the in-kind donation. When first asked, her campaign claimed that the amount of the gift did not require reporting.
However, a GoLocal investigation into the actual fair market value of the rental found that the Raimondo administration masked the actual cost and did not properly report the value of the event, circumventing the state statute. The case mirrors a previous GoLocal investigation relating to Speaker Gordon Fox and political insider Michael Corso.
Ric Thornton, Director of Campaign Finance at the Rhode Island Board of Elections, told GoLocal that in the Board's Campaign Finance Manual, an in-kind contribution "is the monetary value of paid services, or other things of value donated to any person required to file reports with the Board of Elections. The value of an in-kind contribution is determined by the fair market value or prevailing commercial rate of the goods, services or other thing of value contributed."
Rental Rate Inquiry
GoLocal’s Russ Moore called Hope Artiste Village for pricing, undercover, to determine the fair market value of renting space at the facility. According to staff at the property, the cost of the rental of the property for an event of approximately 100 people is $75 per hour — not the $7 dollars Raimondo’s campaign claimed, based on what they said was "pro-rating" a monthly lease.
“The space was donated as an in-kind contribution of less than $100, and as such would not have been reported. We used the room for roughly 5 hours between set up, event time and break down. For context, the space had an estimated retail value of $5,000 a month, which prorated comes out to less than $7 per hour. In all, it was an in-kind contribution of less than $35,” said Kate Ramstad of the Raimondo campaign.
An in-kind contribution of more than $100 is required to be reported.
In addition, additional costs of rental of tables and chairs were not taken into account. Calls and emails into Ramstad were not returned on Monday.
Robbins had come under scrutiny in California after being reported in the press as the one of the state's most notorious slumlords. He has been the subject of lawsuits in North Carolina and Connecticut. Most recently, former tenants of Hope Artiste Village in Pawtucket have come forward with their stories of failed businesses and financial ruin.
"One of the major economic development initiatives of the Governor and General Assembly was the massive expansion of the corporate welfare agency that did the 38 Studios deal. Rebranded as Commerce RI, this agency now has the tremendous power to hand out millions of dollars in preferential tax deals and cash subsides directly to corporations. Company-specific deals put the state government in the position of picking winners and losers. Without getting into a discussion of the merits of corporate welfare driven economic development, any agency that has the power of a Commerce RI must constantly be put under the public microscope," said former Rhode Island Director of Administration Gary Sasse.
Repeatedly, GoLocal has asked Raimondo, who chairs the Commerce RI Board, if she has concerns about the issues in California, Connecticut, North Carolina, and specifically in Rhode Island relating to Robbin's business practices, but she has refused comment.
Reviewing Deal
After more than twenty state officials and leaders have come over raising concerns about the award of $3.6 million to Robbins, Commerce RI issued a statement on Friday evening that Commerce Secretary Stefan Pryor would be directing a review of the award to Robbins.
Last Monday, Representative Mike Chippendale, Vice Chairman of the House Oversight Committee, called for Raimondo and Commerce to halt the $3.6 million in tax credits recently awarded to Robbins.
“You have to question every move [Raimondo] makes with a great amount of caution. We’re seeing fit to give $3.6M that would otherwise be revenues and we're giving to a millionaire,” said Republican Chippendale in an interview with GoLocal. “Let's not forget - [Commerce] wants to talk about safeguards. The language of the legal document for 38 Studios required a third party monitoring firm, which they never did. What makes us think if they couldn’t monitor $75M, how can we trust they’ll monitor $3.6 million? None of this adds up. It’s got too many holes in it.”
Also joining the chorus was Senator Leonidis Raptakis, who said, “I am sickened by the horrific professional history of Urban Growth Smart and I am quite dismayed that they were awarded more taxpayer money. Rather than helping out Rhode Island’s existing, and struggling, small businesses, the Commerce Corporation is giving more hard-earned taxpayer money to an organization with a national reputation of bullying small businesses and preying upon the underprivileged. This is simply not right and unacceptable.”
Speaker Nick Mattiello also urged Commerce to review the award to Robbins.
The report forced the Fox campaign to pay Corso and amend the campaign finance report:
House Speaker Gordon Fox on Tuesday wrote a check to the business owned by 38 Studios insider Michael Corso to cover previously undocumented expenses from a March 2007 fundraiser, according to a letter obtained by GoLocalProv
The $648 payment came nearly two months after initial inquires into the event, which was hosted by Corso and others. Fox spokesman Larry Berman said the payment will appear on Fox’s third quarter campaign finance reports.
“To be in compliance with campaign finance regulations, I am enclosing a check to cover the expenses,” Fox wrote in a letter addressed to Tazza Café, the Westminster Street lounge owned by Corso. “I am basing the amount on approximately 30 people who attended and a menu which included shrimp, cheese and crackers, grapes, and beer and wine. As there was limited food, I have estimated the cost to be $20 per person, in addition to 8% sales tax.”
The event was originally expected to be a small fundraiser held by Rickman, but Corso and Nappa took the lead on the event, with Corso offering catering services. According to a source in attendance, the event consisted mostly of individuals involved in the historic tax credit business, which Corso was connected to until moving on to film tax credits several years later. Records show Nappa contributed $1,000 to Fox.
Fox, then the House Majority Leader, raked in “$10,000 or so” at the $100-per-ticket private fundraiser, which was held at the Peerless Lofts, a property owned by Arnold “Buff” Chace.
Related Slideshow: Lance Robbins Controversies Through the Years
There are dozens of issues and hundreds of articles about Robbins controversies. GoLocal has broken down a dozen of the conflicts that have taken place across the country over the past 30 plus years.
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.
Attorneys for the Spanish-speaking residents related nightmarish stories of cockroaches biting sleeping children, a rat they said tried to drag a baby from its bed and another that allegedly attacked a man in the shower.
They said tenants feel rats crawl over them at night and some stand guard over babies all night, fighting off the rodents with brooms and slingshots.
The lawyers opened roach traps on the front steps of the South Union Street building near downtown to display dozens of huge cockroaches, some still crawling, which they said were caught in the building overnight.
The lawsuit, filed jointly in Superior Court by four private and public- interest law firms, accuses building owner Lance J. Robbins and his associates of refusing to make repairs, curb vermin infestation or provide reliable water, electricity or security in the 40-unit building, which houses large families in one-room apartments.
Robbins said Wednesday that none of his employees in the building have seen any rats and, ''I wouldn't be a bit surprised if a lot of this at the news conference was staged.''
Real estate broker and attorney, Lance Robbins, both owned and managed numerous "slumlord" apartments in the city of Los Angeles. This, as acknowledged by Robbins's attorney, was an extremely lucrative business. The record suggests, though, that Robbins took less than adequate care of the apartments under his control. Between 1985 and 1995, Robbins had been convicted of some 50 municipal building code violations. He was twice disciplined (1991 and 1994) by the State Bar for "facts and circumstances surrounding habitability violations in properties" that he owned.
In January of 2001, Robbins pleaded nolo contendere and was convicted of three misdemeanor violations of the fire protection and prevention provisions of the Los Angeles Municipal Code. He was fined $100 and placed on summary probation for 18 months. In March of 2003 the Department of Real Estate filed an accusation alleging that Robbins's convictions constituted cause for the suspension or revocation of his license as a broker.
Lauren Saunders of the National Consumer Law Center is one of the top tenant advocacy attorneys told GoLocal 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 city money to him.
Lance Robbins was the worst slumlord in L.A. history. The city's Slum Housing Task Force prosecuted him numerous times for horrible conditions at his buildings. He also ran up huge water bills at his buildings that he refused to pay, and the city was reluctant to shut off the water for fear of harming the tenants. I filed a False Claims Act case against him and he was forced to pay $1 million in back water bills.
He was also extremely ingenious about using a complex web of sham corporations to avoid liability. After the fines from his slum violations and his back water bills started adding up, he started foreclosing against himself and putting his buildings into receivership to escape accountability. His buildings were in numerous different corporations and partnerships and he put loans in other names against his own buildings, then started a foreclosure action. He then asked the court to appoint a "neutral" receiver who he chose who actually just let Robbins stay in control of the building. We detailed that in the same lawsuit.
Developer Getting $3.6M in RI Tax Credits Sued by N. Carolina Town for Backing Out of Project
Urban Smart Growth (USG), the developer who just received nearly $3.6 million in tax credits from Governor Gina Raimondo and the Rhode Island Commerce Corporation, was sued by the Town of Belville, North Carolina, in 2015 for backing out of a project, GoLocal has learned...
Robbins and USG stated on Monday that they are intending to utilize the Rhode Island tax credits to complete a $38.9 million project to develop 150 loft apartments at Hope Artiste Village in Pawtucket.
However, in North Carolina, a stalled USG project has led to the Town of Belville to seek arbitration, following its 2015 lawsuit against USG, who in 2007 had entered into a twenty-year agreement to develop a mixed-used project along the town's waterfront.
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."
Former Business Partner of Robbins of USG Sued and Received $28M - and Warns RI
Frank Gamwell, a former business partner of Lance Robbins of Urban Smart Growth (USG), has 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.
On Monday, USG was awarded $3.6 million in tax credits from Governor Gina Raimondo and the Rhode Island Commerce Corporation to develop lofts at Hope Artiste Village.
"This Just Isn't Fair,” Says Restaurant Owner About Developer Robbins Getting $3.6M in RI Tax Credits
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 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."
Benros said that issues with the change in management, coupled with having problems with The Met being located next door, led in part to her closing the restaurant.
USG's CEO and principal is controversial developer Lance Robbins, who in California was cited with 105 health and building-code violations, piled up 32 convictions, paid a $1 million fine, to name a few of his legal problems, according to press reports.
RI Security Firm Says Developer Robbins of USG Won’t Pay $23K Bill
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.
“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.”
Former Owner of Blaze Restaurant: USG’s Robbins “Threatened to Bankrupt Me”
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.
"I wish I never met [Robbins]. I had money in the bank, we were all set to relax for a little while," said Arffa after moving from Hope Street to the Hope Artiste village. "Now, I'm working 12 to 12 to just to pay back what I owe."
Arffa showed a text sent by Robbins threatening to bankrupt her.
The former owner of the Bread Lab at Hope Artiste Village, which is owned by controversial developer Lance Robbins, said she found him to be “morally bankrupt” as she was forced to close her operations in 2015.
Deana Martin, who had owned the Bread Lab with her husband, said that she battled with Robbins over a number of issues -- including the insurance money following the destruction of her bakery equipment due to the mill’s sprinklers going off one night.
“If you don't give him what he wants, he'll use whatever leverage he has to get what wants,” said Martin. “If it furthers his benefit, he'll take it from you, and the legal proceedings are just that — if he wins, he claims he’s not ‘guilty.’
