A West Palm Beach city official disqualified the winning bidder to operate the Sunset Lounge, an iconic nightclub in the city’s oldest black neighborhood, in large part because the bidder’s friends waged a Facebook campaign of support.
However, the city’s procurement officer did nothing to investigate whether those friends were representatives of top-ranked Vita Lounge, a standard needed to disqualify them over prohibited lobbying, procurement officer Paul Bassar testified in an Oct. 7 deposition. Instead, he said he relied on copies of Facebook posts provided by his boss, the city attorney.
His answers place West Palm Beach Mayor Keith James squarely in the crosshairs of a lawsuit challenging the city’s disqualification of the all-black Vita Lounge, one of two bidders seeking to run the long-shuttered nightspot in the city’s oldest black neighborhood.
A trial date before Palm Beach Circuit Judge John Kastrenakes has not yet been set to answer the key question of whether the city properly disqualified Vita.
James, who set off the chain of events leading to Vita’s disqualification by forwarding an email to the city attorney, backed Vita’s lone rival, Mad Room Hospitality, in the 4-2 June 27 city commission vote that awarded the project to Vita. Vita sued on July 25.
At stake is control of a newly restored 150-seat restaurant and second-floor nightclub on Rosemary Avenue seven blocks north of Banyan Boulevard in the city’s Historic Northwest Neighborhood. The city’s Downtown Community Redevelopment Agency poured more than $20 million into buying the property and rebuilding the Sunset Lounge and creating the “Heart & Soul” park in front of it to revive one of the city’s poorest, most crime-ridden neighborhoods. The money comes from property taxes paid downtown.
With the selection of an operator stalled, the Sunset Lounge stands empty, costing the CRA an estimated $320,000 a year, including $145,000 for insurance and $95,000 for security.
After Vita’s disqualification, the city agreed to negotiate a contract with Mad Room but it, too, ran afoul of the city’s procurement code. Mad Room, which runs the Ball & Chain Club in Little Havana, was disqualified over emails its top official exchanged with James — emails discovered by Vita attorney F. Malcolm Cunningham Jr.
Mad Room has since said it no longer wishes to be considered for the job.
Vita made its pitch as a group of West Palm Beach-based black entrepreneurs and professionals, with experience booking nightclubs and running restaurants. They were led by Darrin Cummings, who runs the Bamboo Room in Lake Worth Beach.
James set the tone for an emotional selection meeting, saying before either side made their pitch, that the decision would not be based on race.
“Would it be nice to have an African American operator that could do the job and take this to the next level? Absolutely, yes it would,” the mayor said. “However, in my view that is an inappropriate standard to use to judge who will ultimately get this contract.”
Did the mayor drive the decision?
If Cunningham can prove that James set his staff loose to disqualify Vita, ushering in his preferred operator, it would support Vita’s contention that the city acted in an arbitrary and capricious way, voiding the disqualification.
Cunningham asserts that a June 30 email sent by the mayor to the city attorney prompted the procurement officer’s investigation. But Cunningham has unearthed no other evidence to tie James to the decision to disqualify Vita, which came 12 days later.
In fact, the record shows so little followup by the mayor, Cunningham deemed it suspicious.
“Just think about that. The mayor, your boss, sends you an email and says ‘do we have a cone of silence problem?’ on June 30 and you tell me you didn’t respond to that email until the 12th of July? I think not,” Cunningham said.
But the city’s failure to conduct a proper investigation, revealed primarily in the deposition of the city’s procurement officer, could be viewed as supporting the theory that the mayor’s action led to Vita’s disqualification.
“Otherwise, why would you disqualify somebody on a high-profile procurement without doing any investigation whatsoever?” Cunningham asked. “How do you do that?”
Bassar, the city’s procurement officer, said he never discussed the bid with the mayor. And Cunningham has unearthed no evidence of discussions between the mayor and City Attorney Kimberly Rothenburg.
While Kastrenakes, a former federal prosecutor who oversaw the prosecution of three Palm Beach County commissioners in the mid-2000s, allowed Cunningham to question James under oath, the mayor’s discussions with the city attorney were protected by attorney-client privilege.
In the mayor’s Oct. 5 deposition, many questions went unanswered awaiting the judge’s ruling on whether the mayor should be forced to answer. That resulted in a second deposition on Nov. 22, which has not yet been entered into the public record.
City attorneys Anthony Stella and Doug Yeargin described the decision to disqualify Vita as “furthering the public interest by stopping impermissible lobbying and the appearance of undue influence in the procurement process.”
“Indeed,” they wrote, “if Vita Lounge wanted to show its community benefits and support, it had the opportunity to do so (in its formal response) — not as part of lobbying efforts to unduly influence city commissioners.”
But even if Vita’s actions didn’t meet the strict standards of the city’s procurement code, it matters little, the city argued in court motions. Cities have vast leeway under Florida law in deciding who is playing by the rules because the city makes the rules.
“The law is clear that the courts grant broad discretion to the decisions of municipalities in applying and interpreting their municipal codes,” Stella and Yeargin wrote in an Aug. 2 filing.
When is a partner not a partner?
Still, the description of events offered by Bassar, a Palm Beach Gardens resident who served as procurement officer for less than a year, are cringe-worthy.
He took an email showing a Facebook posting of Lorenzo Lolly Hutchinson, who was listed in the lingo of Facebook as being “with” Vita Vice President Darrin Cummings, to mean that the posting came from Cummings as well.
Cunningham argued that “with” meant that Hutchinson had tagged Cummings with the post so he would read it.
Hutchinson’s post started out: “I need a favor from y’all. My partner Darrin Cummings is up for the Management Company for the Sunset Lounge. On Monday the city commissioners vote on who gets it. … The vote will be Monday at the city commissioners chambers at 3 pm if you can make it and show support.”
While Hutchinson refers to Cummings as his partner, Hutchinson, a Riviera Beach-born former player with the Harlem Globetrotters, testified in his Oct. 6 deposition that he had no role with Vita Lounge and no involvement in the bid.
When asked what he meant by the word partner, he said “Like, my home boy. My partner.”
“And when you say home boy,” the city’s attorney, Stella asked, “do you mean …”
“Friend,” Hutchinson replied.
“Like a friend?” Stella asked.
Bassar, who left the city for the private sector in September, didn’t know that because he didn’t check.
“So if partner meant homeboy or friend, in your mind that was sufficient to ascribe to Vita Lounge whatever Lorenzo Hutchinson said?” Cunningham asked Bassar. “So you understood Lorenzo Hutchinson to be a partner of Vita Lounge, correct?”
“That was my understanding based on the post,” Bassar said.
“And did you undertake an investigation? Did you call anybody, did you go onto SunBiz and see whether or not Lorenzo Hutchinson was a partner?”
“I did not.”
He also made no effort to check the connection to Vita among many others who urged support of Vita on Facebook.
“You know, my investigation was: was contact made or was lobbying made — was contact made to the commission or the — the city commission? And the answer that I answered was yes,” Bassar said. “And in answering yes, I further asked myself, based on what I read, was this an attempt to influence? And my answer was ‘yes, based on these documents that I’m reviewing.’ So, you know, if you’re asking me if ‘partner’ had anything to do with the decision, the whole document was my decision based on all the elements that are in this document.”
When is a representative not a representative?
The city’s July 12 notice of disqualification, which Bassar said he signed even though it had been written by the city attorney, cited as one reason for disqualification: “Facebook posts dated June 25, 2022, by Darrin Cummings and Lorenzo Lolly Hutchinson, Darrin Cummings’ partner.”
“Several individuals who commented on the post did in fact then send email to the commissioners,” the notice said, making a case that the postings resulted in direct efforts to sway the commission, a violation of the city’s lobbying prohibition.
But, under city rules, those efforts must come from a representative, defined as “the proposer, the proposer’s employees, partners, attorneys, officers, directors, contractors, lobbyists or any actual or potential contractor or subcontractor of the proposer or the proposer’s team.”
In one case, the city cited an email from a Vita consultant, Tracy Thomas, asking residents to email commissioners their support for the project. Her appeal resulted in about 40 emails sent to commissioners.
But her email did not violate the code, Cunningham argued, because it was not sent to the mayor or city commission. It simply urged residents to voice their opinion, “a permissible contact under the code,” he wrote.
None of the emails sent to commissioners came from a representative of Vita Lounge so they did not violate the code, he said.
When is a TV interview not a TV interview?
Finally, the city cited Cummings for giving an interview to WPBF-Channel 25 after Vita won the commission vote, pointing out that “news releases, publicity releases or advertisements” were not allowed without city approval.
The mayor’s June 30 email initiating the disqualification probe started with an email from his communications director, Kathleen Walter, who left the city in September.
“As explained to me, media interviews such as this would constitute a violation of the procurement cone of silence,” Walter wrote to the mayor at 9:22 a.m. on June 30, forwarding a link to the TV interview.
Fifteen minutes later, James forwarded the email to Rothenburg, copying several other officials, with the note, “See article attached to the email below. Do we have a Cone of Silence problem here?”
“I was forwarding to the city attorney an email which inquired whether there was a cone of silence problem,” James said in his Oct. 5 deposition. “I’m not the attorney. It was a legal question. I forwarded that to my city attorney.”
For the next 12 days, the evidence shows the mayor took no action and spoke to no one about his concerns, Cunningham said. Bassar began investigating, formally receiving copies of the Facebook posts on July 6.
Even if the city could stop Cummings from speaking freely to a TV reporter, Cunningham argued, Cummings didn’t discuss the bid but focused on the historical significance of the Sunset Lounge.
Bassar wouldn’t have known that, though, because he testified that he didn’t watch the TV interview. He also didn’t check to see if Cummings had gotten city permission to appear, as required under the code.
Rather, he said, the news interview constituted a news release.
“I mean, for me, any type of communication, it would be a news release whether it’s written in a(n) article, in a magazine, in a TV. You know, a news release would just be any form of communication that’s provided — you know, that’s written and is provided to the public,” Bassar testified.
“And that includes where a TV reporter interviews a person, you consider that to be a news release?” Cunningham asked.
“I would,” Bassar said.
News releases typically are sent via email to the media by companies like Vita to draw attention to positive outcomes, such as winning a city contract.
Bassar testified he knew of the mayor’s interest in the issue only through the email that had been forwarded to him. He did, however, talk about the Facebook posts with Rothenburg, the city attorney and his boss.
“I had a conversation with my boss,” he said. “She wanted to see me about this.”
His attorney however, wouldn’t allow him to testify about what she said, citing attorney-client privilege.
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Joel Engelhardt is a co-host of The Reporters podcast, which is sponsored by Subculture Group, a company owned by Rodney Mayo, who is running against Keith James for mayor of West Palm Beach.
© 2022 Joel Engelhardt. All rights reserved.
2 thoughts on “Mayor Keith James in crosshairs of Sunset Lounge lawsuit”
Is this the same Mayor Keith James who was “investigated” for accepting gifts from lobbyists/consultants in 2019?
And for “steering” a City procurement to his cronies in 2020?
He’s a busy fellow
Smoke = Fire?