A Potential Residential Development Threatens Indian River County, FL South Beach Property Owners. And Who Are The Developers?

Round Island 1

SURELY IF YOU LIVE IN VERO BEACH OR INDIAN RIVER COUNTY (IRC), FL YOU’VE DRIVEN DOWN A1A TO FORT PIERCE AND PASSED BY ROUND ISLAND PLANTATION, AN ABANDONED RESIDENTIAL DEVELOPMENT ON THE WEST SIDE OF A1A.

It may no longer be abandoned.

With a mailing address in Plantation, Florida, SBM Associates, LLC is on its way to developing the abandoned property.

SBM filed two petitions with the St. Lucie County (SLC) Planning and Zoning Commission to develop 43.34 acres at Round Island Plantation in North Hutchinson Island.

One petition was to develop 13 condominiums on the east side of A1A varying in size ranging from 1,200 to 1,800 sq. ft.

The other petition was to develop 25 single family residences with a 35′ hight restriction on the west side on lot sizes ranging from 5,327 to 7,100 sq. ft. These residences will back up to the Indian River Lagoon.

On August 23, 2016, the SLC Growth Management Director through GM Order 06-021 approved a Minor Site Plan known as Round Island Plantation.

Then on November 17, 2016 the SLC Planning and Zoning Commission held a public hearing on the “Preliminary” Planned Unit Development (PUD) Site Plan petitions.

The South Beach Property Owners Association (SBPOA) formally registered its objection to “this environmentally destructive project” and called upon Mr. Stan Boling, IRC Community Development Manager to instruct environmental staff to participate in the public hearing in SLC on November 17, 2016, bearing in mind this project is imposing SLC standards for environmental care on IRC zoning.

 

Round Island 2

Further, the SBPOA advised that individual bona fide single family residential owners impacted in IRC are objecting to the project on the grounds of quality of life destruction.

A “final” plan was to be submitted by SBM in early 2017, but apparently has not been completed, since it has been requested by SBPOA and has not been received.

SLC Senior Planner Jeff Johnson wrote to the SBPOA indicating the final plan will go before the SLC Board of County Commissioners in the May, 2017 timeframe for a vote to approve the development

Here’s one problem:

SBM’s development plan includes six family residences in Indian River County. The portion of the development lying in Indian River County (IRC) will need to be re-approved by the IRC Planning and Zoning Commission (PZC) through the preliminary plat process. Through the preliminary plat process the applicable long distance relationships will be applied during the review by all applicable IRC departments and IRC PZC.

 

Round Island map

Round Island Plantation Map. The yellow is IRC.  Note the Indian River Lagoon to the left.

Here’s the other:

SLC has no restrictions on short-term rentals. IRC does.

The planned condominiums and residences are ideally suited as transient boarding houses (short-term rentals).  Imagine the impact of 38 transient boarding houses operating on IRC’s south beach border?

As of 3.21.17 the web site VRBO lists 988 short term rentals in Fort Pierce, the city in which Round Island Plantation is located.

If each house has an average of two cars (many short-term rentals may have up to five) that would potentially be an additional 88 cars traveling up and down A1A passing the Moorings going to Fresh Market or Publix.

While the proposed project will be served by SLC Utilities Water and Wastewater services, in terms of the properties in IRC, the City of Vero Beach would be the water provider but their sewer services does not extend to the County line; so  those properties would be on septic tanks, unless SLC and IRC enter into a deal for SLC to provide sewer services.

Now let’s look at whether or not this project would ever succeed.  It has changed hands three times in five years and has failed as a traditional housing venture with each owner.

The first developer was David Farrow and George Schmidt, Watermark Properties, et.al.

Here is a post we found from August 8, 2010:

“I am trying to contact any investors with David A. Farrow of Watermark Properties, Vero Beach, Florida. I am an investor in Vero Holdings, LLC, and am hoping to hear from other investors who haven’t yet joined the investigation into the fraud perpetrated by David Farrow and George Schmidt, Watermark Properties, et.al. Currently, 25 of the 55 total investors have submitted evidence, documentation and sworn statements. Farrow and Schmidt are being investigated by the FBI in Ft. Pierce, the IRS, the Indian River Sheriff’s Dept., and the Florida State Attorney General’s office. George O. Schmidt is now a convicted felon.

The estimated value of the fraud is $15 million. They have set up new bogus corporations in Florida using their wives’ and relatives’ names, and are starting over again.”.

Also, they are being sued by investors from around the country.

Currently, 25 of the 55 total investors have submitted evidence, documentation and sworn statements. Farrow and Schmidt are being investigated by the FBI in Ft. Pierce, the IRS, the Indian River Sheriff’s Dept., and the Florida State Attorney General’s office.”

Here’s another post dated June 27, 2012.

“Yes, we all had personal guarantees, sorry to say. I have just heard Farrow has been discharged from all debts through a bankruptcy filing. He walks while we all suffer. There are at least 55 investors who will never see a nickel, thanks to his and Schmidt’s scheming. They laid a paper trail that is proving very difficult for the FBI to follow, but I believe in time they will finish the job.”

Then this post dated January 15, 2014.

Yes, the bubble bursting was Farrow’s favorite whine. I suggest you speak with Det. Thornton of the Fort Pierce Sheriff’s Dept. He will tell you about his investigation before it was taken over by the Fort Pierce FBI office. It is about following the huge, obfuscating paper trail deliberately left by Farrow et. al. as they sold the property I was invested in over and over to each other, their wives, dummy corporations, each time inflating the value, then borrowing against the inflated value. Then, as in every Ponzi scheme, once the flow of new investor input ceased, they were unable to make payments and lost the property. So much for my ‘guaranteed’ investment, as well as for the dozens of other investors. And as for Schmidt, he has been convicted of a felony for selling Oxycontin. I don’t care in which state, a felon is a crook.”

Mr. Farrow passed away on August 30, 2016

Then the bank took possession.

The next developer was the Heaton Companies and George Heaton.

Heaton Companies

On July 21, 2009 there was an Order by District Judge K. Moore in response to a complaint by Joe and Stacy Tippens and Doug and Ranet Tippens against the Heaton Companies and George Heaton (Tippens V Round Island Plantation, LLC.)

Here is the “Background” written by Judge Moore:

“This case involves an alleged real estate investment scam. Plaintiffs claim that they were induced by the Defendants to purchase interests in a condominium development called Round Island Plantation on the ocean, near Vero Beach, Florida. Defendants promised to arrange complete financing for Plaintiffs, to procure a builder for the project, and to complete the development community’s road, sewer and water infrastructure. Plaintiffs claim they were told that they would realize substantial returns on their investments in the project by selling their interests in the homes to prospective residents of the new condominium complex, whom Defendants would line up. The infrastructure of the development community is, however, substantially incomplete and Round Island has neither the financial ability nor intention to complete it. No real work has taken place towards completion of the condominium community, and, according to Plaintiffs, the Defendants have neither filed any of the required documents necessary to establish the condominium community nor secured the approvals necessary to construct it.”

Interestingly, this same fellow, George Heaton, was featured on the front page of the March 30, 2017 issue of 32963 under the headline “Hotel developer Heaton facing felony charges.”  As reported by staff writer Lisa Zahner, “The developer and owner of the island’s finest hotel, 73-year-old George Heaton, is facing a 30 year federal prison sentence plus millions in fines and restitution payments if convicted on nine felony charges that he, his accountant and his title agent made false statements on  mortgage locations for buyers of condominium units at his Vero Beach Hotel & Spa.”

The public should know this property has changed hands at least three times in five years and has failed as a traditional housing venture with each owner and what is to suggest this time will be any different.  Mortgage and cost date suggests the only way this venture will be a success is an airbnb.com plantation.  And that Indian Rental Plantation has always been owned by criminals.

Now, who is SMB Associates, LLC, the new developer?

According to SMB’s 2016 Annual Report, FEI Number 46-3478383, SMB has three partners/owners.

One is Padraig Naughton from New York, NY.  One is Donal O’Sullivan from Douglaston, NY (Queens).  The other is Michael Mahopal, NY.

As best as we can determine, Mr. O’Sullivan is the CEO of Navillus Tile, Inc. and co-owner with his brother Kevin O’Sullivan. Navillus is an “illustrious leader in the construction industry, committed to providing the most outstanding customer service and quality craftsmanship for every project it takes on.” (Source: Navillus website)  This may be him.

OSullivan_Donal

We also believe Padraig Naughton is the controller for Navillus Tile.

And as for Michael Brewster, we believe he is a principal of Time Square Construction.

Around 2004 or 2005, Donal and his brother Kevin brother, decided to launch a new business venture as a general contractor that would build properties. The brothers and two co-owners purchased a property on 48th Street and 8th Avenue (the “Project”) and formed Time Square. Kevin, who resigned from Navillus, became President of Time Square, and the company is owned by the two brothers. Kevin is and has always been the only officer of Time Square. Although Donal shares in the profits of Time Square, he is not an officer or director of the company and he has minimal involvement in its operations.

And then we found this on the http://www.laborpress.org website.

November 5, 2014
By Joe Maniscalco

“Companies with ‘alter egos’ are costing construction workers big time.New York, NY

A new lawsuit brought by members of the Concrete Industry Coalition alleges that a major construction firm working with the City of New York used a collection of “alter egos” to avoid paying more than $35 million in union benefit funds.

The owners of Navillus Tile are signatories of collective bargaining agreements with several unions including Metal Lathers Local 46, Cement and Concrete Workers District Council, Cement Masons Local 780, and the New York City District Council of Carpenters. But the unions involved in the lawsuit filed last month, charge that Navillus formed two “alter ego” companies – Advanced Construction Solutions [ACS] and Time Square Construction – to avoid paying contractually obligated payments that should have helped fund worker health benefits, pensions, training, education and more.

According to the suit, ACS and Time Square performed work covered by union contracts at the City Point project on DeKalb and Flatbush avenues in Brooklyn, a publicly funded project in the Bronx located at 1191 Boston Post Road, and two other sites in Manhattan located at 400 155th Street and 551 West 21st Street.

The complainants in the lawsuit contend that Navillus’ actions violated collective bargaining agreements, as well as the Employee Retirement Income Security Act [ERISA].

Navillus did not respond to request for comment.

The company was founded in 1987 and specializes in ‘high-end’ commercial masonry, tiling and stone,” and is involved in hundreds of construction projects annually.

Big companies like Navillus benefit from collective bargaining agreements in a number of ways, among them, having immediate access to a ready pool of highly trained professionals who can be called upon as the needs of individual construction projects evolve.

When companies who have entered into collective bargaining agreements turn around and use many of those same resources to do non-union work under a different name, the resulting entity is viewed as an ‘alter ego.’

Industry insiders say that the use of ‘alter ego’ companies like the ones Navillus is accused of creating, is becoming an increasing trend that organized labor must now confront.”

The lawsuit is continuing.

Then if you study Mr. O’Sullivan, Mr. Naughton and Mr. Brewster, you find they have interests in Blackshore Partners, LLC, Blackhawk Properties and Investments, LLC, Blackfin Properties & Investments, LLLP and Southeast Plantation, Inc.  All related real estate development firms.

Perhaps PLC should do further due diligence as to how this proposed development could   deceive the public.

Round Island scheth

March 27, 2007 investment opportunity in Round Island Plantation.

 

 

 

 

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