By John Pacenti
A newly transformed Delray Beach City Commission decided March 31 to settle litigation with the ousted nonprofit that previously ran Old School Square, ending a contentious 18 months that split the city’s power structure.
The decision came just weeks after the city, in an email obtained by The Coastal Star, added to the controversy by alleging that the nonprofit — “with felonious intent” — took three glass sculptures by famed artist Dale Chihuly worth about $18,000 belonging to the cultural arts center, a claim the nonprofit disputed. The email demanded the artwork be returned or the city be compensated triple its value, or $54,000.
Attorney Marko Cerenko, the attorney for the nonprofit Old School Square Center for the Arts, Inc., said that under the proposed settlement, both sides will surrender their legal claims.
“My client felt that with the breath of fresh air with the new commission, that their resources were far better served in serving the community,” Cerenko said.
The old commission, in one of its final acts in power March 28, tried to insulate the Downtown Development Authority, which was just given control in February over managing the downtown cultural center. The commission removed from the DDA contract a 180-day “without cause” cancellation clause that the new commission could have used to change the management back to the nonprofit.
After the March 14 elections, only Mayor Shelly Petrolia remains on the dais from the 3-2 majority that removed the nonprofit in August 2021, saying it failed to disclose its financial records and mishandled renovation of the Crest Theatre.
Discussions about the settlement were not public because of attorney-client confidentiality, but when commissioners emerged from their special, closed-door session March 31, they opened the door to reestablishing a relationship with the nonprofit. All of this was done without Petrolia, who had a prior commitment.
The nonprofit sent the proposed settlement to the city the day before, after the prior commission’s final meeting, leaving the city’s decision on the proposal to the new board.
The commission voted 4-0 to have the city attorney negotiate a final agreement and execute a settlement. Then Commissioner Adam Frankel — long an ally of the nonprofit — said commissioners should meet in a workshop with Old School Square Center for the Arts representatives to make amends and find ways to work together.
When City Attorney Lynn Gelin suggested that the DDA be present at a workshop, Vice Mayor Ryan Boylston shot that idea down and it was agreed that the commission would meet only with the nonprofit.
“I clearly recognize that Old School Square did make some mistakes here but I don’t think they were fatal mistakes,” Frankel said.
He said that he wanted to sit down with the nonprofit to “try to reestablish some kind of partnership, not only with the DDA, who we asked to do things at the campus, but also with the city.”
The workshop with the commission and the former operators will be held at 6 p.m. May 9 at the Arts Warehouse, 313 NE Third St.
Boylston said the DDA would be brought in after that meeting takes place.
“We’ll bring in our established partner that we’ve already made a decision on, which is the DDA, and they are out there and doing their thing and we have a partnership with that,” he said.
“But I think first we’ve got to mend fences more than we did today and have a conversation about what does the future of our relationship look like between these two entities.”
When contacted following the meeting, DDA Executive Director Laura Simon said that she had not heard about the commission bringing the former managers back into the fold.
How it got to this point
The turnaround was remarkable but not surprising.
Petrolia and Commissioners Juli Casale and Shirley Johnson voted to throw out the nonprofit. But in the city’s March elections, Casale lost to Rob Long, and Angela Burns won the seat that Johnson had to vacate because of term limits.
Both won their seats by fewer than 400 votes and both campaigned on wanting to return the management of Old School Square to the nonprofit.
Five former mayors backed Long’s candidacy, as did board members of the nonprofit.
In the wake of the settlement, Casale said that “handing the keys back over to a group that mismanaged Old School Square to fulfill campaign promises seems like collusive government at its worst.”
An internal auditor found that the nonprofit had missing records, including an annual budget report, an annual audit report and two IRS forms that pertain to nonprofits.
The Coastal Star discovered the nonprofit reported more than $746,000 in net income for the fiscal year 2018-2019.
The auditor also found the nonprofit might have inadvertently “double-dipped” by using a federal Paycheck Protection Program loan to pay for the same payroll expenses already covered by Community Redevelopment Agency money.
The CRA demanded a return of $187,500 and stopped the flow of taxpayer money to the nonprofit.
The decision to oust the nonprofit enraged not only the entity but its well-monied supporters. The nonprofit filed suit in November 2021 against the city, Petrolia and others for allegedly breaching the lease, violating the state’s Government in the Sunshine open meetings law and civil conspiracy.
The city countersued, claiming breach of contract for, among other things, leaving the interior of the Crest Theatre in a demolished state.
Where it goes from here
Regarding the missing Chihuly artwork, Cerenko said the art always belonged to the nonprofit, not the city, and the letter was just attempted leverage by “certain commissioners” in the litigation.
He said the nonprofit is “hoping that the new commission is going to be significantly more supportive of what they have done and what they continue to do, as opposed to the old commission.”
Boylston, in a text message to The Coastal Star following the meeting, said it was time to mend fences.
“Ending these lawsuits is the right thing to do for the taxpayers and for our community; paying endless lawyer bills to prove a point is just wrong,” Boylston wrote. “It’s time for a long overdue public workshop with the board of Old School Square Inc. to address whatever issues are outstanding, because only then can we move forward with any decisions on the future management model of the Old School Square campus.”
Correction: An earlier version of this story had an incorrect location of the commission's May 9 workshop with Old School Square's former operators. The workshop is being held at the Arts Warehouse, 313 NE Third St.
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