Tiki bar owner Bob Gregory and Riviera Beach city officials have had it made in the shade for five years running. It's taxpayers who are getting burned.
Gregory has run the popular Tiki Waterfront Sea Grill at the Riviera Beach Municipal Marina since 2003. The place occupies a prime piece of Florida paradise, on the Intracoastal looking out on Peanut Island, where boaters and tourists flock. It's packed with people every weekend.
Even city officials love the place. And sometimes, they drink and eat there for free. A prominent local civic association has charged that Gregory's Tiki Waterfront Sea Grill was being used by commissioners as a "free private club."
Trouble is that it's the people of Riviera Beach who foot the bill. The terms of Gregory's lease indicate that the city has squandered more than a million dollars in revenue on the deal during the past five years.
Let's break it down:
• The lease itself is grossly inaccurate. It shows that Gregory is renting 1,500 square feet of space from the city for the ridiculously low sum of $2,550 per month. In fact, the tiki bar occupies nearly 11,000 square feet of waterfront on the dock, along with a free boat slip. So Gregory is leasing a large waterfront bar and grill for about what the average person pays on a house mortgage.
• Gregory also pays the city a mere $800 a month for water, electric, and garbage service. According to city documents, taxpayers are paying an additional $900 a month for garbage pickup alone. Electric bills for the tiki bar average about $7,500 a month. Who's picking up that cost? The taxpayers.
• As if the deal weren't sweet enough, the city, with no official authorization or documentation, has given Gregory more than $10,000 worth of breaks on rent payments. In return, city officials ate free lunches at the tiki bar, along with other unspecified purchases. The fact that Gregory employs Ethel Isaacs Williams, wife of Riviera Beach Police Chief Clarence Williams, as his attorney only makes the relationship that much cozier.
The ridiculous lease is up for renewal right now, and veteran West Palm Beach club owner Michael Goelz, who has been investigating Gregory's tiki bar for the past several weeks, wants the city to put it out to bid. He says he would offer the city north of ten times what Gregory is paying. That would come out to more than $300,000 a year extra in city revenues.
Goelz, who owns Mr. G's Rock Bar & Grill in West Palm Beach, says he has used his contacts in the food and beverage industry to determine that Gregory, who didn't return a detailed phone message for comment, likely does more than $2.5 million in sales each year and clears more than $1 million.
It's a huge take, considering Gregory pays the city a mere pittance to use the property.
"I had my eye on the property, and I saw in the lease that it was 1,500 square feet," Goelz says. "Then I was sitting in there one day and started looking around, and suddenly it hit me: 'This place is huge.' "
He says the city must have known the lease was faulty. Gregory applied for a permit with the city to build the 10,636-square-foot tiki bar shortly after he signed the first lease in 2003.
But city officials either somehow missed the discrepancy or simply looked the other way as they ate and drank at the tiki bar. Goelz says he just wants a fair shot to bid for the lease.
"I'm not here to get anybody in trouble," he says. "I'm here to give the city a reason to give me a chance to win the bid. You don't understand — that place is a gold mine for the city, and they've given it away."
Putting the lease out to bid would seem the right thing to do. In Gregory's favor, he did build the structure five years ago. But even though he spent $500,000 on it, the waste in revenue to the city is still in the high six figures, if not a million dollars.
Considering the staggering amount of lost revenue, it's impossible not to wonder if more serious misconduct has been at play — and whether somebody should be in trouble. Singer Island Civic Association President Anthony Gigliotti thinks so. Gigliotti, a health-care consultant who lives on the upscale island with his wife, says the marina is one of several issues that need to be investigated.
"There are very serious questions raised with the tiki bar," says Gigliotti, who is married to Palm Beach County Clerk of Court Sharon Bock. "The only way the change is going to come down is if [federal investigators] bring a legal remedy."
The civic association prompted the state's auditor general to audit the city two years ago after the association complained about a host of problems, including an allegation that the tiki bar was used as a "free private club" for city officials.
The state's ensuing investigation somehow missed the larger problems with the tiki bar lease, but it found evidence pointing to institutional corruption, which might help to explain why Gregory has received the sweetheart deal.
For instance, auditors found that the city reduced Gregory's rent by $1,000 a month for five months in 2004. Former marina director George Carter told state auditors that he believed the break in rent was in exchange for several lunch meetings held at the tiki bar by city officials while they planned the city's Jazz and Blues Festival.
"However, we were not provided documentation of the individuals attending these meetings, the descriptions and costs of the items provided, or the purpose served," auditors wrote in their December 2006 report.
The state also found that the city reduced Gregory's rental fees by $5,999 in 2005 for various tiki bar charges by city employees. Included in that sum was more than $2,000 in unspecified invoices from Gregory. Again, the city was unable to provide documentation of who was involved and what public purpose was served.
The audit, which found reams of other wrongdoing by the city, was referred for review to the U.S. Attorney's Office, where it remains.
Even after so many rules have been broken and so much money wasted, former Riviera Beach Commissioner Liz Wade, who is running for County Commission, says she has no regrets regarding the city's deal with Gregory.
"He brought that place out of nowhere and made it a destination," she says. "I am very proud of what he's done, and he's been an excellent business partner."
She adds that Gregory writes her checks for all her favorite charities. When asked if she accepted free meals and drinks at the tiki bar while she served on the dais, Wade said she could produce credit card bills to prove she paid her way. But she also admitted that Gregory would sometimes pick up the tab.
"Sometimes Bob [Gregory] would come over and say 'This one's on me,' but those were few and far between," Wade says. "There were some occasions, say my birthday or whatever, where he would pay for it. But the majority of my bills I paid."
The evidence indicates that Wade wasn't alone in accepting free meals and drinks from Gregory. Gigliotti says he once accompanied about a dozen city officials and their associates to the tiki bar after a commission meeting. Among them, he recalls, were commissioners Liz Wade and Ann Iles, along with Ethel Isaacs Williams, the wife of the police chief and Gregory's attorney.
He says that after having a drink, he gave a ten-dollar bill to a member of the party to pay for the drink and a tip. He says the person, whom he didn't want to name, said, "Don't worry about it. It's taken care of."
"I knew what was going on that very minute," he says. "The only thing that will clean up Riviera Beach is [the U.S. attorney]. It would be one thing if a few crumbs fell off the table and you had a shining city here. But it's another when the whole loaf falls off the table — and they haven't built anything in years."