What is the Big Secret?

Louis E. Miller appeared before a U.S. House committee four months before he was hired to run Tampa International Airport. "I am pleased to be here today to discuss the issue of airport revenue diversion," Miller began his 1996 congressional testimony. Speaking on behalf of airport executives across the nation, Miller said they shared the committee's view that funds generated by airports should be used for airport purposes. "In a time of declining federal funding for airport development and rapidly growing airport capital development needs," Miller said in his prepared remarks, "it is not in the interest of any airport to allow its revenues to be diverted by local officials or other entities."

Noble words from Miller, who directed the Salt Lake City airport at the time.

So, after he took the Tampa airport job, what did Miller think of International Plaza?

Wheeler-dealer Richard A. Corbett's highly unusual ground lease for the International Plaza hotel-office-shopping complex, which is under construction at the southeast corner of the Tampa airport, has been called unpleasant names by critics. Taxpayers for Common Sense thought Corbett's vastly below-market lease payments deserved a "Golden Fleece Award." Corbett's deal could cost taxpayers more than $500-million over the remaining 79 years of the lease, according to the group. But the one thing Miller won't call the International Plaza lease is revenue diversion. "I don't think so," said the director of the Hillsborough County Aviation Authority — and Corbett's landlord. Fortunately for Miller and his airport, which depends on millions of dollars in U.S. government grants and other subsidies, the Federal Aviation Administration agrees.

As recently as 1999, the U.S. Department of Transportation's inspector general recommended that the FAA withhold discretionary grants to the aviation authority until rents were brought up to market rates. But the FAA concluded last July that the International Plaza land lease "is not inconsistent" with the aviation authority's "obligation to use airport revenues only for airport purposes."

The FAA's blessing of the Corbett lease incensed Taxpayers for Common Sense, a nonpartisan watchdog of federal spending. The group contends the Corbett lease is one of the most obscene diversions of public airport resources into private pockets anywhere in America. "A half-billion taxpayer dollars is being hijacked," said Taxpayers for Common Sense President Ralph DeGennaro. "But the FAA just says have a pleasant flight."

Miller said the FAA report should end the controversy. "The FAA's final report, which is less than a year old, says it's OK," Miller said. "This is something behind us and we're moving forward."

Before the tale of Corbett's lease fades into Tampa political history, however, a few questions beg to be answered. The airport land that Corbett has been lucky enough to lease is 156 prime acres roughly bordered by Columbus Drive and Boy Scout and West Shore boulevards.

Why would a growing airport lease precious vacant land, donated by the federal government for future expansion, at cut rates for yet another mall?

Could it have anything remotely to do with Corbett's employment of the son of a longtime aviation authority lawyer, Stewart C. Eggert? Or that Corbett's own lawyer and former business partner, Stella Ferguson Thayer, was sitting on the authority while he extracted some remarkable concessions?

Deploying influential Tampans such as downtown high-rise developer Richard A. Beard III and land-use lawyer David M. Mechanik didn't hurt Corbett's cause.

Eggert denies an ethical conflict. Thayer has abstained from voting on Corbett's lease. Beard couldn't be contacted. And Mechanik has said there was nothing unusual about the lease.

But rare is the deal that Corbett finagled from the aviation authority. International Plaza quite likely has made Corbett a multimillionaire — at, critics might add, the expense of taxpayers and airport users.

Is there a postscript to the Corbett story?

Miller has refused to secure from Corbett and turn over to the Weekly Planet a document that might disclose how much Corbett is making at public expense and who else could be profiting with him. The Planet went to court April 11 to try to compel Miller to produce the document, which the newspaper's lawyer believes is a public record.

The Tampa Tribune and St. Petersburg Times have published exposes on the International Plaza lease during the past year. The Tribune recounted Corbett's 20-year association with the property and his past failed development schemes. Hardly mentioned was a foreclosure lawsuit against Corbett and his wife on the leasehold. The Times hired an appraiser to debunk a 1996 Corbett-funded appraisal of the lease that airport officials still cite in their defense of slashing Corbett's rent payments.

But it wasn't local news media that initially uncovered irregularities with the Corbett lease. It was the nervous owner of nearby West Shore Plaza. Executives of Grosvenor International (American Freeholds) Ltd. Inc. are concerned that Corbett's taxpayer-subsidized sweetheart deal puts their mall at a competitive disadvantage. Corbett's land-lease payments are so low that his mall development partner, Taubman Centers Inc., has been able to offer special rent concessions that could enable International Plaza retail tenants to undersell West Shore Plaza merchants, Grosvenor executives believe.

"We haven't changed our thinking that the lease is way below market and it doesn't meet the FAA's own guidelines," said John R. Flavin, president of Grosvenor. "I still can't make sense of it."

Grosvenor executives sounded alarm bells for federal auditors, news reporters, and Taxpayers for Common Sense. Tampa Mayor Dick Greco and other airport officials have disregarded them.

On Feb. 1, 1996, Greco and the other four members of the aviation authority voted to reduce Corbett's already low land-lease payments by more than $2.6-million over the subsequent three years.

Greco once worked for a mall developer, securing such one-sided deals from government. The mayor said Grosvenor executives were only jealous of a new competitor with a first-class project coming off the drawing board to threaten their West Shore Plaza profits.

"Where was everybody's concern for the last jillion years? The concern came about when they got Neiman Marcus and Nordstrom and Lord & Taylor, period," the mayor lectured a Grosvenor lawyer at a 1998 aviation authority meeting. "If you could get stores of the ilk of the ones that are going to be represented at this particular project, communities guarantee them profits, give them land, do all sorts of things."

Airport officials have clung tightly to the much-maligned 1996 appraisal as their justification for reducing Corbett's ground-lease payments. The valuation by the late Tampa real estate appraiser C.L. Knight is valid, according to the FAA. "The Knight appraisal constitutes a good faith appraisal completed in accordance with professional standards," the FAA reported last year. "There is no indication of improper direction or motivation in the conduct of the appraisal."

The FAA arrived at that opinion despite the aviation authority relying on just that single appraisal. Corbett hired Knight to perform the appraisal and paid him for it.

Miller acknowledged that is atypical. "Generally, we hire the appraisers," said Miller, and the authority pays for the work to maintain some impartiality.

Knight valued the airport land leased by Corbett at $18,871 an acre. Within days of his appraisal, Knight valued nearby comparable land for another client at $433,358 an acre, nearly 23 times more than Corbett's property.

It might indeed seem like a "jillion" years since Dick Corbett moved from New York to Tampa and jumped aboard the airport bandwagon to develop the International Plaza site. But it was only 1979.

Former Tribune sports columnist Tom McEwen has written that Corbett came to Tampa at the invitation of Stella Thayer's father, the late Chester H. Ferguson, among others. Corbett, 63, who studied at Notre Dame and Harvard universities, worked in the bowels of the Kennedy White House and married into another prominent Democratic household. His wife's Old Money bloodlines flow through New York's influential Harriman and Gerry families, who made fortunes in energy, investment banking and railroads.

In the summer of 1979, Corbett and a partner, New Jersey lodging developer William Graulich III, paid $4-million for a motel and golf course that residential builder Jim Walter had erected on the Tampa airport property. Thayer handled the legal work when Corbett assumed Walter's obligations under the homebuilder's ground lease, which ran until 2019. Graulich dropped out in 1980.

Throughout the 1980s, Corbett proposed grand commercial developments for the property. He invariably failed to deliver. Meanwhile, he dabbled in professional soccer. Thayer, doyenne of Tampa's powerful Lykes clan, invested in Corbett's Tampa Bay Rowdies, a team his family eventually folded.

By 1986, Corbett was borrowing heavily against his ground lease on the airport property. St. Petersburg's Florida Federal Savings and Loan took over a $4.8-million note payable to the Lykes family's First Florida Bank and advanced Corbett millions of dollars more. He and his wife, Cornelia Harriman Gerry Corbett, signed personal guarantees for a new $13.5-million consolidated note payable to Florida Fed.

The Tampa Bay Buccaneers, under former owner and Corbett buddy Hugh F. Culverhouse Sr., moved their offices and football practice field to a piece of the leased property.

Corbett had little else to show on the site for his big mortgages. Yet he faced few questions from airport officials. One aviation authority member did express reservations.

"I am very cognizant that we have a long-term lease but we are now going into the eighth year with literally no progress," Tampa automobile dealer Frank L. Morsani wrote about Corbett in a 1988 letter to George J. Bean, Miller's predecessor. "I truly think that this is causing a tremendous loss, not only to the airport revenues but to our community, by not having the businesses that should be there."

An aviation authority member from 1983 to 1991, Morsani wondered how long an underachiever like Corbett should be allowed to tie up an important airport asset. "All one has to do is examine what is happening over at Carillon to realize that we are rapidly losing business that could be in this complex," Morsani wrote, referring to a high-end St. Petersburg office park that was thriving.

Not much came of Morsani's letter, which was copied to Stewart Eggert. The authority lawyer's son, John S. Eggert, was busy trying to help his boss, Dick Corbett, get something going at International Plaza.

Corbett wasn't the only one failing miserably. His lender, Florida Fed, went under in 1990. The Resolution Trust Corp., the federal government's savings and loan cleanup agency, sued the Corbetts the following year. The RTC charged that the Corbetts defaulted on the 1986 mortgage when they couldn't make a balloon payment in September of 1990.

Aside from Morsani's qualms, airport officials didn't seriously question their tenant's performance, even when the RTC filed a foreclosure lien against the leasehold. Court records show the Corbetts in May 1992 asked to buy back the $13.5-million note from the RTC at an undisclosed discount.

After the offer was rejected, Thayer sprung into action. Thayer, who would be appointed to the aviation authority in 1993 by Democratic Gov. Lawton Chiles, formed CHAR Inc. The CHAR corporate officers were Cornelia Corbett's relatives. After acquiring the note, Corbett's in-laws wrote down the debt from $15.4-million, including interest, to $5.4-million for Corbett, county records show.

The Planet filed a Freedom of Information Act request with federal banking regulators in hopes of learning how much the RTC settled for.

Lawyers for the Federal Deposit Insurance Corp. said there were 13 boxes of Corbett loan records that they inherited from the RTC. But they could locate only 11 of the 13 boxes. They said one box is missing and another suffered water damage, possibly from a long-ago hurricane. The lawyers cannot find any record of the negotiations between the RTC and CHAR that spared the Corbetts from foreclosure.

Corbett finally retired the debt to CHAR two years ago, the county records show. Corbett didn't respond to Planet requests for an interview.

Later in 1992, there was more trouble for Corbett on another federal front. The Transportation Department's inspector general informed the FAA that Corbett was 22 years into what was then a 50-year lease of airport property and the land had yet to be appraised for fair market value. "Since the tenant has not developed the property since the start of the lease in 1970," the inspector general wrote, "the authority has only collected a minimum annual rent amount each year."

Without an appraisal, auditors for the inspector general said it was impossible to determine how much the airport was losing on the 156 acres, approximately 40 acres of which was surplus land that the FAA had given the aviation authority for airport use.

The auditors were more successful quantifying the taxpayer loss on most of the other 27 airport properties that the authority was leasing out for a song. By neglecting to collect market rents, the authority failed to recover $4-million from tenants during 1988 through 1990, the auditors concluded. The auditors strongly hinted that the FAA wouldn't have had to award anywhere near the $16.3-million in discretionary grants that the agency made to the aviation authority during the three years if airport officials had collected fair-market rents on those assets.

Then-airport director Bean refused to talk about the audit or anything else to do with his old job. "I retired five years ago and I don't discuss airport business with anybody," Bean told the Planet. Stewart Eggert was among the Tampa officials who assured the FAA that the aviation authority's lackadaisical management of public assets was in compliance with the U.S. Surplus Property Act, which governs the transfer of federal land that is deemed expendable. Airport officials promised the FAA that they would get an appraisal of the International Plaza property. Seven years later, Transportation Department Inspector General Kenneth M. Mead told then-U.S. Sen. Connie Mack that there still had been no rent increase for Corbett. "Since our 1992 audit," Mead wrote to Mack on Dec. 22, 1999, "the lease was amended three times, however, the provisions for rental adjustments were never changed."

The only appraisal was the 1996 one that Corbett funded and which he succeeded in using to get his rent payments cut.

Real estate appraiser C.L. "Charlie" Knight presented a valuation for the International Plaza site that Corbett would have been crazy to dispute. Corbett renegotiated the ground lease in 1985 and agreed to pay a perennially escalating minimum yearly rent that would reach $1-million by 1999. Corbett thought that was too high and Knight whipped up an appraisal of support. "The authority has a letter from C. L. Knight, MAI, stating his opinion that the annual minimum rent provided in the lease is in excess of fair market value," airport staffers told authority members in a memorandum for their Feb. 1, 1996, meeting.

Knight's appraisal is dated Jan. 30. But Knight didn't deliver the document to Corbett until March 5, more than a month after the authority voted to reduce the rent.

With that vote, the authority forfeited $600,000 in 1997, $690,000 in 1998, and $790,000 in 1999.

Knight's Jan. 30 appraisal relied on rental income figures for the property that could be projected only after the authority amended the lease on Feb. 1. "There was a letter issued separately after they had the work done and prior to the report indicating the valuation," Miller said. "The report was not in its final form." At the time, Bean told the authority that the minimum rent provision in the updated 1985 Corbett lease had outlived its usefulness. "The purpose of this minimum, the only purpose for this minimum, was to provide an incentive for the lessee to develop the property," Bean said.

Corbett's Concorde Cos. signed what is known as a lease arrangement agreement in 1994 as a big step toward developing the shopping mall. Airport officials talked in 1996 as if construction of the mall was imminent. But ground wouldn't be broken for another two years.

Thayer, who was chairing the authority by 1996, was careful to abstain from voting on the rent drop. "Our firm, which I am with, has had a long-term representation of Concorde Cos., both past and present," Thayer said.

Hillsborough Commissioner Chris Hart asked Thayer for permission to make a motion to reduce Corbett's rent. "I think it is in the best interest of good economic development and I think we are properly safe in the role of government to promote private enterprise," said Hart. With Thayer abstaining, Hart's motion passed unanimously.

In a recent interview, Hart said he deferred to Eggert with his 1996 vote. "Here, we have our counsel telling you it's OK," said Hart. "Where else do you go? The attorneys implied we had no choice."

Never mind that Knight, who died in 1998, was working for another client in the vicinity of the airport at the same time. The Tampa Sports Authority retained Knight in late 1995 to appraise 67 acres between Dale Mabry Highway and Himes Avenue, a bit east along Columbus Drive from the International Plaza site. Sports authority members wished to sell the land to the aviation authority. Unlike Corbett, sports authority officials wanted a high valuation because they needed the sale to fund the planning for what became the new Bucs stadium. Also, in contrast with the airport, the sports authority sought two appraisals and paid for both. Within days of Knight valuing the airport land at $18,871 an acre for Corbett, the appraiser decided the sports authority land less a mile away was worth $433,358 an acre. Another appraiser valued the sports authority land at $372,240 an acre. The FAA saw no discrepancy. "Both appraisals noted significant characteristics of the sports authority land which differ markedly from the characteristics of the International Plaza land," the FAA said in its 2000 report. The aviation authority ended up paying $288,000 an acre for the sports authority land, which the airport supposedly needed for runway clearance. Based on that sale, West Shore Plaza owner Grosvenor calculated that Corbett's ground lease payment for 1997 should have been $2.2-million. The aviation authority had slashed it from $800,000 to $200,000.

Nobody outside of the aviation authority, least of all local news reporters, paid much attention to the seemingly impenetrable discussions of land appraisals and lease amendments. That is, until International Plaza developers started signing up choice anchor tenants such as Neiman Marcus in 1998. After almost 20 years, Corbett's grand development dream was gaining momentum. In 1994, Corbett's Concorde Cos. had entered into the lease arrangement agreement with Tampa Westshore Associates Ltd. Tampa Westshore Associates was a joint venture between Corbett and Taubman Centers Inc., a Michigan real estate investment trust.

Still, Corbett and Tampa Westshore Associates needed more time. Concorde Cos. had agreed to be building by March 1998 when, around the time of the 1994 inking of the lease arrangement agreement, Corbett's outfit signed a lease restatement that called for a shopping mall on the site. The 1994 restatement extended Corbett's lease until 2080. At a March 5, 1998, authority meeting, Hart moved to extend Corbett's deadline six months. Greco seconded the motion. Approval was unanimous. During the summer, Grosvenor operatives began going through the aviation authority's massive files on the International Plaza project. What they found made them anxious to see Greco, Hart and company in September.

Ruth Barnes Kinsolving, a Tampa lawyer hired by Grosvenor, asked to address authority members on Sept. 10, 1998. "We are concerned that the rent in the lease that you have at hand and that you're being asked to approve today is not at market rent," Kinsolving told the authority.

Under terms of the 1994 shopping mall lease, Kinsolving said, the authority may have rights within the lease arrangement agreement to rescind the mall lease and revert back to an earlier pact that would enable the authority to extract a deal more favorable to taxpayers. But Kinsolving said Miller had refused to hand over the whole lease arrangement agreement because he claimed to have only excerpts.

Hart asked authority attorney Stewart Eggert, father of Corbett employee John Eggert, if the airport governing board should be concerned about Corbett's lease arrangement agreement.

"It's not something we have," Stewart Eggert replied carefully.

"I understand," said Hart. "Is it something we should be aware of?"

"Well," Eggert said, "we're aware of certain provisions of the LA agreement as they relate to the time requirements in the 1994 agreement. All of those have been met and the agreement has already been set."

Eggert has since retired after 30 years of representing the aviation authority. Eggert's son quit Concorde Cos. last year to work for Taubman, Corbett's mall partner. Eggert said there was no ethical conflict for him to render opinions that might benefit his son's employer. "I was very careful," said Eggert. "I gave legal advice, whether it helped Mr. Corbett or not. I gave advice that Corbett was unhappy about on several occasions." Corbett did have a friend in Dick Greco, and, at the 1998 authority meeting, the Tampa mayor tore into Kinsolving and her client. "For us to make a change because of competition is wrong, dead wrong," Greco told her.

Kinsolving responded that Grosvenor merely hoped to ensure that a prospective competitor wasn't gaining an unfair leg up in the marketplace through a public subsidy that also happened to harm taxpayers.

"Would you like to see this go away?" Greco asked Kinsolving, referring to the International Plaza mall.

"No," the lawyer answered.

"No?" the mayor asked.

"No."

"Oh, my goodness," Greco said.

"But I want to see it on a level playing field," Kinsolving said.

"Ma'am, I've been in this business," the mayor said. "And if you tell me you wouldn't like to see it go away, you're not telling the truth."

Greco suggested he cut similar deals for Grosvenor when the mall owner expanded West Shore Plaza after he became mayor in 1995. Greco told Kinsolving: "I did everything possible — and your people know that — to help West Shore build to where they are, and we continue to do so."

The mayoral cooperation stopped a year later, as Grosvenor continued to complain about the Corbett lease. Tampa officials denied a request by Grosvenor executives for a $1.8-million credit against transportation impact fees they paid while expanding West Shore Plaza. "The denial is a departure from (Tampa officials') previous interpretation of applicable code provisions," Grosvenor lawyers stated in a 1999 lawsuit against the city. Grosvenor executives claimed they upheld their end of a bargain with the Greco administration. They had allowed the relocation of a transit bus station and the extension of a city street on mall property in exchange for the fee credit. Hillsborough Circuit Judge Manuel Menendez Jr. ruled that the Greco administration hadn't double-crossed Grosvenor. His ruling has been appealed by Grosvenor. Greco didn't return Planet calls seeking comment. The mayor hired Miller's wife as the city's internal auditor and Cynthia Miller has since taken on additional duties as Tampa's top municipal lobbyist. After Greco's confrontation with Grosvenor lawyers at the 1998 meeting, the aviation authority went ahead and gave final approval for the Corbett development team to put an office center and a $265-million shopping mall on the airport property. There is room for more offices and a hotel, too.

With that vote, the rent for the potential 3.5-million square feet of hotel, office and retail space at International Plaza was set at 40 cents a square foot and the rate was frozen for the next 79 years, according to an analysis which Grosvenor presented to federal auditors.

"There are no provisions for any increase in development rents, which will apparently stay at 40 cents per leasable square foot through 2080," Grosvenor stated, "irrespective of the likelihood that changing economic conditions (or simply historical rates of inflation) will render 40 cents a square foot an absurd giveaway in future years."

Grosvenor calculated that the development and ground leases will yield no more than $1.6-million a year for the aviation authority at maximum build-out of International Plaza.

The land lease may be hiked 5 percent — not every year but — every decade, and only starting in 2008. Just faint criticism has come the way of aviation authority members who kept alive the Corbett giveaway.

Hart, a Republican up for re-election in 1998, was questioned by unsuccessful Democratic challenger Kim Wall on the campaign trail about his failure to press for full disclosure of the lease arrangement agreement. Hart told the Tribune that the deal between Corbett and Taubman predated his service on the authority. Hart defended his inaction by saying he had to ratify the low rents or the authority would have been sued.

Wall wasn't buying the explanation from Hart, who more recently has been touted as a Tampa mayoral candidate in 2003. "Why do we keep doing deals with private individuals and letting the taxpayers get shortchanged?" Wall asked. "I'm opposed to letting private individuals make a fortune off public land."

What could be in this lease arrangement agreement, which has generated so little curiosity from Tampa airport officials?

Grosvenor executives felt strongly enough about the importance of the document that they sued Corbett and the aviation authority in 1998 under the state public records law to get a copy of it.

In one of the many curious twists to the International Plaza saga, Miller had displayed tremendous faith in Corbett's lawyers the year before. Miller inquired about how the agreement might impact an upcoming 1998 deadline for the commencement of mall construction. Miller asked Stewart Eggert to get the documents from Corbett. "I wanted him to get those and go through those and see what they said," said Miller. "He's the one who obtained them." All Miller received were eight pages of excerpts from the lease arrangement agreement, interspersed with circled hand-written notations: "break in text." Miller trusted Corbett's lawyers to decide which portions of the agreement were relevant to his inquiry.

"I'd like to see the whole thing, too," Miller said in a recent interview. "We don't have it."

Despite 18 months in court, Grosvenor failed to get even a hearing on whether the authority should be compelled to make Corbett produce the whole document. Public records lawsuits are supposed to get priority on state court dockets. Corbett lawyers appealed procedural rulings until Grosvenor dropped the lawsuit last year.

"Neither the courts nor the federal agencies seemed to be interested," said Flavin, the Grosvenor president. "Our appeals were falling on deaf ears."

Miller said he thought it was interesting that Grosvenor withdrew from the public-records litigation soon after the FAA report was issued. "Fighting a losing battle," he said.

Whatever Grosvenor's motivation, the West Shore Plaza owner has raised questions that should trouble taxpayers. Have a few Tampa power brokers leveraged Corbett's sweet International Plaza ground-lease into a windfall, at a potentially staggering loss to the public treasury? The key to understanding how badly taxpayers are getting hosed — and who else could be benefiting from the Corbett lease — may be the lease arrangement agreement.

The Planet has decided to file its own public records lawsuit in Hillsborough Circuit Court, seeking public disclosure of the lease arrangement agreement. Miller has denied the newspaper access to the full agreement. Responding to a Planet request for the document, airport lawyer Donald W. Stanley Jr. said Miller only has portions of the agreement and provided those excerpts.

David M. Snyder, the Planet's lawyer, believes the entire lease arrangement agreement is a public record, based on Florida court decisions, even if the unabridged version of the document has been in the custody of Corbett or his attorneys for all of these years. The whole document should lay out how much Corbett is charging Tampa Westshore Associates to lease about 108 acres under development for the mall. Taubman originally owned 50.1 percent of Tampa Westshore Associates. In 1999, the Michigan real estate outfit brought in a partner on the International Plaza project, Canadian retail developer Ivanhoe Inc. Taubman reduced its interest to 26 percent. Corbett retains a 49.9 percent stake.

Grosvenor executives strongly suspect Corbett charges Tampa Westshore Associates closer to market rents than what the aviation authority charges him.

With those rental figures, taxpayers could learn how big the rent spread is between Corbett and his development partners — and begin to see how big a multimillion-dollar hit they are taking.

If that information becomes public, perhaps even members of the aviation authority might finally open their eyes. The terms of Stella Thayer and current Chairman W. Crosby Few expire later this year. Gov. Jeb Bush is expected to replace them with two Republicans. Bush's first appointee to the authority, West Shore development pioneer Alfred S. Austin, already has voiced skepticism about the Corbett affair at airport meetings.

Turning back the page to review the shenanigans of Corbett and his largely Democratic circle of facilitators might be too hard for the aviation authority's soon-to-be GOP majority to resist.

Contact Staff Writer Francis X. Gilpin at 813-839-3918, ext. 130, or frangilpin@weeklyplanet.com.

This article appears in Apr 12-18, 2001.