Maddox's deals intersect FBI investigation

Jeffrey Schweers
Tallahassee Democrat

The relationship between Tallahassee City Commissioner Scott Maddox and Paige Carter-Smith, friends since their days at Leon High School, has been intertwined with real estate and political dealings going back more than 20 years.

She was his chief of staff when he became mayor of Tallahassee in 1997. She went with him from City Hall to the Florida Democratic Party as executive director when he became its chairman, a post he held from 2003 to 2005.

And when Maddox decided to run for agricultural commissioner in 2010, Carter-Smith bought his Governance Inc. consulting firm to avoid any potential ethical conflicts. The $100,000 purchase was inked on a hand-scrawled piece of company letterhead.

Now the names of Maddox's former firm and Carter-Smith appear on two FBI subpoenas served on the city and its Community Redevelopment Agency two weeks ago.

"Any time there is a request from a law enforcement agency for information I take it very seriously," Maddox said. "Per the city attorney's advice, I will not comment or speculate on any part of the ongoing investigation as it may interfere with the process."

Carter-Smith, executive director of the Tallahassee Downtown Improvement Authority, did not comment on the investigation but told the Tallahassee Democrat in a text: "I have not received nor requested any CRA, local, state or federal funding in regards to any of the properties that my company owns."

Maddox and Carter-Smith's mutual real estate dealings are further connected to John “J.T.” Burnette and Chad Kittrell, longtime business partners involved in high-profile projects downtown, including the renovation of the DoubleTree hotels and construction of the Gateway Center. Both projects received CRA money, and Burnette and Kittrell — and companies they own — are among those named in the subpoenas. They have been unresponsive to requests for comment.

The combined and intersecting real estate deals between Maddox and Carter-Smith, and Carter-Smith and Burnette and Kittrell add up to at least $5.25 million, according to Leon County clerk and property appraiser records.

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The Maddox Square building on the corner of Adams and Carolina Streets on Wednesday, Feb. 10, 2016.

Early dealings

Several months after Maddox stepped down as chairman of the Florida Democrat Party in 2005, he bought a two-story, 12,000-square-foot office building at 208 W. Carolina St. for $850,000 under one of his companies, SCM Investments.

That building became home to his law office and later to Carter-Smith's Governance Services, a company she formed in 2007 and still owns.

In 2011, SCM Investments sold the office building to Governance Services for $465,000 — nearly half what Maddox paid for it six years earlier. 

The transaction occurred a year after she paid Maddox $100,000 for Governance Inc., the consulting firm he formed in 1999.

After she bought the firm from him, Carter-Smith paid Maddox $106,000 for contractual work in 2011 and 2012 — more than she paid him for the entire company. He stopped working for her before he filed qualifying papers to run for City Commission in 2012.

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Home and office

In March 2007, Maddox bought the house at 510 N. Adams Street that would become the center of an ethics complaint and lawsuit over his residency requirements. He paid $550,000 for it.

Five years later, he sold the 3,100-square-foot home on a quarter-acre lot to the Carter-Smith-owned Governance Services for $225,000 — the second time in two years that he sold a property to her well below what he paid for it.

In both cases, Maddox bought the properties at inflated, pre-recession prices and sold them a few years after the real estate market had crashed and was still in recovery.

Maddox continues to claim the house as his official residence and rents it back from Carter-Smith for about $1,000 a month, according to testimony he gave before both the Florida Commission on Ethics and a Leon Circuit Court.

At 31 cents a square foot, that's a bargain compared to current commercial rates for office space downtown, which run from $12 a square foot to $29 per square foot.

 

The Maddox Square building on the corner of Adams and Carolina Streets on Wednesday, Feb. 10, 2016.

That rent includes space for his law office in the 14,000 square-foot, multi-story office building next door that bears the name "Maddox Square."

The building at 502 N. Adams St. also is the current address for Carter-Smith's Governance Services. Her company bought the property for $475,000 in July 2008 from Hunter and Harp, which had purchased it the month before for the same price from Associated Industries Insurance Company. AIIC is not connected to Associated Industries of Florida, a lobbying firm.

Hunter and Harp, which is listed in the federal subpoena, is a company formed by Kittrell and Burnette. It received $2.1 million in city and CRA money for the Gateway Center project at the corner of Tennessee and Monroe streets and the renovation of the DoubleTree Hotel downtown.

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Adams Street Lofts

In June 2008, Maddox and his wife, along with his former company Spectrum Resources, bought nine units in the Adams Street Lofts for $500,000. They sold them all less than a month later, on June 25, to Carter-Smith for the same price — $55,555 per unit.

In an interview with the Democrat last year, Maddox said he sold them to her after she said she was interested in buying them. Maddox also said he wanted to get out of the real estate business.

But Carter-Smith didn't hang onto them for long. Fifteen days later, July 10, she turned around and sold five of the nine units to Hunter and Harp for $475,000 or $95,000 per unit — about $40,000 per unit more than she paid for them.

Hunter and Harp sold Unit 407 to Burnette in December 2013 for $125,000. He is listed as its current owner.

A year later, Hunter and Harp sold the four remaining units it had bought from Carter-Smith back to her for $310,000.

Maddox has not made a real estate transaction with Carter-Smith since returning to the City Commission. He has said he has no desire to buy any of his former properties back.

In May 2016, Carter-Smith became executive director of the Tallahassee Downtown Improvement Authority, a special taxing district that raises about $195,000 a year to spend on various projects.

A month later, Carter-Smith bought a parking lot and small, a two-story building at 209 W. Georgia St.and a townhouse at 522 N. Adams St. from Associated Industries of Florida for $740,000. AIF is a big business lobbying firm that holds a huge party at the beginning of each legislative session. Firm President and CEO Tom Feeney said AIF does not comment on its business dealings. 

Carter-Smith's properties are outside the improvement district but are within the CRA's downtown redevelopment district. 

As a result of these real estate deals, Carter-Smith holds title to $4.3 million worth of property in the Adams Street corridor.  All of it either falls along Governor's Walk or within a block of it.

The value of those properties would benefit from the $25 million beautification makeover project meant to revitalize the neighborhood and create a pedestrian-friendly connector from the Governor's Mansion to the Florida Capitol. It likely would include new sidewalks, underground electric lines and lighting.

The unfunded project has been on the drawing board for years, and city officials have recommended it as the city's top Blueprint 2020 priority for next year.        

Reporting by former Democrat staff writer Sean Rossman, now of USA Today, contributed to this article.

Contact Schweers at jschweers@tallahassee.com. Follow him on Twitter @jeffschweers.