The Selling of Palm Coast:
Mayor’s State of the City Speech: $40 a Plate, Sponsors Sought, Profits Go To The Observer

On Friday, Palm Coast is marking the reopening of its Community Center on Palm Coast Parkway, an $8 million project that turned a relic into a showcase. On April 3, Mayor Milissa Holland will present a State of the City address at the center, the first such event in the city’s history, but at $40 a ticket for the catered lunch, with the profits going to the Palm Coast Observer, which is producing the event.

The city is buying at least $600-worth of tickets, possibly $900, for two or three tables on behalf of its city council members, the mayor and its executive staff. The city is also promoting the event on behalf of the Observer through its marketing office, a “news release” disseminated to local media, a prominent “State of the City” logo on its home page and on its Facebook page, with links to ticketing and to Observer contacts “to arrange for sponsorship of the event or to purchase a table.”

“The content of the meeting is produced entirely by the city,” Palm Coast Observer Publisher John Walsh said, with the city providing the printed program of the event, Holland set to speak about the city’s accomplishments over the past year and project plans for the coming year. Those paying the $40 fee will receive a copy of the city’s annual progress report (a city document and a public record), printed at the city’s expense, and a gold and red-accented commemorative coin, produced at the Observer’s expense, highlighting the community center and first “annual state of the city,” in Walsh’s words: he hopes to make it an annual event.

Holland, Walsh, the Observer’s editor and a city administration spokesperson see no issues with the event or what they describe as a “partnership” between the city and the Observer. They say such events are commonly done and raise no ethical or other concerns. A government lawyer, the head of the First Amendment Foundation, the media business analyst for the Poynter Institute in St Petersburg and even a Palm Coast council member all see it very differently, calling the event unheard of as it’s set up, with the intersection between the city and a newspaper that primarily covers the city raising serious concerns.

And until a FlaglerLive reporter raised questions with Walsh of the Sunshine law and the city subsidizing the Observer’s costs, the city was going to offer the Community Center venue free of charge, waiving the costs it would normally bill anyone else—the $125 per-hour charge for the ironically called Sunshine Room, the $50 set-up fee, and the $100 security deposit. And the event was going to be closed to the general public.

During the interview Walsh took notes about the concerns and mentioned possibilities of altering the program accordingly. Following the interview, Walsh and the city changed course. Walsh agreed to pay whatever fees are necessary. But the city is still amply subsidizing the event in kind, with its marketing staff busily involved in providing all the content, which will also include a powerpoint presentation, a yet-to-be-produced city video, a color-guard presentation by the city’s fire department, and of course the city continuing to sell the event through its marketing arm.

Walsh and the city also agreed to possibly make some seats available in back of the Sunshine Room should members of the general public wish to attend, but not pay, assuming there is room within fire marshal guidelines: the seating capacity for the Sunshine Room is listed at 225 on the city’s rate sheet. City Marketing Director Cindi Lane said the capacity has been bumped up to 250 or 260. But Walsh is expecting a sellout for the 240 seats he’s been granted by the city, leaving little room for additional, non-paying attendance.

Organizers say “overflow” can watch the proceedings from adjoining areas, on video monitors, though as of Thursday it was still not clear what accommodations there would be. “We’re still sorting that out,” Lane said. “Some of the ideas we have are to have some chairs in the back of the room, or if a bunch of people come there would be another room and it could be piped in to them but we’re still sort sorting out the technicals on that.” (WNZF will also broadcast the address.) Either way, a clear line will remain between those paying and those not paying—including who gets to sit with government officials and who does not.

In addition to the cost of the tickets or the tables, business sponsors can buy in, getting display advertising in the paper as part of the package. “We are a for-profit business, absolutely,” Walsh said about making money on the event. “The event is a state of the city, and we’re producing the event. The content is up to the city itself. And we hope to make a profit, yes.”

He said in other years the Observer in a bid process won the bid to publish the city’s progress report, something it did for a few years until the city found it more effective and less expensive to provide the report at no cost on its website or at reduced cost demand. “So this is another way for them to project and present their annual report,” Walsh said. “It’s our intention that it becomes an annual event. We are a private production company putting on an event. And the sponsorship opportunities, the tickets, all of the costs of doing the production, we’re taking that risk and that gamble. As far as future venues, the venue this year, we thought was special to help celebrate the opening of the newly reconstructed community center, and I believe it’s again one of the jewels here in Palm Coast. And because of the timing of the event, being one of the very first events in the new facility, is why it’s there this year.”

Brian McMillan, the Observer’s editor who’d been interviewed earlier and was in the room for part of the Walsh interview, saw no difference between the city event and a chamber of commerce installation event where city officials are present. “We also cover the state of the city in Ormond Beach,” McMillan said, “and I understand that is also a paid event. With that in mind, one way to look at it is that we’re duplicating a successful event in other places.”

But the Ormond Beach event is produced by the chamber of commerce there, not on city property, and exclusively as a chamber event where the guest speaker happens to be the mayor.

Asked about Sunshine Law matters, Bill Reischmann, the city’s attorney, emailed that it was not an issue. “The Mayor and Council Members will not use the event to discuss, among themselves, issues coming before the City Council, and as such, will not circumvent the statutes’ objectives,” he wrote. The city is also ensuring that council members are not sitting at the same table, though it will be up to the Observer to decide who sits where—an issue of access raising no concerns among organizers.

Barbara Petersen, president of the First Amendment Foundation, the Tallahassee organization lawmakers solicit on all matters regarding open government and open records, said that strictly speaking, there is no sunshine law issue with Palm Coast’s state of the city, but that it’s not at all that simple, either.

“I’ve never heard of it before, never,” Petersen, who read the city’s news release, said. “It’s kind of iffy, but on its face I see no violation. I’d be concerned if I were the city, I’d certainly be concerned of what it looks like. But I don’t see a violation unless they get into that back and forth. But if I were the mayor and the city council I’d be concerned about the image this portrays, like if you have money you get to come, but if you don’t have money you can’t, and that’s not good for your public image. It certainly doesn’t look good. If I were a resident of that city and I’d see this is the state of the city address and I’d have to pay $40 at the door to get in, I’d be pretty miffed. But I don’t think it’s a violation.”

Petersen made a distinction between the “the spirit and intent of the law, and you can have a violation of the law, and you can have a violation of the spirit and intent of the law. This looks exclusive.” The fact that it’s held at a city community center, a public venue featuring a government event, only underscores the fact that it’s an exclusive event, she said.

Petersen also questioned why the city would have to pay taxpayer funds to attend its own state of the city address. “From an ethical point of view and from a public ‘oh my god’ point of view I’d think the city would be concerned about this,” Petersen said, while the newspaper, “which is supposed to be a fair and partial observer to report what happens to the public, that also—the host is taking something of value from somebody they cover.”

Rick Edmonds, a former Tampa Bay Times and Philadelphia Inquirer editor and the Poynter Institute’s media business analyst, says for newspapers of all sizes, “producing events, getting sponsors, getting people to buy tables, is a very accepted part of how we do business these days,” with newsmakers and public officials often the center of attention, though all such events are entirely on the record.

But he’s not heard of a newspaper sponsoring and making money off of an event where the focus, the venue and the individuals involved are central to the newspaper’s coverage. “Our newspaper would never get into that type of cozy relationship with the city,” he said, recalling states of the city with mayors on city hall steps or elsewhere, but not at events closed to the broader public.

“I would be uncomfortable with that were I a publisher,” Edmonds said.  “I know quite a lot about events– certainly don’t know everything that’s going on around the country–but I don’t think very many people think that’s a very good idea.”

A lawyer who’s worked at many levels of Florida government and asked for anonymity said a notable distinction between privately organized events off government premises and Palm Coast’s state of the city is the program’s content and the bottom-line purpose of the event: “There are issues because even though it’s sponsored by the entity,” the lawyer said. “it’s only the governmental entity, that’s all that’s there, the elected members, I don’t get that they’re trying to raise money for the newspaper. That’s like using a public resource for a private benefit. You need to look at all the interactions between them to see if it amounts to an illicit arrangement.”

The lawyer was incredulous that organizers would call the arrangement commonplace. “to me it’s very unique,” the lawyer said. “For all practical purposes it’s like a public meeting. How is it different than a public meeting? “It’s a government event that’s being subsidized by a private interest, even if he pays the going rent.” The mayor’s presentation and the materials presented are “the sole content,” the lawyer continued, “and the content is 100 percent from a government official about the government’s activities. In other words, government, government, government, I don’t know, it doesn’t sit right.”

That it highlights the opening of a new government facility makes it even more of a government function, the lawyer said, with the city’s involvement raising its own issues. “We’re going to promote this event so this is an event you want to be seen at if you want to be an influencer,” the lawyer said of the organizers’ approach, “you need to go to this.”

Walsh said he first approached Holland months ago with the idea. She liked it. (“John didn’t approach me, he approached the city,” Holland said.) Walsh then spoke to Jim Landon, the city manager. “I originally requested financial support from the city, and he said no, he was unable to do that,” Walsh said—at least not a direct financial subsidy.

“In my weekly meetings with Jim I believe both he and Cindi had brought it up that the Observer had an interest in partnering with the city to do our first annual state of the city,” Holland said, referring to Cindi Lane, the city’s marketing manager. “I think it’s a great opportunity.” Holland said it was a better way to disseminate the progress report than inserting it in a newspaper, though it wasn’t clear why the dissemination through the website, at no cost, was not doing the job.

Holland said her role is limited and that she’s only being brought in toward the end of event preparation to present the state of the city. She sees no ethical or sunshine issues, repeating what by Wednesday, when she was interviewed by phone, had seemingly become talking points echoed by other city officials and Walsh. “We’re not paying anything to do it, it’s a relationship, we’ve partnered with a lot of organizations that take on worthwhile causes,” Holland said. “I think it’s a good way to highlight a brand new community center that’s going to be opening this Friday.”

Will there be a free state of the city for the public? “It’s not been discussed but it’s not a bad idea,” Holland said. “Any time myself or my colleagues can present to our community I think is a positive thing.” (In Bunnell, Mayor Catherine Robinson presents the state of the city annually, but in the context of a city commission meeting. There is no cost or access restriction.)

Fellow-council members Nick Klufas and Bob Cuff said they had received their invitations but had not thought much about the implications, seeing few issues. “The city isn’t the one putting on the event,” Klufas said, echoing much of what Holland said.

Interviewed last week, Cuff said he was aware only that there’d be a luncheon. “I wasn’t aware that it was the Observer, I thought they were the sponsors, but I didn’t know it was their event, I thought it was the city that was hosting it.” He RSVP’s through the city, not the Observer, considering it “essentially a city function.” At that point he had not been aware of ticketing costs.

Council member Steven Nobile has often taken opposing stances from Holland, Klufas and Cuff, and did so again in this case. “This falls in line like with the radio show and some of the things we’re spending money on,” Nobile said, referring to the now-defunct weekly radio show the city and Holland developed, initially without the council’s knowledge, and paid for with public dollars to air on WNZF.  “They don’t care. They really don’t care,” Nobile continued. “What you think and what the people want is irrelevant to this council. They believe they are the know-better group and they’re going to do what they feel is best to do. Their ideas are from inexperience. I don’t mean political experience. I mean life experience. I mean business experience. If you would take this in the business world it would kind of like be like we’re doing a shareholder meeting and we’re charging you all to come. It doesn’t work that way. I’m OK with the event, I don’t like the title, and then have people pay to come in. If that just happens to be the presentation or the presentation includes the city, that’s good, but it shouldn’t be billed as the state of the city.”

He added, in reference to his council colleagues and the Observer’s publisher: “These are Walsh’s people. If it benefits them they’re going to do it, and they don’t care about the optics.”

But Nobile had no intention of missing the event, saying he would “never disrespect anyone or anything.”

As for the Observer’s role as a newspaper blurring the line between its coverage of the city and its profiting from a city government event, Walsh said: “I took the approach with the city that I do with every business that advertises in the Observer, and we strongly believe in the separation of church and state, in that a financial relationship in advertising does not influence or affect our editorial coverage of that entity. If we have a great relationship with a strong advertiser and he turns out to be a headline, we’re not going to suppress the story. We’ll print the story. And that was the approach that I took.”