Scientology members fuel another land-buying surge in Clearwater

Companies tied to the Church of Scientology paid millions in cash for 45 properties near downtown with no major plans in sight.

Tampa By Times/November 17, 2021

By Tracey McManus

Clearwater — Ed Chesney had two rental homes and two vacant lots in the North Marina Area on the market for a year before his real estate agent called in late 2019 with good news.

A buyer, whose identity Chesney never learned, agreed to his asking price without countering — $1 million cash for the adjoining parcels, which was four times the value set by the Pinellas County Property Appraiser.

“They didn’t say what they were going to do with them, and I never asked,” said Chesney, who works as the city’s marine and aviation department director.

City officials have long hoped for private investors to transform the North Marina Area, a 13-block district with undeveloped lots and 100-year-old bungalows overlooking Clearwater Harbor. They adopted a master plan in 2016 that envisioned housing, a hotel and shopping to complement what they hope will be Clearwater’s revitalized downtown less than a mile to the south. They spent $6.5 million to renovate the public Seminole Boat Ramp, a popular centerpiece seen as a sign of the city’s commitment.

Now, companies connected to the Church of Scientology are buying tracts of land within the 55-acre district and not disclosing what they plan to do with them. Since July 2019, eight limited liability companies managed or operated by members of the church have bought 45 properties in North Marina, including Chesney’s.

The companies paid a combined $11.8 million in cash for 28 undeveloped parcels, five empty commercial buildings and a dozen homes in the district, most of them dilapidated. The city has no record yet of redevelopment plans being submitted for any of the North Marina properties since the purchases began, according to planning and development director Gina Clayton.

The acquisitions mirror the pattern that unfolded downtown between 2017 and 2019, when companies tied to Scientology bought 100 properties within walking distance of the waterfront and the church’s international spiritual headquarters, then left many of those buildings vacant and lots undeveloped.

“I’m concerned,” Mayor Frank Hibbard said. “I believe it’s irrational to buy property and not fully utilize it.”

The most recent deal came when a New York firm bought a former demolition yard on Nicholson Street for $593,400 on Oct. 20 and then flipped it two days later for $1 million in cash to one of the Scientology-tied limited liability companies, according to property records.

All 45 North Marina properties were purchased by companies managed or operated by two longtime members of Scientology: Steven Hayes, an attorney who has done legal work on behalf of church related organizations for more than two decades, and Norm Novitsky, a businessperson who has donated at least $5 million to Scientology.

His wife, parishioner and real estate agent, Terri Novitsky, represented the buyer in many of the deals, according to interviews with sellers. In late 2020, Terri Novitsky also was elected to the Downtown Development Board, an advisory group tasked with promoting downtown.

Norm Novitsky hung up when asked by a reporter about the companies’ plans. Terri Novitsky and Hayes did not return calls and emails requesting comment. In Florida, limited liability companies that buy property are required to disclose administrative operators but not their owners.

Scientology spokesman Ben Shaw said in a statement that the church is not involved with the acquisitions. He called the Tampa Bay Times’ questions about parishioners’ activity “not just stupid, false and offensive, but un-American.”

“You talk out of both sides of your mouth: If redevelopment is being done by the city or a member of another religion, not Scientology, it is good; if redevelopment is being done by a Scientologist, it is bad,” Shaw said. “This makes no sense, except of course to a bigot.”

These two maps show the extent of property ownership changes over the last five years in and around downtown Clearwater. The map above shows properties owned by the Church of Scientology and companies run by parishioners in downtown, as well as recent acquisitions made by church connected companies in the North Marina Area. The map below shows what Scientology and companies connected to it owned in the area in 2016. [ PAUL ALEXANDER | Times ]

The only record of redevelopment that has occurred among the 45 properties is a roof replacement on a vacant building on North Fort Harrison Avenue and internal demolition in a former flooring center two blocks north, according to notices in Pinellas County records.

Seventy-one percent of the 60 parcels the Church of Scientology owns under its name in Pinellas County are tax-exempt for religious purposes. The downtown and North Marina properties bought by limited liability companies managed or operated by members of Scientology remain on the tax rolls.

Richard Tobias, an independent real estate appraiser in Pinellas County, said vast purchases of downtown real estate by entities tied to Scientology have cast confusion over the market.

While there’s no law against hanging onto property, developers typically buy land, build on it and sell it for profit. The pattern of Scientology-tied companies buying so many properties and sitting on them “flies in the face of most land economics,” said Tobias, who has been appraising property in Pinellas County for 50 years.

“You have some buyers here that their motivations are not really clear,” he said, “so it’s tough to make economic sense out of it.”

In mid-2018, one year before the string of North Marina purchases took off, a company controlled by developer Brian Andrus, a longtime member of Scientology, bought the private marina next to the city’s Seminole Boat Ramp. In September, Andrus completed construction there on Marina Bay 880, two towers that hug the marina with 87 luxury condos and amenities like an Olympic-sized pool and sauna.

Construction on eight townhomes on the south end of the marina began Oct. 1, according to county records.

Andrus did not respond to a phone message or email inquiring if he was involved in the 45 purchases in the blocks surrounding his condo project.

He is not listed on the corporate filings for any of the eight limited liability companies that recently bought the North Marina properties. But on the notice filed with Pinellas County for the roof replacement at 801 N Fort Harrison Ave., Andrus signed his name as a manager of the company that owns the building.

Andrus’ involvement in Scientology goes back decades and includes his participation in a plan during the 1970s to stop a church member who had spied on the federal government from turning himself in to the FBI. Andrus was named an unindicted co-conspirator in Scientology’s government espionage scheme, which sent 11 Scientologists to federal prison.

The city received an informal inquiry last year related to vacant land at the southeast corner of Seminole Street and North Fort Harrison Avenue. Those six lots were bought in November 2020 by a limited liability company then-managed by an employee of CA South, a Nashville-based real estate firm founded by Megan Epstein and advised by her husband, Stephen Epstein, both members of Scientology.

Philip Kirkpatrick, Clearwater’s senior economic development coordinator, said Stephen Epstein spoke with city officials in December about a potential commercial and multifamily project on the site.

Through a spokesperson, Epstein said in an email that CA South looked into developing the properties on behalf of a client but walked away when the city did not relax a rule prohibiting a parking lot level facing North Fort Harrison Avenue.

Epstein declined to name his client but responded to questions from the Times with an affidavit declaring it was not the Church of Scientology. On Sept. 7, Epstein’s employee was removed from the corporate filings of the company that own the land. Hayes, the attorney and parishioner involved in the rest of the North Marina purchases, was added as manager on the companies’ filings.

The lack of action from Scientology-tied buyers has precedent.

Of the 100 properties bought by parishioner-managed companies near the downtown waterfront from 2017 to 2019, 24 storefronts and buildings remain empty, including a former Walgreens, an old jewelry store and prominent buildings along the North Fort Harrison corridor. The new owners also are sitting on about 30 undeveloped lots. At least eight businesses that got new landlords tied to Scientology moved out and have not been replaced.

Some landlords tied to Scientology have helped bring life to portions of downtown. After buying eight buildings on and around Cleveland Street in 2018, Moises Agami, a parishioner and developer, now has restaurants, shops and other businesses in 16 of those 20 storefronts. Thirteen were existing tenants when he bought the properties.

City Council member Mark Bunker said although the church is not the official buyer of the downtown and North Marina properties, there is reason to believe Scientology leader David Miscavige is orchestrating the parishioner-operated companies making the acquisitions.

In January and February 2017, a handful of limited liability companies bought six prime downtown parcels. After the Times reported the purchases, Miscavige met with city officials and acknowledged the church acquired them as part of his plan to spend $55 million renovating downtown buildings and recruiting high-end retail to empty store fronts.

Miscavige’s offer to revitalize downtown hinged on the city ending its attempt to buy one vacant lot on which the church was also bidding.

The Scientology leader had offered the Clearwater Marine Aquarium $15 million for that 1.4-acre grass lot on Pierce Street. But the aquarium rejected his bid in order to sell it to the city for $4.25 million.

After the City Council voted to buy the lot in April 2017, Miscavige refused to talk to city officials for the next two and a half years.

During that period, downtown purchases by limited liability companies managed by members of Scientology accelerated.

The city, meanwhile, moved ahead on its now-$84 million Imagine Clearwater project, a plan to transform the city-owned downtown waterfront with an outdoor amphitheater, a garden, bluff walk and plaza. The project broke ground in August and is aimed at helping bring businesses and foot traffic to the empty storefronts in the surrounding blocks.

Because the city rebuffed Miscavige’s offer, Bunker, who has advocated against alleged abuses in Scientology for 20 years, said he sees the parishioner-involved real estate purchases that followed as a “vindictive and desperate” play to interfere with Clearwater’s revitalization efforts.

Purchases in the North Marina Area took off in July 2019, three months after the City Council voted to buy the historic North Ward Elementary School across the street from the Seminole ramp and Andrus’ condo. City officials plan to partner with a developer on ways to adapt the red brick schoolhouse, like turning it into a hub for restaurants, retail, or apartments.

Limited liability companies managed by Hayes, the attorney who’s done work on behalf of the church, bought almost the entire square block directly east of the North Ward school. Jim Huestler is the block’s only holdout with a rental home on the northeast corner.

Huestler said broker Terri Novitsky calls him “every now and again” to see if he’d be interested in selling.

“My plan is to keep renting,” Huestler said. “I don’t know what their plan is.”

Tyler Rice has run Carillon Flooring Center on North Fort Harrison for 30 years, the business his father started there in 1964. He saw the area improve when police cracked down on drugs and prostitution decades ago. But its potential is still untapped, with prime vacant land overlooking Clearwater Harbor.

He’s encouraged by city investments in the boat ramp and North Ward Elementary, and holds out hope that the undeveloped lots and dilapidated homes will be replaced with something vibrant.

Rice said he’s been surprised that he has not been approached by brokers trying to buy his 10,000-square-foot building. Companies controlled by Hayes have bought about half the property on Rice’s block and nearly the entire block directly south.

“I’ve been waiting for this neighborhood to clean up for 30 years, and I still think it’s around the corner,” Rice said. “I think it throws a stake in it when one party owns 50 percent or so. It’s like they are trying to control the whole thing.”