City Commission Expresses Angst as FDC and BizLINC Violations Continue

News file photo

Biz and FDC operate from this building at 225 Lincoln Avenue, which was remodeled without building permits and has no occupational permits, according to city records.

A lack of proper permits and an incorrect claim of corporate status by a city contractor has led to a thorny problem for Lake Wales city commissioners.

The BizLINC business incubator, funded by a $1.2 million grant from the City of Lake Wales, has apparently operated for more than two years while failing to pay required city business taxes or obtaining a certificate of use for their building.

Florida Development Corp. was retained under a 2022 contract with the city to provide expert business advice to entrepreneurs. They quickly launched BizLINC to operate a business incubator in hopes that they could spark a re-birth of the historic Lincoln Avenue business district. That goal was outlined in the Lake Wales Connected plan adopted by the city in 2019.

City records confirm that FDC conducted interior and exterior construction projects without required building permits or inspections and has never received a certificate of use or occupancy.

The operation has been dogged by questions since February 2024 when Lake Wales News.net raised questions about the quality of the advice they were dispensing, citing multiple questions including the lack of business tax receipts, formerly known as occupational licenses, among both BizLINC operators and most of their clients.

Courtesy City of Lake Wales

An application for a city business tax receipt was rejected in February 2024 citing a lack of building permits and plans as well as fire safety violations, but no corrective actions have been taken by FDC. They continue to operate without the permits but are seeking new city funding.

Two days after that report was published, FDC filed an application for a city business tax permit, but it was rejected by both the fire inspector and the building department. A code violation case was opened giving the company just over a year to correct the deficiencies, with a deadline of July 11, 2025.

The fire inspector reported that "this business opened without our knowledge, my inspectors went by, and they have a few code violations. One of them being the fire alarm is not operational. With that being a high life safety issue, I cannot sign their BTR until they bring this up to code."

The building inspector reported that no plans were ever filed or construction permits issued for the building at 225 Lincoln Avenue, which is still reported in city records as a dental clinic. The report stated that "If this is a multi-use building...building permits will be required at a minimum for tenant separation and all other work."

An email response from the city's Development Services stated that "there have not been any building permits obtained since 2011 for the requested address."

The ongoing violations were brought before the Lake Wales Community Redevelopment Agency by resident Howard Davies and seemed to catch the board by surprise. Davies provided documentation to each of the city commissioners who also sit as the CRA directors and were considering a request for an additional $750,000 in funding for FDC and BizLINC.

FDC Falsely Claimed to be Non-Profit

The CRA board was also dealing with the failure of FDC to initiate development of five vacant lots they purchased from the CRA for $$33,757 on July 20, 2023. The original agreement committed the group to beginning construction of five new duplexes within 180 days. In those documents, FDC President Efrain "Frank" Cornier and Chief Operating Officer Derrick Blue warranted that FDC was a non-profit company, despite Florida Division of Corporation records identifying it as a profit business.

"One of the things that's in this agreement is that they represented and warrant that they are a not-for-profit corporation," City Attorney Chuck Galloway told the board. "I'm going to pursue that," he said. "I believe that, realistically when the title transfer first took place, in order for the title insurance to be issued, and Mr. Corby Meyers is the one who did that, he wouldn't have issued a title policy to an entity that he didn't know how it existed. I don't see that. I'm going to follow up on it."

BizLINC LLC is also listed in state records as a for-profit company.

Courtesy City of Lake Wales

This notice citing a violation of municipal code was issued to FDC in care of BizLINC on June 26, 2024. The company has not addressed the violation and no Business Tax Receipt has been issued to either business.

As a result of the glaring discrepancy, the CRA board agreed to table the question of an additional 30-day extension to allow the initiation of construction on one of the five lots. CRA Executive Director James Slaton told the board that there was "plenty of time" to determine the status of the agreement. "We can give the city attorney time to sort this out...and then we'll bring it back for a final decision," he said.

Commissioner Carol Gillespie cited the shortcomings in operations of BizLINC in musing about the possible extension, saying that "I'm troubled too by hearing that the BizLINC facility was not properly permitted, and that the plans were not submitted. If these are the same people, and they are...why do we think they are going to be more responsible with these properties than they were with that one?"

"You're offering them an opportunity to screw up again," Gillespie said of the proposed extension. "Somebody should be checking, not just our local newspaper, that these property owners are complying with our rules and regulations... The property owners who do comply certainly incur some expense" in submitting plans and obtaining permits. "Why should these people be given another opportunity to shirk those responsibilities?" Gillespie asked rhetorically.

"That's the decision that you all get to make," Slaton told her.

In the executive summary of their separate request to the CRA for additional funding FDC stated that "over the past three years, BizLINC has exceeded expectations- supporting more than 50 local businesses, creating 35 steady jobs, and helping entrepreneurs generate over $750,000 in gross revenue." The company provided no documentation to back up those statements.

"Entrepreneurs receive access to deeply subsidized workspaces," the statement continued, "personalized coaching (valued at over $1,300/month), and strategic support that includes direct pathways to government and institutional contracts, loan readiness, and vendor certification," the summary stated.

Courtesy City of Lake Wales

FDC president Efrain "Frank" Cornier, center, and Derrick Blue (L), chief operating officer, seen here at the ribbon cutting of the facility in August 2023, are requesting a new tranche of $750,000 from the City of Lake Wales as their initial $1.2 million grant contract ends July 20. The operation has been dogged by problems and questions. Former chief financial officer Charles Young Jr., center left, was arrested and charged with defrauding the corporation and is awaiting adjudication.

The city committed federal American Rescue Act funds to the incubator concept in July, 2022 and all seemed to be going well until the discovery of missing business tax receipts, along with non-working phone numbers and email addresses, plagiarism, and fake testimonials found on the operation's website as documented by Lake Wales News on February 14, 2024. The new tax applications were filed two days later but quickly rejected.

Accusations Haunt FDC Operations

On November 20, 2023 FDC entered into the real property development agreement to purchase the five lots from the CRA. The next day, Blue and Cornier reported to Lake Wales Police that they had discovered in August that a third partner in FDC, Chief Financial Officer Charles Young Jr., had allegedly defrauded the business.

https://www.lakewalesnews.net/story/2024/04/24/news/bizlinc-florida-development-corp-financial-officer-arrested-charged-with-grand-theft-fraud/4230.html" taret="new">An investigation by police and the State Attorney resulted in Young's April 2024 arrest on two felony counts. Young had operated Young and Sons Tax and Accounting from the BizLINC address. He awaits adjudication.

In January it was revealed that three investors had filed a lawsuit against FDC alleging that the company had accepted $260,000 in cash from them but was refusing to allow them access to the company's financial records. The five-count lawsuit asks the court to clarify the plaintiff's right to access the financial records of the company and to clarify the trio's ownership interests in the company.

In the request for city funding, BizLINC lists "market rate" charges of $350 a month for the use of each of six internal offices and $362 a month for eight dedicated desks, but is asking the city to subsidize those for $3,743.50 a month. They also asked the city to pay for 14 Toastmaster memberships at a cost of $116 per month.

Commissioners Seeking "Finish Line"

"What is the end goal here?" asked board chairman Robin Gibson. "Is the end goal that they be self-sufficient?"

"For me it is," Slaton replied.

"We have to get to the finish line with all this stuff," Gibson said. "We want to be reasonable and fair...but there are consequences, there is a finish line, there is an end. Let's define that."

"The reverter clause, that's the death sentence, we pull the trigger on it, if we have to," Gibson added.

Commissioner Daniel Williams, citing the funds directed to other community efforts such as economic development "to take care of this entire area," pointed out that "none of them are close to the dollar amount" being directed to FDC. "I was a big fan of what BizLINC was supposed to do," Williams said. "These allegations are disturbing to me."

Commissioner Thompson said that, if FDC can't demonstrate that they can turn a profit, "you're not going to be very successful as a business incubator."