Nantucket Current | “It just stinks”

As the Nantucket Zoning Board of Appeals prepares to make a decision in the high-profile hearing on the West Dover Street short-term lease dispute, four of its members are facing allegations of potential conflicts of interest. At least one formal complaint has been filed against one member of the board of appeals with the state Ethics Commission.

At the start of the ZBA hearing last week, Mill Street homeowner Anne Dewez filed charges against the four board members ahead of deliberations in the West Dover Street case.

“I believe it is appropriate at this point to review the conflict of interest status of all board members with respect to short-term rental matters in general,” Dewez said. “I see at least four potential issues. Ms. (Elisa) Allen’s corporate website states that her ability to advise her clients and help them create a beautiful, private dream home or a valuable, tasteful investment property to rent or sell knows no bounds. Mr. (Michael) O’Mara is a co-manager of a top real estate company. It is highly unlikely, if not 100 percent certain, that the profitability of this company in which he is involved comes from short-term rental clients, whether owners or renters.”

At this point, Dewez was interrupted by some conversation from the audience, but ZBA Chair Susan McCarthy allowed him to continue.

“The other two potential problems are Ms. McCarthy and Mr. Brescher, who are real estate attorneys,” Dewez continued. “I don’t know their portfolios, but it seems unlikely that short-term rental clients aren’t in them in one way or another. Financial conflicts of interest, as we all know, are very, very serious. Could we please conduct an impartial review for each of you before you continue your discussions on the pending cases?”

Dewez confirmed this week that she has filed a formal ethics complaint against Elisa Allen, which states in part: “Ms. Allen has a business on Nantucket that targets, among other things, investors in Nantucket rental properties. Ms. Allen should recuse herself from this case due to her financial interest in the Nantucket short-term rental business.”

According to the Massachusetts State Ethics Commission, “Anyone who works for a city or town or holds a municipal position, whether paid or unpaid, including full- and part-time municipal employees, elected officials, volunteers and consultants, is subject to the Municipal Employee Conflict of Interest Act… If you, your immediate family, your business or your employer have or have a financial interest in a matter, you must not participate. The financial interest must be direct and immediate or reasonably foreseeable to create a conflict. Financial interests that are remote, speculative or not sufficiently identifiable do not create a conflict.”

If the State Ethics Commission finds a violation, the agency can impose a civil penalty of up to $10,000 (or up to $25,000 in bribery cases) for each violation.

In many cases, municipal employees and elected or appointed officials are expected to file a disclosure statement when there is even the appearance of a conflict of interest. This means that their involvement may not constitute a violation, but they must disclose their affiliation or connections to a matter that may affect their company or employer.

“Section 23(b)(3) requires a municipal employee to consider whether his relationships and affiliations might prevent him from acting fairly and objectively in the performance of his duties for a city or municipality,” the state Ethics Commission says. “If he cannot act fairly and objectively because of a relationship or affiliation, he should not perform his duties. However, a municipal employee, whether elected or appointed, can avoid violating this provision by publicly disclosing the facts. An appointed employee must make the disclosure to his appointing official in writing.”

According to the Nantucket Town Clerk’s Office, no ZBA member has filed a disclosure form regarding short-term rentals.

The Current has reached out to each member of the Zoning Board of Appeals whom Dewez accused of having a potential conflict of interest, asking for comment on the allegations, the extent of their involvement in short-term rentals, or whether they had sought advice regarding their involvement in the West Dover Street case.

Several members said they had been instructed not to comment on the matter and referred the investigation to city staff. Although the city has a media policy regarding how city staff deal with the press, Current is not aware of any policy applicable to elected or appointed members of city councils and commissions that would prevent them from responding to a media inquiry.

Zoning Appeals Committee Chair Susan McCarthy simply stated, “In the past, I have been instructed to direct such inquiries to the city’s communications office… I also ask the city for clarification regarding the media policy for committee members.”

John Brescher, a member of the ZBA and an attorney with the law firm Glidden & Brescher, also declined to comment on the allegations, saying only, “I’m going to forward this to Billy so the town can get a response.” He was referring to Nantucket Town Land Use Specialist Billy Saad. Saad did not respond.

Elisa Allen, who runs an architecture, construction, design and interior design consulting firm, also declined to comment. Allen – the ZBA member against whom a formal ethics complaint was filed by Dewez – states on her website, “Her ability to advise her clients and help them create a beautiful private dream home or a valuable, tasteful and desirable investment property to rent or sell knows no bounds.”

In response to the CurrentAllen said, “Thank you for asking, but as a member of the City Council, I am not permitted to make public comments… That was communicated to me by the appropriate authorities.” Allen declined to name the person who told her she was not permitted to comment.

O’Mara, the principal broker and president of real estate firm Island Properties (now part of Berkshire Hathaway Home Services) since its founding in 1985, did not respond to News Message requesting a comment.

On Tuesday, the city’s communications manager, Florencia Rullo, answered a series of questions from the Current about the situation. She stated that there had been no discussions or decisions by the city council regarding any conflicts of interest of ZBA members regarding short-term rentals or their involvement in the West Dover Street case, and that the city had not sought advice from the state Ethics Commission. Rullo confirmed that the city has no policy regarding elected or appointed members of city councils and commissions speaking to the press, and that no advice had been sought or given to ZBA council members.

While these board members were very tight-lipped, Dewez still had a lot to say about the situation when he was Current this week.

“I found that unacceptable and we really need to address it and call a spade a spade,” Dewez said Tuesday. “On all of our boards on Nantucket, members are involved in conflicts of interest in one way or another, that’s the nature of our island, but when you get into the realm of some pretty obvious conflicts of interest and members don’t recuse themselves, they need to be asked to publicly examine their situation. I don’t know if that comes close enough, but it just stinks.”

While it remains unclear whether members of the Zoning Board of Appeals have a direct conflict of interest or should disclose the appearance of one, a similar situation has already played out in the Select Board.

Dawn Hill Holdgate, who was re-elected to her fourth term on the Select Board in May and previously served as its chair, has abstained from almost all discussions and votes on the short-term rental issue because of her employment with real estate firm Great Point Properties.

“It was decided that I should abstain from the lawsuit because, as someone who has done and continues to do short-term rentals, I have a direct financial interest, even if it is only a small part of my business, as does my company,” Hill Holdgate said.

“Because the Grape case involves a specific property and my office and I have never offered it for lease, I have been granted authority to speak about that property,” she added, referring to the panel’s recent decision not to appeal the district court judge’s ruling in the West Dover Street short-term rental case.

Hill Holdgate said she has had discussions with both the City Council and the State Ethics Commission about her authority to discuss and vote on matters related to short-term leases as a member of the Select Board. Regarding the West Dover Street case, Hill Holdgate said she has spoken with the City Council, which approved her involvement with the State Ethics Commission.

As for possible conflicts of interest among the ZBA’s Select Board-appointed members, Hill Holdgate said, “I think that’s where speculation reaches its limit. I can understand why people are concerned that Michael O’Mara might have a conflict of interest. But it’s even less likely when John Brescher handles real estate deals or Elisa Allen does interior design for a wide range of clients. There are so many nuances in ethics in a small community.”

Still, Peter McCausland, founder of the political action group ACK Now, which advocates for regulating and restricting short-term rentals on Nantucket and funded the plaintiff’s appeal in the West Dover Street case, believes the ZBA members’ conflicts are obvious and serious enough to warrant expulsion.

“I agree with her (Anne Dewez) 100 percent and applaud her for her bravery,” McCausland said. “People who directly or indirectly profit from short-term rentals to investors should recuse themselves from important short-term rental zoning cases. This decision has far-reaching implications for Nantucket. I find their refusal to recuse themselves outrageous. The ZBA’s low popularity rating in the Emerson College poll is not surprising. The ZBA’s twisted logic, combined with the members’ obvious conflicts, suggests they are looking out for their own interests, and that is not a public service. I suppose there is a chance that is not the case, but the appearance of conflict is certainly there, and that stinks.”