As the company operating a business incubator in Lake Wales seeks another three-year contract, it would take the city more than a century to recover its investment, according to an independent review.
The recent report from Carr, Riggs & Ingram, an Orlando accounting firm, also found that 11 of 16 businesses on the BizLinc roster are not current tenants.
The report was included in the agenda for the Sept. 9 meeting of the Lake Wales Community Redevelopment Agency. The CRA board consists of the Lake Wales City Commission.
The board took no action on two agenda items related to Florida Development Corp., the company that operates BizLinc. One item addressed the expiration of an agreement for FDC to redevelop five properties in the Northwest neighborhood.
The other centered on what CRA board Chair Robin Gibson called the “administrative question” of whether the city should continue its relationship with FDC.
The creation of a business incubator in the economically challenged Northwest neighborhood was one of the suggestions in Lake Wales Connected, a guideline for revitalization commissioned by the Lake Wales Community Redevelopment Agency and completed in 2021.
The consulting firm Dover, Kohl & Partners produced the plan, which included dozens of projects, many of which have already been completed. Lake Wales Connected derived from a city plan created in 1931 by Frederic Law Olmsted Jr., the designer of Bok Tower Gardens, and his brother, John Charles Olmsted.
The Lake Wales CRA signed an operational agreement with Florida Development Corp. in 2022, offering a potential $1.2 million over three years to manage the facility. FDC purchased a vacant, 3,570-square-foot office building at 225 W. Lincoln Ave. in 2022 to house the incubator.
That contract has expired, and FDC is seeking another three-year agreement that would pay the company $420,000, according to the independent report. That money would cover salaries and operations.
Resident: Reject firm’s request
Richard McKinley, a longtime Lake Wales resident, urged the board to reject the request from the Florida Development Corp. for a new contract during public comments. He referred to details in the report from Carr, Riggs & Ingram.
“That report is notable in that it speaks to some deficiencies in FDC’s performance,” McKinley said. “And to make it quick, my recommendation to the committee, and I’m urging you guys, (is) to tell them no. They haven’t done what they promised. They have a bad track record, and we need to tell them no.”
No one else spoke during public comments. No representative of FDC was able to attend, City Manager James Slaton said.
Derrick Blue, chief operating officer of FDC and director of BizLinc, had not responded by the afternoon of Sept. 10 to a voicemail left the morning of Sept. 9.
Under the original three-year contract, Tampa-based FDC agreed to promote small businesses by hosting training seminars, providing technical assistance and renting space in its office on Lincoln Avenue. Lake Wales agreed to pay FDC $500,000 for the first year of the contract, $400,000 for the second year and $300,000 for the third year, contingent upon FDC meeting the contract’s “deliverables.”
The city used federal funds delivered through the American Rescue Plan Act to cover that $1.2 million contract.
Questions about BizLinc’s performance arose with a report published in February 2024 in Lake Wales News. The article challenged the credentials of BizLinc leaders and questioned whether some business partners were licensed to operate. It also claimed that the BizLinc website contained phony testimonials, plagiarism and invalid contact details.
At a subsequent City Commission meeting, Blue strongly rejected the criticisms and invited some BizLinc business partners to speak. He did acknowledge that the BizLinc website contained fictitious testimonials he said were inserted as placeholder material.
After the article published, the City Commission ordered an audit of BizLinc. Carr, Riggs & Ingram conducted a first review of BizLinc in 2024 that covered the first year of the contract, a period ending July 24, 2023. That assessment found that the company had fallen short of some obligations in its agreement with the CRA.
The firm reported that BizLinc had failed to meet its goals in three areas: holding at least 10 training seminars for local business owners, providing at least 2,000 hours of technical assistance for members and submitting quarterly reports to the city.
A subsequent audit, covering the period from July 25, 2023, to June 30, 2024, found that BizLinc exceeded most benchmarks in the second year of the contract.
The third audit, issued in early September, covered the period from July 1, 2024, to June 30, 2025.
Non-tenants fill roster
The report included a roster of businesses with their addresses listed in Florida’s official records as 225 Lincoln Ave., the BizLinc site. Of the 16 businesses, 11 were not current tenants, the report said.
One of those, Ashton & Ashton III LLC, had no verifiable information online, the report said. Another was based at a residential address in Lake Wales. Four businesses had moved to other locations.
Five of the businesses were affiliated with either Blue or Frank Cornier, FDC’s CEO. One of Blue’s businesses, Pam’s Kitchen, opened in May in Putnam County, the report said. Cornier’s business, Inner Drive Investments, was listed as a non-tenant.
The report looked at assessed values and property taxes paid from 2021 through 2025. It found that FDC is paying about $3,985 in property taxes on the Lincoln Avenue building, and no other businesses had moved into locations in Lake Wales.
“Taking all of these elements into account the return on investment for the $420,000 that is being asked for would take approximately 105.4 years,” the report said.
The agenda packet included a summary of code-enforcement cases Lake Wales has lodged on the BizLinc property on Lincoln Avenue. The property has been cited for failing to display a local business tax receipt, sanitation and storage of materials and accumulation of garbage.
As previously reported in The Ledger, FDC’s former chief financial officer, Charles Young Jr., was arrested in 2024 on charges of embezzling more than $250,000 from the company.
Though the CRA meeting agenda did not include taking action on FDC’s request for another three-year contract, board members shared their skepticism that the city should have further relations with the company.
The other agenda item involved an agreement the CRA made with FDC in 2023 after advertising requests for proposals to develop five properties in the Northwest neighborhood. The city chose FDC’s proposal to build 1,900-square-foot duplexes on each of the sites.
FDC has not started work on any of the structures, and the agreement expires in late October, Slaton said.
Second chance to redevelop?
In the agenda summary, city staff suggested entering a revised contract giving FDC six months to begin construction on at least one site, and if those terms were met, offering another 12-month extension to start construction on the other four parcels.
Slaton said that FDC’s principals told him they were speaking with banks and expected to have a loan deal in place by November.
During discussion of the item, it emerged that the original contract described FDC as a nonprofit entity, when it is actually a for-profit corporation. As board members mulled the need to correct that detail in any new contract, Keith Thompson questioned whether city staff should even work on a new agreement with FDC.
“I don’t know how six months is going to help you get a building even started on that property over there, on even one piece of property,” Thompson said. “You’ve had two years to get something going. I’m suggesting that this body needs to consider whether it wants to do business with FDC at all before it tells me to create a new agreement.”
“That makes sense to me,” Gibson said.
Board members questioned whether the city would regain ownership of the properties through the expiration of the contract. Though the contract contains a “reverter clause,” City Attorney Chuck Galloway said the Lake Wales CRA would need to recover the property through a quit-claim deed in order to be eligible for title insurance.
Ultimately, the board voted 4-0 to table any action on a new contract and to allow FDC leaders to speak at the next meeting in October. Lake Wales Mayor Jack Hilligoss recused himself from the discussion and vote, presumably because Blue is a volunteer pastor at HighPoint Church, where Hilligoss is senior pastor.
Slaton later said that he planned to present the board with a concise agenda item at the Oct. 13 meeting, simply asking whether they wish to continue the city’s relationship with FDC.
CRA board member Carol Gillespie expressed frustration that no one from FDC appeared at the Sept. 9 meeting. Slaton confirmed that he told the company’s principals that the duplex contract would be discussed.
“Why would we give them another chance to come in when apparently they didn’t tell anyone they weren’t coming today?” Gillespie said. “They had a chance today, and they’re not here.”
In his public comments, McKinley said he wrote a detailed letter to the CRA board and Slaton in September 2024, scrutinizing FDC and its leaders, and only one member responded. McKinley said it appeared that no one with the city had investigated any of the allegations in his letter.
McKinley chastised Hilligoss for his previous responses to residents who criticized FDC and BizLinc. He noted that Hilligoss accused residents during a recent meeting of presenting inaccurate and poorly researched information.
“As a city, let’s move toward a climate where concerned citizens, these people that come to you with legitimate questions, are not dismissed with derision, disrespect, hollow rhetoric, name-calling and dismissal,” McKinley said.
Gary White can be reached at gary.white@theledger.com or 863-802-7518. Follow on X @garywhite13.
This article originally appeared on The Ledger: Report: Lake Wales would need 105 years to recoup money spent on new BizLinc contract
Reporting by Gary White, Lakeland Ledger / The Ledger
USA TODAY Network via Reuters Connect
