AN OPEN
LETTER TO THE MEMBERS
OF
THE CORAL
CASINO BEACH AND CABANA CLUB
January 20, 2006
Dear Fellow Member:
I am writing this letter to you
out of concern over the direction the Coral Casino Beach and
Cabana Club has taken in recent months, particularly with
regard to the closing of the Club. I’ve been a member of
the Club for many years but have stayed out of the controversy
regarding the owner’s proposed construction. . I’m not a member of
the Preservation Committee, CORE or any other faction. I’m not an opponent of
renovation of the Coral Casino and want only to continue using
the club as my family has for decades.
In the last few weeks, as a
retiree with time on my hands, I’ve become quite curious about
the actual facts surrounding the controversy at the Club, and
I’ve made a number of telephone calls and collected a good
deal of information.
The findings seem important enough to share with my
fellow members.
But as others who have questioned Mr. Warner’s actions
have been subject to uncomfortable pressure - and I do not
choose to join their ranks - after much deliberation, I’ve
chosen to send this letter anonymously.
However, the question of
authorship should not be an issue, for like Joe Friday, I’m
interested in the facts, just the facts, and that’s what I
intend to present – along with a bit of commentary.
Fact
1: The
closing of the Club is a breach of Mr. Warner’s legal
obligations to the membership. The members have paid
initiation fees and dues for the use of the Club. There is a real
and an implied contract between the owner and the Members that
requires Mr. Warner to keep the Club open and to continue to
operate it as a private club. Mr. Warner is ignoring
this obligation in the expectation that the membership will
continue to
acquiesce to his incursions on their rights.
I have reviewed a 16 page legal
opinion written for Club members by Robert E. Duffy, a senior
partner and a highly experienced attorney with the 237 member
law firm of Brown Raysman Millstein Felder & Steiner. The
carefully considered opinion concludes that the members of the Coral
Casino have a legally enforceable right to the use of the
Coral Casino as a private club. I am informed that
this legal opinion has been provided to the Member Committee
and that they have shown no interest in it, or have challenged
its conclusion that the legal rights of the members have been
compromised by both the Member Committee and the owner. Furthermore, the
Member Committee has not sought legal counsel to confirm or
refute the conclusions of this opinion, although they have
been urged to do so. The Brown Raysman legal opinion can be
reviewed at the following website: www.coralcasinoprivateclub.org. [(Click on “Legal
Opinion.”) Please
review this opinion – it deals with your rights – and then
ask yourself: Why has the Member Committee refused to obtain
an independent legal analysis of the rights of the
membership?
Fact
2:
The closing of the Club is not necessary, the Club is
not uninsurable, and the Club is not in danger of “falling
down” in spite of public statements to the
contrary.
Commentary: As you may know, the
Coral Casino, which has been in operation since 1937, is now
closed indefinitely
and many believe it may be years before it reopens.
Thus far, no satisfactory reason for its closure has been
provided to the membership. It has been claimed on many
occasions by Greg Rice, the owner’s representative, that the
Club is in danger of collapse and insurance may no longer be
available. Mr.
Rice has repeated this argument in several public forums.
I decided to test the veracity
of this statement.
When an inquiry was made with the appropriate authority
at the Four Seasons, the response was, “This is the first time
I’ve ever heard of this.” I called other
Four Seasons executives and heard the same answer: they had
heard nothing about a lack of safety at the Club or lack of
insurability. Is it plausible that Four
Seasons would continue to manage the Club, and take on the
tremendous liabilities involved, if there is evidence the
building is unsafe?
Fact 3: The Coral Casino is
being used as the Biltmore’s dining room and kitchen, while
the Biltmore’s kitchen and dining areas are being
renovated.
Commentary: The real reason for
the Club being closed is not a lack of insurance as Mr. Rice
contends, but so that it can be used as a kitchen and dining
room for hotel guests while the Biltmore is being
remodeled. If so, Members are being
denied the use of their Club so that the Biltmore can avoid
the inconvenience of relocating the kitchen and dining
facilities elsewhere on the hotel grounds. If the Club is safe and
insurable for use by the Biltmore as a kitchen and restaurant,
why isn’t it safe enough for Members to use for swimming and
sunbathing?
Fact
4: According to a February 16, 2005
article published in the Chicago Tribune and reports in the
Santa Barbara News Press, U. S. District Judge Joan Lefkow
ruled that Ty Warner had engaged in witness tampering and
perjury. The
Court punished Warner by ordering him to forfeit $710,046 in a
trademark dispute. The article goes on to say “Court documents
in the case reveal some of Warner’s hardball tactics that are
in sharp contrast to the cuddly image on which he has built
his fortune.”
Commentary: There is ample
evidence that Mr. Warner and his team have been less than
candid with the membership as well, as Fact 5 will indicate.
Fact
5: In May of 2003 Mr. Warner’s team
received a permit to repair the beach
access stairs.
Instead the stairs were demolished, although
they did not have a permit allowing them to do so. As a result
the County halted the work. Mr. Warner’s
representatives have since claimed that the County of Santa
Barbara won’t allow them to rebuild the stairs. But the fact is
that the Warner team could have obtained approval for the
replacement of the beach stairs at any time over the last two
and one-half years, but they chose not
to.
Commentary: Last month I called
officials at the Dept. of Building and Safety who stated,
“Mr. Warner’s team can obtain a permit to rebuild the steps
to the beach in front of the Coral Casino any time they
wish.” The official said that this fact was conveyed to a
delegation from the Member Committee, which included Greg
Rice, some months ago.
Following this revelation one would have expected the
Member Committee to take action. But as far as I have
been able to determine, the Committee has lodged no complaint
and written no letter to the Warner group to oppose what
appears to have been the intentional denial of access to the
beach to members for two and a half years.. The Coral Casino has
thus become, in the words of one sarcastic observer, “A beach
club without a beach,” not by accident, but by design, with
little or no objection being expressed by the Member
Committee.
Fact
6:
Mr. Warner has intimidated the local press. I asked Guillame
Doane, the managing editor of the Montecito Journal why his
paper has not been more even-handed in reporting the Coral
Casino controversy.
I was shocked to hear Mr. Doane say, “I can’t do it. If
I dig into this story, I could lose my job. This won’t be the last
time I have to deal with Warner and Davies
(Communications).
They call me all the time. I’m a young man
and I know the kind of thing that can happen, I could lose my
job.” I said that
in 20 years, the story he might be proudest of would be the
one that took the most courage, “It seems to me that the real
story here is that of an out-of-town billionaire who has
bought, bullied or deceived the local population.” Mr. Doane responded,
“I don’t disagree.
That’s the story that’s been bubbling inside of me for
months.” When I
asked him why he didn’t write it, he could only say, “Listen,
I’m not proud of my position.”
Commentary: Mr. Doane and the
editor of the Montecito Journal will make ritualistic denials
that this discussion ever occurred; what else can they
do? It’s clear
evidence of the fear the Warner machine has provoked and how
the Journal has buckled under. On the other hand, one
can hope that Mr. Buckley realizes that there are civic
responsibilities that come with his role as a publisher and
that he will not only promise not to fire Mr. Doane, but insist that he write
the story he wants to write. We might then have
some real reporting on Mr. Warner’s activities.
Fact
7:
The Member Committee recently made a change to the
rules of the Club that would allow the Committee to
indefinitely suspend the membership of any Member that files a
suit against the owner, the management, the Member Committee
or other Members.
Commentary: The reason for this
rule change is clear:
the owner
recognizes that you, as a Member of the Club, have rights that
are being violated and he wants to discourage you from taking
any action to enforce those rights. The timing of the
rule change is instructive; it was passed just a few
weeks prior to
the closing of the Club.
I’m informed that the rule
change was drafted by Mr. Warner’s team and presented to the Member
Committee, which dutifully approved it. Thus, the Member
Committee has given its full cooperation to Mr. Warner in his
plans to close the Club, turn it over to the Biltmore, and to
threaten with suspension any member who might take action to
enforce the Members’ contractual rights to the continued use
of the Club. It
looks as though the Member Committee has lost its way – they
seem to believe that by appeasing the owner they are acting in
the best interests of the Members.
Fact
8: The Warner group now claims that the
Coral Casino is not a private club: This is shown by:
(a) Statements made by the Warner group
to that effect in reports to the County;
(b) Greg Rice’s statement to Club
members: “It’s a misconception that the Coral Casino is a
private club; it never was a private club and if that’s what
you believe, we can give you your money back.” In an August 14, 2005
article in the London Times, Mr. Rice said that Mr. Warner had
spent millions trying to reach a deal with the “elitists” who
want to keep the club
private;
(c) Montecito Planning Commissioners
Claire Gottsdanker and Michael Phillips stated in public
hearings that, “If the Warner plan goes forward the Coral
Casino will no longer be private club”;
(d) Mr. Warner’s view is even shared by
some on the Member Committee. One member of the
Committee told members, “The Coral Casino is not a private
club and the owner has the right to throw you out and give you
your money back at any
time.”
Commentary: The Coral Casino Beach
and Cabana Club has functioned as a private club for 68
years. The As
Built Development Plan filed with the County states that the
Coral Casino shall “remain a private club.” The legal opinion
cited in (1) above states, “the private nature of the
Club is confirmed by its history and organizational documents
and is, in fact, mandated by zoning entitlements.”
Applicants for membership pay an initiation fee, are reviewed
by the Member Committee, their names are listed in the
membership directory and they must pay dues to maintain their
membership, and of course the club is not open to the public;
these are the defining characteristics of a private club. Any effort to label
the Coral Casino as anything other than a private club is
simply false. It
is also worth noting that in a recent election for the
Member Committee virtually all the candidates expressed the
view that maintaining “member privacy” was their biggest
concern – a concern that has received little attention from
the Committee.
The owner does not have the right to operate the Coral
Casino as anything other than a private club.
Fact
9:
The Member Committee now functions more as the Owner’s
Committee than as a representative of the
membership.
Commentary: The Members of the
Committee are good and decent people who have been subjected
to an intense public relations campaign for years. They’ve been wined and
dined; given free massages at the Biltmore Spa, meals,
cocktail parties, beach parties, private meetings with Ty
Warner and many other inducements to encourage their
cooperation with the owner. More importantly, a
multi-million dollar public relations campaign directed at the
membership, the press and public officials has made it appear
that the Warner point of view is the only legitimate
perspective.
While there is no doubt the Member Committee has tried
hard to do the right thing, in the end, by appeasing the
owner, they have failed to protect the rights of the
membership. It is this observer’s opinion that they have been
deceived and in private conversations, more than one member of
the Committee has also expressed this opinion.
Fact
10:
The Club will be closed unnecessarily for many months unless
Members act to preserve their rights.
Commentary: The Montecito Journal
reported in the Oct. 13-26, 2005 issue that the start of
construction will be delayed “until at least next summer.” If
so, there is no reason for the club to be closed now. For myself, I wish the
legal issues surrounding the project were resolved. But the
fact is, the project has been challenged in court and there is
no clear end in sight.
Mr. Warner does not currently have the right to obtain
a building permit and cannot do any major work on the Club
until he does.
Thus, there is no legitimate justification for the
Club to be closed.
Surely, there must be a better alternative than to
stand by and do nothing in response to being barred from our
Club, while the owner uses it as a kitchen and dining room for
his hotel. If the
membership will come together and work in a united manner,
something can be done to remedy this situation.
I suggest a referendum to
determine the true sentiments of the membership regarding the
closing of the Club and the Member Committee’s refusal to
obtain an independent legal assessment of Member rights. This will at least
provide a starting point for consideration of the alternatives
to inertia. I don’t believe the Member Committee, as presently
constituted, would be willing to call for such a vote. Therefore, as a
concerned Member, I am providing an opportunity for the
membership to express its views at my own expense. If a majority supports
the reopening of the Club, a future letter will explore some
of the ways the membership can work together constructively
and in a spirit of cooperation to pursue that goal and to
ensure the continued operation of the Coral Casino as a
private club as it has since 1937. Please be sure to
review the Brown Raysman opinion referred to in (1) above to
better understand your rights - which will be taken from you
if not defended.
A ballot is enclosed with
this letter. Ballots will be collected and counted by the
local accounting firm of Larry Woolever, CPA and all votes
will be maintained in absolute confidence. The ballots are
numbered only to prevent any tampering with the vote.
Please mark your choices on the
enclosed ballot and mail it by Thursday, January 26,
2006
You will be informed of
the result of the voting by mail.
Sincerely,
A Concerned Member
