"It Just Smells" - Does Nantucket's Zoning Board Have Conflicts Of Interest On Short-Term Rentals?

As Nantucket's Zoning Board of Appeals prepares to issue a decision in the high-profile remand hearing on the West Dover Street short-term rental dispute, four of its members have been accused of having potential conflicts of interest. At least one formal complaint has been filed against a member of the ZBA with the state Ethics Commission.

At the start of the ZBA’s hearing last week, Mill Street homeowner Anne Dewez lodged the accusation against the four board members ahead of their deliberations in the West Dover Street case.

“I believe it’s appropriate at this point to review the conflict of interest status of all of the board members relating to short-term rental matters in general,” Dewez said. “I can see at least four problems, potentially. Ms. (Elisa) Allen’s business website says there is no limit to her ability to advise her clients and assist in creating a beautiful, private dream home, or a valuable, tasteful investment property to rent or sell. Mr. (Michael) O’Mara is a co-principal broker of a top real estate business. It is most unlikely, if not 100 percent sure, that the profitability of this business in which he shares derives from short-term rental clients be they owners or renters.”

At that point, Dewez was interrupted by some cross-talk from the audience but was allowed by ZBA chair Susan McCarthy to continue.

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

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

According to the Massachusetts State Ethics Commission, “Anyone performing services for a city or town or holding a municipal position, whether paid or unpaid, including full- and part-time municipal employees, elected officials, volunteers, and consultants, is a municipal employee under the conflict of interest law…If you, your immediate family, your business, or your employer have or has a financial interest in a matter, you may not participate. The financial interest must be direct and immediate or reasonably foreseeable to create a conflict. Financial interests which are remote, speculative or not sufficiently identifiable do not create conflicts.”

If the state Ethics Commission finds a violation has occurred, the agency can impose a civil penalty of up to $10,000 - $25,000 for bribery cases - for each violation.

In many cases, municipal employees and elected or appointed officials are expected to file a disclosure form if there is even an appearance of a conflict of interest - meaning their participation may not rise to the level of a violation but they must disclose their affiliations or connections on a matter that could potentially involve their business or employer.

“Section 23(b)(3) requires a municipal employee to consider whether her relationships and affiliations could prevent her from acting fairly and objectively when she performs her duties for a city or town,” according to the state Ethics Commission. “If she cannot be fair and objective because of a relationship or affiliation, she should not perform her duties. However, a municipal employee, whether elected or appointed, can avoid violating this provision by making a public disclosure of the facts. An appointed employee must make the disclosure in writing to his appointing official.”

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

The Current reached out to each member of the Zoning Board of Appeals accused by Dewez of having a potential conflict of interest seeking a response to the allegation and asking about the extent of their involvement with short-term rentals or if they had sought any guidance about their involvement in the West Dover Street case.

Several members stated that they had been instructed not to speak on the matter, and referred the inquiry to town staff. While the town does have a media policy regarding municipal employees’ interactions with the press, the Current is not aware of any policy that applies to elected or appointed members of town boards and commissions that would prevent them from responding to a media inquiry.

Zoning Board of Appeals chair Susan McCarthy stated only that “In the past, I have been instructed to direct this type of inquiry to the Town Communications office…I am also seeking clarification from the town on the media policy for Board members.” McCarthy is a real estate attorney with Griffin Law, LLC, a Boston-based law firm.

John Brescher, a ZBA member and an attorney with the law firm Glidden & Brescher, also declined to comment about the allegation, stating only that “I’m going to send this over to Billy for the town’s response,” referring to town of Nantucket land use specialist Billy Saad. Saad did not provide any response.

Elisa Allen, who runs an architectural, construction, design, and furnishings consulting company, similarly declined to comment. Allen - who is the ZBA member facing a formal ethics complaint lodged by Dewez, states on her website: “There is no limit to her ability to advise her clients and assist in creating a beautiful private dream home or a valuable, tasteful & desirable investment property to rent or sell.”

In a response to the Current, Allen stated “Thank you for asking but as a town board member I am not permitted to make any public comments…That is what I was told by the powers that be.” Allen declined to name who advised her that she was not permitted to comment.

O’Mara, the principal broker and president of the real estate firm Island Properties (now part of Berkshire Hathaway Home Services) since its inception in 1985, did not respond to the Current’s message seeking comment.

On Tuesday, the town’s communications manager Florencia Rullo replied to a series of questions from the Current about the situation. She stated there had been no discussions or decisions made by the town administration regarding the ZBA members having conflicts of interest pertaining to short-term rentals or their participation in the West Dover Street case, and the town has not sought any guidance from the state Ethics Commission. Rullo confirmed that the town has no policy with regard to elected or appointed members of town boards and commissions talking to the press and that no advice had been requested or provided to ZBA board members.

While those board members were tight-lipped, Dewez still had plenty to say about the situation when reached by the Current this week.

“I thought it was unacceptable and we really have to call it out and call a spade a spade,” Dewez said on Tuesday. “On all of our boards on Nantucket, members are conflicted in one way or another, it’s the nature of our island, but when you get into the realm of some pretty obvious conflicts of interest, and if the members don’t recuse themselves, they have to be requested to review their situation in public. I don’t know if this is close enough, but it just smells.”

Dewez's allegations came one month after the Zoning Board's July meeting on the West Dover Street case when ZBA alternate Lisa Botticelli left the meeting early after a tense exchange with Elisa Allen in which she suggested Botticelli may be "conflicted" because of her position on political action group ACK Now’s Advisory Council, as well as the proximity of her residence to the short-term rental in question. The plaintiff in the West Dover Street case, Cathy Ward, also serves on ACK Now’s Advisory Council and has had her legal effort supported by the political action group. Botticelli denied that she was conflicted, but did not return for the duration of the meeting. 

While it remains undetermined whether the Zoning Board of Appeals members have a direct conflict of interest or should have made a disclosure regarding the appearance of one, a comparable situation on the Select Board has already played out.

Dawn Hill Holdgate, who won reelection to her fourth term on the Select Board in May and previously served as its chair, has recused from nearly all discussions and votes on short-term rentals due to her employment with the Great Point Properties real estate firm.

“It was determined that I should recuse because as someone who has done short-term rentals and still does, even though it’s a small part of my business, I have a direct financial interest, as does my firm,” Hill Holdgate said.

“With the Grape case, because it is specific to a property and my office and myself have never listed it for rent, I was cleared to discuss that property,” she added, referring to the board’s recent decision not to appeal the Land Court judge’s ruling on the West Dover Street short-term rental case.

Hill Holdgate said she had had discussions with both town counsel and the state Ethics Commission regarding her ability to discuss and vote on matters relating to short-term rentals as a member of the Select Board. With regard to the West Dover Street case, Hill Holdgate said she spoke with town counsel, who cleared her involvement with the state Ethics Commission.

When it comes to the members of the ZBA - who are appointed by the Select Board - potentially having conflicts of interest, Hill Holdgate said “I think that’s when it comes to that threshold of being too speculative. I can understand why people would be concerned with Michael O’Mara possibly having conflict. But it’s further removed if it's John Brescher who handles real estate closings, or Elisa Allen, who does interior design for a broad range of clients. There are so many nuances to the ethics stuff in a small community.”

Still, Peter McCausland, the founder of the political action group ACK Now which has been fighting to regulate and restrict short-term rentals on Nantucket and funded the appeal of the plaintiff in the West Dover Street case, sees the ZBA members' conflicts as obvious and rising to the level that should require recusals.

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