REIT President Steps Down After Probe of Florida Project
Saturday, November 18, 2006
The president and chief development officer of District-based Republic Property Trust has resigned, the company announced yesterday, after an internal inquiry into the hiring of a West Palm Beach official who later voted on a company project.
Steven A. Grigg terminated his employment as of Nov. 13 but remains vice chairman of the company board of trustees, Republic Property Trust said in a written statement. He and the company are disputing whether he is entitled to an estimated $1.8 million severance package, according to a filing yesterday with the Securities and Exchange Commission.
Grigg, however, said he did not initiate the action and that the company is trying to push him out. "I am not functioning as president and chief development officer because they have not allowed me to do that," Grigg said.
The company said Mark R. Keller, chief executive of the real estate investment trust, will assume Grigg's responsibilities. Keller did not return phone calls seeking comment.
"We are fully committed to doing all that is necessary to ensure a smooth transition," Keller said in the statement.
Republic Property Trust, founded last year, owns, develops or manages more than 2 million square feet of office space in the District and Northern Virginia.
The board had been discussing Grigg's employment and the position of founder and chairman Richard L. Kramer after investigating their dealings with West Palm Beach City Commissioner Raymond A. Liberti.
Liberti had been hired as a consultant by Republic Properties Corp., a separate private company owned by Kramer and Grigg, during a period when Liberti voted favorably on Republic Property Trust's project to build a new city hall, library and museum in the center of West Palm Beach. Kramer and Grigg own about 11 percent of the trust.
The trust's audit committee said it "uncovered no wrongdoing or impropriety on the part of Republic Property Trust," but an attorney to the committee warned that the conduct of the two men could "impact on our ability to maintain effective internal controls and procedures," according to a Nov. 7 filing.
Grigg said the investigation was a "pretext to attempting to throw Mr. Kramer and myself out" because of a disagreement over the strategic direction of the company.
Kramer said that the trust was aware of Liberti's involvement and that there was no conflict with his duties on the West Palm Beach City Commission because he was doing unrelated work for Republic Properties Corp.
Republic Properties Corp., founded in the 1980s, is best known for its $1 billion Portals project in Southwest Washington, the site of a Mandarin Oriental hotel and office buildings with tenants that include the Federal Aviation Administration and the Federal Communications Commission. Liberti was scouting possible development deals for Republic Properties Corp. in Palm Beach County, according to Kramer.
Liberti, who resigned from his job in May, was sentenced last month to 18 months in federal prison on charges of mail fraud and obstruction of justice on a separate matter having nothing to do with Republic Property Trust.
The trust is no longer involved with the West Palm Beach project.