Legal Issues Mount In City/CCU Take-Over Of SuperBlock?

July 14, 2020 sworn court depositions show troubling signs for the muscle behind the City of Myrtle Beach’s “big flip” master plan.

Statements made by Myrtle Beach City Manager John Pedersen and former Downtown Redevelopment Corporation head David Sebok show signs that the city may be in for another round of legal payouts.

In this Big Flip series, we told you to date, for a big flip to happen, an area needs:

1. Motivated sellers – Court depositions show that Myrtle Beach City Manager John Pedersen and the DRC in Myrtle Beach have been working to “motivate” small business owners to sell for many years.
2. A buyer with deep pockets of cash… this piece is yet to come.
3. A decades long careful plan, meticulously sculpted over time that includes: Business, Higher Education, Politicians, and Government.

Today we introduce you to twenty years of planned City of Myrtle Beach muscle known as the Downtown Redevelopment Corporation.

What method could better motivate merchants into selling than a “government sponsored” effort to drive them out of business?

City of Myrtle Beach residents gasped last February with the news of the city’s landmark settlement to Julian Betton for damages. The City of Myrtle Beach paid Betton $8.5 million for illegally raiding his home, spraying the interior of the house with bullets and paralyzing Betton for life.

The city may soon be looking at its next round of pay outs.

THE UGLY SIDE OF THE BIG FLIP

The city used multiple, suspicious methods (including a shady straw buyer), police, construction services, threats of imminent domain, and neighborhood blight, to shut city merchants down and drive them from the Superblock.

In a key round of questioning, Attorney Tommy Brittain notes an email sent out by DRC Head Sebok.

Brittain: Okay. Down at the bottom, next-to-the-last paragraph, it says, Hobeika is way out of line with their asking price and may require strong council action.

Mike Hobeika is a property owner in the downtown Myrtle Beach SuperBlock.

In another key exchange concerning redevelopment, Brittain asks, “So can you give me a property where that has occurred down there, the broadest definition [of redevelopment] you’ve got from 2014 until 2020.”

Sebok responds, “I’m not aware of any that I can think of off the top of my head.” To which Brittain replies, “That’s what I thought.“

In yet another round, Attorney Tucker Player questions Sebok referring to an attempt by the city to create neighborhood blight:

Sebok: Neighborhood blight is a common historical term used to describe an area or a property that is by some standard deteriorated, neglected, exceeded its useful life. And that’s what it is. It’s a property that is, you know, in tough shape and has been neglected or is not being used at that time.

Player: And how does that affect the property value of the surrounding properties?

Sebok: It’s called the broken window theory, where a blighted property would have a negative effect on adjacent properties.

The city ultimately purchased many of those properties. Noam Pyade, DRC Board Member purchased many others along 7th North. We wrote that article on August 12, 2018. Questions still remain as to if Pyade is simply no more than a straw buyer for the coming big flip.

Reading the transcript, you will hear much of a Children’s Museaum and a Library. Neither will ever be located in the SuperBlock.

As we reported last week, however, the city has since leased a significant portion of that area to Coastal Carolina University in a front end loaded, “taxpayer funded”, lease.

Myrtle Beach Attorney Tommy Brittain represents SuperBlock owner James Brady. He led the depositions of both Pedersen and David Sebok. Andrew Conner represented Sebok and the city in this deposition.

In part one, today, we bring you Tommy Brittain and Tucker Player deposing David Sebok. Sebok was the Executive Director of of the DRC from 2000 to 2014.

We are choosing to simply present the entire transcript. Purists will want to read it for themselves.

Tomorrow, we bring you the deposition of John Pedersen in part 2.

Brittain: So was there any activity that you were engaged in in what we call the Superblock from 2000 until, say, 2013?

Sebok: Well, it was referred to as Superblock. It was a part of that particular area, one of the sub areas discussed in the pavilion area master plan. And so to that extent, it’s an area that we did get involved with.

Brittain: When did you start engaging with businesses that were in the Superblock concerning their business activity and plans to change the area. What year would that have been?

Sebok: I’m assuming it was not long after 2000, but the plan was not necessarily to change the area, it was to assist those businesses in becoming more successful. Not necessarily to change the area.

Brittain: Well, what was your involvement with C&C Moving Company?

Sebok: I think they eventually left the business and closed that business down. And our job was always to assist property owners for businesses to expand their business or find tenants for their business or find buyers for their property. We offered assistance in that effort.

It’s a liaison between the prospective buyers and developers and them.

Brittain: Did your company keep records?

Sebok: Yes.

Brittain: Do you have any records of your involvement with C&C Moving Company?

Sebok: I don’t. For whatever reason, the DRC files, I don’t think there was much involvement with them. They were an ongoing business at the time and they closed that business and then they were looking to, I believe, sell their property or get a new tenant for their property.

I don’t recall which was their objective back then

Brittain: And my point is that the businesses were there from 2000 until about 2013 or ’14. Your company had very little interaction with them. Isn’t that true? ….I mean, the truth of it is that you have very little interaction with the businesses that were in the Superblock from 2000 up until about 2014.

Brittain: I mean, there wasn’t an active effort on your part to go talk to C&C Moving Company or the other businesses in the area.

Brittain: That came later after the city council had made some decisions about trying to put other businesses in there, the Children’s Museum.

Brittain: It was a fairly inactive redevelopment project with these businesses in the 2000 to, say, 2010, ’12 area?

Sebok: That’s not true. We were very active in all of the various sub-districts within the DRC area, and I believe the Superblock was an area that was right near city hall. And we were very active in contacting those businesses, as we did others. And, in fact, we established and created what was called a storefront loan program which was targeting initially only those in the Superblock area, to help those businesses redo their facades, landscaping, parking areas. And so we were actually very involved with businesses and property owners throughout that period.

Brittain: Okay. Do you think you can look through your records and find your records that would substantiate that?

Sebok: I don’t have access to any of those records, and, you know, I’m sure there were emails and there were FOIA notices, and we had a, I don’t know if it was, a website or a newsletter at the time that talked about a storefront loan program and assisting the DRC developer.

Brittain: Who owned C&C Moving Company?

Sebok: I don’t know.

Brittain: You don’t know whether C&C — do you recall having any conversations personally with anybody that owned C&C Moving Company?

Sebok: I don’t recall whether I did or didn’t.

Brittain: But you remember the nature of that business in this area?

Sebok: I believe it was — it started with, like, a warehouse, an antique store collection of various types of furniture and things like that.

Brittain: Do you know who bought that building from C&C Moving Company?

Sebok: No, I don’t recall.

Brittain: All right. Do you have a written contract with the Redevelopment Corporation and/or the City of Myrtle Beach?

Sebok: I don’t know what you mean by “written contract.”

Brittain: I mean an agreement between the two of you as to what you’re going to do and what they’re going to pay you put down in writing and signed by two responsible parties?

Sebok: Yes. I was hired by the City and then contracted to the DRC to be the administrator for the DRC.

Brittain: Does it have a job description in it? [The DRC’s Job Description for Sebok]

Sebok: I believe it did. Primarily it was to implement the area master plan and advise.

Brittain: All right, sir. Would you be willing to provide me a copy of that contract?

Sebok: I don’t have it.

Brittain: You don’t have a copy of your own contract?

Sebok: I’m retired. I’ve been retired two and a half years.

Sebok: I don’t have any documents. The City would have those.

MR. CONNOR: Objection.

Brittain: Do you have any objection if the Redevelopment Corporation or the City of Myrtle Beach makes that document available to me?

Sebok: No. It’s public information.

Brittain: I’m trying to get a feel for now your interaction and the Redevelopment Corporation’s interaction with the city council and the city manager. If you could tell me how that worked. I mean, did you appear in front of the city council to answer questions? Did they have somebody on your board that was connected to what you were doing? What was the nature of that relationship?

Sebok: The City created the DRC, and then by the bylaws of the DRC, the city manager was one of 11 board members and also the treasurer of the DRC.

And the City also could appoint one of its members, council members, or somebody else to represent the city council — the mayor and city council on the DRC, which they did.

So of the 11 board members, there were two seats, two memberships, reserved for city representation. The rest of the board members were appointed by the board of directors.

Brittain: So the City, through that representation, had actual knowledge of the activities of the Redevelopment Corporation?

MR. CONNOR: Object to the form.

Sebok: The DRC was an advisory body to the City. And its mission, again, was to follow recommendations to the area master plan, trying to revitalize and approve the downtown area.

Brittain: You didn’t try to keep anything from the City; you were trying to involve the City, let them know what your efforts were and what you were doing; isn’t that correct?

MR. CONNOR: Object to the form.

Sebok: We followed the pavilion area master plan recommendations. And obviously the City knew about those.

And some of those actions that we were involved in with the pavilion area master plan, in fact most, required city council action, not DRC action.

Brittain: You had a substantial amount of email correspondence with John Pedersen, didn’t you?

MR. CONNOR: Object to the form.

Sebok: I don’t know what “substantial” means. We certainly communicated with each other.

Brittain: Did you send any email to John Pedersen? [Myrtle Beach City Manager]

Sebok: I’m sure I did.

Brittain: What was his job?

Sebok: He initially was city manager. He was hired by the mayor of city council to be city manager.

Brittain: Did the Redevelopment Corporation have any corporate meetings?

Sebok: We had monthly meetings.

Brittain: Did you have a secretary who took
25 minutes of those meetings?

Sebok: We recorded those.

Brittain: All right, sir.

Sebok: . And we kept brief meeting notes, and, you know, we kept a record of those.

Brittain: Who was the secretary to the board that would have taken those notes?

Sebok: Well, I had an executive assistant and that person generally took notes. There was one of the board members who was president, vice president, treasurer and secretary of the board, but the staff person generally reported, not necessarily always, reported the meeting and took notes. Those notes were then produced at subsequent meetings and approved by the board as meeting minutes.

Brittain: And so what was the name of that person who would have taken those notes and presented them as minutes at the next meeting?

Sebok: There were several people over a period of the 17 years that I was executive director of the Redevelopment Corporation of Myrtle Beach.

Brittain: Can you name them?

Sebok: Kelly Amichdally [phonetic] then Kori (Brett) McKeithan. There was another person before that who was there for a year, and then ultimately Rory Glover was the last person in that position.

Brittain: So those minutes should still be — those minutes should be something we could — you could find and I could find if I needed to, correct?

Sebok: I can’t find them but they exist.

Brittain: Who did you report to, Mr. Sebok?

Sebok: I reported to the DRC Board of Directors.

Brittain: All right. And who was the president of that board?

Sebok: Again, that changed from year to year. There were term limits. Officers came and went on the board, so it changed over time.

Brittain: Who was the president from, say, 2014 until you retired?

Sebok: Probably Chuck Martino was president during most of that time. I don’t know what year he became president.

Brittain: Did you ever appear in front of or have direct communications with the full city council?

Sebok: Yes.

Brittain: And that would be to get an update on what was going on or for what other purpose?

Sebok: Sometimes it would be an action that city council was entertaining. They might seek art to put on, an art. Advice. For the most part, we did propose various actions to implement components of the DRC master plan, but also it was to report to city council the status of the DRC’s activities.

Brittain: Who’s Brown Bethune?

Sebok: Brown Bethune, I believe, is — I believe he worked at one point at Burroughs & Chapin and either is a realtor or was a realtor.

That’s all I know about Brown Bethune. I believe he’s now married.

Brittain: Married to who?

Sebok: Mayor Bethune.

Brittain: What involvement did you have with Brown Bethune as part of the redevelopment committee?

Sebok: I don’t think we really had any. I think Mr. Bethune at one time was a member of the Community Appearance Board in the city, which at times the DRC did appear before because it was some action that they were considering building or something like that within the DRC district.

And I believe that he is a member of that board, but that would be the only direct involvement I can recall.

Brittain: What other realtors did you work with as part of the Redevelopment Corporation?

Sebok: We worked with any realtor who approached us and answer information about opportunities within DRC.

Brittain: Who’s Scott Taylor?

Sebok: Scott Taylor is a realtor, I believe it’s called Metro Properties, and he has — he’s a realtor, but I believe that’s —

Brittain: I mean, your company — the corporation entered into a specific agreement with Scott Taylor, didn’t it?

Sebok: Yes, we did.

Brittain: In other words, I’ve seen some documents, it looks like going back and forth between — what was the name of his company, Mr. Sebok?

Sebok: I believe it was Metro Properties or Metropolitan Properties, something like that.

Brittain: And the corporation had a signed agreement with Scott Taylor to deal with numerous projects that the Redevelopment Corporation was interested in; isn’t that true?

25 MR. CONNOR: Object to the form.

Sebok: I believe that the DRC only had one contract with Metro Properties, and it was at the direction of city council to hire someone to assemble properties within the footprint of the Burroughs & Chapin Library.

Brittain: All right. Mr. Sebok, I was asking you some questions about Scott Taylor and Metro Properties. And I asked you if the Redevelopment Corporation entered into an agreement with him, and I believe you said they did; is that correct?

Sebok: Yes.

Brittain: What was he doing for you? What was he doing for the Redevelopment Corporation?

Sebok: He was hired to assemble the properties within the footprint of the proposed Chapin Library and Children’s Museum redevelopment project.

Brittain: Okay. So he was part of a program to get some businesses to make some changes — get some businesses in there that were compatible with the Children’s Museum?

MR. CONNOR: Object to the form.

Sebok: No. His only job was to acquire properties.

Brittain: And how do you mean “acquire” them?

What was he supposed to do? Buy them himself or get y’all a price for them or get somebody else a price for them?

What was the deal there?

Sebok: He would make offers to property owners and also, if there were any tenants, to assist with relocation opportunities for those tenants, but primarily to make an offer, acquire a particular parcel, and then upon acquisition by Metro Properties of that parcel, it would be transferred to the DRC.

The DRC would hold those properties until such time as the City needed to re — was prepared to redevelop the properties.

Brittain: Okay. So — and we’re talking about the Superblock area, correct?

18 MR. CONNOR: Object to the form.

Sebok: He was hired to acquire the properties within the — the city council identified a footprint, which was part of the Superblock area.

23 MR. CONNOR: Same objection.

Brittain: How many projects did you have him working on?

Sebok: That was the only one that I recall.

Brittain: One??? I think I saw in the agreement was project A, B, C, and D.

Does that mean anything to you?

Sebok: Yes. A was the Children’s Museum project. There were — there was a potential that DRC was working with some property owners in other areas of the downtown district to help redevelop those properties, but, you know, nothing really materialized with those.

Brittain: So the game plan here was he was acting basically as a realtor for the DRC; is that correct?

15 MR. CONNOR: Object to the form.

Sebok: He was acting — I don’t know if realtor is the right word. He was to acquire certain properties within certain parameters of a purchase price and then convey those to the DRC.

Brittain: Okay. So the game plan was for him to approach people, get a price, and the DRC eventually owned certain properties?

MR. CONNOR: Object to the form.

Sebok: Yes.

Brittain: Okay. Now — and once the DRC owned certain properties, then the DRC would be responsible for, quote, transferring those properties to other owners?

MR. CONNOR: Object to the form.

Sebok: The DRC was supposed to hold these properties until the entire footprint of the site, redevelopment site, was assembled and then at some point thereafter, when the City was prepared, to transfer those properties to the City so that the City could implement the Children’s Museum and Chapin Library project.

Brittain: Okay. And like, for example, what’s EdVenture?

Sebok: EdVenture was a name for the Children’s Museum. I believe that’s the parent corporation.

Brittain: And what properties was the City trying to acquire for the Children’s Museum?

Sebok: Initially, the Children’s Museum approached the DRC because they were looking to be relocated from the location that they were at, which was over by the old mall site across from the Convention Center.

And so the DRC initially was looking to marry them with other properties, redevelopment properties, primarily in the downtown hotel district as part of the hotel redevelopment project.

The Children’s Museum, they were open to any and all sites for consideration, at least initially. So at some point — and the city manager, who is a member of the DRC, John Pedersen, was aware that the Children’s Museum was looking for a new site.

And so the idea was, perhaps the Children’s Museum would be a good candidate to be partnered with the Chapin Library in a new project.

And the site that was identified that was acceptable to the City and the Children’s Museum was the site, you know, in the Superblock area because it was visible and accessible from Kings Highway along 9th Avenue, abutted Nance Plaza, a public space.

And many of the properties within that footprint that met the size requirements were vacant or under-tenanted.

Brittain: So as part of that process, was it important for surrounding businesses to be, quote, compatible with a Children’s Museum-type use?

Sebok: I don’t know that we were — the DRC was involved in making any determination about what was compatible and what wasn’t. If it was a legal property, then it was a legal property. And as long as it obeyed the laws, that was fine.

Brittain: I mean, you were trying to get rid of the bars in the area, weren’t you?

MR. CONNOR: Object to the form

Sebok: The DRC was not trying to get rid of any businesses in any area of the downtown area.

Brittain: How did the DRC obtain the loan to purchase any Superblock properties?

Sebok: The City and DRC worked with a consortium of local banks to create a loan pool of $10 million, which was to be utilized for various redevelopment projects, not just the Children’s Museum and library project, as a resource to get redevelopment to occur.

And the DRC pledged certain parking revenues to the banks in support of that loan as a credit.

Brittain: Was there any other security for the loan?

Sebok: The primary security for the loan was the pledge of the revenues generated by [downtown] parking meters. And there may have been a good faith promise from the City but not a contractual promise that I recall.

Brittain: Do you know a man named Andrew Paulssen?

Sebok: Yes, I do.

Brittain: Did you have any conversations with him about purchasing his property on behalf of the DRC?

Sebock: His property — House Parts was a business that had been in the DRC district for several years and was within the footprint of the proposed Chapin library/children’s museum redevelopment project.

Once the City decided it wanted to have those properties assembled for the redevelopment project, the only person that was authorized to contact property owners about acquisition of their properties was Scott Taylor, through the DRC contract.

At some point, I believe it probably was after Scott Taylor had had some initial meetings, perhaps even made a proposal to Mr. Paulssen to acquire his property, that Andrew came to the DRC offices and asked to meet with me.

Lauren Clever, the executive assistant, and I agreed to meet with him. We met in my office.

Andrew and Lauren sat at the conference table, and I either sat at my desk or leaned on my desk, and the door to the office was open at that time.

And Andrew essentially wanted to ask a couple of questions because now there were rumors and the speculating about this project and properties being acquired, what was going on, because some properties had already been acquired, and he wanted to know who was acquiring the properties and for what purpose.

And I informed him that the only way he — at that point that he could be made aware of the parties involved and the project was if he signed a nondisclosure agreement, which was offered to him by Scott Taylor and others, anybody who wanted to know about the project.

And Andrew, I believe, did not want to sign a nondisclosure agreement, so we were not at liberty — permitted to inform him or answer his question.

At some point the topic of eminent domain came up. I don’t really recall how it came up.

And I informed him that the City, under State of South Carolina laws, was the only local authority that could exercise the eminent domain powers that were prescribed procedures and appraisals and processes for that should the City decide to pursue that, but the City had not at that point decided to use eminent domain for any acquisitions.

He became agitated and then left the office.

Brittain: Did you tell him in that meeting that he could not leave your office until he had a signed agreement for the sale of his store?

Sebok: No, not at all. Again, my role was not to be involved directly in the acquisition of a particular property.

Brittain: How many properties were obtained through eminent domain in this area?

Sebock: None. None that I know of.

Brittain: Okay. I’m sorry. I’ll give you plenty of time to complete your answer.

Sebok: Okay.

Brittain: None that you know of?

Sebok: None that I know of.

Brittain: Who met with Justin Lovely and Mike Kelly to explain to them that their properties were not necessary to be purchased for the DRC or the City?

Sebok: Lauren Clever and myself.

Brittain: Who’s Tim Wilkes?

Sebok: Tim Wilkes is a businessperson who owns various properties throughout the city and I believe on the East Coast and operates, you know, various businesses, you know, on those properties.

Brittain: As any connection with your responsibilities with the DRC, have you received complaints from people like Tim Wilkes that the Redevelopment Corporation has played favorites with the properties, taken less money to get a particular owner in a particular spot?

Have you had any complaints like that from Tim Wilkes or others?

Sebok: Can you ask that again?

Brittain: Here’s what I’m asking. Here’s what I’m asking. You know, have you had any complaints that your corporation and/or the City had played favorites in the area with the properties, you know, that you might take less money to get a particular owner than someone else?

Have you had such a complaint like that as far as this process?

Sebok: I don’t believe so.

MR. CONNOR: Object to the form.

Brittain: Have you had any complaints from Tim Wilkes?

Sebok: Tim, because he owned some properties in the downtown area, not in the Superblock area, he had issues with, you know, some of the regulations and some of the things that were going on in and around his businesses that affected his businesses.

And he, I’m sure, in our conversations, complained about the business climate along Ocean Boulevard, but not in the super — he didn’t have any properties in the Superblock that I’m aware of.

Brittain: And have you had any complaints about your corporation and you and the City using the City’s power, including police power, to, quote, run people out of their businesses?

Sebok: I don’t recall any complaints. It’s possible that somebody could have, you know, complained in the course of our, you know, routine, you know, walking around the downtown district, particularly along the boardwalk and Ocean Boulevard, but I don’t recall any specific complaints.

Brittain: Do you know who Henry and Virginia Brewington are?

Sebok: No.

Brittain: Do you know what Levelz Bar & Grill is, or was?

Sebok: Levelz?

Brittain: Yes.

Sebok: I don’t recall.

Brittain: Who is Natalie Litsey?

Sebok: I believe that Natalie was an operator of a bar in the Superblock area.

Brittain: What involvement did you have with her?

Sebok: Our only involvement was after — she was the tenant in a property within the footprint of the Children’s Museum/Chapin Library redevelopment project.

And once that property was acquired, we assisted her in letting her get her possessions out of the property.

Brittain: Did you try to move a Metro Properties into the buildings owned by the plaintiff in this case?

Sebok: No.

Brittain: Did you ever tell the plaintiff in this case, Jim Brady and Hector Melendez, his tenant, that they would start getting offers for their property?

Sebok: No. That property was never within the footprint of the redevelopment project. As part of the process of assembling properties within the footprint, Scott Taylor did contact all other property owners within the Superblock area to just let them know that, you know, there might be an opportunity, if they had a vacant space, to get a new tenant as a result of some relocation projects or that there might be somebody else that, you know, could be interested in acquiring their property, but the DRC and the City were not interested in acquiring any other properties outside the footprint.

Brittain: Do you know Jim Brady?

Sebok: I don’t believe I’ve ever met him. I may have talked to him briefly on the phone, but I don’t really think I’ve ever met him.

Brittain: Okay. Who were the Karams? Do you know them? Elmadani Karam and Mohammed Karam, do you know them?

Sebok: Say the names again.

Brittain: Let me spell it K-a-r-a-m.

Sebok: That doesn’t ring a bell.

Brittain: How about Danny Groove, LLC?

Sebok: I’ve heard the name, but I don’t know anything about it

Brittain: You don’t know whether they’ve had any complaints about how they were treated in their business by the City of Myrtle Beach during this time period, say 2014 to 2017?

Sebok: I don’t have any knowledge about that.

Brittain: How about Michael E. Hobeika, III, do you know him?

Sebok: I know Mr. Hobeika.

Brittain: What kind of involvement did you have with Mr. Hobeika?

Sebok: He owned a property at the corner of — well, I guess it would have been 8th Avenue, Main Street really, and Kings Highway.

There was a corner property that initially was included as part of the footprint for the state but was not critical to that site.

He was contacted by Scott Taylor to make an offer on his property but — and over the years, Mr. Hobeika had wanted to sell his property.

We thought he would be a willing seller, but he decided that he didn’t want to sell his property, or at least not for the price of his offer.

Brittain: All right, sir. But you’re aware of the fact that most of these people have actually filed lawsuits over the conduct of the City and the Redevelopment Corporation based on the use of their businesses, their property?

MR. CONNOR: Object to the form.

Sebok: I really don’t have any knowledge about other lawsuits like that.

Brittain: Okay. Are you sure you had no direct communication with Jim Brady?

MR. CONNOR: Object to the form.

Sebok: Like I said, I don’t recall any — it may have been one phone call because Scott Taylor was trying to — if it’s the Hector Melendez property that Mr. Brady owned —

Brittain:. Yes. Yes. And let me — let me — that fellow has been unfair to me. Hector Melendez was the tenant. And Andrew can straighten me out if I’m misinforming you here. And Brady and Brady’s company was the owner. So you probably — what kind of interaction did you have with Hector Melendez?

Sebok: We knew Hector when he renovated Mr. Brady’s property into a nightclub.

We were supportive of that redevelopment because it had been vacant for some time, I believe. And Mr. Brady — at some point there was a sign in the window of Mr. Brady’s property. I can’t remember if it was advertising for sale or for lease, but Scott Taylor was trying to reach the owner of the property to, again, see if they were possibly interested in a new tenant or perhaps they wanted to sell their property, even though it was not in the footprint of the project, redevelopment project,

and he had trouble getting an answer from that phone call and asked me if I could try. And I tried and I think I may have gotten through to Mr. Brady and just said that, you know, we were trying to get ahold of Hector or the owner of the property. And that’s the extent of any contact I think I had with Mr. Brady.

Brittain: Did you ever tell Mr. Brady that you, you, David Sebok, would never allow the operation of a business of the type of Hector Melendez’s in the property that Jim Brady owned?

Sebok: No, I did not and would not have — that’s not our job.

Brittain: What constitutional rights to property does an owner have?

MR. CONNOR: Object to the form.

Sebok: I’m not an expert in that. I can’t answer that.

Brittain:Well, I mean, you’re in the process of assessing and trying to acquire properties on behalf of the corporation, correct?

MR. CONNOR: Object to the form.

Sebok: We hired Metro Properties to acquire properties.

Brittain: But, I mean, you were involved in the decision-making once those opportunities arose; isn’t that correct?

MR. CONNOR: Object to the form.

Sebok: No. It was just a contract relationship with Metro.

Brittain: I mean, they tell you a price or a proposition, and you and the board made a decision based on that, correct?

MR. CONNOR: Object to the form.

Sebok: The city council really was the ultimate end-user of the redevelopment site, and the city council is the one that would have to agree within certain parameters to an acquisition price.

If the seller of the property was agreeable to the price within those parameters, then the DRC and the board did acquire them, yes.

If it was outside the parameters that were given to us, then we would have to seek additional authority or approval.

Brittain: But you were part of that process; isn’t that correct?

MR. CONNOR: Object to the form.

Sebok: I was aware — I was the conduit communicating, advising between Scott Taylor, who was making the offers, and the DRC board and/or City, depending on the situation. I communicated the details and facts of those offers.

Brittain: In fact, I believe you signed a contract with Scott Taylor’s company, didn’t you?

MR. CONNOR: Object to the form.

Sebok: Yes, we did.

Brittain: When you say “we,” I mean David Sebok signed it, correct?

Sebok: Yes, I did.

Brittain: Okay. And I think I asked you earlier, you were not aware of any eminent domain purchases in this area; is that correct?

MR. CONNOR: Object to the form.

Sebok: I don’t believe that the City ever exercised its powers for eminent domain in that area that I was aware of to acquire properties.

Brittain: Let me ask you about the two properties in question, which would be 803 and 805 Main Street, Myrtle Beach, South Carolina.

You admit they’re owned by Plaintiff Brady and/or one of his business associations —

MR. CONNOR: Object to the form.

Brittain: — or do you know?

Sebok: I really don’t know. You know, it’s a matter of public record, I guess, with Horry County.

Brittain: Okay. And during the time — I think you said you came in ’97. You began your job here with the City in ’97 or with the Redevelopment Corporation in ’97; is that correct?

Sebok: It was the end of ’99.

Brittain: ’99. I’m sorry. Okay. Thank you.

You’d agree with me, wouldn’t you, that at that time period and up until sometime in the middle of, say, 2010, just to get through, that area over there was essentially abandoned except for some old businesses, and there were homeless individuals over there, it was a problem area, even having fires in the buildings, you know, for some people that were homeless. I mean, it was a trouble spot for the city during that time period.

MR. CONNOR: Object to the form.

Sebok: And your question is?

Brittain: Yeah. I mean, I’m just asking you. What I believe is true, and I’m asking you whether you know it or not, is, let’s say, from 1999, when you came on board, until, let’s say, 2010, that 11-year period, this area over here was very troubled.

There were homeless people congregating. There was misconduct. It was a depressed and bad sort of property use for the City of Myrtle Beach.

MR. CONNOR: Object to the form.

Sebok: It was an area identified in the pavilion area master plan, along with other areas of the DRC district, it did have some problems with code compliance and vacancies, vacant properties, deteriorated properties, and it was an area that was underdeveloped.

Brittain: And during that period, the Redevelopment Corporation didn’t have somebody like Scott Taylor under contract out there trying to buy or sell those properties, right?

MR. CONNOR: Object to the form.

Brittain: Correct. The DRC really was not in the position to acquire any properties.

That wasn’t part of the action plan in terms of the pavilion area master plan.

Brittain: What do you know about Hector Melendez? What had been your involvement with Hector Melendez?

Sebok: Our involvement was that we became aware that he was redeveloping, I say Mr. Brady’s property, into a nightclub, and, in fact, we asked Hector if we could hold a staff meeting of the City Manager’s executive staff of department directors, which occurred every Monday, and occasionally the DRC hosted those meetings,

and we would always try to host them at businesses or properties within the DRC district so that we could showcase those properties to the rest of the city officials, senior officials.

And we asked Hector if we could host that kind of a meeting on a Monday morning, and he agreed.

He was not completely done with his renovations and was not open for business yet, I don’t believe. Well, he was not open for business because it wasn’t completed, his renovations.

But we did host that meeting and thanked him for being a new business owner in that area. And he was present at that meeting.

Brittain: Do you know a person, and I only have his first name right now, named Bruce, who had something to do with zoning in the City of Myrtle Beach?

Sebok: You’re probably talking about Bruce Boulineau, who was the director of — I might have his exact title here — code enforcement, buildin permits and code enforcement.

Brittain: And didn’t Mr. Brady tell you or Mr. Melendez — I’m sorry, Mr. Melendez tell you that Mr. Boulineau told him that he would do everything possible to never let him open a bar in that location?

MR. CONNOR: Object to the form.

Sebok: I don’t have any knowledge of that.

Brittain: Do you know anything about the complaints that Mr. Melendez and Mr. Brady have made about the City’s interaction with their business?

Sebok: I don’t have any direct personal knowledge, no.

Brittain: Did you encourage Mr. Melendez, instead of opening a bar, to open an art gallery?

Sebok: No. We don’t advise — it’s not our role to advise property owners or businesses about, you know, what kind of business they should operate, only that they should operate within the laws governing any business.

Brittain: Did you have anything to do with the City requirement for this business to put a sprinkler system in for their fire protection?

Sebok: I was aware only that any business under certain conditions, under city code or state code, I’m not sure which, would be required to have a sprinkler system. It had to do with capacity or something, but it was not the area of my or DRC’s responsibility or expertise.

Brittain: Do you know whether or not any other business that opened during this time period was required to install such a sprinkler system?

Sebok: I believe that that happened in other locations within the DRC district and probably the City, but I couldn’t name those for you.

Brittain: Okay. Have you ever heard of a place named The Chemist?

Sebok: Yes.

Brittain: What is that?

Sebok: It’s a restaurant on 9th Avenue in the downtown district.

Brittain: Is it a restaurant or a bar?

Sebok: I believe it was a restaurant that also served alcoholic beverages. It had a liquor license.

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Brittain: Do you know the owner of The Chemist?

Sebok: Yes, I do.

Brittain: What’s your relationship with the owner of The Chemist?

Sebok: He’s an owner of several — was an owner, I don’t know if he is still -was an owner of several restaurants, businesses in the downtown area.

Brittain: What’s his name?

Sebok: Geesh, I’m drawing a blank right now. I’m just drawing a blank.

Brittain: What kind of relationship did you have with the owner?

Sebok: I know him through his businesses pretty well in the downtown area. I haven’t seen him in many years, since I’ve retired, and I don’t believe he’s — I believe he’s in Miami now or is from Miami and only comes here on occasion, I believe, to, you know, check on his businesses that he still has here.

I don’t know which ones he still has.

Brittain: Did his business have the same restrictions on it that Jim Brady and Victor Melendez’s did, or do you know?

Sebok: He would have had to comply with whatever the city and state building codes were, and zoning codes.

Brittain: Did you intervene on his behalf so that he would have less responsibilities, like sprinkler systems, et cetera?

Sebok: No. I don’t have that authority or knowledge.

Brittain: Are you aware of news reports by ABC News, local channel, reporting that the bars were being forced to shut down in the Superblock?

Sebok: Say that question again.

Brittain: Okay. Are you aware of news reporting by ABC News that bars were being forced to shut down in the Superblock area?

Sebok: I guess I don’t have any direct knowledge of ABC News reports.

Brittain: Do you remember a December article, 5 December article in The Sun News that indicated that Superblock owners were being targeted for closing?

Sebok: I don’t recall. I don’t have any knowledge about that kind of thing.

Brittain: Did you have anything to do with revocation of Pure Ultra Club’s liquor license?

Sebok: No.

Brittain: Did you know about it?

Sebok: I’m sure I ultimately heard about it at some point because it was a business within the DRC district, but it’s not our area of responsibility.

Brittain: Was it common knowledge and openly discussed that the City wanted to end some business activity in the Superblock, especially bars and nightclubs?

MR. CONNOR: Object to the form.

Sebok: I’m not sure what you mean by “common knowledge.” I don’t know what that means.

Brittain: Well, I mean — let me be a little more specific, I mean, I’ve got your emails back and forth with Pedersen. I’m getting ready to go through them with you. So what I’m asking is — here’s what it looks like to me, and if it’s not, you just tell me, that for whatever reason, and maybe they’re good reasons, you know, there seemed to be an effort to get rid of the bars and put other businesses in there, and I think it was openly discussed by the city council and the Redevelopment Commission.

I mean, that’s my question to you. Wasn’t it the plan to have compatible businesses with the Children’s Museum, which meant shutting down bars that were in close proximity?

MR. CONNOR: Object as to form

Sebok: I’m not aware of any such plan.

Brittain: All right. Do you know who Sean and Joseph Lowe are, L-o-w-e?

Sebok: It doesn’t ring a bell.

Brittain: Okay. Brady claims that he had a new tenant come in, Sean and Joseph Lowe, that were going to have some kind of family business, some sort of family virtual reality business in his location, and that you told him it was not going to happen. Is that true or not true?

Sebok: Not true. I don’t recall any such conversation like that. And I wouldn’t have the inclination or authority to say such a thing.

Brittain: Would it be wrong of the City to try to stop that particular contract?

MR. CONNOR: Object to the form.

Sebok: I don’t have an opinion on that. That would be the area —

Brittain: You say you don’t have an opinion. You don’t say one way or the other whether that’s right or wrong?

Sebok: Correct.

Brittain: Okay. All right. I’ve got here — and your very fine lawyer can help you with this. I want to go over some documents with you —

Sebok: Okay.

Brittain:. — that we’ve received, and here, again, give you a full chance to read them, look at them and make sure we’re seeing them the same way.

The first one I want to look at is 33731. That’s an email from you —

Sebok: Okay.

Brittain: — to staff, Martino, and carbon copy or copy to John Pedersen.
(EXHIBIT 1, Email from David Sebok, Bates labeled 33731, was marked for
8 identification.)

Brittain: But do you have that in front of you?

Sebok: Yes.

Brittain: Okay. As I look at that document, I come down to the second paragraph, and it says, You notice – I get rid of all bars and bar potentials and only those existing on Main Street remain, plus the vacant building at Oak Street.

I would propose that we zone them out entirely over time, offer incentives to existing properties or new investors to renovate or redevelop for suitable uses.

Brittain: That’s what you told them, right?

Sebok: That’s what I wrote.

Brittain: Okay. And then at the bottom —

Sebok: Sir, I mean, you really need to take that into the context of the above paragraph where the Children’s Museum and Chapin Library both, but particularly the Children’s Museum, because of the involvement of children as part of their business, that, you know, they were concerned about safety in the area and, you know, were there crime issues within the area. So, you know, taking those into consideration, I think they’re related in that the Children’s Museum wanted to make sure that it was a safe neighborhood.

Brittain: And let me say I understand that completely.

Sebok: Okay.

Brittain: That’s my point. That’s the point I’ve been trying to make is, we can all argue later on about whether it was right or wrong to do it, but the truth is, because of what you thought you had going in there, you were trying to get rid of the bars.

MR. CONNOR: Object to the form.

Sebok: No, we weren’t trying to get rid of — the DRC was not trying to get rid of the bars.

We were trying to, you know, make sure that — again, it wasn’t even our responsibility.

We only care about businesses that comply with the codes and the laws, you know, that they’re entitled to do business and that they do that. And if they don’t do that, then they could become a problem to adjacent businesses or property owners.

Brittain: Did you type the words, you notice I get rid of all bars and bar potentials?

Sebok: It appears that —

MR. CONNOR: Object to the form.

Sebok: But I believe I’m talking those except for — I’m talking about those within 9th Avenue frontage and those fronting Nance Plaza which were within the footprint of the proposed site.

Brittain: Well, so was — so was — Pure Luck Club was very close to where you were going to put the Children’s Museum, wasn’t it?

MR. CONNOR: Object to the form.

Sebok: It was around the corner, yes. That was not part of anything that we were involved in because it was not part of the footprint.

Brittain: Well, I’m just asking you again. You know, we all make emails and we go back and look at them. You don’t dispute with me that in your second paragraph — you’re talking to Martino.

He’s the councilman, right?

Sebok: Yes.

Brittain: And that John Pedersen is on this email?

Sebok: Yes.

Brittain: And you’re the — what is your position? Are you the chairman of the Redevelopment Commission? What was your title there?

Sebok: I was the executive director.

Brittain: Executive director. And it says here —

Sebok: Go ahead.

Brittain: Okay. It says here in the second paragraph, You notice I get rid of all bars and bar potentials.

MR. CONNOR: Object to the form.

Sebok: I believe that I was referring to the footprint of the proposed site only. Only the footprint.

Brittain: Why would you just care about the proposed site? If you care about — right down here lower, it says you’re worrying about kids being in the proximity of these things, so if something was close to it, you’d have the same concern, wouldn’t you?

MR. CONNOR: Object to the form.

Sebok: Not if they were operating under the laws of the city and safe.

Brittain: Let me move on to the next document, which is 34188.

Sebok: Okay.

(EXHIBIT 2, Email from John Pedersen to David Sebok, Bates labeled 34188, was marked for identification.)

Brittain: And this is an email from Pedersen to you. So you’re the recipient of this email, based on what I can see. And this says, Hector has withdrawn his business license appeal, so we are down to Natalie’s.

If Lauren can be ready to go, that would be good. This is progressing nicely.

What is the status on Lizzie’s work?

Brittain: Now, do you know who he’s referring to there when he says Hector?

Sebok: Mr. Melendez, I assume.

Brittain: Okay. So you and he were talking about and keeping up with Hector’s business license appeal?

Sebok: I wasn’t keeping up with it. That’s not an area of my responsibility or authority. He was just informing me of the status of that particular business license appeal in the first sentence.

And then he, as we acquired properties, Natalia’s was within the footprint, and when we acquired properties, then we’d help tenants remove their personal possessions and equipment and then secure the property. And that’s what he’s referring to, to have Lauren be ready to go. We did that for all properties within the footprint.

Brittain: Okay. Well, here’s what — okay. Go ahead. I’m sorry. Don’t let me cut you off. I apologize.

Sebok: And then I’m just describing — there’s several points in that one paragraph, was that Lizzie was, you know, doing her preliminary design for the Chapin Library/Children’s Museum, you know, to be on the footprint of the site.

Brittain: Well, he’s not informing you just for the fun of it, is he?

MR. CONNOR: Object to the form.

Brittain: I mean, he’s got a role to play?

MR. CONNOR: Object to the form.

Sebok: The only role that I had to play was to acquire the authorized site for the project.

Brittain: So you don’t dispute receiving these words, Hector has withdrawn his business license appeal?

Sebok: Well, it’s there. He was informing me and apparently others about the status of a particular property or business within the DRC district.

Brittain: Okay. And once that business appeal is terminated, that creates a different situation for that business, correct?

MR. CONNOR: Object to the form.

Sebok: I don’t know what that creates for the business.

Brittain: Well, if you don’t have a business license, that property is not worth as much money; isn’t that true?

MR. CONNOR: Object to the form.

Sebok: I wouldn’t be an expert in that.

Brittain: You don’t know whether or not when a business loses its license, it’s worth less?

MR. CONNOR: Object to the form.

Sebok: I don’t — that’s not my area of expertise.

Brittain: So we, that’s we, I guess that means you and him, right? He says, We are down to Natalie.

MR. CONNOR: Object to the form.

Sebok: And your question is?

Brittain: Is that what he meant? Is that what you take him to mean, so we are down to Natalie’s?

Sebok: I don’t know what he was really referring to in terms of Natalia’s. It’s Natalia’s.

Brittain: Okay. Natalia’s. What did you understand her situation to be at this time?

Sebok: I think she was, as a business, having some police and code issues with the City, but I don’t know specifically what those were.

Brittain: Did your corporation ever redevelop a single piece of property down there in the Superblock?

Sebok: No. That was not how we approached getting redevelopment to occur. We provided incentives and, you know, in some cases marketing, access to websites that we might have, and materials to help promote their businesses.

Brittain: So how did that work out? I mean, what changed down there? What change have you brought down there?

MR. CONNOR: Object to the form.

Sebok: Are you talking about the Superblock?

Brittain: Yeah.

Sebok: Some businesses did take advantage of that storefront loan program that I mentioned to you and had renovated their facilities.

Brittain: But that was years ago. That was years ago, right?

MR. CONNOR: Object to the form.

Sebok: It was earlier than this particular project, yes.

Brittain: Right.

What I’m asking you is, what has your corporation, quote, redeveloped in the Superblock area, you know, as far as this process, 2014 to
5 2020?

Sebok: We don’t do redevelopment. We encourage and facilitate private redevelopment.

Brittain: So what event has happened?

Sebok: Say that again.

Brittain: What private redevelopment has happened that you encouraged?

Sebok: In the Superblock area?

Brittain: Yeah.

Sebok: Well, there were some new businesses that came into the area that weren’t there originally in 1999. It was the 90s or 2000 even, there were some businesses that came and some that went. It’s just a natural thing.

Brittain: I’m talking about 2014 to the present.
20 A. I don’t know.

Sebok: I mean, the truth of it is, there’s not one single one that any private person has redeveloped or that the Redevelopment Corporation has redeveloped; isn’t that true?

MR. CONNOR: Object to the form.

Sebok: I can’t respond to that.

Brittain: Well, you can’t give me one. And you were executive director of the Redevelopment Corporation, right?

MR. CONNOR: Object to the form.

Sebok: I’m having difficulty understanding your question.

Brittain: Okay. Well, here’s what I’m trying to ask you. It’s pretty simple.

You are executive director of the Redevelopment Corporation 2014 until you retired, correct?

Sebok: Yes.

Brittain: All right. What property in the Superblock area was either redeveloped by private enterprise, with you helping them with your marketing and encouragement and all that, or by the Redevelopment Corporation?

What property down there has been redeveloped?

Sebok: I’m not — in terms of redevelopment, I mean, there were some new tenants from time to time that came and went, but I’m not aware of any redevelopment per se that occurred privately or publicly.

Brittain: Okay. And that’s what you called your corporation?

Sebok: Right.

Brittain: And that’s what you called your corporation, right? It was Redevelopment Corporation?

Sebok: Right. And redevelopment is a process that in most cases takes a lot of time and a lot of parties and creativity in order for that to be accomplished in the Superblock area. And the whole downtown for that matter. It has really been a process over a long period of time.

Brittain: But you don’t have one to point to in the Superblock area?

Sebok: When you say “redevelopment,” what is your definition of redevelopment?

Brittain: Well, I’m just going with what y’all are doing. I’m looking here at this agreement you had with Metro Properties. It says, you know, that — they talk about how the money is going to be reimbursed and, you know, what the fee is going to be and they’re going to do research. It looks like y’all might buy some of the properties and hold them. I mean, I don’t know. I’m just reading the document here.

It’s 31637. They’ve got four projects they’re working on for you. It looks like y’all are going to buy some of these properties and hold them. You’re trying to keep people from knowing that they’re being sold so the price will stay down.

I mean, that’s all here in these documents. I’m just wondering if any of that ever happened.

MR. CONNOR: Object to the form.

Sebok: Well, in terms of the Superblock, clearly that project never happened.

The redevelopment of the properties were acquired up to some point. I don’t know the status of that.

Brittain: But all that would have been prior to 2014?

Sebok: No. Including now. I don’t know, you know, what redevelopment is occurring or not occurring in the Superblock area.

Brittain: But as we sit here today, you don’t know?

You were chairman of the Redevelopment Corporation. You don’t know and you can’t give me a property that fits that question.

MR. CONNOR: Object to the form.

Sebok: The only — you know, I’m having trouble, sir, with your definition of
2 redevelopment, or lack of a definition.

Brittain: Use yours. Use yours. Use your definition.

Sebok: Redevelopment can also just mean, you know, business events or vacant buildings that are owned by somebody that get a successful tenant in there and create an activity and provide services and goods to consumers. That’s also redevelopment.

It is not only just acquiring certain properties or somebody demolishing an old building that’s, you know, outlived its useful life and then building something new on that property. It’s a very complex, varied definition of redevelopment.

Brittain: I understand that. I really do. I know it’s not just rebuilding.

So can you give me a property where that has occurred down there, the broadest definition you’ve got from 2014 until 2020.

Sebok: I’m not aware of any that I can think of off the top of my head.

Brittain: That’s what I thought. Let’s look at document 31637.

Sebok: Tell me the number again.

Brittain: It’s 31637. Okay. I’ve referred to two documents. We’ll
4 make this one 3.

(EXHIBIT 3, Proposal for Services, Bates labeled 31637, was marked for identification.)

Brittain: Mr. Sebok, I’m looking at this. It claims to be a proposal for services addressed to you from Scott Taylor. Have you got a copy of it?

Sebok: Yes.

Brittain: Okay. And I have — see a little insignia there on the left. It says Metro Properties Group, LLC. It indicates this is a fee proposal that he’s submitting to you; is that correct?

Sebok: Yes.

Brittain: Now, look at the second paragraph under something called Project A, and let’s read that together. My copy be says, Upon direction of client. Now, was the City of Myrtle Beach your client or was the Redevelopment Corporation your client?

Sebok: I’m not sure of the definition of client in this context here. Certainly the DRC was acting on behalf of the City in engaging Metro Properties to acquire these properties, so the ultimate client was the City.

Brittain: Well, I thought you said you weren’t in the business of acquiring any properties?

Sebok: We weren’t ever in a position prior to this to do so, nor did we have an opportunity. We were doing this as a service to the City.

Brittain: The last sentence of that paragraph says, Properties will be contracted for purchase and assigned to client in an agreed-upon time, six to nine months, correct?

Sebok: Yes. Well, in that context, I guess the DRC is the client.

Brittain: So what was going on here was Taylor was trying to buy properties for you, you would have them, you’d buy them, correct?

MR. CONNOR: Object to the form

Sebok: We were asked — the DRC was asked by the City to assemble the sale for the redevelopment project, which this contract will allow us to do, and then ultimately that site would be, once assembled, turned over to the City — sold to the City.

Brittain: But that was going to involve actually buying businesses in the area, correct?

MR. CONNOR: Object to the form.

Sebok: We were buying property in the area.

Brittain: Property. Buying properties in the area?

Sebok: Within the footprint.

Brittain: Okay. Under Project B, the second paragraph, Property owners will be confidentially contacted and engaged in communication regarding the sale of their property at prices agreed to by client. Properties will be contracted for purchase and assigned to client at an agreed-upon time, correct?

Sebok: That’s what it says. Project B was not the Superblock.

Brittain: Okay. But what you had here was a significant relationship with Scott Taylor and his company. He had a lot of responsibility to complete things pursuant to this contract. That’s true, isn’t it?

MR. CONNOR: Object to the form.

Sebok: He had contractual obligations. I don’t know if I would say it was a lot of responsibility.

Brittain: They’re right here on this document, right?

MR. CONNOR: Object to the form.

Sebok: I’m not sure what your question is.

Brittain: Well, I mean, you don’t dispute any of the terms in this contract that we’re looking at together, do you?

MR. CONNOR: Object to the form.

Sebok: It’s a contract. It says what it says.

Brittain: Right. And I look down here at the bottom, I see a signature, what appears to be Brian Scott Taylor, and the words “agreed and accepted” and that looks like your signature, September 12th, 2016. So you signed it?

Sebok: Yes, I did.

Brittain: Okay. Did you do that in your capacity as executive director of the Downtown Redevelopment Corporation?

Sebok: Yes.

Brittain: Okay. If you look with me on document 32532. That’s skipping over a few from what I sent to Andrew.

MR. CONNOR: Okay.

Sebok: 532?

Brittain: Yes, 532.
Sebok: Okay.

Brittain: Okay. You’ve told me before that Lauren Clever had a responsibility at the Downtown Redevelopment Corporation. What was her job?

Sebok: She was assistant executive director. She was my assistant.

Brittain: Okay. And this looks like an email from her to you sent back in June of 2017 saying

Check out the property on 801 Broadway Street. Just got word from real estate connection it’s going to be on the market for 400,000, 8000 square
22 feet. Thoughts for House Parts, corner lot, has parking and includes a vacant lot next to the parking lot.

Let me know if you want to connect with an agent.

Brittain: Now, how close is that property to my client’s property? Do you know?

Sebok: I believe that this is describing property at the corner of Main Street and Oak Street, which is down the block away from — and I guess you’re saying your client is Mr. Brady.

Brittain: Yeah. I notice his addresses are 803 and 805.
Sebok: Okay.

Brittain: And I’m figuring 801 can’t be that far away, but maybe you know.

Sebok: Well, they’re obviously on the same block.

Brittain: Yeah. My point is, y’all at least were interested in purchasing or arranging some sort of transaction because she’s telling you what the price is that she heard, how big it is, and she’s talking about a potential owner House Parts.

Brittain: My point is, that’s the kind of thing you were doing as part of redevelopment was trying to find out what’s available, seeing what the price was, and trying to find, you know, a purchaser to match up with it?

MR. CONNOR: Object to the form.

Sebok: We offered that kind of service to any and all businesses and property owners within the DRC district, as I mentioned before, and House Parts, that’s Mr. Paulssen, his property was within the footprint of the proposed site, and for any business that was within the footprint of the site, proposed site, we offered to help them relocate. And in this case, Mr. Paulssen, we were aware that he was looking for various — prior to the project, looking for various opportunities to relocate his business to some other area because just for his own reasons.

And so we’re just making a connection here, providing information from one person to another.

Brittain: Okay. If you’ll go to No. 2536, probably the next page —
Sebok: Okay.
Brittain: — I’m going down to the bottom of it here. It looks like it’s an email from you to John Pedersen and a bunch of other people, a large group of people, and it says down here at the bottom, Coincidentally, Lauren had just come back from meeting with Mayor McDowell on this topic.

We are attempting to collect data as follows. And I have copied people who may be able to contribute. The link is to our Dropbox which has a DRC boundary map. It’s too big to send by attachment.

Brittain: And then the next page, which is 537, has what appears to be a significant list of information that you’re trying to gather and a designation of people who will be responsible for it.

Brittain: Would you accept that as a description of this document?
Sebok: Yes.

Brittain: Okay.

Sebok: That is typical for what we always did, was to try to assemble information to prospective — make it available to prospective investors, developers, businesses who were interested in the DRC district. And this is a list of typical and ordinary information that developers or businesses look for. We often don’t have this information readily available. It’s not something that’s always available. So this is something that we would normally do for anybody, if we could collect this information because developers and investors and businesses want this kind of information when they’re looking at, in this case, downtown.

Brittain: And all of these people at least were requesting that Mayor McDowell, Chief Prock, Chris Lee, Scott Taylor, do certain things to help you complete what information you were trying to get. Mike Shelton. That’s what they were doing. They were going to go out and get you information that you were going to compile?

Sebok: Well, we would request, you know, certain information. Whether they could provide it or not, we didn’t always know. Sometimes it was information they could not readily retrieve or collect. Sometimes it was information that was proprietary and not under state or local laws available to be disseminated. And in some cases it was information that, you know, not a high priority for them in the course of their business or their work.

Brittain: But you were at least consulting them to see if they could help you get this information?

Sebok: Correct.

Brittain: Okay. If you would go with me to page, the No. 3397, 397. It’s a long, single-spaced letter it looks like, probably an email from David Hucks with a byline of Myrtle Beach South Carolina News, Myrtle Beach Daily News, MyrtleBeachSC.com.
Sebok: Okay.

Brittain: Do you have a copy of that?
Sebok: Yes.
Brittain: Okay. Look with me at item 6. Item six says, Several owners have approached the DRC and the City in the past year trying to sell their properties for redevelopment. We have zero interest from DRC and the City from certain owners.

We have confirmed mean-spirited responses from the City as well as Chuck Martino and David Sebok. No efforts were made by the City nor DRC to connect these Superblock owners to potential investors.

What has changed that the City is suddenly interested in shutting down the Superblock and buying?

Brittain: Now, I’m assuming you say those things aren’t true?

MR. CONNOR: Object to the form.

Brittain: Well, maybe you think they are true. I mean, are they true or not true?

Sebok: No, they’re not true.
Brittain: Okay. Who is, Who is ultimately responsible in the city government for giving the go-ahead and using the full power of the City and its different departments in showing them the Superblock?

Who made the decision to use police/fire department, construction services and zoning in a coordinated effort to selectively enforce and discriminate against these merchants?

Were these not the very city services these merchants should have been able to depend upon for service and support?
Brittain: Do you agree or disagree with those assertions?

Sebok: I would disagree. Disagree.
Brittain: Okay. Did you receive this document? Did you ever see this document before today?

Sebok: I don’t recall it, to tell you the truth.
Brittain: Okay. Well, go back to the page beforehand, which is 396.
Sebok: Okay.
Brittain: And it looks like the second entry on it is from Pedersen to you saying, I saw it. He’s stuck on Fantasy Island again. The plane, the plane.
And my understanding was was that that was his reference to you about this information from David Hucks. Is that true or not true?

Sebok: God, I don’t know.
Brittain: You don’t remember?
Sebok: I don’t remember.

Brittain: Okay. Up there above that there’s an email from you to John Pedersen saying you agree. Do you see that?
Sebok: Yes.

Brittain: Okay. And it looks like, based on the time, yours is at 6:05 and his is at 6:34. So do you agree with me that this is an email from John Pedersen to you and you’re agreeing with it?

MR. CONNOR: Object to the form.

Sebok: It appears that I’m agreeing with John Pedersen’s statement that he’s stuck on Fantasy Island again, whatever that means.

Brittain: So you —
Sebok: Mr. Hucks was a reporter, I believe.
Brittain: Yes. Yes. Yes.

And all I’m asking you is whether or not that exchange between you and Pedersen was based on the information that I was reading out to you with those various items of 6 and 7 from the communication from Hucks or not. Maybe you know, maybe you don’t.

Sebok: I really don’t know.
Brittain: Okay. Can you think of anything else your exchange with Pedersen would have been about?

Sebok: I’m sorry, say that again.
Brittain: Can you think of any other event that you and Pedersen would have had this exchange over?

Sebok: No, I can’t think of — I just can’t think of what was involved here.

Brittain: Fine. Okay, sir. If you look at —
Sebok: It’s a reporter’s opinion. It’s John Pedersen’s opinion.
Brittain: I understand. Look at page 413.
Sebok: Okay.

Brittain: This looks like it’s the next day. The other stuff happened on the 22nd of January. This is on the 23rd. And this appears to be, at the very top of the page, appears to be an email from you to John Pedersen.
Sebok: Okay.
Brittain: Yes, but I doubt that will stop his ongoing persistence with untrue and unfounded conspiracy theories.

Sebok: And your question is?
Brittain: Is that referring to David Hucks’s communication?
Brittain: I believe so.

Brittain: And before you wrote that email, there’s one below that from John Pedersen that says, Is he ever going to be disappointed tomorrow, with exclamation point.

Brittain: What is he referring to?

Sebok: I believe that John is referring to — let’s see, this was January 23, 2017. I believe that there was perhaps a scheduled press conference or public announcement by the City to describe and present to the public the proposed Chapin Library/Children’s Museum redevelopment project.

Brittain: All right, sir. Look at the next page, if you would, it’s 3414.
Sebok: Okay.

Brittain: This, here again, appears to be something from David Hucks. He says in the second paragraph that he currently has an offer from the DRC to sell the Oasis [Motel].
Brittain: Are you aware of whether DRC ever offered to buy the Oasis Hotel?

Sebok: We never made an offer to my knowledge to buy the Oasis.
Brittain: Did you discuss purchasing the Oasis?
Sebok: I don’t recall ever discussing purchasing the Oasis.
Brittain: On Document 544, which is the next one, this is an email from you to John Pedersen. I’m going down to the second email. It says, See
9 attached. And I have prepared for DRC executive session and for council executive session if you desire.

Brittain: Now executive session, that keeps the public and the press out, right?
Sebok: Yes.
Brittain: Very good. Okay. And it goes on, I have this on the board that perhaps don’t want hanging around to this week outside. ES — I’m assuming that’s executive session?
Sebok: I think so.

Brittain: Let me know if you have any questions, wanting something changed.
Brittain: So what did you have on the board?

Sebok: It was a map of the proposed redevelopment site, and if my recollection serves me, it was color-coded to show the status of which properties had been already acquired and in control of the DRC on behalf of the City, which properties there was a pending offer, and which properties were still in negotiation.

Brittain: So am I to understand that you’re actively purchasing properties at this time?
Sebok: As of January 3rd, 2017, yes.
Brittain: Okay. Which properties had you acquired?
Sebok: I don’t recall.
Brittain: What happened to them?

Sebok: Properties that the DRC acquired, if there was a tenant there, or even if there wasn’t a tenant there, we allowed the property owner or business tenant to remove whatever possessions they wanted to. We secured the building and we provided a lock box for the police and fire department, so that during an emergency, they could gain access to the building. And that’s all we did is we just acquired them and secured them and allowed any property to be removed, personal property.

Brittain: Now, does the DRC or the City now have deed and title to some of these properties in the Superblock area?

Sebok: I think we did when I left, when I retired. I don’t know if they do now.

Brittain: So when you retired as part of this process, did the City or the Redevelopment Corporation actually had purchased and had deed and title to certain properties in the Superblock area?

Sebok: Only those properties that we successfully acquired within the footprint of the redevelopment site, yes.

Brittain: And you can’t remember what those properties were?

Sebok: No. It changed from week to week, month to month depending on which properties closed when.

Brittain: Did you — as part of the Redevelopment Corporation, were you a part of selling any of those properties to another owner, subsequent owner?
Sebok: No.
Brittain: Okay. On page 545, Bates stamped 545, I go down to the bottom, what this looks like is sort of a tally of, quote, what’s been going on as of 1-10-17. And at the top it says, Total under contract, $2,465,000.

Brittain: So what does that mean?
Sebok: That means that there was a contract to — agreed-upon contract between the seller and the buyer, in this case Metro Properties, to acquire that amount of property for that price, but they would not necessarily have gone to closing yet.

Brittain: Okay. And then the next starred point is Favorable negotiations, 600,000. So what is that?

Sebok: Again, that’s a list of properties just indicating that negotiations were ongoing and they were looking positive, but, again, there was no contract in hand.

Brittain: Okay. Down at the bottom, next-to-the-last paragraph, it says, Hobeika is way out of line with their asking price and may require strong council action.

Brittain: What does that mean?

Sebok: It just means he was just asking for exorbitant pricing that couldn’t be justified and if that particular property was to be — remained included, it required that city council would have to consider increasing their purchase offer or whatever action the city council could do. But it was just way out of line of what we felt was a reasonable expenditure of public monies.

Brittain: But what — what —
Sebok: And subsequently that property was deleted from the footprint because it was on the corner separated by an alleyway.

Brittain: I’m sorry. What does the phrase “strong council action” mean?

Sebok: It means they would have to consider whatever they could do to approve an increased offer, you know, if they wanted to.

Brittain: All right.

Sebok: Because we were operating and making offers based upon, because it was public money involved here, reasonable estimated value of property, and we were authorized to go to 30 percent over, you know, an appraised value or an estimated value, but beyond that, then council would have to give further direction.
Brittain: Good.

MR. CONNOR: Tommy, is this a good time to take a really important break?
Brittain:: I’ve got about five more minutes. I’m going through these documents, and I’m getting near the end, so it won’t be long.

MR. CONNOR: All right. Go ahead.

Brittain:: Okay.
Brittain: On 713, there’s an email from Karen Coltrane. What is Karen Coltrane?

Sebok: She was the executive director of the Children’s Museum EdVenture.

Brittain: Okay. And this email to you, she said there’s an exchange between her and Melody Breeden regarding the Children’s Museum of South Carolina, interested in knowing the proposed location. Thank you for assistance with this, for all you’re doing to help the EdVenture come to Myrtle Beach, correct? [Edventure is a private business]
Sebok: Yes.

Brittain: Now, the second one here is — you have to help me. It looks to me like it’s from her, too, but it says, I can understand curiosity regarding potential locations. I’ve spoken with David Sebok this morning. He confirmed with John Pedersen that neither of them have related information to anyone regarding the potential site. They continue to ask to share the proposed location as they are currently in negotiations with property owner. The only reason I’m even aware of the location myself is because city officials wanted to make certain that it would be suitable to EdVenture as a satellite location. We’ve fully put effort and resources into obtaining it. I can assure you that as soon as the City tells me they have secured a location for EdVenture, this one or another, if this falls through, the first call I make will be to you. But I feel strongly that I must honor both the mayor and John Pedersen’s request of me to maintain confidentiality.

Brittain: So it sounds to me like y’all had agreed to keep this potential location secret; is that true?

MR. CONNOR: Object to the form.

Sebok: It’s very typical with anybody, whether privately or publicly, when you’re trying to assemble a site involving multiple, you know, properties that you pursue that acquisition process in confidence or — you know, you used the word “secret,” but pursue it confidentially to prevent unnecessary or unreasonable speculation, price gouging and those kinds of things, which can happen both publicly and privately.

Sebok: And so, yes, we were — because, again, they were public monies, we wanted to expend them, you know, properly and in good faith. It’s the taxpayers, so that we didn’t want speculation to occur, which can happen.

Brittain: And that was — because the people might — that might increase the value of their property, if they don’t know that something nice and big is going in there, that makes it a better negotiating situation for whoever is trying to buy it; isn’t that correct?

11 MR. CONNOR: Object to the form.

Sebok: You’d have to ask that question again.

Brittain: Okay. What I thought I heard you explaining was, it’s normal practice when you’ve got a significant owner coming in or tenant coming in, you try to keep that quiet from the adjoining properties because, once they find that out, they may be trying to get more money for their properties than if they don’t know about it. I’m not saying there’s anything wrong with that. I’m just saying, isn’t that — the theory behind it is to keep that information close so the property values won’t inordinately go up when you’re trying to assemble properties?

2 MR. CONNOR: Object to the form.

Sebok: It’s common practice publicly and privately to keep assemblage of sites for redevelopment or whatever purposes confidential until those sites are all assembled that meet the needs of, let’s just say a developer, in this case the City, and that’s to, you know, get them at the most reasonable fair price.

Brittain: I understand. I think we agree on that.

Brittain: Now you’re in a public sector here. No question about that, right?Your activities in this area are public sector activities?
Sebok: Yes.

MR. CONNOR: Object to the form.

Sebok: Well, we’re part of the public sector, yes.

Brittain: Okay. All right. Right at the end here, I’m just going to ask you to identify two other documents.
Document 870 is a letter again from Metro Properties Group, LLC.

Sebok: Wait a minute.
Brittain: Okay.
Sebok: Got it.

Brittain: That letter — you’re welcome to review it and read it all over. I’m not going to go through it with you. Carbon copies go to John Pedersen and Chuck Martino, Lauren Clever, Jim McCracken, and Buddy Hucks, and that letter is signed by Scott Taylor. And the last sentence in that document, which is the second page, it’s 871, says it has and continues to be an honor to continue to represent the City and their interests in DRC’s district redevelopment goals, which is an accurate statement, isn’t it?

MR. CONNOR: Object to the form.

Sebok: You’d have to ask Mr. Taylor if he feels it’s an honor.

Brittain: Okay. But he was representing — I understand — no, I don’t ask you to do the honor part, but what he says is he’s representing the City and their interests in the DRC district redevelopment goals. Was that part of the sentence true?

MR. CONNOR: Object to the form.

Sebok: He’s — with regard to the contract between Metro and the DRC and these projects, this letter is talking about Project B, which is unrelated to the Superblock. What he says represents the City and their interest in DRC. I think he’s really — I think he’s misstating “representing the City.” He’s representing the DRC and probably saying that the City — you know, the DRC is doing the City’s redevelopment work with regard to the pavilion area master plan, Project B.

MR. PLAYER: Let’s take the break.

MR. CONNOR: All right. We’ll take a short break to see if he can get back on.

Brittain:: Hey, I’m back. I’ve got one more question.

Brittain: If you’ll go to page 922, this appears to be a document from E.F. Hucks Consulting, LLC, making a proposal for services to you, Mr. Sebok, and it’s got Project A, Project B, Project C. On the second page, it’s got Projects A and B, retainer, and it’s got some terms. And I see Buddy’s signature on this document. On the one I have, I do not have your signature.

Brittain: Do you know whether or not that proposal was accepted by the Redevelopment Corporation?
Brittain: It was not.

Brittain: Okay. I have no further questions.

MR. PLAYER: I’ve got a couple follow ups, if that’s okay. Andrew?

MR. CONNOR: Yes. You’ve got some follow ups, Mr. Player?
MR. PLAYER: Yeah.
MR. CONNOR: Okay. Go ahead.

Player: Mr. Sebok, my name is Tucker Player. I represent plaintiffs as well. I just had a couple questions.

Player: You mentioned earlier about putting new tenants in as part of the redevelopment?
Sebok: You broke up there just a bit.
Player: Sorry. Do you recall in your deposition discussing finding new tenants for spaces that were targeted by the DRC?
Sebok: I’m sorry, say it again one more time.

Player: I’ll make it simpler. Did the DRC lease other spaces they had purchased in the Superblock to anybody?

Sebok: We did lease back to an existing tenant, who was still operating on 9th Avenue, because they had acquired a new space on 9th Avenue further downtown, and they were renovating that space to make it — for them to relocate their business but they weren’t ready yet, so we leased that back to them for, I believe it was either under the existing terms of their lease with the original owner or a reduced rate. I can’t remember.

Player: And are those the folks that the DRC — there was a property that was purchased for a minimal amount and then sold for — or vice versa. There was a property where there was $250,000 that was in the press that it was undersold, but a tenant had made renovations to the space and that’s what the additional money was for? Do you recall that at all?

Sebok: I don’t remember — recall the details. The tenant that was going to move into a new space that they had leased wanted to have further assistance from the City in its relocation to that space and/or compensation for leaving the space that they had made some improvements to. And that
was decreeing the City and that tenant, and John Pedersen was the primary person dealing with that tenant in terms of trying to reach agreement.

Player:. But wasn’t that property purchased by the DRC?

Sebok: Yes, it was purchased by the DRC and it had an existing tenant who had an existing lease, which we were to honor and — you know, but then that person had indicated that they were going to move to a new location which they felt was — down the street, down on 9th Avenue, and they were seeking compensation for vacating the property that we had acquired beyond, you know, beyond that which DRC was allowed to do.

Player: Okay. I want to go back to the Document 545, that you had stated, I think, is way out of line on their asking price and may require strong council action.

Sebok: Okay.Player: Do you see the top of that?

MR. CONNOR: What are the rest of the digits so I can find it?

PLAYER: It’s 33545.

Sebok: It’s in Document 545 you said?

Player:: Yes, sir. Right in the middle, a little bit towards the back.
Sebok: Well, my documents are now out of order. Hold on.
BRITTAIN: It’s right before you get to the plats and the drawings.
Sebok: Okay. Hold on. Okay. Got there.

Player: If you check from the bottom about Hobeika or Hobeika, however he pronounces it, and specifically, may require strong council action.

Player: Was that not a reference to eminent domain?

14 MR. CONNOR: Object to the form.

Sebok: I don’t recall. It — I don’t recall.

Player: Do you recall that it was basically a month later that city council announced that it would use eminent domain to take properties in the Superblock?

MR. CONNOR: Object to the form.

Sebok: I don’t recall the timing of whatever the council did there.

Player: Do you know Noam Pyade?
Sebok: Yes, I do.
Player: How do you know him?
Sebok: Is that in this document here?

Player: No. I’m just asking you if you know. That’s not in that document. I’m just asking you personally, how do you know Mr. Pyade?

Sebok: I believe that he is — he bought some properties along Ocean Boulevard in the downtown area. I believe it’s a motel. I can’t remember which. And he had other properties in the city or downtown. He was a property owner/business operator.

Player: Was he not on the board of the DRC?

MR. CONNOR: Object to the form.

Sebok: He wasn’t when I was there.

Player: When did you leave?
Sebok: January 31st — I mean December 31st of 2017.
Player: Okay.

Sebok: Well, I don’t recall him being on the board when I was there. He may have been on the board shortly after.

Player: Do you know if the DRC ever made an offer to any of his properties on 7th Avenue, in that area?

Sebok: I’m not aware of any offers by DRC to buy any of his properties.

Player: In the contract with Metro Properties, it discusses Plan A, Plan B and Plan C. Can you delineate what areas of the city those separate plans were?

Sebok: Project A referred to the Children’s Museum/Chapin Library, a project in the Superblock.
Project B referred to about, I think it was five different hotel or vacant property locations along Ocean Boulevard, generally in the south area, that we were trying to create redevelopment opportunities for those property owners or for prospective developers. And — so Project B was to assemble some maps, some data that might be in cooperation with the property owners and their approval that could be presented to developers if developers, you know, expressed an interest. It was primarily hotel-related.

Player: Right. Would it be proper for a board member of the DRC to use the information coming into the DRC to purchase properties for themselves?

MR. CONNOR: Object to the form.

Sebok: The DRC did have a disclosure requirement as part of its bylaws, I believe, that board members needed to disclose interest that they had in businesses or properties within the district, and that if they were to seek to acquire a property or a business within the district, that they were to inform the board of that and seek board approval and determination as to whether it was a conflict of interest or not.

Sebok: And then the board would decide on an individual case by case whether there was a conflict of interest. Board members who did own property within the district were advised to generally recuse themself from voting on any action that either had a direct or indirect or perceived impact to their property, and they regularly did that.

Player: Do you know if the DRC had, I guess, any designation of properties to seek along 7th Avenue North at all?

Sebok: There were — no. The DRC — okay. I think I know what you’re talking about. But, no, we had no interest in acquiring and being landowners in any other — in any area. We really didn’t have the wherewithal to do that. Our role was to try to package potential redevelopment sites information and make that available, basically create an opportunity between property owners and prospective developers or investors, for them, to see if there was an agreement they’d reach.

The DRC, except for the role played with regard to the Superblock and the Children’s Museum and library, which was really as a pass-through, the DRC was not equipped to go out and just buy properties and hold them for redevelopment purposes or for —

Player: That kind of leads to my final area.
Player: Did DRC ever market any of the properties it purchased in the Superblock for rent or renovation or to do anything with it except sit?

Sebok: The only rental that I recall was a short-term rental, or whatever, for the one we were talking about earlier, which I forget the name of the people involved or the business even.

To my knowledge, while I was there, our role was only to acquire and hold the properties until the City was ready to redevelop them.

Player: What about maintenance?
Sebok: We were responsible for securing the properties, which we did. As I mentioned before, we would request the fire department primarily and the police secondarily, we installed what we would call, I guess, lock boxes, similar to what you do in residential houses, where there was a key in there that the fire department and the police department could get to by entering a code, so that they could get into a building to protect it or do whatever they needed to do. Other than that, that’s all we basically — we shut the utilities off, if there was no active tenants going on. It just secured the property.

Player: Okay. Do you know what neighborhood blight is in a real estate context?

Sebok: Yes.

Player: What is it?

Sebok: Neighborhood blight is a common historical term used to describe an area or a property that is by some standard deteriorated, neglected, exceeded its useful life. And that’s what it is. It’s a property that is, you know, in tough shape and has been neglected or is not being used at that time.

Player: And how does that affect the property value of the surrounding properties?

Sebok: It’s called the broken window theory, where a blighted property would have a negative effect on adjacent properties.

Player: That’s all the questions I have. Mr. Sebok. Thank you.

Depo Transcript-Sebok COND by David L Hucks on Scribd

Depo Transcript Pedersen-Cond by David L Hucks on Scribd