CLEAR
TAKEOVER

The Church of Scientology and companies run by its members spent $103 million over the past three years buying up vast sections of downtown Clearwater.

They now own most commercial property on every block within walking distance of the waterfront, putting the secretive church firmly in control of the area’s future.

Most of the sales have not previously been reported. The Tampa Bay Times discovered them by reviewing more than 1,000 deeds and business records, then interviewed more than 90 people to reconstruct the circumstances surrounding the transactions.

Even city leaders said they didn’t know the full extent of the purchases until they were shown maps created by the Times.

The church, its members and companies they control now own 185 properties that cover 101 acres in the center of downtown.

Half the properties were bought since January 2017.

The land grab started as tensions grew between the church and the Clearwater City Council. Each had proposed major redevelopment projects, designed to lure new business into the empty storefronts that surround the city-owned waterfront and the church’s spiritual headquarters. Then the council interfered with a land deal that Scientology demanded for its plan. The church stopped communicating with the city.

Almost immediately, a decades-long trickle of purchases by church members turned into a flood.

Before and after

Nearly all of the properties were bought through limited liability companies, which are required to disclose their operators but not their owners. Although that arrangement is standard in real estate, it makes it impossible to know whether the properties are owned by the Scientologists who manage the companies, the wealthy church or another hidden party.

But companies controlled by different parishioners bought neighboring properties that create clear assemblages of land.

Scientology’s extraordinary influence over its members has been documented in government investigations and testimony from former parishioners throughout its 65-year history. That has led defectors from the church and city leaders to believe there is little chance parishioners are making significant real estate deals around Scientology’s mecca without the church’s involvement.

The church has shed no light on its plans. Local Scientology spokesman Ben Shaw and international spokeswoman Karin Pouw did not respond to repeated requests by the Times for an interview with Scientology leader David Miscavige.

In response to detailed memos summarizing the reporting, the church criticized the Times for portraying its members as “mindless robots” and for having a “preconceived agenda to present every Scientology story in a false and unfavorable light.”

“There is nothing unnatural about Scientologists wanting to live in the same city that houses the international spiritual headquarters of their church,” said a letter signed by Scientology attorney Gary Soter.

“The Church was unaware of the significant number of properties owned by Scientologists in the Clearwater area and are delighted you provided the information,” the letter continued.

Asked directly whether Scientology orchestrated or paid for any of the sales, the church did not answer.

The Times also contacted representatives of all 32 companies it identified that bought downtown real estate over the past three years. Most did not respond or declined to comment.

The few willing to answer questions said Scientology has no influence on their real estate dealings.

“I don’t mix my personal business with other areas in my life,” said Terri Novitsky, a Scientologist who manages a company that bought two office buildings on Chestnut Street in 2017.

In interviews, sellers said most of the transactions unfolded the same way. A broker who was a Scientologist approached a downtown property owner. Made an offer. Paid in cash.

Many of the properties weren’t on the market. And half the sales were for more than double what the properties were valued by the county property appraiser, the Times found. In six cases, buyers paid quadruple the property’s value.

Most of the new owners have done little with their acquisitions. Block after block, vacant lots sit untouched, and storefronts remain empty: A former jewelry store. An empty Walgreens. A deserted coin laundry.

All five City Council members said they doubted the rash of purchases were unrelated.

“The logical conclusion is Scientology must have some sort of a game plan in mind, but they’re not public with what it is,” City Council member Hoyt Hamilton said as he looked at a map of downtown’s new ownership. “Typically, when people buy commercial real estate, they move forward with construction or redevelopment. That’s not happening with almost any of these properties.”

[ More reaction: What Clearwater’s City Council thinks about Scientology’s downtown takeover ]

The city wants to turn downtown into a regional destination for food, drink and entertainment. Longtime City Manager Bill Horne said he can’t tell whether the church wants the same thing.

“Ever since I’ve been here, and ever since I’ve dealt with Scientology officials, I have heard the leaders articulate that they want to see a vibrant downtown,” Horne said. “However, it hasn’t always been clear to me as to just what does that actually mean.”

Tom De Vocht, a former Scientology executive who oversaw the church’s property in Clearwater from 1996 to 2001, said he believes Scientology is responding to the city’s efforts by creating a buffer to keep the public away.

“They’ve got one intention, and one intention only,” De Vocht said. “Buy up as much property as they can for the church — whether they use it or not, whether they let it sit there and rot — so no one else can be there.”

‘The first Scientology city’

Scientology’s survival depends on the preservation of its headquarters in Clearwater.

Scientology has said it has 10 million followers, but surveys and accounts from former members suggest there are no more than 30,000 worldwide. The church’s influence comes from the estimated $3 billion in cash and assets it has collected from its followers.

Clearwater is the center of that revenue stream. Scientologists from across the globe make pilgrimages to the campus, called Flag. It’s designed not for recruiting new members but for hosting established followers. The campus collects millions each week through fundraising and payments for expensive courses and high-level religious counseling not offered anywhere else. Visitors are expected to stay in Scientology’s hotels and eat at private church restaurants.

Flag is run by the church’s full-time workforce, the Sea Org, whose members sign billion-year contracts and work around the clock. Defectors have said they were paid less than $50 a week.

Flag is supposed to be an insulated oasis. Non-Scientologists who get too close are a threat to the operation, said Mat Pesch, who spent 27 years in the Sea Org and worked as Flag’s treasury secretary before defecting in 2005.

“It’s a business,” Pesch said. “The more it’s isolated and doesn’t have people who are non-Scientologists around the area, the better.”

The church’s hostility toward the public became clear from its first days in the city in fall 1975.

Scientology founder L. Ron Hubbard had written about doing away with governments and replacing them with a Scientology-run society. He was overseeing the religion from aboard a ship to avoid investigations into tax evasion and fraud when he selected Clearwater as a spiritual headquarters. It met his criteria: It was located in a warm climate near an international airport and had a hotel the Sea Org could turn into a base.

Church officials used a straw corporation to buy the historic Fort Harrison Hotel and moved in under a fake name. They posted guards wielding billy clubs and mace. Suspicion swirled. A few months later, the newcomers admitted they were actually Scientology.

By then, the church’s intelligence unit was already deploying an elaborate scheme to “establish area control” in the city.

[ The full history: Scientology’s 40 years of conflict with the City of Clearwater, recapped ]

Internal church documents detailed missions that planted spies in the state attorney’s office, the Chamber of Commerce and the Clearwater Sun newspaper. Operatives framed the mayor in a staged hit-and-run and spread false rumors he was having an extramarital affair.

The church also targeted the Internal Revenue Service, Department of Justice and scores of foreign governments. It set aside $10 million for secret real estate purchases in Clearwater.

In a letter to the Times, the church denied it ever tried to take control of the city.

After FBI raids uncovered the infiltrations, city officials launched their own investigations. The city and the church fought in court for years.

Eventually, open tensions faded. Over the next four decades, the church gradually amassed 58 properties in Clearwater under its name, 49 of them downtown. Seventy-three percent of the property is tax-exempt for religious purposes. (Everything owned by parishioner-run companies is still on the tax rolls.)

[ Slideshow: See every building owned by the church ]

In the ’90s, a Scientology magazine listed the church’s goals for 2000. Among them: make “Clearwater known as the first Scientology city in the world.”

An offer with a catch

Even as Scientology’s footprint expanded, and nearby Clearwater Beach became one of the most popular tourist destinations in the United States, downtown businesses struggled to stay open.

City leaders spent tens of millions improving streets, subsidizing residential projects and hiring consultants. They started hosting concerts on the waterfront that now draw thousands.

But on days with no events, downtown feels deserted. Real estate offices, vitamin shops and vacant storefronts fill prime locations that in a more vibrant downtown might hold breweries, restaurants and boutiques.

In 2016, city consultants began planning what has become a $64 million effort to reinvigorate the waterfront called Imagine Clearwater. They envisioned apartment buildings with ground-floor stores, winding paths with views of the Intracoastal Waterway and a concert venue that would draw visitors from across the region.

In January and February 2017, as the council was preparing to approve the consultants’ concept, a handful of companies bought six commercial properties downtown. They paid $26 million.

After the Times reported the purchases, Miscavige acknowledged the properties were bought for a second revitalization strategy — one devised by the church. In private meetings with council members, the Scientology leader described a plan for high-end shops, Cleveland Street facade renovations and an entertainment complex involving actor Tom Cruise, Scientology’s most famous parishioner. The church promised to spend $55 million.

But his offer had a catch. He wanted the council to stop trying to buy a vacant lot on which the church was also bidding.

The 1.4 acre lot was across the street from City Hall and adjacent to a 13-story Scientology religious retreat. It was owned by the Clearwater Marine Aquarium.

The church offered $15 million for the parcel. Instead, the aquarium sold it to the city in April 2017 for a lot less — $4.25 million. Miscavige cut off communication with the city.

A string of purchases

A few weeks later, John Yarbrough sold the building where he had run his electrical services business for 22 years.

The property wasn’t on the market. But David Kerr, a local real estate agent and parishioner, walked in one day with an offer. After negotiations, Kerr’s company paid Yarbrough $1.1 million in cash for the lots, then valued by Pinellas County at $331,000.

Yarbrough never learned the buyer’s identity. “They were very secretive,” he said.

A few months after Yarbrough relocated, a new electrical company moved into his old building. This one is owned by a parishioner who had been featured on the church’s “Meet a Scientologist” video series.

Brokers who are Scientologists approached at least 15 downtown owners about unlisted properties.

Wayne E. Lee ran his Auto Parts Distributors business on Park Street since 1982. Real estate agent Daphna Fischler, a Scientologist, called and showed up to the shop a handful of times in mid-2018. Lee sold when Fischler upped her offer to $410,000 cash for the building valued at $109,000 by the property appraiser.

Fischler would not disclose the buyer.

But Lee assumed the church was involved. He told Fischler that before Scientology bought the Fort Harrison Hotel in 1975 he worked there as a busboy. “She said, ‘Well, we’ll have to invite you down for dinner,’ ” he recalled.

All together, 32 companies bought 92 downtown properties since 2017. Of the $103 million spent, $99 million was paid in cash.

Nearly all of the roughly two dozen people listed as operating the companies are Scientologists. They have completed courses and spiritual counseling that can cost tens of thousands of dollars.

Some have donated millions to the church. The family of Moises Agami, a developer whose companies bought 20 storefronts and a parking lot last year, has donated at least $10 million.

Shahab and Catherine Emrani — who manage companies that purchased four commercial buildings, retail space in a condo and vacant land — have given at least $1.75 million to the church. This month, Shahab Emrani was elected to the Downtown Development Board, which helps promote downtown. For the first time, a majority of the board’s members will be Scientologists.

The greatest number of properties were bought by companies controlled by either Israeli businessman Itzhak Zano or another Scientologist who represents him. Although Zano is not well known in Clearwater, the companies spent $16.7 million acquiring 26 commercial properties downtown. About $15.9 million was paid in cash.

Zano did not respond to questions about what his plans for the properties. His attorney, Louis Zaretsky, wrote in a letter to the Times that Zano is a businessman with vast real estate holdings in Israel, Germany, Poland, New York and Florida who makes investments “based on his belief that they will appreciate or otherwise contribute to his long-term goals.”

“Your characterization that his religious affiliations somehow control his business activities is evidence of personal bias against his religion,” Zaretsky wrote.

Some of the parishioners have a history of working on Scientology’s behalf.

Fischler, a local real estate agent, negotiated at least 10 of the downtown deals, according to interviews with sellers. In 2002, she was listed as an international deputy of a committee tasked with disseminating Scientology doctrine. Fischler did not respond to phone messages, a certified letter or a note left at her condo.

Brian Andrus controls companies that last year bought a marina on N Osceola Avenue and six nearby properties, all bordering a redevelopment project at the city’s public boat ramp. He owns Stonebridge Real Estate and served as president of the Florida Gulfcoast Commercial Association of Realtors in 2017.

But in the ’70s, Andrus was named an unindicted co-conspirator in Scientology’s government espionage scheme, which sent 11 Scientologists to federal prison.

Andrus helped carry out a plan to stop a Scientologist who had spied on the federal government from turning himself in to the FBI. According to court records, Andrus accompanied two guards as they handcuffed and gagged the man, dragged him into a car and drove him to a hideout, where he was held for a month before escaping.

Andrus did not respond to an email, phone message, a note left at his office or a certified letter. Reached at their condo, his wife declined to comment.

Control

The church attracts members through a theology of self improvement and understanding. It teaches that expanding Scientology is key to saving the world, then wields a system of totalitarian policies to keep parishioners in line.

Members have to answer to their “ethics officer” for any act of disloyalty to Scientology’s mission. Mike Rinder, who led the church’s intelligence arm before defecting in 2007, said that when it comes to property around Flag, there’s no real distinction between whether it’s owned by the church or a parishioner.

“Most religions have a fundamentalist wing,” Rinder said. “There’s no such thing in Scientology. You are a fundamentalist Scientologist, or you’re not one at all.”

Disloyalty has life-changing consequences. The church requires followers to shun family members, friends and business contacts who defy it. It has terrorized defectors with private investigators, smear campaigns and relentless litigation.

During spiritual counseling, parishioners are interrogated about their deepest secrets, which are recorded in folders and stored indefinitely. Scientology has been accused of using the information as blackmail.

“Any property owned by a Scientologist or linked to a Scientologist is owned by the church, because the church owns its parishioners,” said De Vocht, the former executive in charge of real estate, who reported directly to Miscavige.

In a letter, the church said the Times is misinterpreting Scientology policy and that other religions also practice shunning. It said information in parishioner folders is sacrosanct and claims of blackmail have “long since been disproven.”

Former parishioners say the church has a history of interfering in Scientologists’ downtown business.

Aaron Smith-Levin, a former Sea Org member, said a church ethics officer in 1993 pressured Smith-Levin’s father-in-law to sell Scientology a downtown property it wanted for expansion.

Another Scientologist, Rick Argall, owned a building on downtown’s Garden Avenue that housed six Scientologist-run businesses, including a chiropractic clinic he operated with a fellow church member. But after he forwarded an email critical of the organization in 2012 to another parishioner, the church began an excommunication process that would have forced his partner of 24 years to stop working with him and his tenants to move out.

Argall left the church and was forced to abandon his business of more than 20 years. Concerned he wouldn’t be able to pay his mortgage, Argall said he deeded the building, appraised at $780,000, back to the previous owner. He walked away with nothing.

Visions for the future

It’s too soon to say how the shift in ownership will affect downtown.

Andrus, the former church operative, has broken ground on a condo tower near the city’s boat ramp and filed plans for another housing complex nearby. Tal Ezra, a Scientologist who recently bought four parcels around an office where he has run his fuel management company since 2005, said he’s considering office space and possibly a retail shop.

“I saw a business opportunity,” Ezra said. “No one from the church dictates to me what to buy, what to sell, what to do.”

None of the other parishioners whose companies bought property since 2017 responded to questions about their plans.

Right now, at least 30 businesses owned by non-parishioners are renting from Scientologists. But Scientologist-controlled companies are also sitting on at least 26 vacant lots and 31 empty storefronts and offices.

Businesses without ties to the church are moving into a few of those. Agami, the developer whose family gave $10 million, leased a storefront to a non-Scientologist that has become a successful restaurant since opening in 2017. Agami also signed two more leases on the same block with restaurants owned by people not connected to the church. Both are supposed to open soon.

But far more non-Scientologists are moving out. Seven businesses have left following recent purchases, and at least three more are leaving this year, including Clearwater Plumbing and Gulf Coast Marine. Both have been there for decades.

Looking at the Times’ map of the new ownership, City Council member David Allbritton recalled a moment from 2017 that now seems telling.

When the city was considering buying the aquarium’s lot, Miscavige threatened to stop communicating until the 2020 election, when term limits would force most of the council out of office. Then he would try again, with new council members.

“He’s starting to assemble properties,” Allbritton said. “If the council in 2020 isn’t on board with doing something his way, he’s going to do it himself.”

City officials say their dedication to redeveloping the waterfront hasn’t changed. Assistant City Manager Michael Delk said the city’s priority is turning the spectacular land it owns into a community destination, no matter who owns the private property around it. “That’s a factor we do not control,” Delk said.

In addition to a park and amphitheater, Imagine Clearwater also calls for several new projects on the waterfront with residences and retail. Delk described the projects — which require voter approval — as key to the plan’s success.

But even when the church isn’t in control, its presence can deter development.

In summer 2017, Mark Searcy, a longtime Clearwater real estate agent who is not a Scientologist, assembled a 1-acre site by getting the owners of three adjoining properties to agree to sell.

Searcy felt like he’d created a canvas for a dream hotel, condo and retail project: near the bridge to Clearwater Beach, no height restrictions, all under $5 million.

He promoted the site to about 75 hoteliers and developers across the country.

They all passed.

“The main reason why developers didn’t want it was they didn’t want to be near the Church of Scientology,” Searcy said.

Then Fischler called with a buyer.

Nearly two years after the properties were sold to a company run by two Scientologists, no redevelopment plans have been submitted.

And Fischler is still making offers.

In 2018, Peter Lares got a call from Fischler, asking if he’d sell the prominent building in the center of downtown that houses Emily’s Restaurant. Lares and his wife, Emily, sold the diner inside a decade ago. But they weren’t ready to sell the building, which they had owned for 27 years.

Lares declined again when Fischler met him at a restaurant in Pinellas Park for lunch, and once more when she tried in May. He’s still holding out.

“We’ve spent a lot of happy years here,” Lares said.

In summer 2018, Fischler walked into Bob Lee’s Auto Repair on Park Street to make owner Dennis Bosi an offer. Bosi wasn’t interested.

He had committed to downtown in 1997. He took over Bob Lee’s Auto to continue the business’ legacy and served on the Downtown Development Board for a decade.

But the promised downtown revival never came. Over the past two years, the properties surrounding the shop have been sold to Scientologist-controlled companies.

Fischler approached Bosi again in September. By then, he had found an auto garage he could buy in Dunedin. Fischler offered Bosi $1.4 million, almost three times what the property was valued.

“I had to make a decision,” Bosi said. “Do I spend another 10 years and see what happens in downtown Clearwater?”

Bosi took the deal.

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