After 18 months of feuding, Delray Beach settles lawsuit with nonprofit that ran Old School Square

DELRAY BEACH — With two newly-elected commissioners now on board, the Delray Beach City Commission accepted a settlement offer by nonprofit Old School Square Center for the Arts, Inc. on March 31, ending a lengthy and bitter dispute over managing the popular cultural center that anchors the city's downtown shopping district.

The dispute dates back to August 2021, when the nonprofit ran Old School Square before it was ousted under the previous board by a 3-2 vote.

Under the settlement, both sides would surrender legal claims, ending the 18-month battle. Direction would then be provided to city staff to negotiate a new management deal, executed either by Mayor Shelly Petrolia or Vice-Mayor Ryan Boylston, per City Attorney Lynn Gelin.

The vote comes just weeks after the election of commissioners Rob Long and Angela Burns. Long now serves as the city’s deputy vice-mayor, a seat previously held by Juli Casale. In the lead up to their elections, both Long and Burns were strong proponents of settling the litigation surrounding the operation of Old School Square, if elected.

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“I don't know how it could really be construed as anything but a good thing,” Long said of the settlement. “We're ending a lawsuit that costs taxpayers money and that is creating division in our city. This is the first step in bringing together groups that have been enemies."

He also said he believed the move would reunite the community and ensure the cultural hub would become sustainable for the future.

City terminated its lease agreement with management in 2021

Delray Beach terminated its lease agreement with the venue's management organization in August 2021 because of problems with its financial reporting and oversight. The decision sparked backlash from some residents who argued that it would be a mistake to end to a more than 30-year relationship with the nonprofit.

The city said Old School Square Center for the Arts also refused to provide a complete schedule of binding contracts for events, displays, performances and exhibits.

The nonprofit then sued the city, Petrolia and other officials for allegedly breaching the lease, violating the state’s Government in the Sunshine open meetings law and civil conspiracy. The city subsequently countersued, claiming breach of contract for leaving the Crest Theatre unfinished.

But after Long and Burns won their March 14 elections, Mayor Shelly Petrolia was the only member remaining on the city's commission who had voted to remove the nonprofit.

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Up until March 31, 2023, conversations about the settlement were kept private in respect to attorney-client confidentiality. But when all commissioners but Petrolia — who was not present at Friday’s special meeting — returned from their closed session, the chance to renegotiate a settlement was back.

Upon reconvening, the new board voted 4-0 to accept the nonprofit’s settlement offer, which, still, has yet to be clearly disclosed. After doing so, City Attorney Lynn Gelin would negotiate a final agreement.

"We really can't do much as a commission, publicly, while we're in litigation," Long said of the city's current discussions with the nonprofit. However, he said the city's workshop with Old School Square Center for the Arts, Inc., would be happening "pretty quickly."

Though its date hasn't yet been disclosed, the workshop will be open to public input.

“We can bring the public back in to be part of this discussion,” Long said. “I think that's an important note, that the public was never part of the decision to kick Old School Square out in the first place. Settling this lawsuit, we can effectively bring the public back into the conversation on how to revitalize and reimagine what Old School Square’s going to be for the future.”

What does the future management look like for Old School Square?

Currently, the Downtown Development Authority (DDA) operates the Old School Square campus under a contract. Long does not see that changing, despite the settlement.

"I don't think there's a scenario where we push the DDA out," he said.

After the vote, Commissioner Adam Frankel suggested asking Gelin or a representative from her office to try reaching out to representatives from the nonprofit to reconcile.

“I clearly recognize that Old School Square did make some mistakes here, but I don’t think they’re fatal mistakes,” Frankel said. “I would like to seek consensus … try to mediate the things and try to reestablish some kind of partnership, not only with the DDA who we’ve tasked to do things at the campus, but also with the city.”

Gelin had a different suggestion: Have the DDA present at this workshop Frankel was pitching. But Vice-Mayor Boylston quickly shut down the idea of a triparty workshop.

Boylston believes the first necessary step is the commission’s meeting with Old School Square Center for the Arts, Inc. Only after this should the Downtown Development Authority, already an established partner of the city’s, be brought in.

“I think, first, we’ve got to mend the fences more than just what we did today, and have a conversation about ‘what does the future of our relationship look like’ between these two entities, before we bring in that third entity,” he said.

Jasmine Fernández is a journalist covering Delray Beach and Boca Raton at The Palm Beach Post. You can reach her at jfernandez@pbpost.com and follow her on Twitter at @jasminefernandz. Help support our work. Subscribe today.

This article originally appeared on Palm Beach Post: Delray Beach settles Old School Square lawsuit with nonprofit