Occupants of historic homes owned by Nassau County, many of them in secluded locations on the North Shore, soon may have to disclose their campaign contributions to public officials as legislators seek greater oversight of county real estate deals.
A bill up for a vote in the county legislature Monday would require individuals who live or work at the properties to disclose their contributions to elected officials and political committees.
Republican county legislators say they are trying to close a "loophole" in county law: Smith & DeGroat Real Estate, which handles the transactions, must disclose its campaign contributions, but renters don't have to.
What to know
- A bill up for a vote in the Nassau County Legislature Monday would require individuals who live or work at properties owned by the county to disclose political campaign contributions.
- Republican legislators introduced the bill after discovering a woman made a $20,000 contribution to County Executive Laura Curran on the same day the legislature granted the woman and her husband an occupancy permit for a mansion on a historic Sands Point estate.
- A spokesman for Curran said she supported "any measure that enhances transparency" but wants to make sure the bill doesn’t "unduly burden" veterans and active duty military living in county housing at Mitchel Field.
The issue surfaced on Jan. 11 when the legislature approved a "use and occupancy permit" for Karli Hagedorn and her husband James Hagedorn at Mille Fleurs, a mansion on a historic Sands Point estate once owned by Florence Guggenheim, for $9,000 a month.
GOP legislators said they were surprised to learn subsequently that Karli Hagedorn also had contributed $20,000 to Democratic County Executive Laura Curran's reelection campaign on Jan. 11.
Karli Hagedorn has contributed $70,000 to Curran's campaign since 2017, state campaign finance records show. Jim Hagedorn has contributed a total of $50,000.
In past years, the Hagedorns also donated to former Nassau County Executive Edward Mangano, a Republican, and the Hicksville Republican Club, campaign finance records show.
Karli Hagedorn contributed $25,000 to Mangano's campaign in 2013. James Hagedorn contributed $50,000 to the Hicksville Republican Committee and $1,500 to Mangano's campaign in 2012.
Karli Hagedorn, who served on Curran's transition team in late 2017, is chairwoman of the Sands Point Preserve Conservancy. The nonprofit has held a contract with Nassau to preserve the 216-acre former Guggenheim estate, operating about half of the estate.
James Hagedorn is chairman and chief executive of Scotts Miracle-Gro Co., the Maysville, Ohio-based manufacturer of lawn fertilizer and other garden items.
Hagedorn's late father, Horace, founded the Port Washington-based Miracle-Gro Co. in 1951, before it merged with Scotts in 1995.
In an interview, Karli Hagedorn said she has been working for years to put Mille Fleurs under the umbrella of her conservancy and open the mansion to the public. No one is living there and there are no plans for anyone to, she said.
Hagedorn said she had been "deep in negotiations" with the county for two years to operate the mansion and open it to the public. County officials told her they wanted to keep it for rental income, she said. In the weeks before the coronavirus shutdown last year, she became concerned another renter might make changes to the mansion's historic features.
"If we didn't rent it, we’d lose it," she said.
Hagedorn acknowledged her donations to Curran, and suggested she might have been rushing to meet the state's Jan. 11 filing deadline for the first half-year contribution cycle.
"How the timing coincidence happened, I couldn't tell you," she said. "I was proud to support her and to vote for her. There’s absolutely no relationship there."
The county's disclosure laws took effect in April 2016 after contracting scandals involving former State Senate Majority Leader Dean Skelos (R-Rockville Centre).
Nassau County Legis. Steve Rhoads, who voted to approve the permit for the Hagedorns at Mille Fleurs, said the campaign filing on Jan. 11, "certainly raises some eyebrows."
Rhoads (R-Bellmore) said, "when you have a lease for county property, essentially when you have someone who lives on a mansion on a county property for $9,000 a month, and then you find out that the county executive … has received $120,000 in contributions to her reelection campaign, it may be completely innocent."
But "I know as a legislator and a taxpayer I have some questions," Rhoads said.
Presiding Officer Richard Nicolello (R-New Hyde Park) said at a hearing in March about the Hagedorn permit: "We were not aware of the contributions … and there was a history of contributions, actually."
He continued, "We certainly would have considered [the donations] in the global sense of looking at the use and occupancy permit."
In a statement, county spokesman Mike Fricchione said for the past 15 years, Mille Fleurs "has been a solid revenue generator that has helped the County offset expenses that would otherwise fall onto taxpayers. The County Executive supports any measure that enhances transparency but wants to make sure the bill doesn’t unduly burden the more than 50 veterans and active duty military personnel currently living in County housing at Mitchel Field."
A prior tenant, Joseph DelGreco, had a permit for Mille Fleurs for $9,000 a month, county records show.
Before that, the Salgo Trust for Education had rented the property for $6,600 a month, records show. The nonprofit preserves the collections of its late founder, Nicolas M. Salgo, who served as U.S. ambassador to Hungary during the 1980s and was a builder of the Watergate complex in Washington D.C.
The GOP disclosure bill comes as Nassau is moving to rent more county properties to help generate new sources of revenue.
Properties managed by Smith & DeGroat of Mineola generate $1.5 million for Nassau County annually, officials said.
Nassau County maintains dozens of historic properties.
In some cases, nonprofits rent them for office space. Some properties such as Mille Fleurs have been occupied by residents and closed to the public. Others including Chelsea Mansion, built in 1924, are open to the public and caretakers live there.
Smith & DeGroat base the prices on "fair market value," said Eileen Krieb, commissioner of the county Department of Parks, Recreation and Museums.
A lease at one of the historic properties can be a plum perk. It can take years for tenants to land one, and many renters end up staying for decades at exclusive properties, county parks officials said.
"These properties scatter quite remote, they're not on the main highways, they're tucked away into the estate area," Krieb said. "There's not a lot of turnover."
Smith & DeGroat has had the contract to manage the historic properties for the past 15 years. The company lists the properties, picks the tenants and collects the rents for the county.
The Republican bill initially required all individuals who received special use permits to file financial disclosure forms.
Rhoads acknowledged Democrats' concerns that the bill technically would have required picnickers, Little League teams, veterans who live in affordable county housing at Mitchel Field in Uniondale and others with special use and occupancy permits to file campaign finance disclosures.
The version up for a vote Monday would require disclosures from permit holders who pay more than $25,000 for residential or business use. The measure excludes government subsidized veterans and military housing.
In its application for the special use permit for Mille Fleurs, Smith & DeGroat listed its campaign contributions since 2016, including to Curran, legislative Minority Leader Kevan Abrahams (D-Freeport) and county Legis. Rose Marie Walker (R-Hicksville).
Matthew Smith, president of Smith & DeGroat Real Estate, did not respond to requests for comment. He also is president of Standard Valuation Services, a Mineola company that conducted Nassau's most recent property reassessment.
The Hagedorns also have a use and occupancy permit for the county-owned "Captain's Quarters" on the Sands Point Park & Preserve.
The county legislature’s Rules Committee must approve special use permits for any revenue-generating permit on parkland that provides Nassau more than $25,000 annually.
A 65-page legislative packet provided by the county Parks Department to the Office of the Clerk of the Legislature, and provided to Newsday by GOP legislative majority, includes information about the Hagedorns such as proof that credit and criminal background checks of Karli Hagedorn were run, proof of property insurance and a 2016 W-2 form listing James Hagedorn’s income.
According to the W-2, James Hagedorn's gross pay from Scotts-Miracle Gro was $19.3 million in 2016, and his reported wages were $18.176 million.
Nassau officials say new properties are likely to come on the market.
An underutilized Navy gym at Mitchel Field in Uniondale will be turned into a youth sports center; and the current police evidence storage facility, also at Mitchel Field will become the county's first affordable apartment complex for veterans.
The historic George Sumner Kellogg house in Baldwin, which is being renovated, could be rented to the Baldwin Civic Association and the Baldwin Historical Society, which have expressed interest in renting the property, Fricchione said.
Any new properties will be part of Smith & DeGroat's portfolio, officials said.
NASSAU COUNTY HISTORIC PROPERTIES
The county's top revenue generating residential properties are:
• Sands Point Park & Preserve — Mille Fleurs: $9,000 a month
• Sands Point Park & Preserve — Captain's Quarters: $5,000 a month
• Jericho Historic Preserve-Cheshire House: $4,000 a month
• Tiffany Creek Preserve-Caretaker Unit: $4,000 a month
• Smithers Estate: $3,600 a month
Source: Nassau County Department of Parks, Recreation and Museums