Scientology's Town

As Scientologists launch unprecedented expansion, downtown Clearwater's identity is at stake.

St. Petersburg Times/July 18, 2004
By Robert Farley

Clearwater -- The room is packed with computer consultants, real estate agents, home financing professionals, Web site designers, accountants, hairstylists, artists, interior designers.

All based in Clearwater. All Scientologists.

Guest speaker Mark DeEulio bursts in.

"How are you doing?" he booms.

"Great!" comes an enthusiastic chorus.

"Who could use more money?" DeEulio teases.

Without pause, he launches into the basics of financial planning - as taught by Scientology founder L. Ron Hubbard.

It is the weekly meeting of the Clearwater chapter of the World Institute of Scientology Enterprises, business people using Hubbard's business techniques. Akin to a chamber of commerce for Scientologists, WISE members network, recruit employees, share business tips and hear lectures on topics such as marketing.

And they refine ideas for new businesses for downtown Clearwater.

For Scientologists, opening a business is "just as natural . . . as taking a shower and putting their shoes on," said WISE's Tampa Bay area president, Bud Reichel.

In Clearwater, the shoes fit especially well.

Scientologists now own more than 200 shops, restaurants, service outlets and small businesses in and around Clearwater's downtown. Many employ fellow Scientologists. WISE's Clearwater membership stands at 687, more than triple what it was five years ago.

More growth is coming. Scientologists will open twice as many businesses in the next five years, Reichel predicts. As many as 900 condos and townhouses are to be developed downtown, mostly by Scientologists.

A group of Scientologists from Mexico plans a project that could bring hundreds of condos to prime downtown property bought last year for $9.8-million.

Just two blocks away, a Scientologist will break ground this summer on a 146-unit, 15-story condo tower. Church members also will build dozens of townhomes downtown.

For Clearwater, it's an unprecedented wave of private-sector investment by entrepreneurial Scientologists. And it's taking root alongside the numerous high-profile properties of the expansion-minded Church of Scientology, which since 1976 has made Clearwater its worldwide spiritual headquarters.

Already the largest property owner downtown, the church next year will open its $50-million Flag Building, sitting on a full city block across from the church's Clearwater icon, the Fort Harrison Hotel.

About 6,850 Scientology followers have moved to the Clearwater area, joining the church's 1,400 uniformed employees. It's a community that has grown 20 percent per year in the past decade, according to church tallies.

Business expansion. New housing. Population growth. Scientologists have emerged as leading stakeholders in a tired downtown.

After 28 years, Scientologists are on the brink of creating what amounts to a Scientology city in Clearwater's downtown core.

'It's their town'

Church officials scoff at the suggestion that they have a formal plan to dominate Clearwater. They insist they want diversity.

"I don't see any shift in balance," said church spokesman Ben Shaw. He called the church's growth natural.

As for Scientology overwhelming the downtown mix, Shaw said, "I don't know that that will happen any time in the near future."

But Scientologists don't plan to slow down, Shaw said.

In a series of rare interviews, Scientologists spoke candidly, and excitedly, with the St. Petersburg Times about their business plans and how other church members, drawn by a new comfort level in Clearwater, will expand the Scientology community.

"You can't separate Salt Lake City and the Mormons, and you can't separate Clearwater and Scientology," said Ray Cassano, a Scientologist whose 146-unit downtown condo tower will rise next door to the historic post office. "We may be a bigger presence here because Clearwater is a smaller city."

Many agree.

"It's their town," said lawyer Lou Kwall, whose downtown office afforded a front row seat to watch the church evolve through the decades. "The reality is Scientology is much more in charge of downtown Clearwater than anyone ever anticipated it would be."

Here's the critical question, Kwall said: "Are people like me going to stay in downtown Clearwater or will they be run off by an overwhelming number of Scientologists?" Kwall, for one, says he's staying.

Also critical is Clearwater's bridge to the beach. Once the new Memorial Causeway is finished, it will divert traffic from the commercial core. Many see downtown heading in one of two directions. It could ride the wave of New Urbanism and become another Hyde Park, or it could become a Scientology campus.

"We'll have Clearwater Beach, Scientology City and Countryside," said Pinellas County Commissioner Susan Latvala. She is one of a growing number of politicians who are friendly to the church, but a one-dimensional downtown, she says, is "not a good mix."

A Scientology identity would dismay many in Clearwater, where a crush of uniformed church staffers walk the streets and often are targets of whispers and jokes. The church's own research last year determined that many in Pinellas consider Scientology a cult, mysterious and secretive. Most also said they know little about the church, other than John Travolta is a member.

In Clearwater, branding someone a Scientologist is "how people in the old guard of the city slander you," says Clearwater Mayor Brian Aungst. He and his wife at times have needed to fend off rumors that they are Scientologists.

Aungst, a public supporter of many church programs and efforts, thinks talk of a Scientology-dominated downtown is overblown.

"If the church wanted to be dominant, they could buy the whole city up right now," Aungst said. "They're not that stupid. If they try to make this L. Ron Hubbard Town with some kind of a big theme, it'll be a disaster. And they know that, because people will not accept that."

An architect signs on

Clearwater architect Steve Klar doesn't know how they got his name, but a few years ago church officials called to see if he was interested in designing an expansion of Scientology's waterfront Sandcastle retreat, which offers advanced church counseling.

What would people think if he took the job?

At the first meeting with church officials, he took the direct approach.

"I'm nervous about this," he told them. "Quite frankly, your PR sucks. If I believe everything I read in the newspaper, I shouldn't be here."

He ran through a list of questions. They patiently answered.

Then they had questions for him.

"Any of your employees have a DUI? Any of them have a drug habit? Can I have your driver's license number to run a background check on you?"

Klar took the job, and has since developed a good working relationship. He is the architect of record for the massive new Flag Building.

Having lived and worked in downtown Clearwater for 20 years, Klar says it comes down to this: "Today, if you are downtown, who else are you going to work for?"

1,000 a year follow Flag

Aside from the few shops selling Hubbard texts and those with his likeness on the walls, businesses owned by Scientologists look like any other.

But in the heart of downtown - the four blocks of Cleveland Street, between Osceola and Myrtle avenues - 25 percent of the 106 licensed businesses are owned by Scientologists, according to WISE. Dozens of other Scientologist-owned (and property tax-paying) businesses are within walking distance.

That roster of commercial activity, along with the church's many properties and functions, creates an economic engine producing financial opportunities for Scientologists and non-Scientologists alike.

Scientologist Dwight Matheny's ArtGlass Studios on Missouri Avenue has eight employees; half are Scientologists. He moved to Clearwater from Atlanta eight years ago to be closer to Flag, shorthand for "Flag Service Organization," the church's official name in Clearwater.

Every year, almost 1,000 Scientologists make the same decision. They find a community with Scientology schools, business groups and charities, Boy Scout troops and running clubs.

"People are more comfortable associating with people who have similar interests," said Matheny, 50. "There's a whole (Scientology) community here."

Matheny took a pioneering step for Scientology when downtown property owners elected him to the Downtown Development Board, which promotes a more vibrant and active downtown. He is now chairman of the seven-member board.

Scientologists are members of 98 civic organizations and clubs, church representatives proudly point out.

Matheny grew his business using Hubbard's business principles, which address everything from employee relations to customer service and management. Hubbard preached exhaustive market research, and Scientologists constantly survey customers about wants and needs. A Scientologist business owner also will display charts of staffer performance. On a wall of Matheny's shop is a Hubbard-conceived business organizational chart - complete with titles, responsibilities, department and overall goals.

He echoes the call for a diverse business mix downtown. But if non-Scientologists don't step forward, Matheny said, downtown surely will become more Scientology-influenced by default.

The business environment for Scientologists has improved, Matheny said, because the city government and civic leaders softened their attitudes toward the church.

Not long ago, he said, "the city wanted nothing to do with the church, and the church wanted nothing to do with the city."

From the beginning, Clearwater had a strained relationship with the mysterious and sometimes feared Scientologists. In late 1975, the church covertly bought the then-vacant Fort Harrison Hotel under an assumed name. Then, in 1977, church documents seized by the FBI in Washington and Los Angeles revealed a plan to "take control" of Clearwater.

Scientology officials also had plotted, the documents showed, to discredit their Clearwater "enemies" - political figures, local police and newspaper editors and reporters.

In 1982, the city government held hearings to explore allegations that the church was a cult. The church cried "witch hunt."

The hearings led to a city ordinance regulating solicitations by charities, but the courts later tossed it out, saying it showed "a widespread political movement . . . intent on driving Scientology from Clearwater."

The 1995 death of Scientologist Lisa McPherson, who in her last 17 days was cared for by church staffers, again put the church on the defensive. Criminal charges were pursued against the church but were later dropped. A much-publicized wrongful-death suit made headlines for seven years until it was settled in May.

Until just a few years ago, city police routinely gave new city officials two-hour briefings summarizing its 14-year investigation into the church, which resulted in no charges.

The healing power of time, plus many community efforts by Scientologists, have made relationships with City Hall and numerous politicians comfortable.

But that feeling has not carried through to the general population.

"They don't know that (the stereotype) has been burst," Matheny said. "The question is: When does the public find out, now or 10 years from now?"

One of the fruits of the church's working relationship with the city sits at Fort Harrison Avenue and Cleveland Street: Starbucks.

One of the few national chains with an outlet downtown, Starbucks was recruited by a tag team of church and city officials. The deal was sealed once the church agreed that Starbucks could sell coffee at the Fort Harrison Hotel. Starbucks opened, to much fanfare, in a building owned by a Scientologist.

Increasingly, downtown business people appreciate Scientology's catalytic efforts.

"If they moved out, this place would be a ghost town," said Traci Walters, owner of Oceans Funding.

Instead of ignoring Scientologists, as many tried to do for decades, Walters courted them. She advertised in a shopper popular with believers. And she made a point to hire a Scientologist. At one point, most of her business consisted of Scientologists who were getting mortgages or refinancing them.

Walters has this message: "Get on the bandwagon!"

Many have.

Parachute into some Scientologist-owned companies - from health stores to call centers to computer software firms - and you will find non-Scientologists working for Scientologists.

Richard Ghazarian's New Port Richey neighbors gasped when he took a job at Event Management Services, a downtown Clearwater ad agency owned by Scientologists and run according to Hubbard business principles.

Working according to Hubbard's teachings has its quirks. Office walls are lined with graphs and charts tracking daily and weekly progress.

No one, he said, has tried to convert him.

"What's the big deal?" Ghazarian told his neighbors. "They put on their clothes the same way I do. There are no secret meetings with hoods."

The housing juggernaut

Elias Jafif made a fortune in Mexico developing shopping centers and upscale golf communities. His Casa Club Bosquereal is a small city - 10,000 homes and, he boasts, the biggest clubhouse in the world.

The grandson of a Lebanese Jew, Jafif was born into one of Mexico City's industrial families, manufacturers of textiles, shoes and lingerie. He became a Scientologist as a young man after hearing about it from his then-girlfriend.

His first trip to Clearwater was in 1977. Downtown seemed in decline. Spooky even. His most lasting memory is of mannequins without wigs in aging downtown store windows.

Now, Jafif, 50, views it as a place to spend millions. Last year, he and his investment partners, all Scientologists, snapped up downtown Clearwater's nine-story AmSouth Bank building and 3 surrounding acres.

A part-time Clearwater resident, he bought the property to build condos. While still on the drawing board, his project could be the biggest in Clearwater history.

It is one of six substantial housing projects proposed for downtown by entrepreneurial Scientologists.

This club of developers will create hundreds of dwelling units in a range of prices. Many of their buyers, most of them acknowledge, will be Scientologists.

Jafif said his condos, with first floor retail, will be high end with Mediterranean Revival architecture.

Less pricey will be the condos being built just down Cleveland Street by Ray Cassano and partners. It will be the first major development in years to bring residents with disposable income to downtown. Units will go for $200,000 to $499,000.

In an ironic twist, the same city government that years ago was cold to Scientologists now is assisting Cassano. The city is selling him a parking lot and agreeing to pay him a higher price later in exchange for Cassano building public parking.

"It used to be we just got along," Cassano said of the city and Scientologists. "Now we're friends."

So far, Scientologists have reserved about a quarter of his units, he said.

On downtown's eastern flank, Bud Reichel, the WISE president, is part of a development group building 47 lofts. Price tag: $229,000 to $251,000. Scientologists are a prime target market, Reichel said.

Next door, Scientologist William Lazarony recently opened his 18-unit Laura Street Townhomes, the first townhouse complex downtown. He said it is "irrelevant" how many were purchased by Scientologists.

On downtown's northern edge, Scientologists plan two more projects. Ben Kugler has filed plans for 24 units immediately north of Scientology's Osceola Inn, a cushy lodge for visiting Scientologists. Gerald Ellenburg, the Starbucks landlord, talks of building a $20-million condominium tower with 25 units just north of the church's Sandcastle religious retreat.

Only one downtown housing project is being built by a non-Scientologist. Sarasota developer Bruce Balk completed 15 of 100 planned units before encountering delays.

Clearwater power broker Lee Arnold, chief executive of Colliers Arnold real estate, says he intends to build a high-rise on land he owns next to Jafif's project, but has submitted no plans to the city.

The impending housing boom, certain to attract more Scientologists, likely translates into more dollars for church coffers, and the community as a whole.

Scientologists do not tithe, but they pay for services. "Donations" for some introductory courses start at $35, but a two-year training program can cost $22,000. "Auditing" services range from $200 for a week of beginning Dianetics to thousands for the most advanced sessions.

In their daily lives, Scientologists often seek out other Scientologists, whether shopping for a haircut or a house. But they also spend money with non-Scientologists.

A St. Louis consultant estimated that Scientologists spend $80.5-million locally each year. Scientologists' median household income was found to be $58,000, 64 percent higher than the Clearwater area.

One handsome portfolio

The church owns 21 buildings and about a dozen vacant lots in Clearwater, a portfolio valued for tax purposes at $46-million. It's in the midst of an unprecedented $160-million spending spree downtown.

The crown jewel will be its Mediterranean Revival Flag Building, nearly finished on the outside but still raw inside and more than a year away from occupancy.

It will feature a ground-floor Scientology museum open to the public. On upper floors will be 300 rooms for Scientology's core practice of auditing. A dining hall with seating for 1,140 and two full kitchens will be in the basement.

To staff it, the church will bring to Clearwater 1,200 more members of its loyal Sea Org, the group who dedicate their lives to church service, wear uniforms and live in church housing.

Some of that extra staff will move into the 13-story Oak Cove apartments, just a few steps west of the Fort Harrison Hotel. The church bought it in late 2001 for $5-million and will spend $1.5-million renovating it this year.

Most Sea Org members live in the Hacienda Gardens apartments on N Saturn Avenue about 3 miles from downtown. They are shuttled to the church's downtown properties daily by full-sized buses emblazoned in big letters: Flag.

Scientology's 10 Flag buses and eight cargo-sized vans circle downtown streets daily. The busy fleet achieves an overwhelming presence.

But soon, Scientology will have an even larger profile.

This year, the church says, it will begin building a $3.5-million, three-level parking garage southeast of the Flag Building. It will sit just north of the church's $4-million power plant, built in the same Mediterranean Revival style.

Major renovations also are to begin on the Fort Harrison, which will get two redecorated restaurants and a conference center available to the public.

Then another major project will launch: a $40-million auditorium seating 3,600 on church-owned land immediately south of the Flag Building.

That cluster - the Flag Building, Fort Harrison, auditorium, staff high-rise and parking garage - if it's all built, will give Scientology a multiblock campus immediately north and east of the Pinellas County Courthouse.

The church paid property taxes of $605,488 last year, making it downtown's largest taxpayer, even with about two-thirds of its holdings tax exempt. Church property used for religious purposes, such as counseling, is tax exempt. Properties or portions of properties not used for religious purposes, such as restaurants and hotel rooms, are taxed.

When Scientology opens its immense Flag Building, it largely will be off the tax rolls. But the Fort Harrison then will be converted fully to a hotel and will be taxed.

William Miller, a professor at the University of Utah College of Architecture & Planning, has seen the psychological impact of Mormon buildings in Salt Lake City.

Massive buildings awe and intimidate, he said. Religions build them to convey power and impact.

Scientology's Flag Building "is a direct reflection of where the church is now and where it sees itself going," he said. "It's a reflection of their growing position in the world."

Many other sight lines in downtown Clearwater already are filled by properties and ventures owned by Scientologists.

Consider downtown's prime intersection, Fort Harrison Avenue and Cleveland Street.

It's Scientology on nearly every corner.

The two-story Weisman building, built in 1926 and renovated in 2000 by Scientologist Gerald Ellenburg, is home to Starbucks.

Across the street are two church properties, both former Clearwater institutions. The five-story Coachman building, dating from 1917, is a Scientology training center. The venerable Bank of Clearwater, the city's oldest bank, is church meeting rooms and a cafeteria. Screens cover street-level windows of both buildings, preventing passers-by from seeing inside.

The Scientology brand also is associated with a dozen downtown church offshoots such as Criminon, for former criminals, and the activist Citizens Commission on Human Rights. A handful of private schools using Hubbard educational techniques are near downtown, offering preschool through 12th grade.

"Architecturally, if you look down the hill onto the downtown from Court Street at Greenwood Avenue west," said Mike Sanders, Clearwater's leading historian, "today's skyline is dominated by Scientology buildings."

Some feel squeezed.

"As time goes on, I feel more and more surrounded," said the Rev. Max Sigman of Peace Memorial Presbyterian Church, next door to the Fort Harrison.

Leaders of Calvary Baptist Church say Scientology's purchases boxed them in.

"I am concerned that Clearwater, Fla., has become synonymous with being a mecca for Scientologists," said Jim Underwood, a deacon at Calvary Baptist, which is moving after more than 100 years from its downtown home to eastern Clearwater.

"Salt Lake City is the center of the universe for Mormons. That's what Clearwater has become for Scientologists," Underwood said. "As far as overall impact, I don't think it provides a healthy environment for businesses or tourists or the community at large."

A Scientology publication once listed a church goal for 2000 as: "Clearwater known as the first Scientology city in the world."

Church members and officials interviewed for this story insist they never heard of such a goal, or any plans to achieve it.

Flag's aim has never been to develop a large community of believers in Clearwater, said Shaw, the church spokesman, but rather to act as the spiritual mecca where visitors can receive the highest levels of Scientology training. In fact, unlike in Tampa, where church staffers try to recruit strangers on the street, Flag has tried very little recruiting in Clearwater.

As a result, few locals have become members.

Randy Poletz is an exception.

Poletz is a Clearwater boy. Belcher Elementary. Clearwater High. He never knew what to make of the uniformed church employees who showed up in his hometown. Odd, for sure, he said.

His opinion changed when he served with Scientologist Bennetta Slaughter as a board member for the city's annual Jazz Holiday.

"She was a bright, shining light," Poletz said. "She was cool. She was real and true with her emotions. She was not phony. She spoke of getting things done."

He approached her after a board meeting.

"I hear you're a Scientologist," he began. "I want to go to lunch sometime with you to talk about it."

They did lunch. And, in time, Poletz converted.

Poletz, 49, manager of a custom flooring store downtown, now spends lunch breaks taking Scientology courses and says they have improved his life.

Some of his longtime friends were afraid for him. But more and more, he finds, people no longer have a problem with it. In turn, he said, Clearwater is becoming a more attractive place for Scientologists to move to.

"In five years, I think you're going to see triple the amount of Scientologists here," Poletz said.

Downtown will sport more Scientology offshoots, he predicts, such as the Narconon drug program and the literacy effort Applied Scholastics.

"Scientology is going to be huge here."

Cold war thaws

The IRS's 1993 ruling that granted Scientology tax-exempt status was a turning point both for the church and for Clearwater. Scientology embarked on an ambitious capital campaign here.

"The late 1990s is when I really felt a change," said spokesman Shaw. "There was a willingness on the part of city people to talk with us about planning issues and to accept our contributions."

City attorney Pam Akin credits the thawing to a series of meetings between Los Angeles-based church leader David Miscavige and former City Manager Mike Roberto.

"We really had a very hostile kind of environment," Akin said, describing it this way: "How can we ignore them and make them go away?"

Roberto, who declined to be interviewed, enlisted the church as a partner in downtown improvement efforts.

"I think it was an airing that needed to happen," Akin said. "To me it's just the gradual normalizing of relationships over time."

Lips are sealed

It doesn't happen often anymore: someone with power speaking out against Scientology.

Former City Council member Whitney Gray tried it last year and learned a difficult lesson.

The Times quoted Gray, who disapproved of the church sending brochures promoting downtown to national retailers. "If it looks to the public like the Church of Scientology is building downtown, people won't come," she said.

Soon, her phone started ringing.

Most callers, she said, were longtime residents who said, "Thank you for bringing up the subject."

But Scientologists called too. They told her: "You hurt my feelings. You set us back."

At the city's next meeting, Gray took the floor, her voice cracking. Her earlier comments, she said, were not her sentiments, but a summary of what she had heard from others.

When a reporter approached her afterward, Gray dissolved into tears.

Pressed for an explanation days later, Gray said only: "The situation is dicey enough. Comments like that don't help."

Watching, worrying

City Council members are in a bind.

They want to save a downtown that has circled the drain for decades. But voters have thwarted them in recent years and, perhaps unknowingly, made it easier for Scientologists to press forward.

The city's plan, sometimes indelicately called "solution by dilution," goes like this: Get voters to approve public improvements. Private development then will follow, making Scientology less defining.

But twice in three years, voters rejected city proposals.

City leaders are frustrated. And worried.

Council member Frank Hibbard, who hopes to be the next mayor, says he knows that many residents don't want to spend tax dollars downtown because it would benefit Scientologists. But, he adds, Clearwater can't afford to give up.

"The city's got to be the leader," he said. "The question is, where do our citizens want to go?"

Ironically, the voters' refusals appear to have created back-door opportunities for Scientologists.

Matheny, the owner of the stained glass shop, explains: "People who opposed the (2000 downtown improvement) referendum, they thought it would make it so Scientology was less in the downtown. The truth is, the opposite took place. It left the door open for anyone else who wanted to come into the downtown."

The door for Scientology could open even wider when the new Memorial Causeway Bridge to Clearwater Beach is completed.

It will route away from downtown the thousands of beachgoers who have idled along Cleveland for three-quarters of a century.

Will new developers be lured in after the traffic clears out?

Or will even more businesses give up and move out, leaving only Scientologists?

"The timing we have right now is probably the best opportunity we've had in 25 years for downtown redevelopment," Council member Hoyt Hamilton said. "The opportunity was probably available years ago but was not seized, so I think the window has presented itself again.

"If we miss the window this time, it may not come back."

Hibbard's view is just as urgent: "There's a good chance it will turn around. But there's also a chance it won't."

Into the vacuum

WISE's Reichel has lived in Korea, Japan, Russia, Saudi Arabia and Italy.

He moved to Clearwater five years ago to be near Flag. He decided it would be the last stop on his life's world tour, even though he thought it a "sad" place.

Now, he sees opportunity. He's a man on a mission: to see Clearwater become the envy of other cities.

Right now, it's a "vacuum of serious magnitude," Reichel said. Soon, investors will capitalize. Many will be Scientologists.

Following Hubbard's business formula, they will conceive ideas, survey to confirm the market, then pull the trigger.

"We are impelled to do it," Reichel said. "We know how."

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