PALM BEACH, Fla — After a Chicago-based securities firm set up a remote trading site inside a posh hotel in the town of Palm Beach, town officials questioned if zoning rules permitted the business operation, Contact 5 has learned.
In April, Contact 5 reported Citadel Securities rented out the Four Seasons in Palm Beach, flying in about two dozen employees from Chicago and New York. The Chicago-based securities company says it trades over 20 percent of U.S. daily equities, or about one in every five shares.
Now, emails obtained by Contact 5 show days after reports emerged of the temporary trading floor inside the five-star resort, town officials discussed whether such use was up to code.
Town attorney John Randolph wrote in an email April 6 that the issue "is whether a business such as that in issue is permitted in the zoning district in which it exists."
"It is not. It is prohibited," Randolph wrote in the email.
The acting director of planning, zoning, and building responded that "the town should notice the owner of the zoning code violation via a notice of violation from code enforcement."
"The underlying issue is the issue of public health," said Bill Titelman in an interview with Contact 5.
Titelman is the president of a condo association near the Four Seasons Palm Beach. In an interview from California, where he is currently residing under the state's stay-at-home order, Titelman told Contact 5 reports of the resort's guests alarmed his neighbors.
"An explanation wasn't provided to the community and the neighborhood as to the precautions being taken to protect their health," Titelman said, adding he felt it "was quite surprising and disturbing."
The Four Seasons told Contact 5 in April they had "undertaken additional and extensive precautionary measures to ensure the health, safety and well-being of everyone at the Resort." Citadel Securities said all employees and hotel employees were staying on-site.
On April 14, the town of Palm Beach sent a letter to the owners of the Four Seasons.
Citing news reports, the town wrote that while they did not have "direct knowledge as to how the Four Seasons Resort is being used today," local zoning code would not permit the hotel to be used as a remote trading site.
The letter noted if reports were correct, "the trading floor use is prohibited at the Four Seasons resort property."
The Four Seasons Resort Palm Beach sent a response to the town, writing in part that Citadel "have daily conferences with their employees who are staying at the Four Seasons."
"This activity is consistent with the activities of all of the hotel and conference facilities in Palm Beach, Florida when they hold business conferences."
When reached for comment, a spokesperson for the Four Seasons Resort Palm Beach referred Contact 5 back to the letter to the town.
However, a spokesperson for Citadel Securities denied any sort of conference was taking place. When reached by phone, the spokesperson told Contact 5 "it is not a conference."
"We're physically trading there," the Citadel Securities spokesperson said. "That's all it is."
A spokesperson for the Four Seasons Palm Beach declined a request from Contact 5 to go inside the resort and see what activities were actually taking place, saying "there's no in and out."
Contact 5 brought this information to the town of Palm Beach.
In an email, a town official told Contact 5 they were "continuing to explore our legal options in what is believed to be a zoning violation but at the moment we believe our options are limited at this time."
"We can’t enter into the facility without a warrant and the code enforcement has limited direct evidence to bring to the Code Enforcement Board," the town told Contact 5 in another email.
Titelman told Contact 5, "apparently, there’s no will on the part of the town to do something about this and that’s a dangerous precedent."
"The underlying matter that makes the enforcement of the zoning so important is the protection of the public health," said Titelman.