Forrest Lake: crook or visionary?

The real estate bust hit Sanford hard. With the economy in a global meltdown, city leaders had to renege on public works improvements they promised would help reshape Sanford’s image.

To make matters worse, the city of Sanford was broke.

If you don’t remember how bad it was, it’s because few of us were here in 1927 when it happened. Compared to 88 years ago, Sanford weathered the most recent financial crisis relatively painless.

The 1920s were a heady time in Sanford. Real estate – always the economic drug of choice in Florida – was generating fortunes. Vacant lots in undeveloped Mayfair, east of downtown, were selling for as much as $15,000 an acre – calculating for inflation, that’s about $205,000 in 2015. Property in the downtown commercial district was bringing $2,500 per frontage foot.

Skyrocketing land values barely discouraged those who wanted to get in on the action. The Seminole County Bank, founded by Forrest Lake, offered easy terms. In fact, Lake was offering loans to anyone who would take them.

Lake wasn’t just any banker. He was also the mayor of Sanford and the city’s biggest cheerleader. First elected in 1893, Lake served as mayor for 11 terms over the next 34 years.

When he wasn’t serving as mayor, Lake represented the region for two terms in the Florida House of Representatives, during which time he was responsible, almost single-handedly, for chopping off the northern section of Orange County and creating Seminole County in 1913.

Lake had always been a big booster of Sanford. During his time in office, the first street-paving projects began, a new city hall was built, a seawall along Lake Monroe was constructed, a golf course was laid out west of the city and a bandshell was erected on the lakefront.

Click to enlarge. The Hotel Forrest Lake, viewed from 1st Street.
Click to enlarge. The Hotel Forrest Lake, viewed from 1st Street.

Lake was as enthusiastic about private development as he was about public improvements. He loaned money for developments big and small. Never one to let an opportunity pass, Lake jumped into the development game himself buying land, building subdivisions and constructing his own Taj Mahal, the Hotel Forrest Lake.

Today, we know the building by a number of names – the Mayfair Hotel, Sanford Naval Academy or the former headquarters of New Tribes Mission. When it opened in 1925 it was one of the finest hotels in the state. It cost $500,000 to build, had 158 rooms — each with a private bath — a 3,500-square-foot ballroom and two 2,500-square-foot dining rooms.

By 1927, the real estate boom was grinding to a halt, and banks across the state were beginning to close. Had Lake been just a banker, the bust would have sank his bank, and perhaps the city of Sanford’s fate would have been no worse than most other Florida cities. But Lake and Sanford were as intertwined as skunk vine around a camellia bush.

For starters, Lake had saddled the city with $5 million in debt over a 10-year period to finance all of the public improvements. The money had been raised through bond sales, the proceeds of which were deposited, unsecured, in Lake’s bank. A few strong-willed citizens had questioned this arrangement, but they were labeled as non-believers in Sanford’s economic potential.

By the summer of 1927, the ranks of the non-believers began to grow. The city had a $247,000 principle and interest payment due to bond holders on July 1. What few knew at the time was that the city had just $80,703.65 in its account at Seminole County Bank, Lake’s bank.

Forrest Lake
Forrest Lake

To make the payment, Lake convinced the state legislature to allow the city to take on even more debt by selling $170,000 worth of bonds. While in New York to sell the certificates, Lake also sold $500,000 worth of bonds, ostensively for the purpose of extending the seawall and building a new fire station.

Almost immediately questions began to be raised. First, Lake claimed to have personally guaranteed the bonds and certificates so the New York financiers would issue the notes, a claim local businessmen found suspicious.

Second, Lake asserted he sold the notes for 95 cents on the dollar, meaning investors would earn 5 percent interest. But word trickled back from New York that the notes sold for less than 90 cents on the dollar.

Furthermore, there were questions about what was happening to all of the bond money. The year before, in the fall of 1926, Lake travelled to New York to sell $1.575 million worth of bonds, yet projects like a new hospital and swimming pool had yet to begin.

Throughout July of 1927, Sanford Herald Editor Rolland Dean and the Taxpayer’s League, led by businessman D.L Thrasher and attorney George Herring, undertook a relentless campaign to find out answers. Despite front-page stories and full-page ads, few answers emerged. City ledgers were stored at Lake’s bank and neither Lake nor bank vice president A.R. Key would release the records.

Thrasher and the Taxpayer’s League had been suspicious of Lake’s freewheeling style for some time. In 1921, Lake had convinced the citizens to adopt a city manager form of government and reduce the city commission from seven members to three. Since Lake was one of the three, Thrasher believed the smaller commission was too easy for Lake to manipulate.

As questions about the bond sales continued throughout July, The Taxpayer’s League was gearing up for an Aug. 5 referendum asking citizens to expand the city commission from three members to five and to require the commission to establish and adhere to an annual budget. A rally one week before the election drew 2,500 people to City Hall.

With that much support, it was apparent the Taxpayer’s League would easily prevail.

It didn’t.

In 1927, only landowners could vote. The ledger book at Lake’s bank was full of men who had received loans with little or no collateral. A courtesy call by Lake-the-Banker to check up on those outstanding debts was a powerful tool in persuading folks to see things from Lake-the-Mayor’s point of view.

When the votes were tallied, the referendum items failed. Lake’s supporters held a boisterous celebration, and at one point threatened to burn down the Sanford Herald office (located in the former Marco Dino’s restaurant – now the Smilng Bison restaurant – on the east side of Magnolia Square) in retaliation for Dean’s muckraking.

It was Lake’s last triumph.

The next day, Aug. 6, Lake’s bank did not open for business — and it never would. That afternoon Lake submitted his resignation as mayor and left town for Philadelphia, where his wife had travelled to seek medical treatment for cancer.

By Aug. 9, city leaders were facing the harsh reality — Sanford was broke. An audit of the city’s finances was ordered to tally the losses. Those city employees who were not laid off saw their salaries slashed nearly 20 percent. Concerts at the bandshell were cancelled and the golf course was closed. Property taxes were raised by 150 percent.

Rumors swirled about where the money had gone. Some said Lake hid the money in out-of-state banks. Others claimed to have seen trunks of cash being moved during the dead of night out of the Lake home at the southeast corner of Park Avenue and 6th Street.

Cash was missing, including $5,700 in $50 bills, but there wasn’t really much mystery as to where the hundreds of thousands of dollars had gone. Lake had used city funds as collateral to loan money for real estate deals for himself and others.

Lake did return to Sanford after his wife died, and his lawyers put up a vigorous defense to dozens of charges during the course of five trials.

In the spring of 1928, prosecutors proved Lake had swiped $553,000 in deposits from the bank. He was also found guilty of fraudulently issuing $1.3 million in city bonds.

Lake was sentenced to 16 years hard labor at the penitentiary in Raiford, but evidence of his shenanigans continued to be uncovered. The numerous appeals Lake filed included an argument that the grand jury had been incorrectly selected.

In those days, a pool of 500 potential jurors was selected each year. At the end of the year, all the names, including those who had not served jury duty, were removed from the pool, and 500 new names were selected to create the jury pool for the coming year.

Except in 1928. That year the the pool included 770 names because a clerk failed to remove the names of the 270 men who had not served jury duty the previous year. It was that simple to taint a jury pool in 1928.

To be sure, it was a technicality and certainly did nothing to invalidate the mountain of evidence against Lake, which included testimony by A.R. Key, Lake’s right-hand man at the bank. But if you’re the most powerful man in the county – a county that you created – and you’re 59 years old facing 16 years of hard labor in the state penitentiary, you argue every technicality in the book. There is no hard proof that Lake had a hand in creating the tainted jury pool, but there are no credible alternative theories.

The Florida Supreme Court overturned all but a single conviction, which carried a 3-year sentence. Lake tried to get even that conviction thrown out by arguing he was insane and therefore not responsible for his actions. It didn’t work.

Lake began serving his sentence in 1931.

There are mixed thoughts about Lake today. Clearly the man was a crook. Yet, without Lake, Sanford’s waterfront and downtown would look different today: there would be no seawall holding back Lake Monroe, no Mayfair Hotel and no golf course. Some of the downtown commercial buildings his bank funded might not have been built, or might have been built differently.

And if not for Lake, Sanford would be playing second fiddle to Orlando as part of Orange County, instead of being the county seat of Seminole County.

Lake returned to Sanford after his prison stint in Raiford. Naturally, his return was not greeted with a marching band. Prior to prison, the Sunday School class he taught was the single largest weekly gathering of Seminole County’s leading (male) citizens. Afterwards Lake was shunned in public.

It’s rumored that Lake sifted through garbage in the alleys behind the Victorian homes where he was once an honored guest, and that his beloved Cuban cigars were replaced with various butts he scavenged along the streets.

He died in 1939 and was buried in the city cemetery off West 25th Street. At the time of his death, Lake was already being erased from history. Hotel Forrest Lake was renamed Mayfair Hotel, and only the most uncouth Sanford citizens dared to say his name in public.

By the time the city of Sanford paid off all of Lake’s debt in 1971, the United States had won a second world war, six men had served as president and daredevils out at the Cape were riding rockets for trips to the moon and back.

Sanford native David Doudney remembers being a teenager when his dad remarked at the supper table, “Well, the city just paid off the last of the Lake bonds today.”

Even paying off the bonds could not whitewash stain of Lake’s name. In 1976, when the Sanford Chamber of Commerce published a retrospective of the city’s entire history, the man who served 11 terms as mayor, two terms in the Florida House and created Seminole County was never mentioned. Not once.

That’s why I found it perversely amusing how the development company that created the gated community on State Road 46 just west of Interstate 4 tried to divorce its neighborhood from the city of Sanford. Although every house has a Sanford address, the promotional material always referred to the community as being located in the fictional city of “Lake Forest, Fla.”

I guess they didn’t know that polite people in Sanford are still hesitant to use any combination of the words “Forrest” and “Lake.”

– by Dan Ping



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