Directors of a Bahama Village housing organization hope Key West city officials will separate two distinct issues when deciding whether to lease 6.6 acres of the Truman Waterfront to the group for $1 a year.

The Bahama Conch Community Land Trust (BCCLT) has plans to develop the property into affordable housing and retail shops, but only if the City Commission approves a 99-year lease.

But questions remain about the trust's financial management, and the city is conducting an in-depth audit of the organization that examines its financial paperwork, record-keeping and expenditures for the past decade.

"We need to separate the audit from the lease issue," said Bob Kelly, a trust board member. "We wanted to have the lease agreement scheduled for the commission because the board's thinking is that it will take far too long for the city to carry out the audit, and we don't want to miss any deadlines for funding applications for opportunities at the waterfront."

Kelly acknowledged the separation may be difficult, but it has to be done. Commissioner Teri Johnston agrees.

"I would hope, as a body, we'd be able to separate the two issues," she said Wednesday. "I had hoped that the audit would be completed within 30 days, and that the issue would be taken care of, but that's not the case. I have high hopes that we can move forward with a discussion about the lease."

Johnston wants the commission to evaluate the trust lease using the same criteria it did with the assisted-living facility that also is using space at Truman Waterfront, but said she has some concerns about whether the trust would be able to sublease parts of the land and thus make a profit from city-owned property.

"That's something that will have to be looked at carefully," said Johnston, who said she had not taken a close look at the proposed lease as of Wednesday afternoon.

Commissioner Bill Verge had the same concerns about subleasing, and acknowledged he has lingering concerns about the group's financial soundness.

"I still don't know how I'll vote, but I'll also have to get some advice from the city attorney," he said.

Mayor Morgan McPherson was not at all undecided. He said he never was planning to vote in favor of the lease, calling it a "money grab by the BCCLT."

"The lease is totally contrary to what the voters agreed to," McPherson said Wednesday. "It allows the BCCLT to make money while allowing a private developer to basically own or manage the land, and the BCCLT gets lease payments or management fees, and I do not believe for an instant that that's what the voters approved."

Two years ago, Key West voters gave the City Commission the authority to negotiate a 99-year lease with the trust. The matter had to go before the electorate because city law requires voters to approve any lease longer than 20 years.

McPherson consistently has made known his distrust of the trust and its Executive Director Norma Jean Sawyer.

Kelly acknowledged the mayor's sentiments, and said he hoped the commission would view the organization as a whole "because I think the mayor's antipathy is toward Norma Jean as an individual," he said. "The board is taking ahold of this, and we don't want it just to be about Norma Jean."

Commissioner Mark Rossi also had some concerns about the proposed lease and about the organization's finances, but on Wednesday remained undecided about how he would vote on the lease.

The commission meets at 6 p.m. Tuesday in Old City Hall, 510 Greene St.

mbolen@keysnews.com