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4/25/02 - Miami Today News

Trade zone battle stalls Wynwood redevelopment

By Paola Iuspa

A legal battle between the City of Miami, an economic development agency and a builder is keeping a warehouse and office complex in Wynwood vacant, stalling the creation of new jobs and redevelopment of the neighborhood.

Wynwood Community Economic Development Corp. got a federal permit in 1991 to run a foreign-free trade zone in the economically depressed area north of downtown Miami. Through a joint venture with Dade Foreign Trade Zone, a for-profit real estate group, the partnership built a $6-million complex.

But the interior of the building was not completed in 1996 when the shell was finished because the group ran out of money when the city failed to provide promised funds, said Robert A. Stok, lawyer for the Dade Foreign Trade Zone.

Wynwood Community Economic Development and Dade Foreign Trade Zone are suing the city in state and federal court for the $4.5 million loan to finish the building's interior. The economic group also filed a lawsuit for the property's title.

Simultaneously, the city is trying to foreclose on the 5-year-old building at 2235 NW Fifth Ave. Miami city attorneyAlex Vilarello said Dade Foreign Trade Zone failed to repay a construction loan for $5.5 million that the city issued in the early 1990s.

Amid these disputes, the 150,000-square-foot complex sits unfinished and idle. Developers and representatives of the film, auto parts and high-tech industries have approached city officials about leasing or buying the building. But the city can't lease or sell with the lawsuit pending, said Carlos Gimenez, city manager.

"The court will decide who gets to keep the property," Mr. Gimenez said.

Cheryl Ziegler, director of housing and community development at the National Office of the Lawyers Committee for Civil Rights Under Law, who represents Wynwood Community Economic Development, said a state court is set to rule on the lawsuit in June. Dade Foreign Trade Zone has joined the Wynwood Community Economic Development Corp. complaint, Mr. Stok said.

"We are hopeful the issues are going to be resolved in the next two months," Ms. Ziegler said. "And my client will be able to go ahead with its plans. Wynwood Community Economic Development will keep the funds, the property and move forward."

The economic development corporation claims the city did not transfer the title of the property or disperse the $4.5 million - as established in a 1995 settlement agreement - in order to prevent the groups from opening the free zone, according to the complaint. The Wynwood Community Economic Development lawsuit accuses the city of discriminating against the group's Puerto Rican origin, according to the complaint.

Wynwood Community Economic Development first sued the city in 1994 on discrimination charges as well. That suit was settled in 1995 and called for the city to transfer the property title to Wynwood Community and lend the $4.5 million.

Mr. Villarelo rejected the ongoing discrimination charges and said the city is simply trying to collect the $5.5 million the developer owes.

If the court does not rule in favor of the economic development agency, Ms. Ziegler said, her client would proceed with a similar civil rights suit scheduled for May 2003 in federal court.

In the meantime, many agree that occupancy of the site could expedite the transformation of the emerging community, which is west of the FEC railroad tracks, east of I-95, south of I-195 and north of Northwest 20th Street.

"This property is a mayor piece of the puzzle to redevelop Wynwood," said Christine Morales, administrator with the Neighborhood Enhancement Team, a Miami satellite office overseeing the neighborhood's police and maintenance. "The vacant building is attracting vagrant activity."

William Rios, the executive director of the Wynwood Community Economic Development, said his group decided in the late 1980s to create a free zone in Wynwood to bring jobs and revitalize the area. In 1991, he said he applied and received a license to operate a foreign-trade zone, which is an area close to a US port of entry in which imported merchandise is handled and manufactured without being subject to customs laws. Dade Foreign Trade Zone was to build, occupy and sublease the complex, Mr. Stok said.

Designed to employ 1,000 neighbors and train them in international trade, the free zone has never been able to get off the ground. Mr. Stok said his client, who had a temporary office at that site from 1996-2000, said he was unable to sublease the 140,000 square feet of warehouse and 10,000 square feet of office space. He said the building lacks bathrooms and wall partitions.

In 2000, Wynwood Community evicted Dade Foreign Trade for not paying rent, Mr. Stok said. Dade Foreign Trade Zone is now suing Wynwood Community Economic Development to recoup the $6 million it invested in construction and $5 million in losses, Mr. Stok said.

"My client was waiting for the city to provide HUD funds to complete the interior of the building," he said. Wynwood Community Economic Development "kicked my client out because it could not afford to pay rent. The only way for my client to pay the loan back and rent was to sub-lease the space and have revenues."