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Miami Herald - 6/11/02

HUD puts out order for freeze on City of Miami Land Acquisition Funding

By Oscar Corral

The U.S. Department of Housing and Urban Development has ordered the city of Miami to freeze $10 million in federal funding, destined for land acquisition and infrastructure projects, because the city has failed to comply with environmental regulations.

The agency also scolded city officials for failing to keep environmental records, saying they ``violated compliance with numerous federal laws.''

The announcement was made in a May 23 letter sent to City Manager Carlos Gimenez. HUD based its assessments on an April inspection of the city's Community Development Department by environmental specialist Linda Poythress. She decided that Community Development had ignored HUD's warnings from last year that they were not in compliance with environmental requirements.

''Despite the technical assistance provided in the past, the review of the environmental records indicates a number of violations in the city's compliance,'' the HUD letter states.

HUD's order is the latest in a series of embarrassments for the city's Community Development department, which is in charge of distributing federal grant money to programs designed to help the city's poor.

Gimenez said he knew about the order, and had directed his staff in Community Development to address the problem.

''I'm not happy about it,'' Gimenez said. ``I want to know why we did not comply with HUD's past requests.''

Gwendolyn Warren, who was director of Community Development until April and is now the director of the Model City Homeownership Trust, could not be reached for comment. Gimenez said Warren never told him about past HUD warnings despite a letter she received in December warning her to comply with HUD regulations immediately.

The Model City Homeownership Trust is one of the two agencies that has temporarily lost funding because of the environmental missteps, according to the letter. Model City has lost access to $6.6 million that had been slated to acquire property to build affordable homes because they had not been conducting environmental studies required by HUD, the letter said. The city's Community Redevelopment Agency has lost access to about $3.4 million for infrastructure improvements, city officials said. Environmental reviews are conducted by the city's planning department, and are done so the city can gauge the impact demolition and construction will have on the surrounding area, said Barbara Gomez-Rodriguez, assistant director of Community Development.

''We are not going to be acquiring any more properties until we do the environmental studies,'' she said. ``I don't think anybody knowingly did anything in violation of HUD codes.''

She said the city is now scrambling to complete the necessary environmental reviews so it can free up funding for property sales and projects that have been put on hold. City records show more than 40 closings on property sales in the Liberty City area are on hold.

The freezing of funds has angered some of the property owners who had signed contracts to sell land to the city. The closing date on properties slated to be sold has been pushed back indefinitely until the situation is resolved.

''It's frustrating,'' said Malcolm Wiseheart, a lawyer representing several property owners. ``It could have been put together months ago and it wasn't.''

Wiseheart said some of his clients signed contracts to sell the city their property seven months ago and they still had not closed.

''The value of the property has gone up in the meantime,'' Wiseheart said.

HUD said the city partially ignored two prior notices of violation following inspection visits in January and December of 2001.

''These visits were followed by letters outlining the city's failure to comply with the environmental regulations,'' the letter said.

HUD also found that the city:

* - Has not been able to gauge the impact of its projects on neighborhood environments because of poor organization;

* - Failed to cite in writing that projects were exempt from environmental reviews before spending HUD funds, and

* - Began demolition and construction in certain projects before completing the environmental review.

The agency also cited three major homeownership projects in which construction began before environmental reviews were completed, including Latin Quarter, Miami River Park apartments and Rayos Del Sol Condominiums. But Gomez-Rodriguez said HUD had approved funding for those projects and they will not be affected.

''We're correcting the deficiencies,'' Gomez-Rodriguez said. ``We're in the process of working it out.''