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June 20, 2002 - Daily Business Review


By: Alina Matas

The city of Miami is gearing up to become the largest landowner in Liberty City as part of a plan to attract private developers to an area long plagued by poverty and property deterioration.

This is the latest in a string of attempts by Miami ù ranked as the poorest city in America by the U.S. Census Bureau ù to clean up its inner-city neighborhoods and spur economic development in what once were vibrant, growing residential districts.

The city has about $7 million worth of real estate contracts it expects to close this fall, taking title to 76 different properties throughout a part of the Liberty City neighborhood dubbed the Model City Community Revitalization District.

The city has its eye on another 85 properties that have been appraised at about $7.5 million.

"We intend to acquire and demolish," said Gwendolyn Warren, acting chief executive of a public-private trust recently created to lead the revitalization project. "We need to restore the residential neighborhood, bring the dignity back and then diversify the community."

According to the 2000 U.S. Census, Miami ranked as the poorest large city, with an overall poverty rate of 29 percent.

If the newly created trust succeeds, by next spring the acquired property would be bid out to private developers. They would be asked to build 400 to 500 residential units in the district, which stretches from Northwest 54th Street to Northwest 71st Street between Interstate 95 and Northwest 17th Avenue. The district also includes a noncontiguous portion from Northwest 58th Street to State Road 112, between 17th and 19th avenues.

The construction of new, market-rate housing is considered crucial to revitalizing the predominantly black neighborhood whose residents earn about 50 percent less than the Miami-Dade County median income.

The district has suffered income flight over the years, as residents who could afford to have moved out to better housing in the suburbs. While some of its streets are lined with well-kept single-family homes, vacant parcels and decrepit apartment buildings abound in the area.

A crime crackdown by police has also helped the initiative. During the past three years, about 60 vacant homes that had become crack houses have been demolished, significantly reducing the crime rate in the area. Between 1993 and 2000 crimes such as murder, rape, robbery, burglary and car theft were down 45 percent, according to the Miami Police Department.

The city has targeted the Model City district as a pilot project in the revitalization of seven deteriorated areas, including Allapattah, Little River/Little Haiti, Little Havana and Overtown. The plan to focus on residential construction is incorporating current theories of urban redevelopment espoused by think-tank groups such as the Urban Land Institute, which the city has consulted for the Model City initiative. The expectation is that new, attractive housing will draw residents back and create a more affluent residential base. The new residents, in turn, will give a boost to the area's few businesses and spur the creation of new enterprises. The City Commission gave the plan the go-ahead in February 2001.

But project leaders say the private sector must build the housing. Government's role should be to facilitate the construction, and to help low-income home buyers obtain mortgages, so that the poorer residents aren't left out of the improved neigbhorhood.

The city's acquisition of large amounts of property is considered a key to overcoming an obstacle repeatedly cited by private builders for avoiding inner-city areas: The lack of large parcels that can be developed at a profit.

Usually, parcels in the inner city are owned by multiple owners or are encumbered by tax liens, which drives up the cost beyond what any developer wants to risk.

"They're in this business to make money," Warren said. "We're in this business to build homes and a community."

Developers, for their part, say they are following the city's Model City plan with interest.

"I think they've finally got the right formula," said Lester Goldstein, president of the South Florida Builders Association. "We have various members who are in the in-fill [development] field, and we think they will run to pursue this project."

One of those is Pinnacle Housing, a Miami-based developer that specializes in in-fill development.

"Everyone's kind of waiting to see what will happen and what kind of incentives the city will provide for developers to go back into the inner-city," said Mitch Friedman, Pinnacle's chief executive.

Other observers familiar with revitalization woes are watching the Model City project with interest, and many say the city is following a conceptual plan that makes sense. The city has contracted Miami-based urban planning firm Dover Kohl ~Partners to design a master plan for Model City. Creation of the plan will include meetings with the community..

The city has hired the Chesapeake Group to conduct a market study to determine the type of housing units ù whether single-family, apartments, townhouses ù that would best attract residents back to the area.

"I think the plan is very exciting, I think it's very doable, and I see a lot of things they're doing that the city didn't do years ago," said Martin Fine, a Holland ~Knight attorney who authored a 1980 proposal for the establishment of a housing and redevelopment fund in Miami and who attended a conference on the project last week.

However, the jury is still out on how the city will execute the plan, as it already has run into a glitch.

The U.S. Department of Housing and Urban Development, which will fund the land acquisition, last month froze its funding until the city completes the environmental review process that HUD requires for any project. The freeze will delay closing on the contracts for another 60 days.

Malcolm Wiseheart Jr., a Miami attorney who is representing six owners who have their properties under contract to sell to the city, said some of his clients who have been waiting to close since late last year are getting impatient.

"I'm confident that the city in good faith is working on this," said Wiseheart. "My clients are not happy campers right now, but they're holding the course."

At the core of the Model City plan is the concept of building an inventory of land to facilitate development. The untested concept is to pre-package parcels that are completely ready for development ù an incentive for developers who might not otherwise undertake the complicated effort for a project in the inner-city.

In addition, the city plans to fast-track the permitting process, waive impact fees and pay for the improvement of roads and utilities throughout the district.

The creation of the six-member private-public trust is expected to serve as a bridge between the private sector and the city's bureaucracy. The trust, whose members were sworn in last week, is chaired by Fannie Mae South Florida director Shalley Jones. Warren is the acting CEO. Other members are: Hector Brito, senior vice president of the Praxis Group, a general contractor; Lucia Dougherty, a land use attorney with Greenberg Traurig; N. Patrick Range, co-owner of Range Funeral Home in Liberty City; and Linda M. Haskins, senior financial adviser to Miami Mayor Manny Diaz.

John Little, an attorney with Greater Miami Legal Services who works with community groups in redevelopment projects, said the city so far hasn't reached out to nonprofit groups for their participation in the project and has a checkered-record in what its own community development corporation, previously chaired by Warren, has accomplished.

He is optimistic about the city's approach, but has some doubts on how the city will execute it.

"I've heard this brave talk before," he said. "Basically, it's a good plan. The approach is a far cry better than what they had before. But can they produce?"

Alina Matas can be reached at or at (305) 347-6651.