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Daily Business Review - February 05, 2003

Study shows land grab for controversial Little Haiti park could cost triple commissioner's estimate

By: Alina Matas

An aggressive city of Miami plan to build a 60-acre recreational park in Little Haiti has been served with a dose of reality, after a recent cost study showed the tab could be double or as much as triple the $25 million that the city has budgeted.

The city would spend between $53.8 million and $76.4 million to acquire the property in the designated 60-acre district. The project also would have indirect costs: It would displace 112 businesses that employ about 600 people, most of whom live in the area. The plan also would evict more than 280 low-income households in an area that has no viable housing alternatives, according to the study commissioned by the city.

"Although the park will serve to enhance the community at large, the immediate impact on the residents being relocated will be substantial," according to the study recently completed by the Tampa office of engineering, design and consulting firm Post Buckley Schuh ~Jernigan. "Most lack resources to facilitate a move to an area outside the park boundaries."

The study underscores the possible ramifications of the proposed park that began eliciting controversy last summer when the city of Miami began seeking willing sellers in the neighborhood. The city sent letters to all property owners in the designated park district, an area that stretches east from Northeast Second Avenue to the Florida East Coast Railway tracks, and north from Northeast 59th Street to 67th Street.

Most owners weren't interested in selling.

In the fall, Post Buckley began its comprehensive survey of commercial and residential properties in the targeted area, which includes two trailer parks, manufacturing plants, warehouses, some small stores and a few vacant lots and abandoned buildings. The park boundaries were drawn by a group that included some members of the community and city staff and was chaired by City Commissioner Arthur Teele.

"Teele is pushing really hard to eliminate the only thing that Little Haiti has going for it," said Peter R. Ehrlich Jr., managing partner of Palm Bay Studios, which owns a fully leased 150,000-square-foot warehouse in the area. "If you take out 112 businesses and 600 jobs, what do you have left?"

Teele did not return phone calls seeking comment. According to a memo he wrote to city commissioners when the boundaries were drawn in 2001, "the area proposed was selected due to the large tracts of undeveloped land that is presently vacant as well as the desire to remove the blight and slum of two existing trailer parks."

Kelly Penton, spokeswoman for Miami Mayor Manny Diaz, said the mayor would not comment until he had reviewed the study.

"I don't think the park is being done in a reasonable way," said Frank Rudman, president of Sportailor, a 65-employee clothing manufacturer that has been at 6501 NE Second Court for decades. "You should make a park where it doesn't change the jobs in the city. The city was bankrupt just the other day. How can we think about losing even one job in the city?"

The Post Buckley study is the first survey-based cost estimate presented to city commissioners, and as a result of the study's conclusion some are now advocating for changes in the scope of the park project. City commissioners voted to approve the park district in 2001. But cost estimates at the time of the vote were based on information presented by Teele.

According to the September 2001 memo that Teele sent commissioners, his community group estimated land acquisition costs at between $8 million and $12 million for an unspecified number of acres. Later that year, Teele convinced commissioners to allocate $25 million of the city's recent $153 million capital improvements bond issue to cover land acquisition costs as well as planning and development costs.

"The commission has committed and backed the commitment to build a park in Little Haiti to the tune of $25 million," said Commission Chairman Johnny Winton. "It appears that the cost of building a 60-acre park is a lot more than the city can afford and a lot more than the city has budgeted. We need to focus on how to build a park with $25 million."

According to the study, if the city shrunk the district to include only properties north of 62nd Street, land acquisition would cost $26.5 million to $36.4 million. If it bought only the land south of 62nd Street, it would cost $27.3 million to $40 million. None of the figures includes the cost of building the park.

Meanwhile, some phases of the project are moving ahead. At Teele's urging, commissioners last month voted to direct city staff to begin buying land anywhere in the district.

So far, the city is working on deals with two willing sellers, according to documents presented last month to the Bond Oversight Board, a volunteer group charged with overseeing and approving expenditures from the city's bond issue.

City staff asked and obtained board authorization to buy a four-unit apartment building at 265-71 NE 59th Terrace for $140,000, and three empty lots on Northeast 61st Street and Second Avenue for $96,000.

But negotiations with one owner aren't going smoothly. Brian Mashburn, whose family owns the apartment building, said his family decided last week not to pursue the deal with the city, after reading the option agreement the city proposed.

"It was open-ended and ambiguous on when they would close," Mashburn said.

It doesn't help matters that the city is in flux. In recent weeks, the mayor has announced an overhaul of the city bureaucracy, nominated a new city manager and named a new director of economic development, a department that includes the former office of asset management, which had been leading the push to buy property for the park.

Laura Bilberry, former director of the asset management department, said that in the coming days she'll brief the new director of economic development on the park project and on the Post Buckley study. With respect to the deal with Mashburn, she said the city will send Mashburn a sales and purchase agreement, rather than the open-ended option that Mashburn rejected. She had planned to seek commission approval for the deal at its Feb. 13 meeting, but has now postponed that presentation ù the last step before writing the check ù until the new department heads are settled in.

Preliminary discussions with another prospective seller, Frank Pagotto of Pagotto Industries Inc. and related companies, also weren't productive. Pagotto said city representatives met with him last week and offered $21 per square foot for his 16,676-square-foot building at 6380 NE Fourth Ave. Pagotto, who bought the property six years ago, said the offer was "ridiculous."

"If you can find me a building where I can relocate for that price, I'll sell," Pagotto said he told the city. "Good luck. I looked for a year before I moved here."

To make his point, Pagotto said that in December he sold the property next to his plant to a private business for $35 a square foot. The new owner, Roberto E. Rebozo, said he plans to set up a caramel-milk manufacturing plant.

"You won't find a building like this with this kind of [heavy industrial] zoning anywhere else for less than $50 a square foot," Rebozo said.

Bilberry said the city is in the process of reviewing the recent sales information to determine its next step.

Other property owners say they are unsettled because the city eventually can proceed to take the property by eminent domain. In case that happens, about three dozen property owners in the area have retained the Miami law firm Brigham Moore Gaylord Schuster Merlin ~Tobin, which specializes in eminent domain, said attorney Mark Tobin, a name partner.

One of those owners is Manny Maracini, who has run Maracini Upholsters in the area since 1969.

"The day that I retire, this building is my retirement," Maracini, 59, said. "I can lease out my building and support my retirement income. I certainly don't want to sell. I know I can relocate, but why should I have to?"

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