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5/27/03 - Miami Herald

Little to show for $5 million - Model City has yet to build a house

By Oscar Corral

An agency set up by Miami officials to revitalize Liberty City has spent almost $5 million since it was established last year, but so far, it has not broken ground on a single new house and no one has become a homeowner with its help.

The Model City Community Revitalization District Trust's land acquisition practices may have violated federal rules that require housing construction to start within one year. The U.S. Department of Housing and Urban Development is looking at its spending.

City Manager Joe Arriola has frozen the trust's funding, saying he is concerned with its management. But his critics say he's trying to take over the agency.

The trust's current executive director, Marva Wiley, acknowledges some problems, but defends the trust's expenses and land purchases as essential for moving the project forward.

''I understand people are frustrated and pessimistic,'' Wiley said. ``But we have not sat on our laurels. Most of what we have done was essential. There are a lot of behind-the-scenes activities that have to occur to make this happen.''

After commissioners approved the program in concept in 1999, city staff spent three years preparing it. Endowed with a $12 million injection of federal funds, the Model City Homeownership Trust was officially formed in early 2002 with the intention of increasing homeownership in Liberty City. It eventually changed its name to the Model City Community Revitalization District Trust.

The district's boundaries are roughly between Northwest 71st Street on the north and State Road 112 on the south; and between 19th Avenue on the west and Interstate 95 on the east.

The trust has spent about $1.8 million to buy land. It has spent about $2.5 million more on consultants, marketing and other costs that critics say have done little to advance housing in the area.

A Herald review of records found:

 The trust has bought 23 lots since February 2002, but has not yet started any houses. HUD rules require agencies that use federal housing grants to buy land to start construction within a year.

 The agency has given $1 million in professional-services contracts to 13 firms without competitive bids. One of the consultants who won a $100,000 contract without a bid, G. David Black, was a former business partner of Gwendolyn Warren, the executive director of the agency at the time the contract was awarded.

 The agency bought properties from two former Miami commissioners, one of whom has a son on the trust's board of directors.

City sources say the U.S. attorney's office is examining whether the trust has violated any laws. Matthew Dates, a spokesman for the office, declined to comment.

A HUD spokeswoman confirmed that the agency is looking at the trust to confirm that it is complying with all HUD spending rules.

''We want to make sure federal funds are used properly and the project follows the rules and regulations,'' said Gloria Shanahan, a spokeswoman in HUD's Miami office.

Arriola has placed a virtual moratorium on the trust by freezing funding until all legal questions are answered. He fears the trust may be forced by HUD to repay almost $2 million in federal funds used so far.


''Nothing will be bought until we get all our ducks in a row and get all the legal questions answered,'' Arriola said. ``I want to get them back on the right track and help them through the process.''

Arriola blames the trust's problems on Warren, who was executive director from April 2002 until February. Before that, Warren was the head of the city's Department of Community Development, which she left in the midst of controversy. She was placed at the head of the trust at the urging of Commissioner Arthur Teele Jr., whose district includes the Model City area.

Teele could not be reached for comment.

Reached at home, Warren downplayed the HUD-related issues and said Barbara Rodríguez-Gómez, the current director of Community Development, is responsible for raising concerns without justification. Warren left the city with a generous compensation package approved by Arriola.

''To my knowledge, HUD has not raised the issue,'' Warren said. ``Mrs. Rodríguez seems to have taken this on as a personal issue.''

Rodríguez-Gómez referred comment to the city manager's office.

Warren said the trust is not violating HUD rules by land-banking, because it has a good excuse for holding property more than a year: It needs more time to complete the land purchases.

Rodríguez-Gómez asked City Attorney Alejandro Vilarello to rule on the issue in February. Vilarello agreed that the trust may be holding land for too long, possibly in violation of HUD rules.

Wiley, the current director, said neither city officials nor outside investigators have raised concerns with her.

During Warren's tenure, the city, on behalf of the trust, gave $1 million worth of contracts to 13 consultants and other professional services without bids, city records show.

One of the consultants who benefited was G. David Black, a professional grant writer who started two companies with Warren in the late 1990s. According to state corporate records, in 1995 Warren and Black founded the Warren Educational Foundation, which was dissolved in 1999; and the Warren Black Group, which was dissolved in 1997. Warren said neither company ever got off the ground.

Black later worked for Warren when she was director of Community Development.


Wiley said Black helped the trust write two grants in the last two years. When asked about the Black contract and the other no-bid deals, Warren would say only: ``They didn't require bids.''

Black could not be reached for comment.

Between February and June 2002, the trust bought 23 pieces of land at a cost of $1.8 million. Sellers included former Miami Commissioner Athalie Range and Word of Life Community Development Corp., a small, nonprofit company headed by former Miami Commissioner Richard Dunn.

The city paid each of them 10 percent above the appraised value of the lots, a standard allowed by the City Commission. Dunn's lot at 1241 NW 58th Ter. sold for $10,500. Range's lot at 1620-24 NW 58th St. sold for $99,000.

Athalie Range's son, Patrick Range, was nominated by the city administration to the trust board of directors in June 2001. He was confirmed as a board member in June 2002, two months after the trust closed on his mother's property.

Patrick Range, Wiley and Warren all said they did not see a conflict because the property did not belong to Patrick Range, and he was not a board member at the time of the sale.

''I feel that there was not a conflict,'' Patrick Range said. ``My only purpose on the board is to try to help revitalize this area and make a contribution.''

Dunn, who said the lot he sold to the city for $10,500 was donated to Word of Life in 2000, said the city was purposely trying to derail the Model City Trust. He criticized Arriola, saying he was simply seeking to take over the trust.

''The manager and everybody else up there is slowing up the process,'' Dunn said. ``He is trying to undermine it by handpicking his own people. He is not going to run Model City.''


Arriola and Miami Mayor Manny Diaz have, in fact, tried to get fresh leadership on the trust. In February, they floated the job of executive director to former U.S. Rep. Carrie Meek, who told them she wasn't interested. Arriola never consulted the board or Teele before approaching Meek.

The fallout: Teele vowed to demand Arriola's resignation at all future commission meetings, accusing him of trying to take control. Teele and Arriola eventually made up and have agreed to work together to salvage the trust, Arriola said.

''I've been manager for three and a half months,'' Arriola said. ``For anybody to blame me for any of this is ludicrous. . . . I will work day and night to see this be successful.''