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10/13/03 Miami Herald
City tries to unravel Overtown spending
By Oscar Corral
Nearly half of the $70 million in tax money invested in the Overtown area during
the past 10 years has gone to Miami's Community Redevelopment Agency, whose job
was to turn the blighted neighborhood into a place of clean streets, thriving businesses
and affordable homes.
The results: mostly parking lots, nightclubs, a strip joint and broken dreams.
Only five of 36 CRA projects have been completed, agency records show, and the CRA
has not pushed a single housing initiative in the area in 10 years, despite spending
The lack of results has not only angered CRA board members and community activists
but has caught the attention of the FBI and Miami-Dade County prosecutors.
''If we spent $33 million in a decade, absolutely it's been thrown away,'' said
Miami Commissioner Johnny Winton, the CRA vice chairman since 1999. ``Show me where
it is. I can't identify $33 million worth of projects.''
Winton, along with the rest of the Miami Commission sitting as the CRA board, voted
to approve many of the projects and expenses that are now in question. But commissioners
contend that CRA staff members purposely kept them in the dark about financial matters.
''Half the time we didn't even know what we were voting on because the staff didn't
provide backup information on the agenda,'' Commissioner Joe Sanchez said. ``Sometimes
we wouldn't even get the agenda until we got to the meetings.''
Asked whether he felt responsible as a board member for some of the problems, Sanchez
said: ``We've been part of some of the bad decisions. But these were presented to
us as positive things by the CRA administration, and they went wrong in the execution.
In many cases, the CRA administration basically lied to us.''
AUDIT OF SPENDING
Miami Auditor General Victor Igwe hopes to answer some of the financial questions
in the coming days, when he releases what is expected to be a scathing audit of
the agency's spending.
''It's terrible,'' Igwe said of the CRA's spending practices and deals.
In the past five years alone, agency records show, the CRA spent at least $4.5 million
on consultants, including $1.2 million paid to the law firm Holland & Knight,
despite the availability of an in-house lawyer from the city.
Commissioner Arthur Teele Jr., the longtime CRA chairman, said the decision to hire
outside lawyers was made before his time. He insists they are needed to help get
the agency on track.
''We have been trying to unwind property deals that have been made for six years,
and no one is more frustrated than I am,'' Teele said.
Other money went toward projects never completed: the Ninth Street Pedestrian Mall;
remodeling area businesses; additional parking for the growing nightclub district;
rehabilitation of the Ward Rooming House and the Divine Mission Church; and construction
of a 39-unit apartment building on Northwest Eighth Street.
But Teele said the CRA has done other worthwhile things.
''We have put our emphasis on trying to assist existing property owners to upgrade
their buildings and provide quality of life such as Internet and computers as opposed
to building a housing stock,'' Teele said. ``There is a total paranoia in the community.
The people want jobs, they want to focus on job creation. I'm sure we can come up
It wasn't supposed to happen like this.
The CRA began with high hopes two decades ago, when city and county leaders established
a redevelopment authority in the southeast Overtown area, one of the most extensive
efforts ever to revitalize the historic black neighborhood. And the agency had a
By 1990, the area had soaked up about $87 million -- both from the CRA and other
city and county programs -- in public funding for redevelopment, and boasted several
new CRA-subsidized projects: Miami Arena and the Biscayne View and Arena Towers
When Teele became CRA chairman in 1997, he persuaded the city to sign over some
properties in the Overtown and Park West areas to help the CRA build its land portfolio
and increase its tax base.
In that regard, the CRA has been a clear success: collecting revenue. Its tax increment
financing, or TIF -- tax money generated by rising property values -- has increased
from about $815,000 a year in 1992 to about $2.6 million today.
Teele says the rise of TIF income, which is supposed to be reinvested within the
CRA district, is a sign of the agency's success.
''We had a vision, a plan, and people bought into the plan,'' Teele said.
Teele said the most significant thing the CRA has done in the past four years is
to provide infrastructure and support for the club district and the Technology Center
of the Americas, otherwise known as the Network Access Point or NAP, next to Miami
''We can demonstrate that we have stimulated close to $40 million or $50 million
in investment,'' he said.
But critics, including Sanchez and Irby McKnight, an Overtown activist who led an
unsuccessful effort to recall Teele, say what's important is not how much TIF money
the CRA generates but how it is spent.
''You're talking about spending millions on professional services when you're lacking
putting money into brick-and-mortar projects,'' Sanchez said.
Of the five recent projects completed by the CRA, four are parking lots along Third
Avenue, an area with little traffic or storefronts.
Teele says the parking lots will be needed for a housing project that is scheduled
to open across the street in the near future.
He notes that the CRA has also invested in other important projects, such as the
NAP, which houses several telecommunications companies, and the new Performing Arts
Center, under construction on Biscayne Boulevard.
Teele said the CRA spearheaded the NAP project. But agency records show the agency
spent less than $1 million on it, a fraction of the $100 million cost.
One of the agency's most successful moves for redevelopment in the southeast Overtown/Park
West area in the past decade cost very little, some board members say.
It occurred in 2000, when the board voted to designate several square blocks along
Northeast 11th Street as eligible for 24-hour liquor licenses.
Immediately, nightclubs and a strip club opened along the street. Property values
shot up. Tax increment financing revenues skyrocketed from a decade-low $142,000
in 1998 to the current $2.6 million, in part, because of the taxes paid by the clubs.
TURNING THE CORNER
Frank Rollason, the CRA executive director who was brought in by Commissioner Tomás
Regalado to help fix the agency, said he hopes the CRA has now turned the corner,
despite an investigation by state and federal authorities. Rollason said he has
been cooperating with investigators who are examining contracts given to vendors
and consultants who have little work to show for the money they were paid.
In recent stories, The Herald found:
A deal in which TLMC Enterprises, a firm with ties to the CRA's former director,
won a contract to build parking lots in Overtown as the low bidder, despite submitting
a proposal that left out major work, CRA records show. The company later submitted
change orders that added tens of thousands of dollars to the contract, records show.
TLMC Enterprises said it did nothing wrong.
The CRA paid the engineering firm Civil CADD $225,000 for certified blueprints
that the firm never turned over to the agency, records show.
The CRA cannot account for another $220,000 worth of work it paid Civil CADD to
do, including architectural renderings. Civil CADD said it delivered all the work,
and the city and firm are now suing each other.
The federal subpoenas seek information about a broad range of financial transactions
at the CRA since 1998.
On the positive side, Rollason said the agency recently restarted several long-awaited
projects, including the Ninth Street Pedestrian Mall, sidewalk repairs and the Ward
But some business owners within the CRA, which includes the Omni District, complain
that the agency has wasted resources. For example, they argue that parking lots
should be built where businesses already exist, like along the 11th Street club
district, and north to 14th Street.
''The city has such an opportunity to open up an area to development, but nothing
happens,'' said Eugene Rodriguez, owner of the Ice Palace and Big Time Productions
Film studios and other properties in the Omni area.