Google Ads help pay the expense of maintaining this site

Click Here for the Neighborhood Transformation Website

Fair Use Disclaimer

Neighborhood Transformation is a nonprofit, noncommercial website that, at times, may contain copyrighted material that have not always been specifically authorized by the copyright owner. It makes such material available in its efforts to advance the understanding of poverty and low income distressed neighborhoods in hopes of helping to find solutions for those problems. It believes that this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. Persons wishing to use copyrighted material from this site for purposes of their own that go beyond 'fair use' must first obtain permission from the copyright owner.
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 $34.7 million.

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.''


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 with that.''

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 solid start.

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 apartments.

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 Arena.

''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.


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 Rooming House.

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.