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Miami Herald - November 13, 2005

City wants cut from land sale

Using government grants, a Little Haiti nonprofit bought an abandoned city parking lot and sold it for a $1.8 million profit. Now Miami officials want a cut of the deal.

BY SCOTT HIAASEN

shiaasen@herald.com

When the Haitian American Foundation bought a weed-tufted parking lot from the Miami Parking Authority -- using government grant money -- the nonprofit promised to create a vibrant marketplace, bringing jobs and commerce to a depressed strip of Little Haiti.

The Creole Market failed after just six weeks. Then the foundation went into a new business: real estate.

Last year, HAFI sold the 2.4-acre lot at 130 N.E. 79th St. to a developer for $2 million -- nearly 10 times what the foundation paid for the property in 2000.

Now Miami officials are questioning how HAFI managed to turn city and county grants into a $1.8 million profit.

Miami's community development director, Barbara Gomez-Rodriguez, says HAFI violated an agreement with the city by making a profit on the land. The city now wants $1.2 million of HAFI's money from the deal.

''I'm not in the business of making money for anybody,'' Gomez-Rodriguez said.

She also said the Miami-Dade State Attorney's Office asked her about the deal.

HAFI's director, Ringo Cayard, has offered to repay the city's grant money with interest, and said the nonprofit still plans to resurrect the Creole Market at another location using the profits from the land sale.

'We didn't have a `For Sale' sign on the land,'' Cayard said. ``It's not like we turned a profit and went out and bought a Lamborghini.''

HAFI originally bought the lot from the Parking Authority for $210,100, using an $85,000 grant from Miami-Dade County and $125,000 supplied by Miami, records show. The grants specified that HAFI had to buy the land for the Creole Market, which was supposed to create 50 to 100 new jobs.

In effect, Miami gave HAFI money to buy a plot of land the city already owned through the Parking Authority.

Miami's grant came from a larger federal block grant for redevelopment. City officials believe HAFI's sale of the land violated federal guidelines dictating how the grant could be used -- and that federal rules allow the city to take its share of HAFI's profits.

''The funding provided by this program was not intended to assist an agency in purchasing a property and then selling the property for a profit,'' Gomez-Rodriguez wrote in a letter to HAFI last month. ``The purchase of the property without any accomplishment lends to be perceived as land speculation.''

LAST RESORT

Cayard said HAFI complied with its city agreement, and sold the land only after years of failed attempts to raise the $5 million needed to build the Creole Market. The foundation did receive $569,000 in state and federal grants in the late 1990s to start-up the project, records show.

Cayard said he believes the contract with the city gives the foundation 20 years to build the market. But the contract also specifies that the market must go on the parking lot site. HAFI's lawyers have argued that the foundation's agreement with the city only requires HAFI to repay the $125,000 plus interest, not surrender its profits from the land sale. Gomez-Rodriguez refused to accept a $125,000 check from HAFI in August.

''Now they want a million dollars. That's not what's called for in the contract,'' Cayard said. ``The city did not sell the land. They did not find the buyer.''

Before making the deal, Cayard said, he sought the approval of then-Miami commissioner Arthur Teele, whose district included Little Haiti. Cayard said he met at least twice with Teele and the developer who bought the land from HAFI, Robert Saland.

Saland said Teele appeared to approve of the sale because Saland planned to build affordable housing on the site. But Teele also wanted HAFI to get the best profit from the deal, Saland recalled.

''I thought he [Teele] was like an advisor to the foundation. He got us to increase the price a little bit,'' Saland said. ``They knew we were in the affordable-housing business. I'm sure that's what sold the deal.''

Gomez-Rodriguez said Teele also lobbied her to accept the foundation's $125,000 check.

Teele killed himself in July after his arrest on unrelated state and federal corruption charges.

ALIVE ON GRANTS

HAFI helps organize the annual Miami Mardi Gras festival and provides services in the Haitian community, including job placement and elderly care. The foundation survives entirely on government grants: more than $5.2 million from 1999 to 2004, records show.

HAFI is expected to receive $649,000 in grants from Miami-Dade County in the current budget year. In the years before HAFI bought the 79th Street lot, the Parking Authority tried to sell the land several times and found few takers. Appraisers gradually reduced the property's value from $380,000 in 1988 to $210,000 10 years later, MPA records show.

When HAFI finally bought the 166-space parking lot five years ago, the sale price was just $75,000 more than what the city paid when it first bought the land in 1955.

Cayard said the foundation was lured into the booming real estate market after getting several unsolicited offers on the fallow land.

Late last year, the foundation negotiated the $2 million deal with Saland. Two months ago, Saland sold the property to The Gatehouse Group, a Massachusetts-based housing developer, for $3 million.

Working with two local nonprofits, Gatehouse now plans to turn the parking lot into Lafayette Square Apartments, a development of 300 town houses and apartments for low-income buyers.

''We actually got a great deal on the property,'' said Nick Inamdar, a Gatehouse vice president for Florida. ``If you look at the land prices today, it's outrageous.''

Gomez-Rodriguez said Gatehouse has asked the city for $2 million for the project. The city has already committed a $250,000 loan, records show. HAFI, meanwhile, must jump back into the overheated real estate market to get another site for the Creole Market. Cayard said he wants to build the market as part of a larger $10 million plan for a Haitian Community Center. The community center will be paid for with money from the county's community improvement bond.

DISPUTE

''The money [from the land sale] will be reinvested in the community -- by the foundation,'' Cayard said. ``The city wants to be the one to disperse the money. That's not going to happen.''

But Gomez-Rodriguez said she is reluctant to trust that HAFI will build the Creole Market, given the failures of the past five years.

Cayard ''didn't do anything last time,'' she said. ``I want all the money back. They want to go to court, we'll go to court.''
Staff writer Jacqueline Charles contributed to this story.