MAY  23, 2016

The very first question that should be asked when item number 13 comes up for discussion at Monday might’s SEOPW CRA meeting is, how many Hardemons did MDM hire to provide them with “community outreach?”

Was it Uncle Billy, was it Auntie Barbara, was it Uncle Roy, was was it Uncle Allen, or was it a combination of some or all of these family members of SEOPW CRA Chairman Keon Hardemon?

This is a serious question and one that needs to be asked, and answered.

In fact, this should become a standing question at any meeting of this CRA and at City Commission meetings also, because it’s getting so that you can’t have a conversation about any major development in Miami without hearing that one or the other of the Commissioner’s uncles or aunt has been hired to provide the developers with “community outreach.”

The big question that I believe that the Commissioner and his uncles and auntie need to respond to is the growing belief is that the hiring of Hardemons to handle “community outreach” by developers needing City Hall approval for their high-stake real estate deals mean that their nephew is for sale?  Its not an unreasonable question given the history of Uncle Allen, and Uncle Billy and Auntie Barbara, all of whom have had their run-ins with the law, including Uncle Allen’s conviction for grand theft and his being barred from ever lobbying anyone at the County.


The second question that should be asked is why anyone would agree to pay $6000 for a bogus “Independent Financial Assessment Letter” that was submitted as “Back up” to the members of the CRA Board that include the following claims:

                “This review is based on information provided to us,

                which has not been audited or otherwise verified.”

                “We note that square footage totals included in the

                documents provided u reflect 400,000 square feet of

                meeting/Pre-Function Space.  However, specific,

                sellable space components (exhibit,meeting and ballroom

                space) have not been provided.”

                “We have not prepared a detailed analysis of specific

                cash flow line items, however working with colleagues in

                the hospitality industry, several high-level comments have

                been prepared.”

                “These comments are based solely on a cursory review.”

                “We have also prepared a high-level hypothetical estimate...”

Given that the SEOPW CRA Board is being asked to pay a Texas company called Convention, Sports & Leisure International for this mishmash of unaudited and unverified nonsense, it’s reasonable to assume that Clarence Woods, the Executive Director of the SEOPW CRA is the one who reached out to this company, and that he was the one who provided this company with all of the largely useless, self-serving, unaudited and unverified crap generated by the developer, who understandably had every reason to put together a collection of bullshit paperwork, which Woods, found no reason to question before passing it on to this company.

To add insult to injury, FAU Professor Frank Schnidman, who I and others in the community have turned to for guidance and expertise in trying to make sense of the various schemes and scams that have become a cornerstone of CRA financing deals in Miami over the last half-dozen years pointed out in an email over the weekend to the Mayor and members of the CRA Board, that the so-called “Independent Financial Assessment Letter” written on March 9th as a “draft,” was now being included as back up for the May 23rd meeting, and questioned why had there not been a final report prepared since March 9th?

Schnidman also wrote that while the financial assessment letter concludes that other cities subsidize projects like this, and that in fact this subsidy by the SEOPW CRA might be low as compared to other cities, it did not include the fact that “but for” the taxpayer subsidy of slum and blight alleviation trust fund  money the project would not be built. 

Rather, what the letter does in fact say is that that this taxpayer subsidy would not result in a profit that would be unreasonably high to the developer, meaning rather that the subsidy (TIF Funds) “May go right to the developers bottom line.”

In short, the handout that MCM is asking for - whether it be $55 million over the current life of the SEOPW CRA, or $115 million if that lifespan is extended - is not money they need in order to build their hotel and convention center, but is money they want to collect on the back end as profit.

In The City Miami its become apparent that when any of the politicians or bootlicker bureaucrats start taking about due diligence or best practices, what they are really talking about is what are the minimum practices that they can get away without without ending up in a jail cell.

How could anyone in their right mind be willing to give a company $6000 for a 3 1/2 page “draft” financial assessment letter that is based on the self-serving crap generated by the developer whose goal is to screw the taxpayers out of tax increment funds, or worse to go along with a scheme that doesn’t require the $55 million or $115 million being asked for as being needed in order to build the project, but rather is earmarked for the company’s Internal Rate of Return (IRR)?


If all of the reports of CRA activities generated by the students at FAU, and the the analysis provided by FAU Professor Frank Schnidman, and all the stories that I and others have written, and if the Miami-Dade Grand Jury Report that was issued in February pointing out that Community Redevelopment Agencies (CRA’s) in Miami were little more than political slush funds, then the decision of the SEOPW CRA to give away anywhere from $50 million to $115 million in Tax Increment Funds to MDM, should once again raise the question of what is it about the fact that CRA’s were created specifically to deal with the elimination of slum and bight in poor communities, such as the construction of affordable housing, and NOT, to be spent on Economic Development projects for deep-pocket developers,  is it that the members of the Miami City Commission/SEOPW CRA Board don’t understand about that concept?

Here is the heading and first paragraph of the proposed agreement between the SEOPW CRA and the developers of the Marriott Hotel and Convention Center deal.that will be voted on on Monday afternoon.

CRA’s were not created and/or empowered to enter into Economic Development Agreements, yet, with nary a blush, here is hard evidence that illustrates that none of these people care about obeying the law, and in the process, this document reveals that the talk about “community benefits” and all the other promises all pretty much a charade because the deal between the SEOPW CRA and the developers is to let them pocket as much money as they can for as long as they can, because if you carefully read this agreement and all of the other documents associated with this hustle there is no distinction or requirement that changes the parameters of the deal based on whether they end up with the $50 million for the current life of the CRA, or the proposed $115 million if the life of the CRA gets extended. 

Think about that for a moment, and then ask yourself why would the SEOPW CRA be so willing to allow an extension of the lifetime of the CRA to provide the developers with an additional $65 million in TIF money if the $50 million they’re willing to accept for the current lifetime of the CRA represents the base amount that meets their Internal Rate of Return (IRR) needs?

You would expect that the agreement would show adjustments reducing the percentages if the CRA’s lifetime gets extended. But then again, you would expect that only if the Board members were looking out for the public’s interest, and not the developers interests.


Over the last few years FAU Professor Frank Schnidman has done outstanding work in trying to provide insight and factual analysis to what, how and why CRA’s were created and should operate.

Over the weekend he sent the following letter to Miami Mayor Tomas Regalado and the members of the Miami City Commission, once again going into detail as to why this latest deal is so bad, and why like the previous deals that the SEOPW CRA had agreed to over the last couple years it will have long term implications to all of the citizens in Miami-Dade County, because the end result of all of the “economic development deals” with Tax Increment Funds are essentially little more than a looting of the County’s General Revenue Fund.

Dear Tomas;

It appears that on Monday the SEOPW CRA will again deal with giving CRA slum and blight alleviation trust fund money to the Marriott Marquis Miami Worldcenter Hotel & Expo Center.

With the economic success of Miami, with Brickell City Center opening (having been built for the last decade without any government subsidy), with Liberty City going forward without a CRA, as is the redevelopment of Wynwood, with the Worldcenter development going forward next to the Marriott site, and with the All Aboard station going forward—this massive commitment of the alleviation of slums and blight trust fund money is being requested from the SEOPW CRA.

How does this type of payment fit within the goals and objectives of the Community Redevelopment Act of 1969? Where is the blight alleviation?

As we have discussed, under Florida law a CRA is not an economic development agency, and this requested subsidy is not about the alleviation of slums and blight conditions, but about incentivizing a business deal that the hot Miami market, by the developer's own admission, will to support.

Recall that at the Worldcenter negotiation at that famous between Christmas and New Year meeting, there was such concern that even though the developer offered job and wage commitments, there would not be enough people in Overtown to fill those jobs—and so zip codes in each of the City of Miami Commissioner’s districts were included as appropriate for the targeted jobs. Since that time we have had additional commitments for the use of slum and blight alleviation trust fund money to bring Tri-Rail into the All Aboard Station, and now more commitments for the Marriott.  Are there really enough people in Overtown to fill all of the positions and vendor opportunities that are being offered in return for incentives for all these projects? Or, will the shortage of qualified workers actually foster the gentrification of Overtown as people move there to get priority job placement?

And, because of the massive request to subsidize this project with the tax revenue that must be transferred from the general fund of the Miami-Dade County Taxpayers and the general fund of the City of Miami taxpayers to the SEOPW CRA tax increment slum and blight alleviation trust fund, they must request the extension of life of the CRA from 2030 to 2042, and during this SEOPW CRA life extension, an additional $100 million of County and City taxpayers’ general fund money would be transferred to the SEOPW CRA slum and blight alleviation trust fund.

There are many points that can be discussed in relation to what is continuing, even in light of the February Miami-Dade County CRA Grand Jury Report. However, there are two major points that should be pursued. First if the Global Agreement is re-opened. That hopefully can result in a re-negotiation of the Omni CRA responsibility to support the Performing Arts Center. Since 2009 the Omni CRA has spent over $45 million supporting the Adrienne Arsht Performing Arts Center. According to the Global Agreement, this shift of responsibility from tourist taxes to the Omni CRA slum and blight alleviation trust fund was done to finance the Marlins Baseball Stadium. Certainly, in this time of increasing tourist taxes, those taxes can once again take over the debt and operating expense of the Adrienne Arsht Performing Arts Center, and allow the Omni CRA to spend the money as the Community Redevelopment Act of 1969 intended. This will allow the Omni CRA to complete its mission of alleviation of slums and blight in the District and sunset as planned in 2030, if not before. After all, should slum and blight alleviation trust fund money really be used to subsidize debt and operating expense of performing art centers, art museums and science museums?

Another point that needs to be considered is the continuing commitment of all of the County and the City taxpayers to specific targeted CRA areas. The County general fund alone in now paying more than $30 million a year to CRA trust funds, over 1/2 of that annual amount going to subsidize the Miami Beach Convention Center (payments annually to Miami Beach to go on to 2044). The SEOPW and Omni CRAs get an additional $10 million of County taxpayers general fund money each year (payments annually to the the City of Miami CRAs until 2030). And, the City of Miami taxpayers likely contribute an equal amount of general fund money each year to the slum and blight alleviation trust funds of the SEOPW and Omni CRAs. 

Do the County and City taxpayers really understand that hundreds of millions of dollars of general fund money are being diverted to CRAs, and hundreds of millions of more general fund dollars are going to be diverted if the life of these CRAs is to be extended? Do the citizens of Miami-Dade County and the incorporated cities where there are CRAs really understand that it is their general fund money that is going to fund these types of incentives?

Tax dollars paid into the general fund by a developer do not belong to the developer to be transferred to a slum and blight alleviation trust fund and then returned as a thank you for development.

Hopefully,the County Commission Resolution establishing guidelines for County Commission approvals of new and existing CRA actions will soon be approved after being reported out of County Commissioner Xavier Suarez’s Economic Prosperity Committee with a recommendation for passage. Prime Sponsor Daniella Levine Cava held more than a dozen meetings with CRA staff and stake holders, amending the draft initially prepared to implement key recommendations of the Miami-Dade County Grand Jury February 3, 2016 Report, “CRAs: The Good, the Bad, and the Questionable.”  What is needed during the discussion of this County Resolution that will substantially improve the interaction of the County and the CRAs, and provide greater accountability for County taxpayer funds, is a true understanding of the past, current and future general fund obligations to CRAs by both the County taxpayers' general fund and the incorporated city taxpayers’ general fund.  In addition, it will also be necessary to understand the actual County (and city, if in an incorporated area) general fund commitments to the CRA that would be required if the life of any CRA is to be extended.

In all of this discussion of CRA incentives to developers for projects this hot Miami market seems not to want to support, has there been a detailed financial analysis of the impact of the transfer of so much general fund money to CRAs on the ability of the County and the cities to provide basic municipal services? Will there be a shortfall in the ability to pay for sea level rise hardening capital projects, schools, police, basic municipal services, etc.?

As we have discussed so many times before—the above represents important issues that deserve public discussion.  I will copy the members of the City Commission, and hopefully they will review the points made in this e-mail and consider them when they sit as SEOPW CRA Board of Commissioners on Monday to again discuss the subsidy to the Marriott.

My best regards,