SEOPW CRA POISED TO GIVE AWAY $30 - $46 MILLION AND 6 CITY BLOCKS IN

THE NASTIEST DEAL YET

PART I

BEND OVER MIAMI

A CRESPO-GRAM EXCLUSIVE
COPYRIGHT 2011(C)
THIS STORY CAN BE REPRINTED AND CITED BY OTHER 
NEWS ORGANIZATIONS ONLY WITH ATTRIBUTION TO 
THE CRESPO-GRAM REPORT

“Always follow the money.”

                                            - Deep Throat


IN THE BEGINNING


This story goes back almost 13-14 years, and starts with the County deciding at the time to give 4 blocks of property in Overtown to the City of Miami’s SEOPW CRA for development. 


Unlike the City, which often likes to give things away like they were worthless trinkets, the County put a reverter clause in the deal that said if the CRA did not do a deal that started development by December 31, 2007, the ownership of property would return to the County.


Over the years, from the very beginning of the controversy over this project virtually every politician in the City of Miami, starting with then City Commissioner and CRA Board Chairman Art Teele, Manny Diaz, Tomas Regalado, and Marc Sarnoff - whose allegations of being told by then City Manager Joe Arroila in 2007, that City Commissioner Michelle Spence-Jones was demanding $50,000 in payoffs to two confidantes in exchange for supporting the project which resulted in a major he-said-she-said-he-said brouhaha - have in one way or another been enmeshed in the Poinciana Village/Sawyer’s Walk/Crosswinds development that was to become the cornerstone of a revitalized Overtown.


First came Indian River Investments who proposed a project called Poinciana Village. Then came a developer named Ted Weitzel, along with his partners who proposed developing Sawyer’s Walk. Poinciana Village managed to build 64 condominium units before they had a falling out with the CRA.  Sawyer’s Walk didn’t even break ground.  In 2005, theY both were sued by the CRA, which resulted in the first of several “settlement agreements,” that were never finalized.


Sometime after 2005, the Related Group became involved with the Sawyer’s Walk project, which had been renamed Crosswinds, and which led to the infamous Sarnoff memo about his meeting with City Manager Arroila and the alleged Michelle Spence-Jones payoff claim.


(Clarification: The memo that Sarnoff wrote involved both the Mercy Hospital/Condo project that Jorge Perez wanted to do, and the Crosswinds project. That memo led to an investigation that cleared Spence-Jones of any wrong-doing.)


After the Sarnoff revelations, the Crosswinds project quietly slipped from the radar screen.


THE CARLISLE DEVELOPMENT GROUP SHOWS UP


About 8-9 months ago faint rumors started circulating that there was renewed interest in reviving the Crosswinds project. 


Only now a new player had surfaced. Matthew Greer, the President of the Carlisle Development Group, which had quietly been gaining a foothold in the affordable tax credit development market in South Florida was rumored to have struck a deal with the Sawyer’s Walk and Poinciana Village groups to get them out of the various lawsuits for as much as a 90% ownership in a new deal.


Greer, formed Skytown LLC, as his vehicle, and it now shows up as the FIRST of the signing parties in the settlement agreement.

Three days after the fund raiser, Dunn’s campaign reported $20,300 in contributions from a list of developers, contractors and other heavy hitters including $500 from Matthew Greer, the President of Carlisle. 


It’s amazing what $500 can buy a smart guy with connections nowadays.

This comes out to $9,149,416.00.


To appreciate just how egregious this $280,000 a year “rent” is for 6 prime city blocks is, consider that Fox Television is currently renting the old - ready to be knocked down - Miami Convention Center across from City Hall for $240,000 a year to film the TV series Burn Notice.


Then there’s the fact that to add insult to injury, the current settlement doesn’t require that a new appraisal of the properties to be done, because if one was done, even in today’s market, people would realize how stupid and sleazy the CRA giving away 6 downtown blocks of property for $9,149,416.00 was.


To explain this another way, if you were to buy these properties today, with a 25 year mortgage at 7% interest these properties would cost you $4,161,000.00, in order for you to eventually end up paying the $9,149,416.00 in “rent” that the settlement calls for. 


How sweet is that!?!


PIETER AND MATTHEW, BFF’S


By far the biggest problem is the issue of Pieter Bockweg, Executive Director of the CRA and Matthew Greer, President of the Carlisle Development Group, and their friendship.


I have been told that Bockweg and Greer along with  Koteles Alexander, Chief of Staff to Reverend Commissioner Dunn are a regular golfing trio on most Sundays, and that Bockweg keeps a golfing event photograph of himself and Greer in his office.


The Bockweg, Greer relationship should be of concern to those who believe that public officials entrusted to negotiate on the public’s behalf should maintain an arm’s length relationship with those to whom they are giving away the public’s resources, especially since in this case we’re talking 6 city blocks, along with an additional award of anywhere between $30 to $46 million in CRA money.


Unfortunately, this is Miami, Bitches!, where screwing the taxpayers seems to be considered part of the job description for guys like Bockweg.


RFP MEANS RIGGED FOR PALS


The possibility of insider dealing is always a problem when you find a personal relationship like the one between Bockweg and Greer. 


Far more troubling is the alleged secret trip that Bockweg took to New York with Greer to meet with Carlisle’s financiers.  You wouldn’t do that even if you were dealing from the top of the deck, because this all but supports any allegation that however the deal is presented to the public, the reality is that it’s all been rigged before the Developer’s RFP is even issued.


If the “settlement agreement” was predicated on the original properties there might be questions, but Greer’s dealing himself into a principal ownership position with the Sawyer’s Walk and Poinciana Village developers could be viewed as just a smart business deal by a guy with the business and political savvy to make the deal work.


This deal however, includes TWO NEW PIECES of property that were not part of the original deal, and another new part of the the deal would have the CRA give anywhere between $30 - $46 million in CRA money as part a new “Developer’s Agreement” as part of the deal.


It is these issues that are at the core of the questions being raised about this being a cooked up deal between the usual suspects at the CRA and Greer.


THE MOTHER’S MILK OF POLITICS


When it comes to the behavior of Reverend Commissioner Dunn the Chairman of the SEOPW CRA, there is very little that I would not put past him in selling out his constituents.


Although he continues to amaze by his often clueless comments about what’s going on at Commission meetings, thereby making him the current title holder of the dumbest City Commissioner - in April he openly admitted to voting to approve the 5 Day Rule without knowing what it meant - he’s also become little more than a pawn for Commissioner “Ethics” Sarnoff and his efforts to give away CRA money to support his pals and schemes.


In the process, Dunn has also managed to reveal his willingness to do questionable favors - or at least try - for his campaign contributors.


On the contributor side, the best, and fastest way to separate the pros from the amateurs in politics is to see how they play the money game. The Carlisle Development Group has demonstrated that it knows full well how to play that game, and it plays the game aggressively, and with long-term strategic goals.


Last summer, well before public awareness of this scheme was even being talked about, they hosted a major fund raiser for none other than the Reverend Commissioner Dunn, the Chairman of the SEOPW CRA, which coincidentally is now the entity that will be voting on Monday evening to approve the deal that will give them 6 prime blocks of downtown property, and anywhere between $30-$46 million as a deal sweetener.

The Blue Box is the location of  Historic Lyric Theater.  The Red Box at the top right of the map is a current Carlisle Development Group project called the Metro Apartments. It is a 13 story high-rise with 90 units, of which 90% are set aside for families and individuals making less than 60% of the area median income (AMI.)

The county’s area median income is $51,900, and the city’s is $23,483. That is why the City of Miami makes the annual list of being one of the poorest cities in America!

WHAT MAKES THIS DEAL SMELL


The first warning sign is the way in which this deal has all of a sudden resurfaced, and is now headed to approval like a train running on crack cocaine.


Then its the way in which the deal has been restructured to reduce the amount of housing units required. In a 2008 Miami Today story, the Crosswinds project was described as creating a total of 1050 mixed-income housing units. The current “settlement agreement” reduces that amount to a maximum of 687 housing units, and reduces that amount to 596, if they build a hotel with 125 rooms.

What Greer brought to the table in reviving the deal was his claim to the other developers that he could get the CRA and the City Commission on board, which in turn would get the County on board. For his efforts, Greer secured a 90% majority ownership of the entire deal, as spelled out on pages 90, 114 and 115 of the settlement agreement.


Quietly, and below the radar, Greer, along with Pieter Bockweg, Koteles Alexander, Chief of Staff for Commissioner Dunn, along County Commissioner Audrey Edmonson and others negotiated a settlement acceptable to both the CRA and the County. 


Last month the parties were so confidant of success that Pieter Bockweg and Matthew Greer allegedly flew to New York to meet with Carlisle Group financiers.  Bockweg hid the true nature of the the trip by claiming that he had gone to meet with folks involved in affordable housing.


“EMERGENCY MEETING” MEANS DROP YOUR PANTS AND BEND OVER


Like dimwitted poker players, Miami’s City Commissioners cannot resist telegraphing their hand. Whether it’s an Emergency Commission Meeting, or a CRA Meeting, when these guys call for an “Emergency Meeting” you know that it’s an automatic “tell” that whatever they’ve put in the agenda is a nasty piece of business.


After years of inactivity on settling the various lawsuits, all of a sudden the SEOPW CRA decided that they must have an “Emergency Meeting,” to accept a “settlement agreement” on the Poinciana and Sawyer’s Walk lawsuits. 


The deal involves a three step process.  First, the members of the City Commission, acting as the Board of the SEOPW CRA will vote on it on Monday night, and then as City Commissioners, they will ratify the CRA’s vote at Thursday’s City Commission meeting, and then it will go to the Miami-Dade County Commission to be shepherded for a vote by Miami-Dade Commissioner Audrey Edmonson.


That’s about as cozy a deal as you can get at the city’s level.  The City Commission verifies their vote as CRA Board members. No where is there any independent, one-step-removed review of any of this by anyone, and given the relationship that Audrey Edmonson has developed with Greer and the Carlisle Group over the last several years, they got someone they can count on guiding them through the County Commission.


The speculation - and much of what else is going on behind the scenes involving the Miami City Commission these days - is predicated on the possible return of Michelle Spence-Jones - who currently has one more court case to get through before showing up at City Hall with a “Mamma’s Back, Boys!” greeting.


The fear is that Spence-Jones will come back and bitch slap them into the Twilight Zone for setting her up.


The other element that seems to be driving this deal is the close friendship between CRA Executive Director Pieter Bockweg and Matthew Greer the President of the Carlisle Group.


The overarching issue though is that the public is never served when these deals are rammed through in “Emergency Meetings,” with little or no real opportunity for folks to review documents and/or get a full understanding of what’s really involved.


On a personal note, I was first tipped off about this on Friday morning and immediately called and left Pieter Bockweg a phone message letting him know I would be coming to the CRA at around 1 PM to look at the files on this settlement.


I arrived around 2 PM, and was given a runaround about Bockweg not being in the office, and no one knowing where the files were.  I was finally told to come back on Monday, because when Bockweg is not in the office, the staff’s knowledge of what the CRA is doing becomes nonexistent.


UNDERSTANDING THE LAY OF THE LAND


There is no question that Overtown is an area in desperate need of all the help it can get, and if the City of Miami and the CRA were really interested in doing right by the citizens of that area, there is a lot of good they could have already done over the last 50 or so years. 


But, as I’ve previously written. the decline and destruction of Overtown started with the ripping apart of the community by the construction of I-95 and 395, and continued with the knowing nods and “arrangements” over the years between the politicians and “the establishment,” that tacitly agreed that the property that compromised Overtown would at sometime in the future be the basis for Northward development for “White” Miami.


Instead of doing anything of real consequence from the 60’s forward to try and save or revitalize Overtown, many of the properties were bought and flipped over the years by speculators content to sit on these largely vacant lots until the need for land matched the need of developers.  


The area became a real ghetto because it was in the long-term interests of the powers that be for it to become a ghetto.


To now understand the debilitating levels of poverty and the significance and value of the properties involved in this scheme, there are some charts and a map that need to be viewed.


The first chart below, is a breakdown of various areas of Miami taken from the City’s Community Redevelopment Agency’s, Draft Consolidated Plan for 2009-201, (Page 54,) and lists the median income in those areas.  You will see that the median income in Overtown is $13,212.


The next chart reveals the area median income for Miami-Dade County, and reveals just how poor the City of Miami is in comparison to the remainder of the county. Area median Income is an important component when considering how best to spend public money to try and make things better for folks.


Next is a map of the area where the settlement properties are located, and the specific properties identified by their Block Number, as identified in the settlement agreement.


This will help you understand how this deal has been structured when it comes to how much rent the developer is going to pay the CRA for these 6 prime city blocks just North of downtown, and also so you understand how prime this property really is.

Another interesting revelation is that the “rent” that the CRA will be charging the “developer,” as part of the new settlement is $280,000 a year for 25 years.

JULY 11, 2011


ARCHIVESSPLASH_PAGE.html
PART II
I document how Pieter Bockweg flew to New York to take part in a private meeting with Greer’s bankers
STORYPART_II_-_PIETER_BOCKWEG_GOES_TO_NEW_YORK.html
PART III
Doing business the Carlisle way.
STORYPART_III_-_DOING_BUSINESS_THE_CARLISLE_WAY.html
AFTER THIS STORY WAS PUBLISHED, THE JULY 11TH MEETING WAS CANCELLED, AND THOUGH IT WAS RESCHEDULED FOR JULY 25TH, THAT MEETING TOO WAS CANCELLED.  THIS PROJECT WAS NEVER CONSIDERED AGAIN AFTER THAT.