By William Gjebre, BrowardBulldog.org
The Florida Legislature’s joint auditing committee is wading into Hallandale Beach’s questionable spending of local redevelopment funds, demanding that city officials explain the use and handling of those funds.
Legislators who head the committee also are urging the city commission to ask Florida’s Attorney General for a new opinion to clarify how Community Redevelopment Agency (CRA) funds can be spent. City leaders have challenged a previous opinion.
In a separate but related development, the Broward State Attorney’s Office issued subpoenas last week to Hallandale Beach officials -including Mayor Joy Cooper -in connection with a criminal investigation into the alleged misuse of city funds by a nonprofit group, the Palm Center for the Arts.
BrowardBulldog.org obtained one subpoena served on the city clerk asking her to produce the transcribed minutes and tape recordings of a March 17, 2010 commission meeting, a copy of a $5,000 check issued by the city to the Palm Center and any correspondence between the nonprofit group “and/or founder Dr. Deborah Brown” regarding that check.
City Clerk Sheena James is to appear at the State Attorney’s Office with the records and to testify on June 24 at 9 a.m. The subpoena is signed by Assistant State Attorney Deborah Zimet.
A YEARLONG INVESTIGATION
The subpoena and the audit committee’s inquiry stem from a yearlong investigation by the Broward Inspector General’s Office that found city officials had “grossly mismanaged” millions of dollars in CRA funds.
Hallandale Beach Mayor Joy Cooper
The CRA is funding by a portion of the property taxes collected within its boundaries.
Inspector General John Scott’s office said it found “probable cause” that Brown, the Palm Center’s founder and director, had engaged in criminal misconduct and asked the State Attorney’s Office to investigate.
Hallandale Beach officials have denied any misspending of CRA funds and defended how those funds were handled. They have also challenged many of the Inspector General’s findings, including criticism that the city wrongfully funded nonprofit groups, paid for fireworks displays and provided loans to businesses.
A delegation of city officials, led by Mayor Joy Cooper, went to County Hall last week in the wake of talk about a possible county audit of CRA tax funds it had sent to the city to inform Broward commissioners they don’t have the authority to do that.
County officials acknowledged that only the state has the authority to review CRA actions.
The Legislature now appears interested.
Sen. Joseph Abruzzo, a Palm Beach County Democrat who is chair of the Joint Legislative Auditing Committee, and Rep. Lake Ray, a Duval County Republican who is the vice chair, began asking questions on Thursday after being contacted by “a concerned citizen.”
Abruzzo and Ray sent a certified letter to Mayor Cooper. Copies were sent to Florida Auditor General David Martin, Broward’s commissioners, county Inspector General John Scott and City Manager Renee C. Miller.
Citing the report by Scott’s office, the legislators asked Cooper to respond to accusations that Hallandale had improperly co-mingled city and CRA funds and justify more than $2.2 million in questionable spending.
Abruzzo and Ray’s letter says that if the city fails to provide “specific authority” under state law, or if the expenditures were not included in the city’s CRA plan, Hallandale may have to restore the money to the CRA trust fund.
The legislators also suggested that city commissioners, who also sit as the CRA’s board of directors, seek a new Attorney General’s opinion regarding what constitutes allowable expenditures.
Abtruzzo and Ray also want to know if the city is complying with recommendations by Broward’s Inspector General, including whether the city has established policies to comply with state law and ensure the CRA operates independently.
Cooper said she has informed the committee that lawyers for the city and the CRA will respond to their questions. “I reaffirmed my position and that of our attorneys that expenditures by the CRA are within the authority of the statute to address slum blight, crime and economic development,” she said.
County agents have asked the city to provide a status report on their recommendations by July 16.
THE MAYOR’S SUBPOENA
Cooper said prosecutors subpoenaed her as a witness in their criminal case.
“I cannot comment any further on the matter. I was asked to go in as a witness on the 25th, but have asked to come in earlier due t o my schedule,” the mayor said.
Prosecutors’ investigation of The Palm Center for the Arts follows the Inspector General’s allegations that nearly $5,000 in city funds were used to make a payment on Brown’s timeshare at the Westgate Resort in Orlando and to make payroll payments to herself and her brother and for miscellaneous personal expenses.
City Commissioner Bill Julian said in an interview that the city clerk’s office informed him a subpoena had arrived for him, too. He had not seen the subpoena, but was told it requires him to appear at Zimet’s office on June 25th.
Julian believes that many of the same city officials who previously were questioned by the Inspector General’s Office were issued subpoenas. “I’ll go there and answer questions,” he said. “I have nothing to hide.”
Commissioners Anthony Sanders could not be reached for comment. Likewise, Brown could not be reached. Commissioner Alexander Lewy said he did not receive a subpoena.
PALM CENTER PAYMENTS
Palm Center received at least $107,000 in CRA funds over a three-year period. Brown was also listed as a principal and director of Zamar School of Performing Arts. About three years ago, Zamar received $25,000 in CRA funds.
Both programs operate on city property at 501 NW First Ave. The city leased the property to Palm Center in 2009 for a one-time payment of $10. While Palm Center was prohibited from subletting the facility, the city later modified the agreement to permit Zamar to operate a summer camp there in 2009.
The city property was once owned by a group headed by Commissioner Sanders. The Inspector General’s Office probe involved a review of the city’s purchase of the property from Sanders’ nonprofit Higher Vision Ministries.
Higher Vision bought the property in 2001 for $45,000 and sold it to the city eight years later for $235,000. Sanders, appointed to fill a commission vacancy in 2008, did not vote on the purchase.
In between the purchase and the sale, the CRA gave Sanders’ group a $46,000 property improvement loan. Sander’s group was only required by the city to repay $31,000; the rest was forgiven.
In its report, the Inspector General cleared Sanders of an allegation that the CRA showed favoritism toward him by substantially overpaying his nonprofit group for the property.
By William Gjebre, BrowardBulldog.org
Nearly $11 million in fines imposed for property code violations in Hallandale Beach in the past five years have been excused by city managers without the city commission’s review or approval, according to city records.
The city collected only a fraction of the total.
Breaks worth tens of thousands, even hundreds of thousands of dollars, were handed out to individual property owners, developers, businesses, banks and investment companies.
“There needs to be accountability. There needs to be transparency, especially on those not elected,” said former Miami City Attorney George Knox, a professor of law at Florida International University. “There should be some review to avoid the appearance of favoritism.”
Last month, a report by the Broward’s Inspector General’s Office was harshly critical of top Hallandale Beach administrators it said had “grossly mismanaged” millions of dollars in public funds related to its Community Redevelopment Agency.
Hallandale property owners may appeal fines to the city manager. The managers have lowered or erased fines under a policy begun in 2004 under then-City Manager Mike Good. The policy gave them the authority to slash fines 95 percent for homesteaded property and 90 percent for non-homestead property. In hardship cases, fines could be cleared completely or owners charged only the city’s costs.
The question of whether the city manager should have unbridled authority to reduce code violation fines split the city commission, which voted 3-2 in February to affirm that authority by incorporating the administrative policy into the city code and adding clarifying language.
“No one should have that spending authority,” said Commissioner William “Bill” Julian, who noted commissioners have not been informed of reductions in property fines. “I want to be part of the process. We were elected to oversee.”
Commissioner Michele Lazarow, who joined Julian in voting no, said she favored city commission approval of all fine reductions “over $50,000.”
Mayor Joy Cooper and Commissioner Anthony Sanders did not respond to calls for comment. Vice Mayor Alexander Lewy could not be reached. The trio passed the measure to strengthen the city manager’s authority on fine reductions.
From 2008 through 2012, assessed fines totaled $11.7 million, with the city only collecting only about $751,345, or six percent, according to city documents. The fines were drastically reduced by Good; his successor, Mark Antonio; and current city manager Renee Crichton Miller.
Records show there were 276 fine reduction cases during that period, with 75 cases for fines above $50,000. The smaller cases typically involved work done by homeowners without permits and ailing or elderly homeowners who could not afford to keep up their property.
As BrowardBulldog.org reported two weeks ago, the largest fine reduction occurred last month when the city commission voted to wipe out $453,000 in fines against longtime Miami developer Tibor Hollo.
Professor Knox said he was not surprised that the fines reached as high as they did and the small percentage amount the city collected was what could be expected. “In this context [cities] collect a penny or two on the dollar,” he said.
Knox called the fines, which can escalate on a daily basis, “a brutish method” to coerce property owners to clear up violations that is nevertheless “lawful and constitutional.”
Knox, however, said that is a mistake to put “too much authority in the hands of the manager…without a rendering back of accountability.” The manager should be required to provide regular reports to the commission explaining the rationale for such fine reductions, he said.
With Commissioners Julian and Lazarow urging a change in the process, the commission decided to ask City Manager Miller to come back with a report on how other cities handle the reduction of fines for property code violations.
Miller cautioned that requiring commission approval to reduce any fine by more than $50,000 would slow the process of dealing with code violations and fines, and said the commission find itself “flooded” with cases involving small property owners, she said.
“This is not about power and authority,” Miller said. “It’s not about the manager’s authority; it’s about what makes sense.”
The matter would not have surfaced had the Hollo group accepted the 90% fine reduction — to $45,300 – the city manager could grant. But Hollo wanted the fine reduced to zero, something only the commission could do.
The Hollo group bought the 3.5-acre property along N. Federal Highway, next to the Mardi Gras Casino, two years ago. A 250-room hotel, residential and retail complex called “Bourbon Street” is planned. The code violations and fines existed before the purchase.
The developer’s representatives have said there was an understanding with former City Manager Mark Antonio that if their company corrected the code violations and cleared debris from the property the city would drop the fines completely. There was no formal agreement, however.
The Hollo group has a commitment from the city’s Community Redevelopment Agency (CRA) to receive $25,000 to help it clean up the site.
Ultimately, the commission approved a deal in which the Hollo group agreed to pay the city’s costs of $4,600.
By William Gjebre, BrowardBulldog.org
Miami developer Tibor Hollo
Hallandale Beach city commissioners have let a prominent developer off the hook for nearly half-a-million dollars in fines for property code violations accumulated before it bought the land at a much lower price than paid by the former owners.
In a contentious 3-2 vote on Wednesday, commissioners eliminated a trio of liens on property owned by the family of longtime Miami developer Tibor Hollo.
Jerome Hollo, an executive vice president with his father’s flagship corporation Florida East Coast Realty, said the commission’s decision allows him to move forward to obtain financing for a proposed 250-room hotel, residential and retail complex called “Bourbon Street” on 3.55 acres in the 800 block of N. Federal Highway, next to the Mardi Gras Casino.
“It’s going to be a wonderful project for the city,” said Hollo, who is also an executive with the company that purchased the property, 801 N Federal LLC. The younger Hollo appeared personally at Wednesday’s meeting at the request of the city commission, presenting them with preliminary architectural renderings of the proposed project.
But while the commission majority felt the $453,000 in fines were unfairly punitive, two other commissioners, William “Bill” Julian and Michele Lazarow, opposed the measure excusing the fines.
“I have a hard time forgiving this amount,” Julian said, adding he believes it would be the largest fine mitigation in the city’s history.
Julian said the Hollo group knew about the city’s liens when it bought the property in 2010 for $2.5 million. He also noted that the previous owner paid $12 million for the property in 2006.
“You got a heck of a deal and you are coming in [seeking relief]” knowing all that, Julian said.
“This is taxpayers’ money and I am being called to waive it,” said Lazarow. “We are trying to protect the taxpayers.”
But Mayor Joy Cooper, Commissioner Anthony Sanders and Vice Mayor Alexander Lewy agreed that total relief was appropriate.
“There is no money leaving the coffers of Hallandale Beach,” Lewy said. He added that well-off developers should not be treated differently than “mom and pop” property owners.
Preliminary rendering of proposed “Bourbon Street” development
The Hollo group, Lewy said, “wants to do construction.”
Commissioner Sanders indicated Hollo should not be penalized for getting a good deal on the property.
“He did a good business deal,” Sanders said.
Mayor Cooper said the intent of fines and liens has been to get property owners to clean up their property and comply with city codes, not to be punitive. That approach is common in many cities, she said.
Cooper noted that then-city manager Mark Antonio had asked the Hollo group to clean up the land under a city initiative to enhance and make properties attractive for development. Hollo’s group was told that if they complied the fines would be dropped, according to city documents.
“You did what Mark Antonio asked,” said Cooper.
Cooper accepted a $500 contribution from Tibor Hollo for her successful reelection campaign this past November.
Hollo’s attorney, Alan Koslow, pointed out that the fines were accumulated by former property owners and began with only $500. The fines increased daily when they did not comply, he said.
As part of the agreement to drop the fines, Hollo agreed to pay $4,615 to cover the city’s costs in connection with the violations, which included unsafe conditions and littered grounds that led to loitering and slum and blighted conditions.
The city’s Community Redevelopment Agency (CRA), which is governed by the commissioners, previously agreed to award the Hollo group $25,000 to clean up the property, with payment to be made once the liens are cleared.
If commissioners had not erased the fines, the city manager was authorized under city code to wipe out 90% of the fine.
That power concerned Julian and Lazarow.
“We are the ones who should make the decision,” Julian said.
Commissioners agreed to review the policy, which past city managers have used to wipe out fines both large and small. For example, in July 2010 the city manager forgave 90% of assessed code violation fines for foreclosed home at 747 NW Fifth Court – dropping the total owed from $176,300 to $17,630.
City records show the Hollo group acquired the properties on North Federal Highway in November 2010 from the Federal Deposit Insurance Corporation through a foreclosure process.
Both Tibor Hollo and Jerome Hollo are listed in state records as officials of 801 N Federal LLC.
By William Gjebre and Dan Christensen, BrowardBulldog.org
Broward’s Inspector General has found that Hallandale Beach officials “grossly mismanaged” millions of dollars in public funds “entrusted to the care of its Community Redevelopment Agency,” according to a report obtained by BrowardBulldog.org.
“The OIG (Office of Inspector General) investigation substantiated the allegations and uncovered numerous deficiencies in the city’s administration of the CRA,” says the 50-page preliminary report that has not been released publicly.
Investigators said they found at least $2.2 million in questionable CRA expenditures between 2007 and 2012, including inappropriate loans to local businesses and grants to local nonprofits – as well as the improper use of bond proceeds.
The city improperly spent $416,000 of CRA money for parks outside the CRA boundaries, says Tuesday’s report.
The spending, which was not always documented, was often done at what amounted to the whim of former city managers Mike Good and Mark Antonio, the report says.
Former Commissioner Keith London told investigators that his colleagues “looked at the CRA fund as one big pile of money and they didn’t care how or where the money went,” the report says.
Mayor Joy Cooper, however, offered a different take. “She was not concerned with the CRA administration’s lack of (expenditure) verification because the CRA Board members observed the work of the nonprofits when they went out in the community,” the report says.
Cooper and the rest of the city commission also sit as the CRA’s board of directors.
“This report vindicates everything I have stated for the last six years,” London said Tuesday night.
Cooper could not be reached for comment.
Former commissioner Keith London
The probe began 14 months ago following a string of stories in BrowardBulldog.org about questionable city loans to local businesses and land purchase through the CRA. It surfaced publicly last April when county agents sought a multitude of records at City Hall.
In some cases, the report says, the CRA awarded funds despite a 2010 Florida Attorney General opinion that CRA expenditures must be connected to “brick and mortar” capital improvements – not, for example, to promote economic development or promote socially beneficial programs by nonprofits.
In one case, the line of what’s legal was apparently crossed and a crime may have been committed, the report says.
The Inspector General’s findings about Hallandale Beach are the latest to cite serious mismanagement of CRA funds. A year ago, for example, the Inspector General slammed Lauderdale Lakes for misspending $2.5 million in CRA funds. More recently, the Florida Auditor General identified misspending by Hollywood’s CRA.
“It is becoming increasingly apparent that the gross mismanagement of CRA funds by a Broward County municipality is not a unique occurrence,” the report says.
The CRA was established in 1996 under a state law that allows it to collect tax revenue to be used to rid slum and blight conditions. It receives 95 percent of the taxes collected on the appreciated value of properties within its boundaries. The county has provided Hallandale’s CRA with approximately $35 million since it began.
Inspector General John Scott’s report includes what amounts to a warning to other Broward cities that his office will be eyeballing their CRA’s to see how they spend their property tax dollars.
“The OIG will continue to examine the expenditure of CRA funds by municipalities,” says the report.
The final report will recommend to the county that it look over its legal options “to prevent the ongoing abuse of the CRA process and recover those funds that may have been misspent,” the preliminary report says.
In Hallandale, there was an apparent lack of regular monitoring by the CRA of who got its funds and how that money was spent.
In one case, the report says, a nonprofit grant recipient spent nearly $5,000 in funds to make a payment on her time-share at the Westgate Resort in Orlando, make payroll payments to herself and her brother and on other things.
Dr. Deborah R. Brown with former Congressman Kendrick Meek
“We found probable cause to believe that Dr. Deborah Brown, the founder and director of the Palms Center for the Arts (PCA), engaged in criminal misconduct in the handling of a $5,000 award the PCA received from the CRA,” the report says.
Brown could not be reached for comment Tuesday night.
The matter has been referred to the sheriff’s office and the Broward State Attorney for prosecution.
The Inspector General’s report also clears Commissioner Anthony Sanders of allegations that the CRA showed favoritism toward him by substantially overpaying his nonprofit, Higher Vision Ministries, for property it purchased in 2009 at 501 NW First Ave.
“The investigation did not substantiate the allegations, although we found that the CRA fomented an appearance of favoritism by failing to consider the purchase of the property in a fully transparent manner,” the report says.
The report also cites “institutional deficiencies in the establishment, organization and function of the CRA” that it says contributed to numerous instances of gross mismanagement. They include:
• Failure for nearly 16 years to establish a CRA trust fund, as required by law, which led to the commingling of CRA funds with city funds in the city’s bank account. A trust finally was set up last May.
• Failure to operate the CRA independently from the city. Former CRA executive director Alvin Jackson told investigators the CRA “was treated like any other city department and that the city had ‘free rein to tap into CRA funds.
• Failure to timely generate detailed CRA plans and adhere to them, as well as a lack of a “stable and empowered CRA staff to ensure compliance” with the law.
“We also identified multiple instances where city officials ignored warnings from CRA staff of various deficiencies in the management of the CRA,” the report says.
The report notes that before Jackson there were several CRA managers under City Manager Good’s heavy managerial thumb. “More troubling is evidence that Mr. Good and other senior officials lacked understanding of” state statutes governing the CRA “and did not require compliance.”
The report notes that in 2011, after news reports about CRA problems in BrowardBulldog.org and elsewhere, it undertook “remedial steps” to improve its management and effectiveness.
But the Inspector General indicated those steps, including the establishment of the trust fund, are not enough.
The report includes a half-dozen recommendations intended to “ensure the independence of the CRAs,” including building a stable and knowledgeable staff with the authority to ensure compliance with the law, and diligent future monitoring of expenditures.
By William Gjebre, BrowardBulldog.org
The Broward Inspector General’s Office appears poised to ask Broward prosecutors to investigate a Hallandale Beach group that received at least $25,000 in city funds.
The Zamar School of Performing Arts had been slated to get another $50,000 from the city’s Community Redevelopment Agency last week. The deal fell apart, however, shortly after it was discovered that Zamar was ineligible for the funds because its status as a tax-exempt 501(c)(3) non-profit had expired.
CRA Attorney Steven Zelkowitz said the county’s Inspector General’s office has informed him investigation of Zamar by the State Attorney’s Office was “ongoing.” The Inspector General has been investigating allegations of mismanagement at the city and its CRA since last spring.
City Manager Renee Crichton Miller and CRA executive director Alvin Jackson confirmed that a the state’s investigation involving Zamar was underway, although both said Zelkowitz was the source of their information.
A spokesman for Broward State Attorney Mike Satz said Friday that the matter has had some review, but that no criminal investigation was underway.
“I’m told that we have not received anything formally on this yet,” Ron Ishoy said on Friday. “The case was apparently discussed last month at the public IG Oversight Committee meeting that (Assistant State Attorney) Tim (Donnelly) sits on.”
Inspector General Scott declined to comment.
Zamar’s president and director Deborah Brown did not respond to repeated phone messages seeking comment. A person who answered the phone at Brown’s office initially advised a reporter to hold for her. A short time later the line went dead and follow-up calls to Zamar were sent to an answering machine.
Zamar provides arts and education programs and job training and job placement, according to city documents.
County investigators are believed to be nearing the end of a months-long examination of city grants and contributions to community groups, CRA land buys and loans to local businesses. City commissioners – who do double duty at the board of directors of the CRA – and various city employees have been interviewed, and thousands of pages of city records examined.
In June, Browardbulldog.org reported those records included files on eight community-based groups that received city funds, including Zamar.
Zamar, which got $25,000 in CRA funds three years ago, operates on city property at 501 N.W. 1st Avenue – in a building once owned by a group headed by City Commissioner Anthony Sanders.
The city leased the property for a one-time payment of $10 to the Palm Center for the Arts in 2009 shortly after acquiring the property. While Palm Center was prohibited from subletting the facility, the city later modified the agreement to permit Zamar to operate a summer camp there in 2009.
When the Inspector General asked the city this year for records about Zamar and Palm Center, state corporate records listed Brown as president of Palm Center and a principal and director of Zamar. At that time, Palm Center had received at least $107,000 in CRA funds over the past three years.
The IG’s probe has also involved a review of the city’s acquisition of 501 N.W. 1st Avenue from Commissioner Sanders’ nonprofit, Higher Vision Ministries. The group purchased the property in 2001 for $45,000 and sold it to the city eight years later for $235,000. Appointed to fill a vacancy in 2008, Sanders did not vote on the purchase.
In between, the CRA gave Sanders’ group a $46,000 property improvement loan. The city only required Sanders’ group to repay $31,000 of that loan, the rest was forgiven.
The Inspector General’s office has yet to say why it is interested in Zamar and why prosecutors should look at it.
City Manager Miller said Zelkowitz was likely contacted about Zamar by the Inspector General because it involved the CRA, whose directors are the five members of the city commission. She added she has no other information on the nature of the Zamar probe.
“I’m concerned when a non-profit is under scrutiny,” said Miller.
Zelkowitz declined to elaborate.
Earlier last week, Zamar had a setback when it was announced that the group had withdrawn its request for CRA funds for this fiscal year.
Commissioners, as CRA board members, were to vote on the $50,000 GRANT on Dec. 17. Shortly before, however, city staff learned the group did not have current 501(c)(3) nonprofit status, making it ineligible for the funds.
By William Gjebre, BrowardBulldog.org
Mayor Joy Cooper
Hallandale Beach city commissioners last night fired the executive director of the city’s embattled Community Redevelopment Agency after just two years on the job.
Alvin B. Jackson Jr.’s termination comes amid an ongoing investigation by the Broward Office of the Inspector General into management practices at both the city and the CRA prior to Jackson’s arrival.
Mayor Joy Cooper led the ouster, saying commissioners “expected competency, transparency, and communications” that Jackson failed to deliver despite “second and third chances” to improve.
“It’s not just trust,” said Cooper. “It’s the work product,” she said. “It’s been frustrating….I have not seen many of the plans he’s developing.”
“It seems we have lost trust” in Jackson, said commissioner Anthony Sanders, who along with commissioner William Julian backed Cooper’s motion to terminate Jackson “without cause.”
Removing Jackson “without cause” allows him to receive a severance package of health insurance for nine months after his final workday, January 18, 2013, and 20 weeks of pay (about $50,000), in accordance with his contract.
The commission, sitting as the CRA’s board of directors, voted 3-2 to oust Jackson.
Vice Mayor Alexander Lewy and newly elected commissioner Michele Lazarow opposed Jackson’s firing.
Lewy said he favored holding a public hearing at which commissioners would have discussed their specific complaints about Jackson’s performance. If cause for dismissal was established, the city would not have to pay Jackson any severance.
Cooper, however, said she did not want a hearing about cause to avoid airing the city’s “dirty laundry.” She declined to elaborate after the meeting.
Jackson was stoic after the termination vote.
“I’m done,” he said. “When you’re being asked to leave you’ve got to do what’s best for the community. I did not want to impede progress (of projects).”
CRA Executive Director Alvin B. Jackson Jr.
The mayor became upset with Jackson when he approved CRA staff salary hikes, including for himself, during the 2011-2012 fiscal year without guidance from city commissioners.
She also complained when the CRA staff failed to discover that a community group recommended for a city grant had failed to maintain its status as a non-profit group, making it ineligible for the funds.
The CRA collects and oversees the use of property tax dollars to promote business and revitalize neighborhoods. Those dollars are supposed to be spent on projects within the district. Three-fourths of the city, including the area around City Hall, is within the CRA’s boundaries.
When Jackson took over two years ago, the CRA was under the controversialdirection of the city manager’s office. He was hired shortly after city commissioners fired City Manager Mike Good for excessive absences and other problems.
After Good’s departure, an outside auditing firm found that the CRA had failed to properly track city land acquisitions totaling more than $28 million and loans to local businesses.
The Inspector General’s Office began its probe last April. City officials have been questioned and thousands of pages of documents have been obtained about those land deals, loans and various city grants and donations to community groups.
As they dismissed Jackson, commissioners also acknowledged that the CRA had greatly improved under his leadership.
Among other things, Jackson initiated a broad plan for the CRA district and created procedures to ensure accountability for loans and grants.
“We are better off now than under Mike Good, “ said Lewy.
“When he took over the CRA was a train wreck,” said Julian. “There is a good staff now, important projects are underway.”
Julian said he thought Jackson deserved a “second chance” despite some admitted mistakes. But the idea faded when Jackson told commissioners he thought the time had come for him “to move on.”
While some speakers at last night’s public meeting backed the vote to fire Jackson, others faulted it and complained about the lack of improvements in the city’s low-income, predominantly blacknorthwest section.
“He should not be dismissed,” said resident Gerald Dean, who complained that the CRA’s few efforts there have been ineffective.
Mary Washington, a northwest area civic activist, noted the city used the rundown conditions in the northwest section to establish the CRA in 1996.
“I thought by now we’d have decent housing,” she said, adding it hasn’t happened.
“All the CRA money is being spent in the eastern portion of the CRA,” Washington said. “It’s time the northwest to get the balance of the money. Please follow through; we want our community back.”
Cooper told commissioners that after Jackson leaves, City Manager Renee Crichton will temporarily guide the CRA until a new permanent director is found.
By William Gjebre, BrowardBulldog.org
Hallandale Beach Mayor Joy Cooper
The Broward Inspector General’s probe of Hallandale Beach financial management practices has reached a critical stage: the questioning of the five members of the city commission this week.
The interviews got off to a false start on Friday, when Mayor Joy Cooper was to have been questioned by investigators.
Cooper said she went to the IG’s office but there was a miscommunication involving City Attorney V. Lynn Whitfield who had been out of town and was not available to attend. As a result, Cooper said, she was scheduled to meet with IG investigators Monday.
“I’m looking forward to being interviewed and the completion” of the investigation, Cooper said before her scheduled appearance. She could not be reached Monday evening for further comment.
Vice Mayor Anthony Sanders and commissioners Dorothy Ross, Alexander Lewy and Keith London confirmed they would meet with IG investigators this week. The meetings, at the IG’s office in Plantation, are by invitation, not subpoena.
The commissioners, who are also the directors of the city’s embattled Community Redevelopment Agency (CRA), may be the last group to be interviewed in the probe.
Investigators have interviewed former City Manager Mark Antonio, former City Commissioner William Julian, CRA Executive Director Alvin Jackson, Human Services Director Marian McCann-Colliee, and Jennifer Frastai, an administrator in the city manager’s office.
Investigators apparently also met with Richard Cannone, a former director of the city’s Development Services Department. When asked if he met with investigators, Cannone referred request for comment to the IG’s office.
INVESTIGATION MARCHES ON
County investigators are reviewing grants and contributions to community groups, CRA loans to businesses and land acquisitions, and management practices. They are expected to eventually issue a report on their findings, with recommendations, and they may also refer some issues to state agencies, such as the Broward State Attorney’s Office.
Vice Mayor Sanders, who along with his wife Jessica, appear to be a focus of the probe, declined to comment or say when he would meet with investigators.
“I wish I could talk to you,” he said.
Investigators have asked for files of several community groups that received city funds and are linked to Sanders or his wife. They have also asked about the city’s purchase of property once owned by a group headed by Sanders.
Ross said she was not sure of the date of her appointment because it had been changed. “I’m going to ask the city attorney to go with me,” she said.
Lewy declined to say what day he will meetwith investigators. He previously stated he believes the investigators have been “fishing for information.”
London, who is running against Cooper for the mayor’s seat, disagreed with that assessment. “This is not a fishing expedition,” he said.
London said he is to meet with investigators at their office on Thursday morning. “I don’t know who else they can talk to. It doesn’t take six months to find people innocent. I look forward to the final report.”
Former commissioner William “Bill” Julian, who is seeking to regain a commission seat this fall and who voluntarily spoke to the IG weeks ago, said he thinks politics is behind the IG’s investigation.
“I don’t see any wrongdoing,” Julian said.” I think we have solid policies. Any problems in the past have been corrected. I don’t see where they can point any finger at anything criminally wrong. I’d say it’s politically motivated investigation.”
The meetings end a short-lived impasse between the Inspector General’s Office and the city regarding investigators attempts to interview city commissioners.
Earlier this month, an attorney for the city’s Community Redevelopment Agency (CRA), whose directors are city commissioners, had maintained that the IG had no authority to probe the CRA under state and county law because it was an independent special district. Prior to that, the City Attorney’s Office informed the IG that the city manager’s office would not voluntarily schedule meetings between city commissioners and county investigators.
Why the city decided instead to cooperate was not immediately clear.
Steven Zelkowitz, the CRA’s lawyer, and Hallandale Beach City Attorney Whitfield could not be reached for comment. Inspector General John Scott declined comment on any aspect of the probe.
Commissioners didn’t seem to know what had changed and indicated they did not inquire.
London, often at odds with fellow commissioners, said he believes Zelkowitz was trying “to protect his clients (city commissioners) ” when he issued his opinion to the IG’s office.
The city’s opposition to having commissioners interviewed may have dissipated because it was only this past March that it officially constituted the CRA as an “agency” under state statutes. Up until then, the CRA, which began functioning in 1996, had been a sub-department or a department of the city.
Another factor could be the IG’s aggressive oversight of another Broward city where elected commissioners also comprise the city’s CRA.
In a report this March, the year-old agency concluded that Lauderdale Lakes “had grossly mismanaged public funds…The OIG investigation also substantiated allegations that the city’s CRA funds were improperly used to pay city operating expenses….”
Or it could be that city commissioners felt public pressure to at least be questioned rather than having this as an issue during an election year.
William Gjebre can be reached at email@example.com
By William Gjebre, BrowardBulldog.org
Hallandale Beach paid $235,000 to buy this property in 2009 from a nonprofit whose officers included Vice Mayor Anthony Sanders and his wife Photo: William Gjebre
A former Hallandale Beach commissioner said he voluntarily met with Broward Inspector General investigators Monday who questioned him about the city’s embattled Community Redevelopment Agency, its purchase of property once owned by a group headed by Vice Mayor Anthony Sanders and a city loan to a local newspaper.
The former commissioner, William “Bill” Julian, is currently running for city commission. He declined to discuss details of his four-hour interview with three investigators because “they asked me not to talk about anything.”
For more than a year, however, Broward Bulldog has reported about questionable city loans to local businesses and land purchases through the CRA – whose board of directors are also the city’s commissioners.
The IG’s office investigates suspected misconduct that includes fraud, corruption and mismanagement. IG investigators appear to have begun focusing on Hallandale Beach and its CRA this spring with a trip to City Hall in April. In response to their requests, the city recently turned over thousands of pages of records.
Records indicate that investigators are examining the CRA and a city grant program that funneled hundreds of thousands of dollars in grants and donations to eight local non-profits, including several linked to Vice Mayor Sanders or his wife, Jessica.
In 2009, after Sanders’ appointment to the commission the year before, the city spent $235,000 in CRA tax dollars to purchase a building and land at 501 NW First Avenue owned by Higher Vision Ministries, a not for profit corporation whose officers included Sanders and his wife.
Sanders, who did not vote on the city’s purchase, was a director of Higher Vision Ministries when it bought the property in 2001 for $45,000. The nonprofit received a $46,000 property improvement loan from the city not long after the purchase.
The terms of the loan immediately forgave $7,500 in principal. An error by the city at the time the property was sold in 2009 doubled that forgiveness to $15,000 – meaning Higher Vision Ministries only had to pay back $31,000.
LOCAL NEWSPAPER DEAL
Julian, who served as a commissioner and vice mayor from 2001 to 2010 when he was defeated for reelection, said the investigators also asked about a CRA loan to the for-profit South Florida Sun Times.
The weekly newspaper, which regularly features a column by Mayor Joy Cooper, received a $50,000 CRA business loan under favorable terms in 2009.
Half of the loan — $25,000 – was forgiven even though for two years prior to the loan the newspaper’s two top executives each reported incomes averaging more than $200,000.
Julian told Broward Bulldog there has been turmoil at the CRA, with several directors being removed in past years. He added that CRA funds were used for a variety of charitable contributions to community groups.
“I didn’t question use of CRA funds for charitable contributions,” Julian said of his time on the city commission. Commissioners, he added, wanted to “take a load off the general fund…I don’t know if that was legal. That will have to come to light.”
“I don’t know of wrongdoings by commissioners or myself,” Julian said. “I don’t know if I did something wrong.” Julian added that if something was done incorrectly “let’s fix it.”
VOLUNTEERED TO TALK
Julian said he contacted the IG office Friday and volunteered to be interviewed because “there’s a cloud of suspicion over me.”
He said he was compelled to come forward because of public comments on recent stories about the IG investigation and what his involvement might have been while in office.
“I want to be as open as possible,” Julian said. “I have never been accused of anything in my life.”
Inspector General John Scott did not respond to a request for comment.
Julian is one of six candidates vying for two at large commission seats up for grabs on November 6. The other candidates are Vice Mayor Sanders, Gerald Dean, Ann Pearl Henigson, Csaba G. Kulin and Michele Lazarow.
Dorothy Ross, a commission member for 17 years, is not seeking reelection.
CITY BALKS AT COOPERATION
County investigators have asked to speak with each of the commission’s current members. The City Manager’s Office has informed them that it won’t schedule any interviews until the IG’s office informs the city about its intentions.
In addition, CRA attorney Steven Zelkowitz recently told the IG’s office by letter that the CRA is “a separate legal entity” and not subject to the authority of the IG under county and state laws.
Historically, however, the city administration and commissioners have treated the CRA as a part of the city government.
*The CRA has been operating since 1996, but it wasn’t until March that its board of directors – the city commissioners – voted to establish it as a separate “agency” reporting directly to the board in accordance with state law. Until then, the CRA functioned mostly as a subdivision of the city’s Department of Development Services.
* All 59 properties purchased with CRA funds are in the name of the City of Hallandale Beach – not the CRA. The CRA is now seeking to re-title 43 properties to itself, but 16 will remain in the name of the city.
*Hundreds of thousands of dollars in past city grants and charitable contributions to local non-profit community groups did not clearly spell out how much CRA money was used in those taxpayer-provided gifts.
*CRA business loan policies changed frequently under former city managers, allowing for some loans to exceed established limits, some funds to be distributed without repayment agreements, and questionable forgiveness arrangements.
A critical study of city and CRA record keeping this year by an outside auditing firm recommended that a financial manager be hired. The recommendation was also in agency bylaws adopted by city commissioners sitting as the CRA’s board of directors. In June, however, those same board members voted down a CRA staff request to hire a financial manager.
That study was ordered after it had become clear that management problems existed. The commission, however, authorized a limited review rather than a more intensive financial audit. Aside from poor record keeping the recent report by the auditing firm said some $20 million in vendor contracts were never reviewed because city staff failed to provide them.
William Gjebre can be reached at firstname.lastname@example.org
By William Gjebre, BrowardBulldog.org
Broward Inspector General John Scott Photo: CBS4 Miami
A Hallandale Beach program that funneled hundreds of thousands of dollar in grants and contributions to community groups is a key focus of the Broward Inspector General’s widespread investigation of city management practices.
Documents obtained by Broward Bulldog show the Inspector General obtained city files on eight community-based organizations, several linked to City Commissioner Anthony Sanders or his wife, Jessica. The documents include information about city payments to Jessica Sanders and others associated with the groups.
Those disclosures, and others about the probe, are contained in a 15-page letter sent to Inspector General John Scott on April 23 from City Manager Mark Antonio. The letter was the city’s formal response to Scott’s request two weeks earlier for dozens of city records.
Among the records turned over to county investigators are thousands of pages of city memos, reports, minutes, email, budgets, policies, programs, audits, grant reviews and program files. The records sought are for the fiscal years 2010-2012. Antonio also referred investigators to additional public documents on the city’s website.
Some requested information was not supplied. For example, investigators asked for all city records that would show attendance by nonprofit grant recipients at quarterly workshops, as required by grant agreements. Antonio said, however, that there were no sign-in sheets to verify attendance
Antonio, who retires next week, said, “The city has diligently fulfilled the request for records to the best of our ability.’
Scott does not comment on pending investigations.
Antonio’s letter says investigators also sought information about the leasing and rental of city property to local groups; plans and loan programs operated by the city’s Community Redevelopment Agency; and expenditure reports involving the CRA, the city’s general fund and the Law Enforcement Trust fund.
County investigators are also reviewing whether non-profit groups receiving city funds followed procedures, assessments, and commitments.
Broward Bulldog reported last week that the City Manager’s Office has not been fully cooperative with investigators by declining to set up interviews between city commissioners and county investigators who want to speak with them. Those commissioners also sit at the CRA’s board of directors.
The refusal was cited in a June 13 letter from the City Attorney’s Office, which also sought the identities of commissioners who might be targets.
INVESTIGATORS VISIT CITY HALL
The Inspector General’s office began its probe on April 10 with a visit to city hall where investigators met city with Antonio and CRA Executive Director Alvin Jackson. Jackson started in January 2011.
Investigators revisited City Hall in recent weeks, meeting with Jackson for several hours. Documents state that IG special agent William Cates and senior auditor Susan Friend also met with other city officials, including Jennifer Frastai, an administrator in the City Manager’s Office, and Marian McCann-Colliee, the city’s Human Resources Director.
The probe appears to be limited to the past three years, but some requests for records have resulted in the city providing documents going back to 2000.
In March, an outside audit was critical of city management and the tracking of CRA loans and property acquisitions. Broward Bulldog also reported then that the audit, which raised questions about the city’s loan practices, did not review more than $20 million in contracts with city vendors because the city failed to provide the information and limitations on the scope of the audit.
In several of the loan deals involving taxpayer property tax dollars, recipients did not have to pay back the amount as much as half of the value of the loan.
COUNTY FOCUSING ON GIVEAWAYS
While records indicate that the Inspector General’s probe is multi-faceted, investigators appear to be strongly focused on city grants and charitable contributions made through its Community Partnership Grants program.
City records show that such giveaways increased 60 percent in the past three years – from $400,000 in fiscal year 2009-2010 to $647,000 this year.
“As economic times worsened the city saw a greater need for services in the community which directly corresponded with the increase in the amount of requests to the city,” Antonio said in his letter. He added that for 2012 “two teams of professional who were non-city employees” reviewed 29 applications.
Available city documents show that in 2010 and 2011, city grants and donations did not specify where the money came from: the general fund, CRA or the Law Enforcement Trust fund. But this year, after a CRA management makeover, they were shown as follows: general fund, $256,130; CRA, $274,600; and Law Enforcement Trust Fund, $116,654.
The Inspector General asked for the files on these program recipients:
- Eagles Wings Development Center Inc., job training and social services program, $50,000 in the past two years.
- Greater Mt. Everett Resources and Learning Center, a work force training program for construction trades, $61,000 this year.
- Lampkin’s Creative Arts for All LLC, including Dizzy Fingers School of Excellence, Inc., training youth in how to advance in the arts, $50,000 this year.
- Palms Center for the Arts, Inc., a youth arts and job preparation program, $107,000 past three years.
- Palm Community Action Coalition, community based program assistance, $26,000 over two years.
- Palms of Hallandale Beach Weed and Seed, a crime prevention and community development program associated with the Department of Justice, $143,000 past three years.
- Phileo Outreach Ministries Inc., a program for rehabilitation of youth, $45,000 past two years.
- Zamar School of Performing Arts, Inc., $25,000 two years ago.
COMMISSIONER SANDERS AND WIFE
State corporate records for Eagles Wing listed Hallandale Beach Commissioner Anthony Sanders as president and his wife, Jessica, director, in 2009. In 2010 and 2011, Jessica was listed as director, but Anthony Sanders was not listed. He was appointed to the city commission on Sept. 8, 2008 to fill a vacancy.
Commissioner Anthony Sanders
Jessica Sanders also has ties to two other non-profits on the Inspector General’s list, according to public records.
She is a contact for the Palms Community Action Coalition, which until April 2011 was known as the Palms Community Development Corporation. Jessica Sanders, as “interim site coordinator” for Palms of Hallandale Beach Weed and Seed, appeared at a July 14, 2011 Hallandale Beach commission meeting before a vote to award a $45,000 grant to her group. “Vice Mayor Sanders excused himself from the dais during the presentation and recused himself from voting,” city minutes say.
In an interview this week, Commissioner Sanders indicated that he is perplexed about the county’s inquiry.
“I can’t answer why they are asking for the records,” he said. “They are looking at nonprofits. I don’t mind that they are looking at Eagles Wings. It is a service to the community and always has been…food programs, job training and other services.”
Sanders indicated he may meet with IG investigators soon.
Jessica Sanders said, “I’m not concerned about the probe.” She said there has been no wrongdoing and noted that she has provided some records to IG investigators. She said that she and her husband “stayed here to make a difference. We do good work.”
Her income from the Weed and Seed program was not from city funds, she said, but came from the Department of Justice, which backed the program. She said that on several occasions she was asked by the Weed and Seed governing board to operate the program when the group’s administrators failed to perform.
The county investigators also sought information payments made by the city to Nellie Bacon, Clara Brown, Deborah Brown, Selinda Washington-Jackson and Jacquelyn Rosenau.
According to state corporation records Rosenau is director at Eagles Wing. Clara Brown is corporate secretary for Palms Community Action Coalition. Deborah Brown was president of Palm Center for the Arts in 2011, and a principal and director of Zamar School in 2011. Washington-Jackson works for Weed and Seed. Rosenau used to work for the agency.
The city supplied copies of its lease and rental agreements with non-profits to investigators.
Those agreements are with: Hallandale Beach Area Chamber of Commerce, Zamar School of Performing Arts, and the Palm Center for the Arts.
The chamber, which received $25,000 from the city in 2010, has an office in City Hall, next to the commission chambers. The rental fee for approximately 400 square feet of space is $1 a month.
The Palm Center for the Arts, 501 NW 1st Ave., sits on land the city purchased with CRA funds in 2009 from Anthony Sanders’ nonprofit Higher Vision Ministries; a commissioner at the time, Sanders did not vote on the sale.
Sanders bought the property in 2001 for $45,000 and sold it to the city for $235,000 after receiving a $46,000 property improvement loan. The city initially agreed to forgive $7,500 of the loan. When the city bought Sanders’ property, however, it forgave an additional $7,500 when at the time the sale was finalized. City officials have said it was an error by the city.
In August 2009, the city leased Sanders’ former property to the Palm Center for the Arts for a one- time fee of $10, on the condition it provide community art and music training programs. While the lease states the center is not allowed to sublet or rent the facility, the city modified the agreement to permit the Zamar School for Performing Arts to operate a summer camp at the center in the summer in 2009.
A provision in the Palm Center lease allowed for a summer camp music program. The city helped Zamar with $25,000 to operate the camp.
The IG’s office has also requested information about additional money given to various groups that was more than initially authorized.
William Gjebre can be reached at email@example.com
By William Gjebre, BrowardBulldog.org
Commissioners Dorothy Ross, left, and Anthony Sanders
Hallandale Beach City Manager’s Office has refused to fully cooperate with the Broward Inspector General’s Office investigation into the city’s management of the Community Redevelopment district.
City Attorney V. Lynn Whitfield informed the Inspector General’s Office by letter Wednesday that City Manager Mark Antonio’s office will not voluntarily schedule requested meetings between county agents and city commissioners, who also serve as the CRA’s Board of Directors.
City Attorney Whitfield also sought in her letter to identify the target or targets of the investigation.
“As it relates to the members of the City Commission, it is imperative, in order to properly advise them as to the availability of legal counsel, that I know whether your investigation is directed to the actions of the City Commission as a whole or to the actions of only individual City Commissioners,” Whitfield wrote. “This will assist me in advising whether or not they need to obtain independent legal counsel.”
The Inspector General began an investigation in April of city management practices following numerous news stories in Broward Bulldog and elsewhere regarding the city’s poor record keeping of land acquisitions and loans through the CRA.
County investigators have been to City Hall at least twice. They are known to have met with Antonio, who retires June 29, and CRA executive director Alvin Jackson. The city also has responded to the Inspector General’s request for various documents dealing with the CRA and other aspects of city operations.
But in yesterday’s letter addressed to county Special Agent William Cates, the city refused complete cooperation – apparently until the county is willing to disclose which commissioners are under scrutiny.
Outgoing City Manager Mark Antonio
“It is my understanding that the City Manager’s office has notified you that they will not be scheduling those meetings and advised that all such requests should be directed to me or the CRA attorney Steven Zelkowitz,” Whitfield said.
Antonio, a 25-year city employee who has been city manager for the past two years, did not respond to a request for comment. Neither did Whitfield or his replacement, Renee Crichton, who is working alongside Antonio until his departure and has assumed administrative duties, according to a city spokesman.
Special Agent Cates also could not be reached for comment.
Despite the letter, two city commission members told Broward Bulldog that they are willing to be interviewed if asked. Two others indicated they would not talk without consulting with the city attorney.
Commissioner Keith London said he does not understand the suggestion that city officials refrain from cooperating with investigators.
“I will go as quickly as I can. I have nothing to hide and look forward to speaking with the IG about (the) CRA and Hallandale’s mismanagement of fund,” he said. “I look forward to the final report and the arrest and conviction of people who mismanaged taxpayers’ money.”
The Inspector General is not conducting a criminal inquiry. It can, however, refer its findings to the State Attorney’s Office for possible prosecution.
Commissioner Dorothy Ross was not aware of the city attorney’s letter, but said she was willing to meet with county agents. “I’m of the opinion there is nothing to investigate; there is nothing wrong,” she said.
Commissioner Alexander Lewy was more cautious. “If they subpoena me, fine,” he said, adding that the county was “fishing for information.
Lewy said city staff has told him that most of the information the county has sought predates his election to the city commission in November 2010.
Vice Mayor Anthony Sanders took a similar stance. “I would check with (the city attorney) if asked for an interview,” he said.
Mayor Joy Cooper did not respond to a request for comment.
The CRA was created in 1996 with a 30-year mission to facilitate redevelopment in the city. But while it has spent millions in tax dollars over the years, critics complain the city has little to show for it.
Many of the issues faced by the city happened before Antonio and Jackson were in their current posts.
A number of controversial findings and actions regarding the city’s redevelopment agency have surfaced in the past year:
- An auditing firm reported in September that the CRA failed to properly track city land acquisitions totaling more than $28 million and loans to businesses exceeding $1.5 million. In March, auditors said the city also failed to provide them with $20 million in vendor contracts for review, limiting the scope of their audit report.
- The CRA acquired nine properties for $23.5 million during the past five years – taking them off the tax rolls – yet the city has enacted no plans for how to use eight of the parcels. The value of those properties has also fallen by $9.1 million.
- A local weekly newspaper that regularly features a column written by Cooper – and has touted her in front page puff pieces – received a $50,000 CRA loan in 2009 that only required the paper to repay half of that amount.