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 

Hallandale Beach City Hall

Current and former top Hallandale Beach officials defended – or offered excuses for – the handling of millions of dollars in community redevelopment funds to county investigators who have now accused the city of “gross mismanagement.”

The Broward Inspector General’s office slammed the city last week in a 50-page report, citing “numerous” improprieties and deficiencies.

Mayor Joy Cooper staunchly defended the controversial spending by the city’s property tax funded Community Redevelopment Agency (CRA), which she chairs, according to the report.

For example, the mayor said a $50,000 “loan” to the South Florida Sun Times, a local newspaper where she has been a columnist since 2003, was an appropriate 2009 CRA expenditure that she likened to an incentive for a struggling business.

“They were having issues and might fold,” Cooper said.

Under the terms of the deal, the Sun Times was only required to repay half of the loan – $25,000 – even though the paper’s owners paid themselves $469,000 in salaries the year before. Cooper told investigators she was unaware of those prior salary payouts when the CRA Board approved the generous loan.

Former city managers Mike Good and Mark Antonio, who oversaw the huge pool of CRA funds during most of the past 11 years, admitted to investigators that they never had any training regarding the state law (Chapter 163) that governs CRAs.

Ex-City Managers Mike
Good, left, and Mark Antonio

Good, in charge for most of that time, told Browardbulldog.org this week, “I don’t think anything was grossly mismanaged during my administration” adding “I will be vindicated” and so will the city.

Antonio did not respond to a request for comment.

The 14-month probe by the Inspector General began after a string of stories in BrowardBulldog.org about questionable city loans to local businesses and land purchases through the CRA.

Last week’s preliminary report found at least $2.2 million in “questionable” CRA expenditures between 2007 and 2012 – including loans to local businesses and grants to nonprofits. The report also found that bond proceeds had been improperly used.

The report said the city was supposed to set up a separate CRA trust fund in years past, but instead co-mingled CRA money with city funds. It also said CRA funds were improperly spent for parks outside the CRA’s boundaries and city fireworks displays.

In one case, investigators reported finding “probable cause” to believe that the founder of one local nonprofit diverted about $5,000 in grant funds for personal purposes, including making a payment on her Orlando timeshare. The matter was referred to the Broward State Attorney’s Office for prosecution.

City records regarding payments to non-profit groups were so lacking, the report said, that investigators were “unable to reliably assess the amount of possible losses suffered by the CRA as a result of ‘misapplication of funding by non-profits.”

Florida law does not permit the CRA to fund charitable donations to non-profits, the report said.

Hallandale’s CRA was established in 1996 under a state law that allows it to use an increase in tax revenues to rid slum and blight conditions in the designated area, in this case the entire city west of Northeast 14^th Avenue.

The funding total since then has reached approximately $70 million, approximately one-half coming from the county and most of the other half coming from the city.

The five members of the city commission control that money because they also serve as directors of the CRA governing board.

Cooper, the leader of the city commission, had a different viewpoint than investigators on a number of issues. She contended that CRA funds can be used for expenditures such as Fourth of July fireworks held “outside the CRA boundaries” because such activities “also benefit and promote the CRA.” the report said.

While the Inspector General asserted that a 2010 Florida Attorney General’s opinion required CRA expenditures be related to “brick and mortar” projects, Cooper stated “she believed CRA funding for festivals was” permitted by the Attorney General’s opinion.

Hallandale Beach Mayor Joy Cooper

When investigators questioned Cooper about the CRA’s donations to local charities because they were not mentioned in the city’s CRA plan, Cooper said that “those donations were identified in the city budget” and “encompassed the actual goals and objectives of the CRA plan,” the report said.

Cooper also told investigators that the law that governs CRAs is “pretty general” and allows them “flexibility” to spend CRA funds as it sees fit to “address slum and blight,” the reported added.

Cooper would not be interviewed, said city spokesman Peter Dobens.

Good, city manager from 2002-2010, “had a free hand to implement anything for the CRA” and rarely asked for and considered any other opinions, former CRA director Kendrick Pierre told investigators.

Another former CRA director, Bobby Robinson, said he told his immediate superior about inappropriate spending and other problems, but nothing was done.

Good was given wide latitude in making CRA business loans. He OK’d the controversial $50,000 Sun Times loan under a program he created to assist businesses having financial problems, the report said.  Like the mayor, he told investigators that he was unaware of information in CRA files that showed the paper’s executives had paid themselves $469,000 in 2008.

Good acknowledged his 2009 recommendation that the CRA waive a requirement that a startup business, Digital Outernet, own its business location in order to receive a $75,000 loan.  The owners planned to install closed-circuit television screens in local businesses to provide information to the public, earning income by selling advertisements.

Digital Outernet made one installment payment of $2,284, then shut down after its local partner died suddenly. The city never obtained a signed guarantee document from the firm’s partners and was eventually forced to write off nearly $73,000.

“Sometimes in a blighted area, you take a risk,” Good told investigators.

Mark Antonio, who took over after Good was fired in 2010 due to chronic work absences and other reasons, told investigators that he, too, “never received any CRA-related training.” He served for two years, following stints as Good’s chief assistant and finance director.

Antonio told investigators that before 2011 “the CRA had no viable process in place for managing charitable donations it provided to non-profits.” He said city commissioners would use the CRA’s money to “fund whatever they wanted” and that “neither the city nor the CRA attempted to verify how they were spent,” the report said.

When Alvin Jackson was named the CRA’s executive director last August, he was the first person to head the agency that did not take orders from the city manager.

With that independence, he pushed through a number of changes that addressed investigators‘ concerns. He created a separate CRA trust fund and bylaws; hired an independent finance director to conduct an annual audit; employed an attorney experienced in CRA law and established an accountability system for grants to local groups.

But Jackson resigned under pressure from the CRA board in January following a dispute with some commissioners.

Today, Hallandale Beach once again is operating the CRA under the city manager model that got it into trouble.

“Whether the CRA executive director duties remain with the city manager or are again filled by an independent officer, the CRA should incorporate some level of independent management for CRA issues,” the report recommended.

William Gjebre can be reached at wgjebre@browardbulldog.org

By William Gjebre, BrowardBulldog.org 

Hallandale Beach’s Community Redevelopment Agency, run by the city’s five elected commissioners, has sent a message to Broward’s new Inspector General’s Office – you can’t touch us.

Numerous questions have been raised about the business dealings of the CRA, in which city commissioners also serve as directors of the agency.

But now the agency has called into question the IG’s authority to delve into its management practices, declining to have commissioners answer county investigators’ questions about their actions as CRA directors. The move is the first significant challenge to the authority of the year-old criminal justice agency whose job is to investigate possible fraud, corruption and gross mismanagement.

“It is our opinion that the authority of the Inspector General does not generally extend to a community redevelopment agency (CRA) and its board members,” CRA attorney Steven Zelkowitz wrote in a June 18 letter to Inspector General Counsel Jennifer Merino.

“As we both know, the individual Hallandale Beach CRA board members and the city commissioners are each one in the same person. However, in these separate capacities they wear separate hats and are guided by separate legal requirements.”

The Hallandale CRA’s bottom line: the IG’s auditors and agents can talk to the five commissioners about their actions as commissioners, but not as CRA board members.

INVESTIGATIVE AUTHORITY QUESTIONED

Zelkowitz’s legal opinion is rooted in the CRA’s status as a special district, a distinct legal entity under Florida law. According to him, board members are public officers regulated by Florida’s Code of Ethics for Public Officials, not the recently updated, and more stringent, Broward County Code that covers all officials and employees of the county and its municipalities.

The CRA uses property tax dollars collected within the district to promote businesses and redevelopment.

What may happen next is unclear, but the Inspector General’s Office is not expected to back down from continuing its probe in the face of a challenge that could impact its authority over the many other special districts in the county. They include large the North and South Broward Hospital Districts and smaller ones such as the Performing Arts Center Authority or the Hillsboro Inlet District.

Inspector General John Scott declined comment.

Robert Jarvis, a professor of constitutional law at Nova Southeastern University, said this is the first big test of the IG’s authority, and that Zelkowitz may have a point. He cited a recent decision by the Fourth District Court of Appeal in West Palm Beach that limited the jurisdiction of the Attorney General to investigate foreclosure mills.

“I think the CRA may be right,” said Jarvis. “I think this has to be decided by a court.”

Last week’s letter is the second push back from Hallandale Beach.

Several weeks ago, City Attorney V. Lynn Whitfield informed the IG that the City Manager’s Office would not voluntarily schedule meetings between city commissioners and county agents investigating city management practices, including those at the CRA.

In last week’s letter to IG counsel Merino, Zelkowitz allowed that the IG has the authority, under county code, with respect to the same city commissioners in their city functions – but not those concerning the CRA.

He also stated that the IG may have the authority to review any goods and services that CRA provides to the city. However, Zelkowitz, stated, “In such case, the Inspector General would have authority, but solely with respect to the provisions of such goods and services.”

Zelkowitz declined comment.

City Attorney Whitfield also declined comment. In her June 13 letter to the IG, she said her office wants to know whether the probe is targeted at commissioners as a whole or to actions of individual commissioners to determine what type of legal representation they may require.

The IG is a watchdog agency established in the wake of recent county scandals. It can investigate, but not arrest. It is a member of Broward’s Public Corruption Task Force – a specialized group of federal, state and local investigators and prosecutors – that in April was designated as a “criminal justice agency” by the Federal Bureau of Investigation.

CITY WANTS MORE INFO

Renee Crichton, Hallandale’s newly appointed city manager, said when the office received a call from the IG it contacted the city attorney and the CRA attorney to discuss the IG’s request to interview commissioners. She declined to comment on whether any member of the city commission was involved in the discussion at some point.

“The CRA and the city commission has not taken any position” on the dispute, Crichton said. “On our part, we need more information as to why the Inspector General wants to interview commissioners. There needs to be some structure; what do they want to discuss.”

“We are not saying we will not cooperate,” Crichton said, adding the city has done so by providing many of the documents requested by the IG.

A call to Broward County Attorney Joni Armstrong Coffey resulted in a callback from Assistant County Attorney Anthony Myers. Asked about the IG’s authority in the matter under county law, Myers said he does not have “sufficient knowledge” to comment. He added it is possible the matter could end up in a court of law.

At least one city commissioner disagrees with the CRA’s position. “The IG does have jurisdiction,” said London, who is running for mayor against incumbent Joy Cooper. A part of the state law, he said, speaks to the mingling of city and state funds and that would give the investigators authority.

If called by the IG, London said, “I’ll go; I look forward to it.”

Commission members Dorothy Ross and Anthony Sanders both said they would be guided by the city legal counsel on whether to be interviewed.

As Broward Bulldog reported last week, the IG has requested city documents about several community-based groups associated with Sanders or his wife Jessica. The complaints made to the IG, Sanders said, are “coming from the negativity of people. I’m not saying who specifically. It is what it is; it’s a part of the politics.”

When and if he speaks to investigators, Sanders said, “I’ll be glad to talk to them in any capacity, as a city commissioner or a CRA director.”

Mayor Joy Cooper and Commissioner Alexander Lewy could not be reached for comment.

In his letter, Zelkowitz asked the IG to restrict his questioning of city commissioners “to their actions as city commissioners and not as HBCRA Board Members. In this regard, we defer to the City Attorney as to the direction of your investigation with respect to the City and Commissioners.

“Notwithstanding the foregoing, the HBCRA is ready, willing and able to comply with all public records requests of the Inspector General as the records of the HBCRA constitute public records under Chapter 119, Florida Statutes.”

William Gjebre can be reached at wgjebre@browardbulldog.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.

OTHERS SCRUTINIZED

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 1^st 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 wgjebre@browardbulldog.org

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.

MEETINGS ANYWAY?

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.

By William Gjebre, BrowardBulldog.org 

The Village at Gulfstream Park

Developers of a $1.2 billion residential and commercial development at Gulfstream Park have convinced commissioners at Broward County and Hallandale Beach to release them from an earlier pledge to build 225 units of affordable housing.

The county and city also agreed to eliminate requirements to build a 500-car parking garage area nearby and a connecting shuttle bus service to Hollywood’s Tri-Rail station. The concessions should save the developers of the Village at Gulfstream Park as much as $15 million.

As an alternative to building the 225 units, the developers have agreed to pay the city’s Community Redevelopment Agency at least $5,000 per unit – or $1.1 million. The money would go to rehabilitate housing or build new residences for low income residents elsewhere in the city.

“They are letting them off cheap,” said Broward Commissioner Sue Gunzburger, who opposed the project six years ago. The county commission OK’d the changes 6-3 in March.

“That’s way too low,” lamented community activist and city commission candidate Csaba Kulin. He said developers should have been asked to pay $50,000 per unit, or $11.5 million – an amount he contends was the city’s original low-ball estimate of building costs.

Kulin said developers would save an additional $5 million by not having to build the 500-car parking facility, and up to $250,000 a year by not having to implement the shuttle service. “Three gifts worth about $17 million,” Kulin said.

A spokesman for Village at Gulfstream Park defended the money-saving deal modifications.

“Things have changed since the project was approved,” said Will Vogel. He said that’s why Hallandale Beach approved the changes in December and the county followed suit in March.

The 1 million square foot development at Hallandale Beach’s famous horse track and casino is a signature project for the city, featuring commercial, condo and office space aimed at making it a destination, like downtown Fort Lauderdale, Aventura and South Beach.

CITY REBUFFS CRITICS

Alvin Jackson, executive director of Hallandale’s Community Redevelopment Agency, said the money from the developer will be used to “create a pot of funding to address existing substandard and foreclosed housing and possibly build some new housing in other parts” of the city’s redevelopment agency. He said he did not know how far $1 million would go to rehabilitate existing housing or build new housing.

“I don’t feel the developer got off the hook” by being allowed to contribute $5,000 per unit as an alternative to building them, Jackson said.

Broward County Director of Housing, Finance and Community Development Ralph Stone said that when the economy was booming it was possible to extract more money from developers for affordable housing.

“There was a profit in many of these projects and the builders could afford” to offer additional inducements,” Stone said. “But the real estate market and the economy changed; there’s less profit and thus these [inducements] could not be supported in projects in today’s market.”

“We have to be realistic,” Stone said.

In unanimously approving the proposed changes, Hallandale Beach commissioners included a provision urged by Mayor Joy Cooper that would hike the $5,000 payout slightly to adjust for annual increases in construction costs.

BIG PLANS FIZZLE

The project received widespread attention in November 2006 when the Hallandale City Commission approved zoning for the mixed-use project on 60.8 acres at the southeast corner of Hallandale Beach Boulevard and Federal Highway. This is the city’s busiest intersection, just opposite city hall and the city library; the city of Aventura is just south.

The Village at Gulfstream Park s a joint venture of Forest City Enterprises, headquartered in Cleveland, Ohio, and MI Development Inc. (MID), a real estate whose racetrack properties include Santa Anita Park in Southern California and Gulfstream Park, according to the developer’s website.

The joint venture presented a bold plan that was approved by the city and the county: 1,500 condominium units, including 225 affordable/workforce housing units, 75 of them inside the complex, and the other 150 offsite; 750,000 square feet of leasable retail space; 140,000 square feet of office space; a 500 room hotel and a 2,500 seat movie complex.

When built out, the complex and the adjacent race track and casino make for a compelling draw for locals and visitors from around the world.

The first portion of the restaurants and shops open February, 2010.  Currently there is approximately 420,000 square feet of retail and 100,000 square feet of office.

With the approved changes, Vogel said, it is now “more practical and feasible to go forward.”

Vogel said Village at Gulfstream Park is having some talks with developers regarding construction of the residential units. City documents indicate that, giving the current economic situation, the first units may be rentals rather than sale units. There may be some workforce housing and some affordable housing in the complex, Vogel added.

The developers hope to have agreements by the end of this year, Vogel told city commissioners, for not only the first housing units, but also for the hotel, and the movie complex.

William Gjebre can be reached at wgjebre@browardbulldog.org

By William Gjebre, BrowardBulldog.org

A firm that obtained a $75,000 business development loan from Hallandale Beach without signing a repayment agreement or providing collateral has defaulted, leaving the city unable to recover nearly all of the taxpayer-supplied money.

The loan default by Digital Outernet Inc. (DOI), headed by a Californian with past ties to the pornography industry and a local businessman who has since died, is the latest snafu to surface in the operations of the city’s Community Redevelopment Agency (CRA).

News of the soured loan comes as the Broward Inspector General’s Office opened an investigation last week into the city’s management practices, including those at the CRA, whose director are the five city commissioners.

“I was against it from day one; we are not in business to lose money,” said City Commissioner Keith London, who cast the lone vote opposing the loan three years ago. “It was never a sustainable, viable initiative.”

Commissioners approved the taxpayer loan in their capacity as CRA board members.

Digital Outernet was incorporated in November 2008. Four months later, it got the loan to buy equipment and materials. The plan it sold the city on: to setup television screens in local businesses and condominiums and sell advertising while also airing city and other information, such as job ads

CONTROVERSIAL HANDOUTS

The corporate loan was made during a time when the city was making numerous loans to local businesses, some controversial.

In 2009, the city administration also approved a $50,000 loan for a weekly newspaper, The Sun Times, forgiving half the loan ($25,000), even though two top executives earned $200,000 annually two years before the loan. Mayor Joy Cooper is a featured columnist.

The same year, the city erroneously forgave an extra $7,500 on a property improvement loan that Commissioner Anthony Sanders obtained before he was a commissioner. As a result, Sanders’ non-profit Higher Vision Ministries did not repay $15,000 on a $46,000 loan for property improvements at 501 N.W. First Ave. The city then brought the property for $235,000, even though the church only paid $45,000 for it in 2001.

Digital Outernet’s chief officials were local businessman John Hardwick and Steve Fecske, a Californian, according to state corporate and city files.

When the loan was approved, the Sun-Sentinel reported at the time, Fecske told Hallandale Beach commissioners he had been involved with a company that provided technology services to porn-connected websites, one of which featured star Jenna Jameson. He assured commissioners his pornography work was in the past.

Fecske is listed on LinkedIn, the professional networking web sit , where he is described as an “independent information technology and services professional.” He is currently associated with McKenzie & Co., Forensic CPAs in Los Angeles. He was president of Digital Outernet, Inc. from 2007-2010.

Fecske could not be reached for comment.

LOAN RECIPIENT OUT OF BUSINESS

On the current Florida Department of State Division of Corporations web site, Digital Outernet is listed as inactive.

While approved for a $125,000 loan, Digital Outernet only received $75,000. It had to meet certain city-imposed conditions to get the rest, but apparently did not do so.

However, one loan requirement was waived by the city: that the firm had to own its place of business; it was leasing. The loan also provided for 15 percent ($11,250) forgiveness, with the balance to be repaid at 4 percent (interest rate) over 10 years.

City records show it wasn’t long after funds were distributed that problems at Digital Outernet became apparent.

In June, 2010, the city sent a letter to Hardwick and Fecske denying their request for the additional $50,000. The letter pointed out the firm had missed its first two quarterly loan payments of $2,284 each, failed to sign a loan promissory note, and did not provide required financial reports and details on employee hires.

A month later, the city sent a similar letter.

CRA director Alvin Jackson said he met with Hardwick shortly after he became director of the CRA in January 2011, reminding him about the loan repayments and the documents and reports that needed to be filed with the city.

But state corporate records show that by then, the company had ceased to exist as a legal entity.

HARD TO TELL WHAT HAPPENED

Available city records do not explain what happened to Digital Outernet and the city’s $75,000. A recent report by an auditing firm criticized the CRA for failing to properly track loans and property acquisitions.

Jackson said the company made only one installment payment of $2,284 in July, 2010, adding that the firm appeared to go out of business with the death of Hardwick.

A member of the Hallandale Beach Chamber of Commerce, Hardwick, 41, suffered a stroke and died at Hollywood’s Memorial Hospital on May 22, 2011. Prior to becoming involved with Digital Outernet, Hardwick ran a barbershop/salon at 708 Foster Road in the city, the same location listed for DOI.

Jackson said the DOI file was sent to the City Attorney’s office for review and follow-up action. He said he was told that an investigator was sent to the Foster Road address to identify possible assets but none have been recovered, so far.

Jackson said he believed that Digital Outernet may have actually placed several television screens in local businesses, but he did not know for certain. The city file contained no information on the placement of the video screens.

The city “never got the balance” of the loan, Jackson added.

Broward Bulldog reviewed the city’s file. It makes no mention of Hardwick’s death and gives no indication that the city was trying to follow up by reaching Fecske in California.

The file also did not indicate what, if anything, the city attorney’s office did in the matter. There were no reports by the city attorney’s staff in the DOI file.

Local realtor Joe Kessel is listed as an official of DOI in one document in the city’s file. He said in an interview that he was “not involved” with the company and had long ago asked that his name be removed as a DOI associate. Kessel declined further comment.

Mike Good was the city manager at the time of the loan. The file contains a letter he wrote endorsing the DOI project. “The city supports the concept and advertising model offered by Digital Outernet, Inc., and seeks the support from our local business community as well,” Good wrote in his letter in December 2008.

Good, who was fired in June 2010, could not be reached for comment.

By William Gjebre, BrowardBulldog.org

Investigators with the Broward Inspector General’s office descended on Hallandale Beach City Hall this week following numerous reports of mismanagement of tax dollars.

On Tuesday, two OIG investigators spent nine hours at city hall seeking records and interviewing City Manager Mark Antonio and Community Redevelopment Agency (CRA) director Alvin Jackson.

“We were there,” confirmed Dylan Hughes, an assistant inspector general. “I can’t comment on the nature of an ongoing investigation.”

City officials had no immediate comment.

Broward’s Inspector General investigates suspected misconduct, “including fraud, corruption and abuse and gross mismanagement,” according to its web site. The specific focus of investigators at city hall was not immediately clear, but for nearly a year Broward Bulldog has reported about questionable city loans to local businesses and land purchases through the CRA. Hallandale Beach city commissioners also sit as the directors of the CRA.

Last month, a report by outside auditors described poor recordkeeping and oversight at the agency during the tenure of former longtime City Manager Mike Good. Good was fired in 2010, and commissioners asked for the audit weeks later.  On April 2, the city announced that it had selected Renee Crichton to take over as the next city manager when Antonio retires on June 29.

News of the Inspector General’s probe was welcomed by critics of city management.

“I’m delighted to hear that,” said activist Charlotte Greenbarg. “It’s long past due. What’s going on in Hallandale Beach needs a lot of investigation; it’s very welcomed.”

“I’m thrilled that Hallandale is being looked at by an independent agency,” said City Commissioner Keith London, who is running for the mayor’s seat. “I’ve been asking for this for about four years.”

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.

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.  Last month, 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 Mayor Joy 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. The loan was made even though the South Florida Sun Times’ two top executives had made annual salaries averaging $200,000 for two years prior to the loan.
• Last month, the Sun-Sentinel reported that city officials acknowledged they erroneously forgave an extra $7,500 on a property improvement loan that Commissioner Anthony Sanders had obtained in 2002 before he joined the commission. That meant Sanders’ nonprofit Higher Vision Ministries didn’t have to repay $15,000 of a $46,000 loan. In 2009, the CRA brought the property from Higher Vision for $235,000, with Sanders abstaining, triggering a controversy because the price was higher than two city appraisals, the newspaper reported.

City Manager Antonio, a long time city employee and city manager for approximately two years, would not talk about the Inspector General’s investigation. Through a city spokesman, he declined comment.

Mayor Joy Cooper did not respond to requests for comment.

CRA Director Jackson, who took over at the agency in January 2011, had no comment.

William Gjebre can be reached at wgjebre@browardbulldog.org