Hallandale Beach halts advertising in local newspaper where mayor is a columnist

By William Gjebre, FloridaBulldog.org 

A column by Hallandale Beach Mayor Joy Cooper in the Sun Times

Hallandale Beach city commissioners have pulled the plug on city advertising in the local Sun Times newspaper featuring articles by Mayor Joy Cooper that drew fire from commission colleagues as “propaganda” for the mayor.

Cooper used the platform regularly before and after the weekly newspaper received a favorable — and controversial — $50,000 loan from the city’s Community Redevelopment Agency (CRA). The Sun Times, according to city documents, has been paid nearly $400,000 in city advertising to publicize events since 2003, most of the money coming after the loan was made during the 2008-2009 budget year.

The Florida Bulldog published a story about the loan, which later became a matter of interest to the Broward Inspector General’s Office in its 2012 probe. While the IG stated the Hallandale Beach CRA had “grossly mismanaged” millions of dollars, tallied $2.2 million in questionable expenditures and made inappropriate loans and grants to local businesses and non-profits, there was no finding of wrongdoing in the city’s Sun Times loan.

“The whole thing is a propaganda paper for the mayor,” said Commissioner Michele Lazarow, who moved at the Dec. 7 meeting to halt funding immediately.

While not voted on, the measure gained consensus support from the new majority of the five-member commission, and city staff said it would not place any more advertisements in the newspaper. Cooper had left the meeting before the item came forward.

In the past, the newspaper had the support of Cooper and commissioners who backed her. Lazarow, Vice Mayor Keith London, a long-time Sun Times critic, and newly elected Commissioner Anabelle Taub successful pushed the item to halt further advertising.

“The Sun Times is the mayor’s pulpit or podium for her to spin the truth,” Lazarow said at the meeting. “It has become a political rag during the political season.” Making matters worse, she added, the newspaper was unfair by not accepting or allowing “rebuttal.”

“I’m appalled that city funds go to the Sun Times,” Taub said at the meeting. “We should not fund the mayor’s political propaganda and personal vendettas and attacks.”

Taub said she was incensed during her recent election campaign when the Sun Times printed personal information about her that “could be used to commit fraud on me.”

“They have a one-sided view of city hall,” said London, adding that a reporter from the newspaper rarely attends a city commission meeting.

Mayor: ‘I will continue writing’

“They are entitled to their opinion,” Cooper told a reporter in response to the criticism from her commission colleagues. “I report on city business. I will continue writing. Everything I write is edited by an editor and it’s their choice to use it.”

Cooper began writing for the Sun Times in 2003, the year she became mayor. Her opinion piece last week was about Dr. Martin Luther King and political protest.

 

Sun Times officials said they were unfazed by the funding cutoff. “The commission has every right to do so,” said Craig Farquhar, president of the South Florida Digest, which publishes the Sun Times. As for the accusation that the newspaper has been a forum for the mayor’s propaganda, he said, “That’s their political opinion.”

The money paid by the city to the Sun Times, Farquhar added, “was to promote city events.”

City records showed that between 2003 and 2008, the city paid the Sun Times about $32,000 for advertising – an average of about $6,400 a year. But the relationship changed the following year.

That’s when the Sun Times became the first city business to receive a loan under a new program, funded through the CRA, to retain and to assist firms having financial difficulties. It received a 10-year $50,000 loan, with half of it forgiven, to be paid at two percent interest; the loan balance of approximately $7,500 is expected to be paid off in July 2019.

What raised questions about the newspaper’s financial problems was that Farquhar and another official of the newspaper, Cecile Hines, were each paid an average of over $200,000 in 2007 and in 2008, the years before the Sun Times received the city loan.

City advertising in the Sun Times, after the loan approval, also began to escalate. From 2008-2009 until the end of 2016, the city paid the newspaper $362,929, averaging more than $45,000 yearly during the past eight years, according to city documents.

 

Tired of problems, Fort Lauderdale audits its community redevelopment agencies

By William Gjebre, FloridaBulldog.org cralogo

Fed up with project failures, management problems and possible city overcharges, Fort Lauderdale commissioners have ordered an extensive audit of the city’s Community Redevelopment Agencies.

In a little-noted action, commissioners directed the audit of three CRAs at a conference meeting earlier this year.

The audit was triggered by the million-dollar failure of the Sixth Street Plaza project. Some commissioners expressed additional concerns about the findings of a city auditor’s report on CRAs that they said indicate the city had unfairly overcharged the CRAs for services during the past five years.

Commissioners ordered “a full audit” of the Northwest/Progresso/Flagler Heights (NWP) Community Redevelopment Agency, the Central Beach (CB) CRA and the Central City (CC) CRA, City Auditor John Herbst said in an interview. He said the audit, now under way, may be completed in two months.

Herbst said the audit was undertaken because the city wants to get in front of the matter, knowing the Broward Inspector General’s Office has been investigating CRAs around the county for some time.

Herbst said he expects the audit to determine whether CRA spending was “in compliance with state law and CRA bylaws,” and whether the CRAs were properly managed and contracts adhered to the CRAs’ limitations.

“We want to make sure money was spent in accordance with governing legislation,” Herbst said. The audit will cover the past three years – a reasonable time period, the auditor added.

Fort Lauderdale Commissioner Robert McKinzie

Fort Lauderdale Commissioner Robert McKinzie

Herbst said the troubled Sixth Street Plaza project is a key factor in the ongoing audit. Last May, the city auditor’s office criticized the CRA for poor oversight of a taxpayer-supported office and retail plaza that was to be the centerpiece of the city’s ambitious plans to revitalize the Sistrunk Boulevard corridor.

But the 23,000-square-foot building at 900 NW Sixth St. filed for bankruptcy, jeopardizing the repayment of $1 million in taxpayer loans.

Following that finding, Vice Mayor Robert McKinzie’s staff asked Herbst in a memo to conduct “a complete audit of the day to day operations of the CRA.” Herbst said Mayor Jack Seiler and his fellow commissioners backed the call for the audit in a consensus vote during a city commission conference meeting in January.

‘Inconsistent leadership’

Herbst said the city’s CRAs have had problems because of frequent management shuffling. “There was inconsistent leadership due to transfers,” he said.

A report by his office noted that the Northwest/Progresso/Flagler Heights CRA, in a less-affluent area, was charged $1.7 million for city services over the past five years, while the Central Beach CRA, in a wealthier area, was charged $909,000 during that same period.

The finding upset City Commissioner Dean Trantalis, who said an “excessive amount of money is charged for administration, denying the neighborhood that is suffering blight and neglect and so much money being used for staff.”

Fort Lauderdale Commissioner Dean Trantalis

Fort Lauderdale Commissioner Dean Trantalis

Trantalis said he has asked City Manager Lee Feldman about correcting CRA allocation issues, but “he hasn’t been responding. We need to change the practice. We discovered that the city manager, to shore up the budget, has been attributing staff time to the CRA.”

Feldman did not respond to requests for comment before deadline after promising to make himself available for an interview.

At the city commission meeting in January, others expressed their concern about the auditor’s findings.

Minutes of the meetings say McKinzie “questioned why such a large portion of funds was allocated [to] the [Northwest/Progresso/Flagler Heights] CRA for administration and resources when the CRA did not have a director.”

Commissioner Bruce Roberts suggested the matter be referred to the State Attorney’s Office or some other investigative agency for a criminal probe.

“Many feel CRA funds have been drained for administrative services, and there is a lopsided disparity,” Trantalis said at the January meeting. The mayor and the city’s four commissioners also serve as directors of the CRAs.

Problems found

Herbst’s audit report mainly delved into the current fiscal year salary allocations of the two CRA offices, Northwest/Progresso/Flagler Heights and Central Beach. But it found problems.

“The method used to allocate personnel costs may lead to excessive General Fund expenses being allocated to the CRA, a violation of Florida Statute 163.370(3)(c),” the report stated. The state provision prohibits the tax-increment funds that CRAs receive from covering general government operating expenses unrelated to planning and carrying out a CRA plan.

The report goes on, “We determined that the Department of Sustainable Development (DSD) and the Budget Office were not able to provide adequate support for the percentages used for personnel cost allocations to/from the CRA fund and the sub-funds. Additionally, they are allocating charges to the CRA for personnel positions which are vacant for either a portion of the fiscal year or the entire fiscal year.

“The budgeted allocations are then charged to the CRA throughout the year without reconciling those estimates to actual costs incurred, resulting in an excess of allocation over actual cost,” according to the report.

The faulty allocations can negatively impact the CRAs’ ability to achieve their goals, the report aid.

The city charged the CRAs for hours city employees spent working on agency matters.

In one instance, the report said the Northwest/Progresso/Flagler Heights CRA was “overcharged” $30,000, which should have been charged to the Central Beach CRA. That happened after an employee was promoted from assistant to the city manager to the position of economic and business development manager in charge of the Central Beach CRA. For three months, he was paid from funds allocated to a vacant position in the Northwest/Progresso/Flagler Heights CRA, the report said.

A correction was later made, but “the prior overcharging was not corrected timely” and ate into how much funding was available to meet the CRA’s goals.

Since the report, the city has begun making changes.

Trantalis said in an interview that city commissioners have removed the CRAs from reporting to the Department of Sustainable Development and made them separate entities with their own managers to oversee day-to-day operations. State law requires CRAs to operate independently of other departments.

City Manager Feldman, however, will continue to function as executive director of the CRAs.

Other changes call for improved financial oversight from the city finance director and the city auditor, identifying a separate CRA funding and accounting structure, and allocating additional funds for the two CRAs to implement changes during the current fiscal year.

Auditor rips Ft. Lauderdale CRA as taxpayers face $1 million loss

By William Hladky, FloridaBulldog.org 

Sixth Street Plaza

Sixth Street Plaza

A new Fort Lauderdale auditor’s report castigates the city’s Community Redevelopment Agency (CRA) for its poor oversight of a taxpayer-financed office and retail plaza that was to be the centerpiece of the city’s ambitious plans to revitalize the Sistrunk Boulevard corridor.

Sixth Street Plaza, a 23,000-square foot building at 900 NW Sixth Street, filed for bankruptcy this month, further jeopardizing the repayment of almost $1 million in taxpayer loans.

“The project lacked fundamental project management discipline, from risk assessment and establishing proper governance to detailed accounting of funds disbursement,” City Auditor John Herbst wrote in a cover memo to the city commission. “Accordingly, there is no way to be certain that all of the funds put into this project were spent appropriately.”

The city commission, sitting as the CRA board, requested the report after FloridaBulldog.org reported in February that taxpayer loans were in jeopardy due to the forced sale of the plaza.

FLAWED FROM THE START

The report found the Sixth Street Plaza project flawed from the start by a shoddy business plan. Still, it was pushed by cheerleading CRA staff.

“The CRA staff failed to maintain their objectivity,” the report adds. “As observed in emails…in 2008 and 2009, they appeared to view their role as project advocates rather than as stewards of the CRA’s funds.”

Former CRA director Al Battle, now deputy director of Fort Lauderdale's Department of Sustainable Development

Former CRA director Al Battle, now deputy director of Fort Lauderdale’s Department of Sustainable Development

Alfred Battle, who headed the CRA for the Northwest-Progresso-Flagler Heights area during part of Sixth Street Plaza’s construction, did not respond to requests for comment. Battle is currently a deputy director at the city’s Department of Sustainable Development.

The report, released last week, to be discussed during Tuesday’s city commission conference meeting.

The Fort Lauderdale CRA is one of nine municipal CRAs in Broward County that direct tax dollars to areas to clean up slum and blight.

In November, Broward County Circuit Court Judge Carlos Rodriguez ordered the public sale of Sixth Street Plaza at the request of Regent Bank, which from 2005 to 2007 had loaned the developer nearly $2.3 million.

The developer is Sixth Street Plaza Inc., whose corporate president is Maria J. Freeman.

Freeman is well known to city hall and Broward political circles. She is vice chair of the Fort Lauderdale Housing Authority and has served on the CRA’s Northwest/Progresso/Flagler Heights Redevelopment Board, the city Marine Advisory Board, the city Planning and Zoning Board and the city Planned Unit Development Zoning District Advisory Committee.

Freeman’s business telephone has been disconnected. She did not respond to a request to comment made through her attorney, Susan D. Lasky.

LOANS AND GRANTS

The Fort Lauderdale CRA gave Sixth Street Plaza another $1.2 million in loans and grants between 2005 and 2009, according to the report. The South Florida Regional Planning Council, a quasi-governmental agency, also loaned Sixth Street Plaza $300,000.

Regent Bank hoped to recoup some of its loan in the public sale of the plaza. The sale, however, was put on hold when Freeman’s Sixth Street Plaza Inc. filed for bankruptcy in federal court. Sixth Street Plaza filed for Chapter 11 bankruptcy protection on May 4, the day before the plaza was to be sold at a public auction.

Freeman personally filed for Chapter 11 bankruptcy in 2013, claiming she “has experienced difficulties caused by the significant downturn in the real estate market.” That action is pending.

Regent Bank’s attorney Steve Moody said in an interview that the latest bankruptcy filing shifts the state court foreclosure case to federal court and stops the public sale.

Even if the public sale eventually occurs the odds remain long that the city will recoup the money it loaned to build Sixth Street Plaza. The taxpayer loans are “subordinate,” meaning that if the public auction does not raise enough money to pay off Regent, no monies will be left over to repay the taxpayers.

Zillow, an online real estate database, placed the value of Sixth Street Plaza this month at $743,512, down from a February estimate of $905,275.

The Sixth Street Plaza opened in 2010, but has never been successful in attracting more than a handful of long-term tenants despite rosy CRA estimates. A 2002 CRA staff analysis of the plaza’s vacancy rate “was unsupported” and lacked “market studies or comparative rents,” the auditor’s report states.

“…Even under aggressive assumptions regarding vacancy rates, and using an extremely low budget for construction, the development was projected to generate barely enough cash flow after operations to service its debt,” the report concludes.

One long-term plaza tenant is the CRA itself, which is paying $96,000 a year through 2016 for 6,000-feet of office space, rent the auditor’s report criticizes as an “above-market rate.” The CRA will pay “as much as $481,947” in excess rent” during the term of its lease, the report points out.

NO JUSTIFICATION

The report says “the CRA director at the time” said that “paying higher (rental) rates would jumpstart the office market in the area, but there was no rationale provided to justify that statement.”

The report goes on describe the plaza’s business plan as “meager, lacking a detailed market demand analysis, marketing plan, construction budget and cash flow projections.” Auditors found no “documentation of the developer’s capacity to undertake the work.”

That disorganization was reflected in the project’s construction budget that jumped from $735,000 in 2001 to $1.6 million in 2002. “There is no explanation of what increased and why,” the report states.

CRA files likewise contained “no payroll reports, subcontractor labor invoices, material invoices, etc…It is unclear whether the information regarding the cost overruns, change orders and additional loans from Regent Bank was shared with the CRA in a timely manner,” the audit said.

Sixth Street Plaza failed even though Freeman raised a total of $3.75 million through loans and grants. “The project should have had more than adequate capital,” the report adds.

According to Sixth Street Plaza’s bankruptcy petition, the company also owes more than $52,000 to subcontractors and other businesses.

One reason the auditor had difficulty tracing expenditures is because the original agreement between the CRA and developer did not allow for the CRA to audit Sixth Street Plaza’s records.

“Accordingly, the (auditor’s office) was unable to review key elements that may have yielded a better understanding of the cost increases and flow of funds,” Herbst said in his cover memo.

The report also blasts the CRA for failing to monitor adequately the distribution of taxpayer monies to the project. As a result, “the city is unable to determine how $916,344…of CRA funds were spent,” the report says.

Herbst recommended the “CRA needs to integrate a culture of fiscal discipline and accountability into its core mission of eliminating slum and blight.” To accomplish that, the report suggests the city commission separate project management and advocacy within the CRA as “these functions have goals which may be at odds with each other…”

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