By Dan Christensen, BrowardBulldog.org
Homeowners are crying foul at Pompano Beach’s plans to funnel to a private developer as much as $2 million in federal housing funds meant to help neighborhoods blighted by foreclosed and abandoned houses.
“Do we feel betrayed? You got that right,” said Ron Boehl, president of the Cresthaven Civic Association.
Pompano Beach is among the hardest-hit cities in a county with one of the highest foreclosure rates in the nation. A city report this month said there are more than “1,900 bank-owned properties” in Pompano, with another 1,600 homes in pre-foreclosure proceedings.
The Cresthaven and Pompano Highlands neighborhoods on the city’s north side have taken the brunt of the foreclosures and now face a second blow of losing access to about $1 million in federal money meant to revitalize abandoned and foreclosed houses.
Those dollars appear headed to a private developer to build new apartments, rather than fixing up existing distressed houses.
The Cornerstone Group of Coral Gables wants to build 360 “attractive, affordable” rental apartments on 20 acres in a dreary industrial area in the 1200 block of S. Dixie Highway. The developer has cobbled together a financing package for the $40–million project that includes millions in low-interest construction bonds and state housing grant money administered by Broward County, according to city records.
But a $2 million “funding gap” remains, according to city records, and Cornerstone wants the city to plug it with a loan. The city commission, in a 3-2 vote last month, tentatively agreed to make the loan.
A final vote of the city commission is set for Tuesday. Mayor Lamar Fisher has abstained from past votes because his Fisher Auction Company was used to dispose of unsold condos from other Cornerstone projects.
The developer’s representative, Leon Wolfe, did not return phone messages before deadline.
Funds are to be diverted from several pots of federal housing dollars, including about $1 million received through the Neighborhood Stabilization Program. The NSP was established by the Obama administration to buy and fix up foreclosed and abandoned homes. Pompano Beach received a $4.4-million grant in 2009. Through June, 27 properties had been acquired throughout the city, including Cresthaven and Pompano Highlands.
Commissioner Woodrow Poitier thinks that’s enough for the time being.
“We represent the whole city and they’ve redone 24 homes up there in that area,” said Poitier, who supports construction of Cornerstone’s $40 million Captiva Club project. “I think the housing that’s needed are rental apartments. It will create more of a tax base and give people jobs.”
It is also a matter of equity, according to Assistant City Manager Willie A. Hopkins Jr.
“We are diverting a small amount of program income into a loan for the additional construction of housing for another low-income segment of the community. Unfortunately, that community may not be able to participate in a home purchase-driven program,” Hopkins said.
Commissioner Barry Dockswell voted against the rental project last month. He said it is a mistake to pull back from rehabilitating abandoned homes.
“I don’t think NSP money should be used to create new housing. We already have an overabundance of housing units,” Dockswell said.
“The loss of these funds will be devastating,” said Walter Syrek, president of the Pompano Highlands Civic Association. “While we have nothing against low-income rental housing, we believe it is within the letter and spirit of the law to use these funds primarily for the purpose the Congress intended, to stabilize existing neighborhoods such as ours.”
“We have 12 homes in Cresthaven that the NSP has bought and started cleaning up,” said Boehl. “It’s a chance to help people get their feet back on the ground. We have enough rental property in this city already.”
The Highlands is located between US 1 and Dixie Highway, and Sample Road and Northwest 54th Street. Cresthaven, with more than 3,700 homes, lies due south, running south from Sample Road to Copans Road.
Cornerstone first asked the city about a year ago for financial assistance to build Captiva Club on the site of an old trailer park. At the time, the city agreed to commit $1.2 million in NSP funds.
Poitier said any city loan will be repaid through fees paid by the developer and rents paid by the tenants. The city will also benefit from increased tax collections, he said.
In a memo last month, Hopkins said that making the loan would qualify the city for additional NSP funds “because we have obligated our funding 100 percent.”
But homeowners say the diversion of NSP dollars will threaten both the existence of the program, and the city’s ability to attract future rehab grant funds.
“Funds from the sale of foreclosed houses in the Highlands and elsewhere, rather than being used to buy more foreclosed houses, will be given to the Cornerstone Group,” said Syrek. “We fear that the NSP will be prematurely shut down and the experienced city staff let go.”
Poitier says homeowners are overreacting.
“We’re not done by a long shot. Once those homes are rehabbed and sold, that money will be turned over and over again. It’s not like we are abandoning them,” said Poitier.