By William Gjebre, BrowardBulldog.org
Hallandale Beach’s controversial decision in July to pay $1.2 million for property owned by a charter school group headed by former Broward Democratic congressman Peter Deutsch keeps getting more costly for the city.
City officials now say the price tag to repair a building on the 1.9 acre site may be as much as $1 million.
They also said that when city commissioners authorized staff to purchase the property this summer they didn’t know about extensive maintenance issues that might render part or all of the building unusable.
At the time of the property purchase, officials and residents speculated that besides creating a park on the property the existing building might be converted to a community center for the city’s northeast section.
The deal with Hallandale School LLC, a charter school company managed by Deutsch and his partners, has yet to close. That’s expected in mid-November.
Hallandale Beach officials and Deutsch said the purchase price was based on the land value and the aging building was included “as is” with no requirement that it be in good condition.
But a city commissioner who joined in the 4-1 vote to buy the property, Keith London, told Broward Bulldog that he was not aware the building required an expensive fix up. He said the commission might want to reconsider the deal.
“I’m disappointed that we are finding this out months after authorizing purchase of the property,” London said.
At the time of the sale, the Broward Property Appraiser’s Office listed the site’s market value at about $916,000 — $680,000 for the land and $236,000 for the 22,484 square-foot building. A pair of private appraisals ordered by the city set the total property value at $1.43 and $1.85 million.
Deutsch’s group bought the site in 2008 for $500,000, according to county property records.
“The land value was worth the price,” said Mayor Joy Cooper. “The building has become obsolete; we kind of knew it. I can’t see using money to rehab” the structure.
Deutsch said Hallandale School LLC hoped to expand its Ben Gamla charter schools program by locating a 450-student, grades K-8 school on the property at 416 N.E. Eighth Ave. But neighbors opposed the project because of traffic and other concerns.
“The contract,” Deutsch said, “does not say the building has to be in good condition or meet code. If they wanted that the city should have said so.”
APPRAISALS AND SECOND-GUESSING
One appraisal report by Robert D. Miller of Coral Springs said structure was built about 1972 as a church and “has suffered from some deferred maintenance. The property has not been maintained to the typical standards of most churches. We will consider the deferred maintenance and condition in our review of the property value.”
Miller set the value at $1.43 million
Miller’s report added that prior roof leaks indicated that “major [roof] repairs or replacement may be required in the near future.” The building’s air conditioning systems were in “poor” condition, the report said.
L.B. Slater and Company, a Hollywood appraisal firm, found the building to be in better shape. It reported that various building improvements were in “average condition” and that the property was “properly maintained although the improvements were in need of updating, especially the restrooms.”
Slater and Company valued the property at $1.85 million.
Charlotte Greenbarg, a community activist and president of the Broward Coalition, said she was not surprised to hear the aging building may not be usable. Greenbarg, who lives in nearby Hollywood, said, “it would be another blow in a list of snafus in the history of that property” as well as Hallandale Beach government.
TROUBLED CRA MAKES THE DEAL
Commissioners made the purchase for the city’s Community Redevelopment Agency (CRA), a special taxing district they control. It uses property tax dollars to make improvements in commercial areas.
The acquisition will add yet another property to the city’s CRA land bank that now has approximately 85 properties acquired for nearly $30 million since 2001. Much of the land sits unused.
Broward Bulldog reported this month that over the past five years the agency spent $23.5 million to acquire nine properties whose market value had dropped to $9.1 million, costing the CRA and city tens of thousands of dollars in lost annual revenue.
The story was based on criticism contained in a draft of an outside audit that examined the CRA’s land acquisitions and other agency practices. The draft stated that Hallandale Beach had failed to adequately track various transactions, noting information and documents could not be readily located in city files.
City officials say most of the documents cited in the draft have since been located.
COST OF REPAIR
CRA director Alvin Jackson said city officials were not surprised that the building on the Ben Gamla site would need repairs. He noted that while the appraisals did not go into specific repair costs, maintenance issues were factored into the appraisal estimates.
But the extent of the repairs, and their potential cost, wasn’t known until city building officials took a closer look during the 60-day “due diligence” period – now expired — after commissioners agreed to buy the property.
In a Sept. 12 report, they estimated needed repairs and potential costs:
- Roof replacement, $319,000.
- Replacement of six air conditioning systems, $207,000.
- New Fire alarm system, $135,000.
- Rehabilitation of structure over 40 years, including code compliance, $100,000.
- Restroom handicap accessibility, $13,000.
Jackson stated the estimates are “worst case scenarios.” He said costs would be much lower if the city tears down all or part of the structure, but could cite no costs.
Jackson said officials have decided the property will be used to expand Sunrise Park, a small playground area contiguous to the site.
“This meets the goals and objectives to increase and create park land and to reduce blighted conditions,” Jackson said. Because of this, Jackson said, the acquisition “is a great deal.”