By Francisco Alvarado, FloridaBulldog.org
Since a Miami-Dade County selection committee ranked its $287-million proposal first among six firms last October, Atlantic Pacific Communities appeared to have the inside track at redeveloping Liberty Square – Miami-Dade’s oldest public-housing project.
But now allegations of malfeasance surrounding Atlantic Pacific’s 2013 takeover of 13 affordable housing buildings throughout Miami-Dade unrelated to Liberty Square could derail the company’s chances.
For months, Related Urban Development Group, the second-ranked firm headed by Miami condo king Jorge Perez, has been aggressively lobbying county officials to disqualify Atlantic Pacific due to its alleged ties to Carlisle Development Group, an affordable housing company at the center of a $26-million scandal.
Related Urban hopes to deal the crushing blow by highlighting a previously undisclosed dispute among investors who financed the construction of the 13 buildings, Carlisle and Atlantic Pacific.
“We are confident that once the County completes its legally required due diligence and background review of Atlantic Pacific, its principals, work history, experience and financial capacity, Related Urban will undisputedly be declared Miami-Dade County’s most qualified and the best financial partner,” said Related Urban Senior Vice President Albert Milo in a statement.
Atlantic Pacific spokeswoman Jessica Wade Pfeffer said concerns about disenchanted investors is a moot issue because the company ultimately decided not to take over the 13 buildings.
“During the early part of 2015, Atlantic Pacific Communities was in negotiations to acquire certain general partnership interests from Carlisle Development Group,” Pfeffer said. “Upon Mr. Greer’s plea agreement with the federal government and subsequent conversations with several of the limited partners, Atlantic Pacific Communities discontinued its efforts of its own accord.”
Two years ago, Atlantic Pacific’s Miami Beach parent company, which shares the same name, purchased all of Carlisle’s affordable housing assets and hired Carlisle Chief Operating Officer Kenneth Naylor and vice presidents Dan Wilson and Lindsay Lecour to fill the same roles for its new affordable housing subsidiary.
At the time, Carlisle chief executive Matthew Greer and company co-founder Lloyd Boggio were under federal investigation for allegedly stealing $26 million in federal affordable housing dollars. Last summer, the feds indicted and arrested Greer, Boggio and three others involved in the conspiracy.
The Carlisle Scam
According to court documents, Greer and Boggio submitted inflated construction contracts to the Florida Housing Finance Corporation in order to obtain more federal tax credits than Carlisle needed.
In the world of affordable housing financing, investors — from fat cats to community banks to hedge funds — buy the tax credits from developers, who then use the cash equity to pay for the construction of low-income residential buildings.
In the Carlisle case, the excess funds were used to line Greer’s and Boggio’s pockets instead of paying construction costs, according to the criminal complaint. Federal prosecutors also alleged that Greer and Boggio received kickbacks from two other developers and a contractor, who were also charged. Boggio is the only defendant who is going to trial, while the others, including Greer, pleaded guilty. Greer is to be sentenced in September.
As part of its deal with Carlisle, Atlantic Pacific was supposed to assume control of 13 low-income apartment complexes in Allapattah, Florida City and Opa-Locka, among others. However, Carlisle’s investors intend to block the transfer of the 13 properties to Atlantic Pacific, according to a Jan. 14 letter by their lawyer, Steven Griffith. The letter was addressed to Carlisle, Greer and Boggio.
In his letter, Griffith accuses Carlisle of “self-serving and surreptitious efforts to transfer management responsibilities and general partner interests” to Atlantic Pacific without obtaining approval from the investors.
The letter also claims that $2 million Atlantic Pacific still owes Carlisle will be used to help pay off $6.7 million in criminal penalties incurred by Greer, who pleaded guilty last September to conspiracy charges of defrauding the U.S. government.
“Under these circumstances, the investor limited partners have no desire to have Atlantic as their new general partner and will not consent to the transfer,” Griffith wrote. “The investor limited partners have repeatedly suggested that an established property manager with a long track record in affordable housing — and no ties to the Greer/Carlisle criminal enterprise — be retained, but the general partners … have persisted in their efforts to transfer management to Atlantic.”
Attorney Griffith declined to comment to a reporter.
Last Monday, Related Urban attorney Al Dotson provided a copy of Griffith’s letter to Miami-Dade Mayor Carlos Gimenez. In a memo to Gimenez, Dotson said the dispute with the investors should give the county enough reason to eliminate Atlantic Pacific from the Liberty Square competition.
“Miami-Dade County should follow the lead of the tax credit investors and disassociate themselves from APC and Carlisle in order to protect the public,” Dotson wrote. “The county must ensure the integrity of its affordable housing programs by taking decisive action not to do business with non-responsible companies.”
Gimenez has given Atlantic Pacific and Related Urban a Feb. 5 deadline to submit revamped proposals that will be evaluated by another selection committee before the mayor makes a final recommendation to the County Commission.
Gimenez spokesman Michael Hernandez referred questions to Michael Liu, director of Miami-Dade Public Housing and Community Development.
Liu said he could not comment about Liberty Square while the bidding process is pending. However, Miami-Dade’s inspector general and county auditors are conducting separate, forensic audits of all Carlisle projects that received county funding, including ones acquired by Atlantic Pacific, he said.
“To the extent of whatever evidence is produced from those audits, we will take appropriate action,” Liu said. “We want to be thorough, we want to be fair, and we want to be transparent once we get the information.”