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A plan takes shape to fix Miami-Dade’s CRAs

By William Gjebre, FloridaBulldog.org 

FAU professor Frank Schnidman and Miami-Dade Commissioner Daniella L. Cava

FAU professor Frank Schnidman and Miami-Dade Commissioner Daniella L. Cava

Miami-Dade commissioners would take greater control of community redevelopment agencies under a proposal that would tighten oversight and reduce funding, yet also require many CRAs to set aside dollars for much-needed affordable housing they have yet to provide.

FloridaBulldog.org has obtained a copy of a resolution that’s making its way through county agencies. It is to be presented to Miami-Dade’s Economic Prosperity Committee on April 14 and to commissioners in May. Many of its remedies follow recommendations contained in February’s Miami-Dade Grand Jury report that found operating deficiencies among the 14 CRAS operating in the county, including little effort to develop affordable housing.

The proposal, however, is drawing criticism from a local CRA expert.

“It’s a step in the right direction, but it doesn’t go far enough,” said Frank Schnidman, a Florida Atlantic University professor with extensive knowledge of CRAs and how they should operate.

If adopted, the measures would apply to both new CRAs and existing ones that seek to extend or amend their 30-year terms.

Schnidman is opposed to the county granting CRAs any extensions unless they can demonstrate that they’ve been effective in their state-mandated mission of ridding “slum and blight” from within their limited boundaries. He also believes that newly approved CRAs should not receive county tax-increment funding. TIF funds, as they are known, are property tax dollars earmarked to some CRAs from increases in assessed land values within their designated district.

Extending the life of CRAs to finance new or existing projects transforms them into “economic development agencies,” whose purpose is other than eliminating slum and blight, said Schnidman. And CRAs already have demonstrated they have no desire to create much-needed affordable housing for poorer residents, he added.

Nevertheless, discussions are under way to extend the terms of two Miami CRAs – Omni, which hasn’t built any affordable housing, and Southeast Overtown Park West, which has – in order to back both proposed and existing projects.

If extended, the proposed Miami Marriott Marquis Hotel and Expo Center, the Miami Streetcar and Baylink could expect to receive CRA funding for debt service and/or operating and capital expenses. The Patricia and Phillip Frost Museum of Science, the Perez Art Museum Miami and the Adrienne Arsht Performing Arts Center stand to receive CRA dollars to cover similar expenses.

Most of those projects are “for the rich,” said Schnidman.

‘No real teeth’

The proposed county resolution would “have some effect but it has no real teeth,” Schnidman said. He noted, for instance, that while it seeks to address affordable housing, it would not require existing CRAs without a housing plan to adopt one. He was also critical because the proposal would continue to allow CRAs to issue bonds to support projects without voter approval.

Miami-Dade Commissioner Daniella L. Cava proffered the resolution.

“I have created a proposal to deal with slum and blight and not just for developers,” she said. “We can’t do anything that is in violation of state law…state law does not require housing.

Cava noted that her resolution provides that there be a finding of “necessity” for approval of new CRAs, added she was interested in Schnidman’s suggestion that CRAs should have to show they have addressed slum and blight before they can get an extension or amendment to their term.

The Miami-Dade Grand Jury issued a scathing report in February about the operations of 14 CRAs that exist under an agreement with the County Commission. The grand jury said CRAs skirted the law’s intent with “overly broad interpretations” of definitions and requirements, by paying for inappropriate things like “fairs, carnivals and community entertainment;” and squandering “… large amounts of taxpayer dollars on what appeared to be pet projects of the elected officials.” Likewise, CRAS allocated a significant amount of funds “on salaries, benefits and other administrative costs.”

But the grand jury’s harshest criticism was aimed at the failure of CRAS to provide affordable housing in the blighted areas they were supposed to assist.

“Our investigation uncovered large scale spending on projects that did not address slum, blight or affordable housing … Evidence presented to us indicates that affordable housing is not a priority for many of the existing CRAs … (and) is almost non-existent.”

County leverage

The proposed resolution would declare the county’s intention to include the new provisions as a condition for approval for any new CRAs and for existing ones seeking extensions. The county has considerable leverage because it provides nearly half the tax-increment funds collected by the 14 CRAs: this year, $32 million in all.

Among the resolutions key provisions is a requirement that new and some existing CRAs have a housing component and a budget that annually includes funds for low, moderate and workforce housing. Existing CRAs without housing provisions in their plans may be able to circumvent the requirement, according to Schnidman.

In a measure aimed at widening CRA oversight, the county commission would appoint two members or designees to each CRA board. The county Inspector General’s Office would be given extensive authority to review all transactions of the CRAs, including actions that allegedly involve “fraud and/or corruption.”

CRAs also would be obliged to demonstrate the benefit of projects by holding a public hearing to consider how they will primarily benefit residents and business owners within the redevelopment area.

On the financial side, CRAs would be subject to a cap on administrative costs of 20 percent and new CRAs would not receive more than 50 percent of tax-increment collections unless commissioners approve a higher amount by a two-thirds vote.

CRA grants of $200,000 or more to community groups would have to primarily benefit residents in the redevelopment area. That would include hiring the labor force from workers within the redevelopment boundaries and allowing the county to recover funds not used for their intended purposes.

Likewise, CRAs would also be required to provide relocation assistance to individuals, families and businesses displaced by its projects. CRAs would also have to provide “one-for-one” replacement of affordable housing units they demolish, with those displaced having the right of first refusal to move back into affordable units.

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