By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
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By Kyle Swenson
In October 1991, the Miami City Commission handed out a half-million dollars and started a small war. The fight erupted over how to improve a few blocks of deteriorated property on the northeast side. As happens with many of the city's best intentions, political combat quickly replaced constructive action. Today the area in question -- parts of NE 62nd and 63rd streets just west of Biscayne Boulevard -- is still in drug-ridden decay, and little of the city's $500,000 has been spent. The two-year-old battle, however, has only increased in intensity. Drawing most of the fire: a top city official and a member of a citizens advisory board known as the Northeast Task Force, both of whom are facing pointed accusations about their personal interests in the neighborhood. Complaints about their conduct and the initiation of an in-house task force probe have prompted City Manager Cesar Odio to order an investigation by the Miami Police Department's Internal Affairs office, as well as an independent audit of the city's entire housing department.
Assistant City Manager Herbert J. Bailey, an expert in urban renewal and head of the city's Department of Housing and Development, this past June purchased an abandoned fourplex on NE 62nd Street. Bailey's partner in the purchase was Northeast Task Force member Judy Clark, a realtor who was the leading advocate of a neighborhood redevelopment plan using the city's $500,000. After buying the property, Bailey and Clark replaced its broken windows, cleared away weeds and junk, repaired the apartments' bathroom plumbing, and painted the two buildings. Then they rented the apartments. All of which should have pleased task force members, or anyone interested in improving the area. It didn't.
The property Bailey and Clark bought (and another across the street they considered buying but which was quickly picked up by a private investor) borders the blocks targeted for redevelopment by the city when it allocated the $500,000 back in 1991. Moreover, Bailey's housing department is responsible for administering these funds. If the redevelopment project were to succeed and property values rise as a result, he and Clark could make a good profit when they sell the fourplex, as they are encouraged to do by the terms of their federally insured mortgage and rehabilitation loan. On the other hand, the neighborhood isn't guaranteed to turn around, and they may not make back their investment.
But Bailey's financial interest in a property so close to planned redevelopment that he would oversee has raised serious questions about conflict of interest, which he adamantly denies. And some puzzling aspects of the sale, including an unregistered company listed on the deed as co-owner with Bailey, remain unexplained.
As for Clark, Northeast Task Force officers are angry that she never disclosed her financial interest in the area even as she pushed for a city-financed redevelopment project. They say she secretly pursued the project despite the fact that most task force members were opposed to it. Task force officials are so upset, in fact, that at a special meeting on November 30 they authorized attorney and task force member Scott Warfman to undertake an investigation to determine if any improper and/or illegal conduct has occurred. Clark, through her attorney, has threatened a slander suit against the task force "if this witch-hunt continues." Clark contends the accusations against her are politically motivated and that she has no conflict of interest.
Northeast Miami ranges roughly from NE Seventeenth Street on the south to NE 87th Street on the north, and from Biscayne Bay on the east to NE Second Avenue on the west. Once a scenic residential area graced with elegant homes, it suffered a steep decline in the Sixties and Seventies, much like near-downtown urban neighborhoods all over the nation. But a slow renaissance took root in the Eighties. Professionals began to refurbish and move into bayfront homes on quiet, palm-lined streets. Property values started to rise. The east side -- at least that part of it east of Biscayne Boulevard above 50th Street -- was enjoying a new cachet.
But the west side of the boulevard, home to entrenched drug and prostitution trades, hasn't taken nearly as well to gentrification. In 1989 the Miami City Commission created the Northeast Task Force, composed of elected representatives of about a dozen homeowner groups and the Greater Biscayne Chamber of Commerce. The task force, whose members were approved by the commission, was charged with developing strategies to restore and revitalize the area and to make recommendations to the commission. Committees formed to address an array of concerns: economic development, crime, funding, beautification.
In her position as chairwoman of the economic development committee, Judy Clark was instrumental in persuading the city commission to reallocate more than $500,000 in federal Community Development Block Grant funds originally intended for Little Havana. According to the commission's resolution, the half-million was to be spent for "undertaking land acquisition activities in the area bounded by Biscayne Boulevard and Northeast Eighth Avenue between Northeast 62nd and 63rd streets, for the development of a mixed-use residential housing project." City plans called for the purchase of most of the south side of NE 63rd Street from Biscayne to NE Fifth Avenue, and parts of NE 62nd Street, including the infamous green-and-pink Sinbad Motel, whose name defines it these days. The project would include low- and moderate-income housing and some shops on the boulevard. It would need additional money from private or public sources to become a reality, but getting the land was the first step.
A year later, in October 1992, the commission authorized the city manager to make offers on three lots in the targeted area. Two adjacent parcels on NE 63rd Street were bought at a total cost of almost $40,000. Meanwhile, the Northeast Task Force apparently was learning little about the progress of the project. "There was no documentation," says former task force chairwoman Ernestine Stevens. "We didn't know how much was spent, who spent it. We knew appraisals were done but we didn't know who did them. But what really concerned us was -- for a lot of different reasons -- the community was not for this, yet it still was going forward."
Herbert Bailey, an eleven-year veteran of city government, has a different assessment of the project. In an interview this past week, he initially claimed none of the $500,000 had been spent. But after the two 63rd Street purchases were brought to his attention, he noted that the city is constantly buying pieces of land to rehabilitate. The development project promoted by Clark was a good idea, Bailey asserted, but the city was finding the current property owners reluctant to sell, and land prices were higher than expected. "The whole thing just fell apart because of a lack of money," he said.
Other city and county officials, however, weren't so discouraged. This past May, according to several task force members, a number of city and county representatives (not including Bailey) made a formal presentation about the project during a task force meeting. The next month task force members, unhappy over a lack of details and fearful the proposed housing and shops would deteriorate instead of rejuvenate, voted overwhelmingly against proceeding with the project. (The nonbinding vote was actually more like a poll.) Apparently they were unaware that some land already had been acquired.
That was also the month in which Bailey and Clark purchased their property on 62nd Street, although the change of ownership would not show up in public records for at least another four months. Clark continued to advocate the redevelopment project; her adversaries on the task force continued to oppose it. After nearly two years, almost nothing had been done with the city's $500,000, and last month Miami's director of community development, Frank Casta*eda, informed task force chairman Patrick Prudhomme the group was perilously close to forfeiting it.
By that time the Bailey-Clark purchase was common knowledge, although Clark insisted at task force meetings that it was nobody's business. Letters from task force members then began arriving at city hall accusing both Clark and Bailey of a conflict of interest and complaining that Clark and her committee kept from the task force almost all information about the status of the mythical half-million-dollar community improvement plan. "I consider it highly inappropriate that a housing director who is trying to put a project in a neighborhood buys property right on top of the project," Prudhomme snaps. "And it really ticks me off that when all the homeowners associations say 'We don't want it,' Judy Clark is somehow allowed to continue to pursue it. They were getting real estate appraisals when they didn't even know if the neighborhoods wanted these things."
Clark defends her actions as attempts to take action to address the area's problems. "My hope is to move the place from hourly and nightly rentals to owner-occupancy," she says. "To me that stabilizes the neighborhood."
Bailey says he bought the rundown, trouble-plagued fourplex as a favor to Clark, who lives and owns property in the northeast and who had been trying to find a partner to purchase the property on 62nd Street because it was a menace. "It was money out of my pocket that I worked for," Bailey insists. "I have nothing to hide. By law there is no conflict of interest. I have done nothing wrong at all; otherwise I wouldn't put my name on it."
Yet Bailey and Clark, while acknowledging they own the property, are vague in answering questions about their business partnership and the "SF Properties" that is listed as co-owner with Bailey. SF Properties is not registered with the Office of the Florida Secretary of State, nor does it have a Dade County occupational license, required for companies doing business in the county. Its address, as listed in county records, is that of Clark's home on North Bayshore Drive, and its phone number rings at Bailey's city office.
Financial Research Services, the firm that allowed Bailey and Clark to assume the property's mortgage and to obtain rehabilitation financing, believes SF Properties to be a nonprofit corporation that rents residences to low-income individuals. But Bailey and Clark describe the company as an investment group.
Bailey, as a department head, is required to file disclosure forms each year revealing any property holdings or outside sources of income. The most recent statement of real property, filed by Bailey this past November 18, lists only his home on Brickell Avenue. No mention is made of anything on NE 62nd Street. (Bailey did not return numerous phone calls seeking an explanation.) Bailey's most recent statement of outside income was filed in June of this year and includes nothing related to real estate in Dade County.
Also unexplained is the mysterious four-month lapse in listing the property transaction among public documents. Realtors and title attorneys agree a delay that long is unusual and almost inexcusable, but can't say why it would have happened. Maynard Hellman, the Coral Gables attorney who handled the title work for the Bailey-Clark purchase and who might have had an answer, did not return phone messages.
Whatever the explanations, Bailey now faces increased scrutiny of his actions and inquiries into whether they constitute a conflict of interest or worse. City Manager Odio says he wants answers. He hopes to get them soon from the prestigious accounting firm Deloitte & Touche, as well as from the Miami Police Department's Internal Affairs office. Though he won't discuss particulars of any investigations, Odio has this to say: "I take the complaints seriously and I am pursuing this. I have told an outside auditor to go immediately [to the housing department]. The whole unit will be audited, and when that's completed, we'll come up with recommendations.