The Powers Behind Ocean Drive

For South Beach publishing magnate Jerry Powers, life wasn't always marked by glamour and upstanding citizenship. Some would argue it still isn't.

Well aware of his project's need for capital, Powers had found private backers who invested money in the magazine by buying shares of SoBe News, Inc., the private company Powers had established to launch Ocean Drive. For example, in November 1992, a man named Derick Daniels invested $50,000 in the company, according to documents reviewed by New Times. Powers says Daniels is a former newspaper editor and friend who is chairman of the magazine's editorial advisory board.

As president of SoBe News, Inc., Powers refuses to discuss anything further about Ocean Drive's investors. "Anything having to do with financials I'll have no comment on," he says. "It's a private company and people have a right to their privacy." With some reluctance, however, Powers is willing to comment about one other backer.

Thomas Kramer's relationship with Ocean Drive dates all the way back to the magazine's second issue, which featured an exclusive interview with the German currency trader whose Portofino Group had just purchased $40 million worth of real estate south of Fifth Street in Miami Beach with a grandiose plan to refashion the blighted area into an Italian Riviera-style resort.

The article glossed over questions about Kramer that were raised in other press accounts -- questions regarding his shady dealings in his native country, and his erratic behavior. (In December 1992, New Times published such a piece, a cover story entitled "Tycoon Thomas.") Instead, the interview, which ran under Jerry Powers's own byline, afforded Kramer the opportunity to lash out at his critics.

February also marked the month that Kramer signed on as a major advertiser with Ocean Drive, running two full-page color ads.

The soft-edged Kramer piece meshed with the rest of Ocean Drive's editorial content. Indeed, the magazine continues to write laudatory features about current or desirable advertisers. Clothing designer Betsey Johnson, one of the publication's flagship advertisers, was profiled in the same issue as Kramer. The following month Powers interviewed another prominent advertiser, Russell Galbut, managing director of condo colossus Crescent Heights. Absolut vodka, one of Ocean Drive's first national accounts, has been touted in two separate profiles about artists who worked on the company's ubiquitous ad campaign.

According to Ocean Drive editor Lori Capullo, the line between the magazine's editorial and advertising sides is firm. "They have no say whatsoever over what we print," Capullo says. "I told Jerry I wouldn't work here under any other circumstances."

Kramer's involvement, though, is somewhat special, given that he owns part of the magazine. A significant part, judging from documents obtained by New Times. These not only list Kramer as a shareholder, but indicate that in 1993 he paid $250,000 for 25,000 shares of SoBe News, Inc. At the time he invested, that represented 25 percent of the company. His shares were nonvoting, meaning he was entitled to dividends but had no control over the corporation.

For months people have speculated that Kramer might be backing Ocean Drive, and understandably so. It would be a shrewd move for a landowner with such a large stake in the continued popularity of his adopted home turf: Along with its noncontroversial tone, Ocean Drive is known as an incessant lobbyist for all things South Beach.

Though Powers initially refused to comment on the subject, he later admitted Kramer is an investor, though he says the German has infused less than $250,000 into SoBe News, Inc. One former employee of Ocean Drive, however, claims to have seen the check the magazine received. "It was for 250,000 bucks," says the source, who requested not to be identified by name. "That's not something you forget."

Kramer himself is out of the country, skiing in St. Moritz. His second-in-command at the Portofino Group, CEO Heinrich von Hanau, confirms Kramer invested in Ocean Drive. "We think it's a great magazine and Jerry's doing a great job," says Hanau, but he refuses to reveal how much Kramer invested or whether Kramer has been apprised of Powers's legal troubles.

Since his splashy arrival in 1992, Kramer's reputation has plummeted among Beach residents. He once spoke of building an elegant development that would match the scale and ambiance of the Art Deco District. That vision somehow mutated into a stated desire to build a gargantuan casino and hotel complex; Kramer contributed heavily to last year's push to legalize casino gambling in Florida.

Powers stresses that Kramer's stake in Ocean Drive is purely financial, that aside from the ads he continues to run, the real estate magnate has absolutely no influence over the magazine's content. "My only comment [about Kramer] is that I don't share his philosophy on how the Beach should be developed and I'm totally against gambling in this town, totally," Powers says. "Then again, I don't know his philosophy, so I'm not sure that's correct. But I know about gambling and think gambling would be a nightmare for this town, and I've said that in an editorial."

Though Kramer is a regular attendee of Ocean Drive's various fetes, Powers says he and the developer are hardly mutual confidants. "I know him when I see him out. He always slaps me on the back a little too hard and laughs real hard. I like him."

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