A War of Addition

A legal battle between developer Ron Bloomberg and Beach officials over the fate of the city's cultural campus has both sides fuming

In December 1997 Ron Bloomberg strode into Miami Beach City Hall for a predevelopment meeting with city planners. He hoped to construct a four-story office building at 23rd Street and Park Avenue, on the site of a long-abandoned Chevron station. The 33-year-old developer arrived feeling optimistic. He and his partners, after all, had already received the city's blessing to renovate the historic Palm Court building across the street.

Thomas Mooney, the city's principal planner, quickly dampened his mood. He told Bloomberg he would have to move his proposed building five feet north to accommodate the already-approved design for the Miami City Ballet's new headquarters.

"Tom, this is fucking bullshit," Bloomberg remembers saying. "Let me see their plans right now." His perusal of the file confirmed that the ballet, in apparent violation of city regulations, was being allowed to build right up to the property line. More remarkable was that the ballet's proposed building extended over two lots that Bloomberg knew to be privately owned. Yet the file also contained an affidavit declaring that the city, or more specifically its Redevelopment Agency (RDA), owned these properties.

He recalls pressing Mooney on this point: How could the city have given the ballet the go-ahead to build on land that neither the ballet nor the city owned? According to Bloomberg, the city planner was speechless.

Bloomberg left the meeting fuming. He knew that if he or any other developer had turned in an application like the ballet's, they'd have been laughed out of city hall. Nor did it take him long to develop his own theory about the city's actions. The ballet building, along with the expanded Bass Museum of Art and a proposed regional library, are the key components in creating a "cultural campus" in and around the Beach's Collins Park area. It seemed to Bloomberg that the city was determined to develop the area, even if that meant trampling on the rights of individual property owners like him.

In the first of a series of moves that would pit the pugnacious developer against the city, Bloomberg filed an appeal of the approval. This appeal has done nothing to slow construction of the ballet headquarters. The project is a concrete-and-steel reality. The city ordered the construction stopped in March because of a structural defect in the building's second floor, but once that is straightened out, the builders will continue pushing toward a scheduled completion in August. (A different error by another contractor also caused a delay in the construction of the Bass Museum in March.)

Bloomberg has managed to put the kibosh on another crucial aspect of the cultural campus, though: a 400-space parking garage, which would serve not only the ballet, but the Bass and the proposed library. City officials would love to get their hands on Bloomberg's Chevron property, to build the western half of the garage. In fact this past year they filed an eminent domain suit to wrest the property from him for that very purpose.

That suit has since been dropped, but after eighteen months of rancor, of suits and countersuits, the very mention of Bloomberg's name in city hall is enough to elicit rolling eyes, groans, and grimaces. Commissioners and staffers have pegged him as greedy, obnoxious, litigious, and obstinate; a fly in the ointment, the guy who wants to kill the cultural campus.

Bloomberg's battle with the city has all but ruled out the construction of a garage in an area of the Beach where parking is scarce and getting scarcer. The city has also had to defer a plan to turn a surface parking lot across from the cultural campus into a public park.

The developer maintains that he's just trying to look out for his rights, and that if the city would deal with him reasonably, he could help them with their parking problem and drop his litigation.

At least for now, the city is having none of it. Although everyone agrees that his property is the ideal site for a garage, officials are dead set against working with Bloomberg, whose attitude and financial demands they consider offensive. As Commissioner Nancy Liebman puts it: "We're not going to be blackmailed into paying his price."

The birth of the cultural campus concept can be traced to Commissioner Susan Gottlieb. A couple of years ago, in the midst of discussions over the placement of several artsy edifices in the city, an idea suddenly occurred to her: "What if we put the ballet near the new library and the Bass Museum, and made the property into a kind of cultural campus? I gave it that name, and it stuck," Gottlieb says now. "It would absolutely revitalize a very downtrodden area of the Beach."

The area she describes, bounded by Park Avenue to the west, Collins Avenue to the east, 23rd Street to the north and 21st Street to the south, is surrounded by Art Deco apartment buildings and hotels that range from rundown to presentable, assorted low-end retail stores along Collins, and the legendary Wolfie's Restaurant. Collins Park itself is a gathering place for the city's homeless population.

Miami Beach's politicians and bureaucrats alike pounced on the concept. "It really was a wonderful idea," Mayor Neisen Kasdin gushes. "It would create one of the most spectacular cultural venues in Florida."

The bigwigs of the ballet loved the idea, too, and in April 1997, the first rough sketch of the cultural campus was drawn. It not only showed the Bass, the library, and the ballet, but a big parking garage to the north of the ballet building.

All of these were major projects, and all involved a good chunk of public money. The augmented Bass Museum of Art, a city-owned facility, is budgeted at $8 million ($3.6 million from city coffers). The city has $11.5 million in county bond money available to build the regional library, which is still in the planning stages.

The Miami City Ballet, now in its thirteenth season, is a private nonprofit entity, but the City of Miami Beach has committed $2.5 million of public money to help build its new digs. The success of the company has exceeded even the most optimistic expectations of its founder, the legendary Edward Villella. But as both the teaching and performing aspects of the company have grown in size and prestige, the ballet's Lincoln Road headquarters have become a tighter and tighter fit. Even in the early Nineties, the company knew that its need for more and better space (along with the skyrocketing rents on Lincoln Road) would eventually force them to leave the pedestrian mall. The Collins Park locale appeared to be the perfect solution.

But bringing these projects together came with an extra price: The city would have to buy up several lots of privately owned land to secure room for the ballet and library buildings.

With visions of a subtropical Lincoln Center dancing in their heads, the commission authorized city staff to begin buying the necessary property in July 1997. The city's RDA targeted six privately owned lots on the two blocks that it needed to acquire, and began filing eminent domain lawsuits.

Although eminent domain allows governmental agencies to take possession of private property, the governmental body in question has to pay for the private property it wants. In the case of the cultural campus, the city filed the type of eminent domain suit known as a "quick take." Under such proceedings the city tries to convince a judge that buying the land would serve a valid public purpose. If the judge agrees, the city assesses the value of the property in question, then deposits that amount of money in the court registry. After that the city and property owner can either negotiate a new price, or go to a jury trial, in which the jury determines the final price. Also, the city is always responsible for paying the property owner's legal fees in any eminent domain case.

For most of the lots needed for the cultural campus, the city's eminent domain cases have proceeded more or less uneventfully. In the majority of those cases the city and the property owners have settled on a selling price slightly higher than the land's assessed value. One of the owners, however, has refused to get with the program.

The suite of offices on the fourth floor of the 420 Lincoln Rd. building is spare, unfinished-looking, with whitewashed walls and exposed wiring. Even the garishness of two Leroy Neimanns and Joan Miros can't liven up Ron Bloomberg's cluttered center of operations. The developer and real estate broker, now 35 years old, sits behind his desk, tugging at his green-striped shirt with rolled-up sleeves.

His career, as he describes it, has been short but eventful. Armed with a bachelor's degree from the University of Pennsylvania, the New York native was putting together commercial real estate deals for Citicorp when Aventura megadevelopers Turnberry Associates recruited him to Miami in 1991. Turnberry put him to work managing properties that had been foreclosed, including The Grand condominium across from Miami's Omni mall, and 100 Lincoln Rd. in Miami Beach. "I met some commissioners, some of the other players [in Miami Beach]," he recalls, in his relentless manner. "I got my feet wet."

In 1993 he struck out on his own as a commercial real estate broker. He brokered leases ranging from the upscale eatery China Grill, to the adult-novelty store The Pleasure Emporium.

His ultimate dream was to buy and develop his own properties, and he soon snatched up a likely one: the run-down but impressively arcaded Palm Court building, two blocks north of Collins Park. "I went up and looked at it, and said, 'This is a nice property,'" he remembers. "The neighborhood needs some work, but sooner or later this neighborhood's going to come around."

Bloomberg also had his eye on the abandoned Chevron gas station across the street. Initially he signed a contract with Chevron's landlord, an Ocala retiree named Patricia Bush. When Chevron threatened to sell its long-term lease, rather than terminate it, he decided to buy out Chevron instead in August 1997.

Meanwhile his Palm Court plans had hit a minor snag: lack of parking. Bloomberg paid a $65,000 one-time parking-impact fee to the city because Palm Court didn't have any parking spaces for its eventual tenants. In hopes of getting that fee refunded, Bloomberg went after a third property in the neighborhood, at 221 22nd St., then owned by Cleveland investor Carl Ablon. By the fall of 1997, Ablon had signed a contract to sell the property to Bloomberg. Anticipating that the Ablon lot would take care of his parking needs and earn him his money back from the city, Bloomberg began planning an office building on the Chevron site.

As 1997 drew to a close, Bloomberg's plans for adjoining retail/office buildings at the northern extreme of South Beach seemed to be coming together nicely. His extensive renovation of the historic Palm Court was under way; he had drawn up plans for a complex of retail stores and offices across the street, with the Ablon property providing parking for both of those buildings. In a delightful bit of tired jargon, Bloomberg says he was on the brink of "creating my own synergy" in the neighborhood, hastening its eventual renaissance.

After his December 1997 meeting with Mooney, though, he realized that his plans were on a collision course with the city.

The city's eagerness to approve the ballet building irked him for two financial reasons. First the proposed building obstructed Palm Court's views of Collins Park and the beach. Second, it forced him to shrink his buildable square footage on the Chevron lot.

But what really ticked him off, he says, was the principle of the thing, the fact that city officials had rubber-stamped an application that he saw as clearly substandard. The city even went so far as to defer the ballet's parking-impact fees. Having gone through the design-review process himself, Bloomberg knew a double standard was in effect.

In December he filed an appeal of the ballet's Design Review Board (DRB) approval with the "special master," an administrative judge specifically charged with overseeing DRB decisions. His attorney in that matter, Stanley Price, has handled the case from the outset. In April 1998 the special master rejected the appeal, ruling that he didn't have jurisdiction over Bloomberg's specific complaints. Price took the appeal to the next step: a lawsuit in Miami-Dade County Circuit Court.

The central issue in the appeal was that, at the time the DRB approved the project, the city did not own the property upon which the ballet was to be built. "To this day, and it's been almost a year, no one ever answered me how the city can just overlook a falsified affidavit [of ownership]," Price relates. "That's the whole problem here: The city feels like the end justifies the means. I'm in favor of the ballet, too. I'd like to see it there, but just apply the same rules to them as you do to my client or any other property owner."

City administrators concede that the city had not finalized its ownership of all of the land for the ballet building at the time of its DRB approval on November 4, 1997. The city owned half of it: A surface parking lot at the corner of Park Avenue and 22nd Street. The other necessary land included the parking lot for the Onyx nightclub at Liberty Avenue and 22nd Street, and part of the so-called fruit stand parcel at Liberty Avenue and 23rd Street. Still, city staff insist they didn't need to actually own the property.

"We processed and accepted the application to the DRB without owning it," Assistant City Manager Janet Gavarrete allows. "But it was in the works. I think it's important to note that numerous commission actions validated the fact that we were going to own it."

In fact contained in Bloomberg's suit is a memo from Gavarrete to redevelopment coordinator Marla Dumas. In it she notes that an affidavit of ownership is a requirement for DRB approval. But, she adds, "We know that it will be impossible to obtains [sic] such affidavit from the owner, and since the Commission has by Resolution instructed the Administration to acquire by purchase or eminent domain such land for a Cultural Center, this official City action is sufficiently acceptable to [Planning Director] Dean [Grandin] to serve as an 'affidavit' pending acquisition of course."

Price doesn't find that anywhere near sufficiently acceptable. "If I said, 'Dean, I don't own this property, but I'll probably own it a year from now; can I get my plan approved?' he'd laugh me out of the room."

The ballet wrangle, though, was just the beginning of Bloomberg's battles with the city. Soon after he filed his appeal, he got a call from Dumas. "She asked if I owned the Chevron and Ablon properties. I said, 'Why?' And she said, 'Well, the city has authorized eminent domain on your properties, and we need to make sure you're the owner of those properties.' I said, 'What does that mean?' She said, 'Oh, cities have the right to take properties through eminent domain.' I said, 'What do you mean, "take properties?" I have plans. I'm working on things right now.'"

Dumas confirms calling Bloomberg, as she called everyone else who had any interest in the six lots the city was targeting for eminent domain.

Sure enough in January 1998, the city's RDA filed an eminent domain lawsuit to take the Ablon parcel. A suit over the Chevron lot followed that March. The city appraised the Chevron lot at $580,000, the Ablon lot, $430,000. No chump change, but compared with what he stood to make building upon and leasing out those properties in such an up-and-coming area, Bloomberg says, it seemed like a lowball.

"That's when I ran out and hired my eminent domain lawyer," he adds.

Bloomberg describes the first few months of 1998 as a "time of panic" for him. The city's two eminent domain suits brought forth two more legal actions against him. First, Ablon sued to get out of their contract. Second, as a cross-claim filed in response to the city's eminent domain suit against the Chevron property, the heirs of Bloomberg's landlord, Patricia Bush, alleged that he hadn't included them in his transaction with Chevron, and that he had defrauded Bush in their negotiations over the years.

Adding to the confusion, the city's parking department approached him and asked him to respond to a request for proposals (RFP) to build a public-private parking garage on the Chevron property -- at the same time the city was suing him to acquire the Chevron property, so it could build a parking garage there. In effect the city was hedging its bets, giving itself two possible avenues to reach its ultimate goal: the 400-space parking garage north of the ballet.

Despite all of this swirling litigation, Bloomberg went ahead and responded to the parking RFP. Bloomberg portrays his offer, which he brought before an evaluation committee in June 1998, as a win-win arrangement. "The city would buy [the Chevron parcel], we would lease that land back, we would build the parking garage, and once it was complete, we would lease back a portion of the spaces at some return. It was a beautiful situation. The city didn't have to come out of pocket one dime."

Bloomberg also noted that, if the city agreed to this partnership, he'd drop his appeal of the ballet project.

The parking board didn't see the beauty of it. One sticking point was Bloomberg's proposed "one-time development fee" of $1.3 million -- more than twice the city's appraised value of the Chevron property. Another was his proposal to charge the city $450,000 per year for leasing the parking spaces from him. In fact under Bloomberg's plan, he would control not just the Chevron parcel, but its neighbor to the east, the fruit stand; he had the city buying that land through eminent domain, then leasing it to him.

This plan dashed Bloomberg's dream of constructing an office building on the Chevron site. But it also provided a payday far greater than the $600,000 or so the city was offering for the Chevron lot through eminent domain.

Of the ten applicants for the RFP, Bloomberg's was the only one rejected out of hand. "He proposed a deal where he would partner with the city to develop parking, but in reality, the proposal was outrageously lopsided in his favor financially," Mayor Kasdin says.

"We didn't want to go into partnership with him under his terms," Susan Gottlieb says. "It seemed like once he knew the city was interested, he just chose to escalate the cost way beyond what was reasonable."

Once the city rejected Bloomberg's proposed partnership, however, eminent domain was its only avenue left to secure a garage on the Chevron parcel. Curiously, though, the city dropped its eminent domain suit this past December.

Why? According to sources at city hall, because it would cost too much. The city inferred that Bloomberg's asking price for the parcel might well approach the $1.3 million figure he floated as his "development fee" for his jilted garage. Bloomberg's eminent domain attorney, Mark Tobin, is a specialist in the field. He might well have been able to convince a jury to award Bloomberg something close to that amount. Also, a lengthy trial would become a further financial hit for the city, as the city would be paying Bloomberg's legal fees.

"[Bloomberg] has just offended every city official he's dealt with," Kasdin notes. "The things he's asked for have been outrageous, plus he's challenging the design-review approval for the ballet project. I, and I think most people, view his tactics as sort of obstructionist. Maybe he thought the city would knuckle under, but the reality is, the [cultural campus] project can be done quite well without his property."

The same can't be said, however, of the Ablon parcel, which Bloomberg now owns outright, having settled his differences with Ablon. This land sits squarely in the middle of the proposed site for the regional library. And the city has no intention of dropping this eminent domain suit against Bloomberg. It's set for a hearing by June 1999.

In the midst of these legal maneuvers, Bloomberg's Palm Court renovation proceeded apace. It wound up in November as a refurbished office space that various city commissioners and staffers have lauded.

"It's ironic that the one who's stopping [the cultural campus parking garage] is the guy who just renovated a gorgeous building across the street," Gottlieb muses. She notes additional irony: "[The cultural campus] has to make his property more valuable, but he is the one making the parking garage impossible, and we are all being impacted by his stance. I think he's just being greedy, trying to jack up the price. It's unconscionable, because this is for a cultural institution, something to benefit every citizen. I mean, how much of a piggy-wiggy could he possibly be?"

Adding fuel to the fire is Bloomberg's quixotic challenge to the ballet project, which drags on and on. "He is nitpicking over technicalities rather than working with the city," Nancy Liebman says. "It's in his own best interest to have this cultural campus work properly. Maybe this is how he learned to do business, by agitating to get what he wants. But I don't think he's going to win anything with this. Even if he won some portion of his lawsuit [against the ballet], what is the city supposed to do? Do we tear down the ballet because we didn't have ownership that we now have? Why is it to his advantage to have that single parcel of vacant land across from his beautiful building? Wouldn't it benefit him as well as the city to have a public parking garage there?"

Bloomberg points out that it also would benefit him to put a retail/office building next to the cultural campus, and that the city should be prepared to pay him a fair price to take those rights away from him.

His complaint against the ballet took a hit in November 1998 when the circuit court judge dismissed the case -- not on the facts of the suit, but on a technicality. Undeterred, Bloomberg directed Price to appeal to the Third District Court of Appeal.

When the city dropped its eminent domain lawsuit on the Chevron property, another bit of legal ugliness in Ron Bloomberg's life also seemed to fade from view: the cross-claim filed by Patricia Bush's heirs. Although the claim has not been filed as a separate lawsuit, and might never be, the damage to Bloomberg's already-dismal reputation at city hall has been done. He is now portrayed not only as the Philistine and profiteer, but as the kind of guy who defrauds little old ladies.

Patricia Bush might take exception to being called a little old lady. She's only 68 years old, after all. Still, reached by phone in Ocala, she freely describes her health problems: "I've got a bad leg, had my knee replaced twice. I've got a bad heart, diabetes, arthritis everywhere. I'm almost housebound: I've got an electric cart, a walker." She is also on medication.

The cross-claim her two heirs (a nephew and a family friend) brought against Bloomberg's corporate entities asserts that the developer didn't secure their permission before signing his agreement with Chevron. In addition they charge that Bloomberg, "through fraud, overreaching, and duress," took advantage of Bush's poor health in December 1996 to get her to sign away her rights to him in the event of eminent domain proceedings against the Chevron lot.

Bloomberg vehemently denies any misconduct in his dealings with Bush. When he first investigated the property in 1993, he says, it appeared likely that Chevron would eventually simply terminate their lease with Bush. So, instead of negotiating with Chevron, Bloomberg began negotiating with Bush, in hopes of buying her lease from her once Chevron was out of the picture. According to another of Bloomberg's attorneys, Gary Brooks, Bloomberg was offering Bush roughly $140,000. Bloomberg and Bush entered into a contract in 1994.

By early 1997, though, Chevron had changed its stance, and instead of canceling its lease with Bush, the company began to field offers to sell its sublease, which was supposed to last until Bush's ends in 2042. When Bloomberg got wind of this, he began negotiating with Chevron.

In August 1997 Bloomberg bought Chevron's interest in the property. Bush is now, in effect, his landlord, collecting $500 in rent from him every month for the property. Brooks says Bloomberg has amended his agreement with Bush to allow him the right to buy her out at any time, for an amount based upon how many years would remain on the lease. But she still believes Bloomberg took advantage of her at a time when she was more addled by her medication than usual. "I begged Chevron not to give their lease to him, because of all his wheeling and dealing with me," Bush recalls. "He was willing to buy it from me, and then all of a sudden he wasn't."

When told that the city has shown little or no interest in dealing with Bloomberg over the parcel, Bush is not surprised. "He is a bad guy," she says, then laughs softly. "He's a smooth talker. You talk to him and you think, Oh, this poor man, everybody's mistreating him."

Although the cross-claim died in the courts when the city dropped the eminent domain suit, the city resurrected it in an attempt to block Bloomberg's planned office building on the Chevron site.

That building received design-review approval on November 10, 1998. On December 21 the city filed a special-master appeal of that approval, arguing that Bloomberg didn't actually have "site control" of the property when he submitted his plans. The appeal appears to rely heavily on the questions raised by Bush's heirs about Bloomberg's conduct.

It also offers an ironic echo of Bloomberg's challenge of the ballet building. Just as Bloomberg charged that the city didn't own the land when it got DRB approval for the ballet project, the city is now charging that Bloomberg didn't own the Chevron parcel when he got DRB approval for his office building. The city's appeal is scheduled for a special master hearing in late April.

Robert A.M. Stern, the diminutive New York City-based architect, stands before the dais in the Miami Beach City Commission chamber, gesturing at a scale model of the cultural campus with one hand, holding a microphone in the other. "You have the library here, the ballet here, the Bass here, and Wolfie's here. All the landmarks are in place," he jokes during his February 17 presentation. The commissioners chortle.

The city hired Stern to design and build the library and the parking garage, and to develop a unifying plan for reshaping Collins Park itself. By now everyone has conceded that the parking garage is not going to happen in the foreseeable future, so Stern has adjusted his plans accordingly. Although not present, and never named, Ron Bloomberg looms large in the discussion.

"We recognize the need to keep parking on the beachfront site now," Stern says, pointing at the city-owned surface lot between Collins Avenue and the ocean. "We hope, in the future ... to remove the parking with the eventual construction of a garage, or some other way to address the large-scale parking problem in the area."

After Stern completes his presentation, Assistant City Manager Mayra Diaz-Buttacavoli gives commissioners the lowdown on how much parking, on-street and off, exists to accommodate future patrons and employees of the cultural campus. By her calculations the city can offer barely enough spaces to meet the facilities' needs under the zoning code -- for now.

Commissioner Susan Gottlieb, though, wants to make sure blame is assigned for this mad scramble for adequate parking. "The reason we have not been able to go ahead with the 400-space parking garage, which would more than address all of the problems in the area, is because of the escalating cost of a particular piece of property."

The only problem with the ballet's present location, she posits, is that the project has run afoul of "the greed of one particular landowne...."

"Okay, okay, okay," Kasdin says, hoping to stem her anger.
Bloomberg's perceived greed notwithstanding, the city is sending out mixed messages about its intentions for the Chevron lot. On one hand the city dropped the eminent domain suit, and Stern adjusted his library plans to allow for the lack of a parking garage. On the other the city has moved to block Bloomberg from putting up an office building there, and Stern still is talking about "the eventual construction of a parking garage."

Nor is there any end in sight to the war.
Consider this: On April 13 Stern's library plan was scheduled to go before the Design Review Board for approval. But before city officials can push forward with the third piece of the cultural campus, they will have to wrest control of the former Ablon lot from Bloomberg, via an eminent domain suit.

Bloomberg stresses that he will vigorously fight this lawsuit, which might well result in a big payday both for him and his attorney. He's also determined to battle the city's attempt to stall his office building on the Chevron lot. And (lest his friends at city hall forget) he's holding out for a ruling in his favor by the Third District Court of Appeal in his ballet lawsuit. The court will hear arguments on April 26.

If his appeal does succeed, what then? Bloomberg isn't sure. Maybe he'll ask for monetary damages, maybe the judges will order construction of the ballet stopped.

He would rather it didn't come to that. He says he hopes the city will either try to negotiate with him for the Chevron parcel, take it from him fair and square through eminent domain, or just drop its appeal of his office building there. He doesn't see any of those things happening anytime soon.

A meeting in late March between Commissioner Liebman and Bloomberg's lawyers, though civil, has yet to result in any viable compromise, Liebman says. "I can't even get one person to answer my phone calls," the developer maintains. "Ron Bloomberg, since he's litigating against the city, nobody returns his phone calls. Their attitude is, 'Okay, screw him.'

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