The Bitterness of Sugar Hill

The plan was to turn inner-city housing into an AIDS refuge. The reality is a shocking waste of money and charity.

One recent afternoon visit to the property found six young men huddled shooting dice on the broken, unfinished sidewalk at Sugar Hill's main entrance. One of the men, wearing John Lennon-style granny glasses with frames that appeared to be solid gold, smiled and said, "Hey man, you look like a customer." Across the street, in front of a run-down housing complex now owned by the Urban League, a young man rolling a joint commented wryly that he passed his time just trying to stay alive.

Oddly enough FHC did not purchase a block of twenty apartments that sit in the middle of the Sugar Hill development. Chiquitha Penson and her three children live on the second floor of this building. Like most of the residents, she receives welfare. The government helps pay her $225 per month rent. Great blotches of mold grow on her ceilings. Her children crawl around sagging floors of rough wood. Penson doesn't quite know what to make of the multimillion-dollar development going up around her. Others in the neighborhood grouse that they don't want AIDS patients living next to them.


At the outset FHC hired the consulting firm Gagnier, Hicks Associates, Inc., to help with the project. The firm submitted a list of "known" contractors for consideration by FHC and Middlebrooks, but the bid for the publicly funded project remained open.

Indeed a contractor not on the list was chosen by the architect and FHC. When all the interviews and conferences concluded, Tecina International, Inc., signed a contract with FHC on August 2, 1994, for $1,495,713, an almost perfect bid, just $14,287 shy of FHC's own estimated building costs. In the contract Tecina pledged to complete all the project's construction, including materials and labor, within 195 days after work began. The firm also agreed to pay a $200-per-day penalty if it finished late. And the company guaranteed all of its work for a year after completion.

Then the fun began. Communication broke down and delays set in almost immediately. The gap between reality and what was reported started to widen.

According to memos between FHC and the city, actual construction did not commence until September 15, 1995. Problems with building permits and exasperating code changes were blamed.

Then a mysterious fire burned down the community building sometime in 1996. The Miami-Dade County Fire Department has no record of the blaze. The first mention of it in government documents was in late April of the same year.

The only part of the building that could be salvaged was the foundation. But no setback seemed too large to paper over. An April 22, 1996, memo from an FHC consultant to city officials explained how the damage was enormous yet unimportant. They would have to rebuild almost from scratch, but work on the structure still qualified as a rehabilitation.

"The fire damage did not result in total destruction; however, we were faced with structural damage to the walls," the consultant wrote. "The buildings department allowed us to remove [the walls], but keep the foundation and slab. They [still] consider this a rehab just as long as we do not increase or decrease the structure."

No one seemed to care about the project's true state as long as the key players kept the federal cash flowing.

On April 29, 1996, Tecina declared bankruptcy, but amazingly, continued working and receiving payments. It appears the City of Miami, which had taken over supervision of the project from the county, was not immediately notified.

But Tecina's subcontractors noticed quickly enough when they stopped being paid for their work. They began placing large liens against the property as early as October of that year. For instance Miguel Lopez, Jr., Inc., which provided paving and drainage for Sugar Hill for $32,513, filed a lien against the property for $10,670 that remained unpaid despite the work's completion.

By November 1996 Tecina had devoured $1,372,303. Yet during that same month, more than half a year after Tecina declared bankruptcy, Middlebrooks approved two more construction payments totaling $77,765.

On December 10 the city finally reacted to the crisis. Paul Eisenhart, a housing official, expressed alarm at the situation. In a memo he noted that though most of the Sugar Hill construction money had been spent, the work was far from complete. Based on a city inspector's report, he described workmanship as ranging from poor to fair and stated that most categories of construction appeared to have been overfunded and overpaid. Eisenhart refused to release $67,376 of the payments approved by the architect. The city official worried in the memo that Tecina would walk off the job, even though his own inspector already had reported that no one was working at the site.

Eisenhart wondered in writing who exactly was supervising what had clearly become a disaster.

"I question whether the architect is scrutinizing the [contractor's] applications and certifications for payment adequately enough to assure project completion," he pondered.

The day after Eisenhart's memo, the insurance company that had written the policy guaranteeing Tecina would finish the job wrote an indignant letter to FHC demanding that the agency release the final payments. Its request appears to be based on the inflated conclusions of Middlebrooks, who apparently told the insurance company that the project was almost finished. Obviously it would be in the company's best interest if the project were indeed completed. "This last draw, according to your architect, brings the project to over 90 percent," wrote Michael Burton of United Surety Associates, Inc. "Common construction practices allow for a reduction in retainage at this point." (Retainage is the small fraction of contract monies held back from the contractor to ensure the contractor finishes the job.)

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