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Like many small businesses in this destitute section of America's poorest city, Southall's is suffering from the number-one cause of business failure anywhere: lack of customers. "They moved over 2000 people from back there," Southall says, pointing through the dimness toward the back wall of his building. He is referring to several apartment complexes that once stood just south of the launderette. Now there is just vacant land. This 40-square-block area in the heart of Model City -- from NW 55th Street up to 62nd Street and from NW Twelfth Avenue to NW Seventeenth Avenue -- once teemed with men, women, teenagers, and children from low-income, mostly black families who paid rent with Section 8 federal housing subsidies. But in 2000, long after the apartment complexes they lived in had become home to excessive numbers of rats, drug dealers, and gang members (and was informally christened Germ City), the City of Miami condemned the structures. Then came the bulldozers.
Where did all the people go? "Nobody knows," shrugs a middle-age man with a knee brace and an aluminum cane who has been visiting with Southall. The man limps away on the sidewalk and heads past a boarded-up building next door that once housed Johnny's Meat Market.
Even Karen Cooper, administrator of the city's local Neighborhood Enhancement Team office, isn't sure exactly where the Section 8 tenants went. "Some people went to North Miami. Some went south," she says. Cooper is certain, though, that city officials issued federal housing vouchers to residents of the razed apartments so they could relocate to other buildings whose landlords are authorized to receive housing funds. Because few such subsidized rentals remain in Model City, the residents had no choice but to leave the area.
Most other small businesses in Model City, if not defunct, are either dying or barely surviving. Next door to the boarded-up Johnny's is Thomas Produce Market. "This place used to be crowded," says Howard Thomas, who runs the store with his brother Cedric. Their father began the business 50 years ago. Two customers browse among bins of watermelon, peanuts, peppers, and other vegetables. Pushing a grocery cart stuffed with collard greens into a chilled storage room, Howard Thomas estimates the apartment exodus led to his market's revenues plunging 30 to 40 percent. He holds elected officials and city planners responsible. "They have turned this area into a graveyard," he says angrily.
His brother Cedric, the market's business manager, relates that city officials recently offered him $30,000 for the building, which is located on the northern edge of the Model City Community Revitalization District. The district is to be the locus of a grandiose, city-managed urban-development project that is supposed to result in hundreds of new townhouses and single-family homes. But he rejected the offer, noting it was a pittance compared with the value of the business. "I'm taking care of two 80-year-olds with this place," he says.
Gangs and senseless violence have also contributed to the necropolis. Two blocks south of the produce market a young man wears a T-shirt with a photograph of his brother printed on the front. "Nigger killed him over a girl," he says, then points to a small apartment building down the street. "It happened over there." The young man's murder was one of 30 homicides in Model City in 1996, far more than any other neighborhood in Miami. Since then, according to police records, 87 additional murders have occurred over a five-year period, including nine last year. Two blocks west, near the Sol Market at NW Fifteenth Avenue and 60th Street, residents armed with paint and brushes have turned a tree trunk into a shrine for Fish, a.k.a. Fly Head, one of the Model City murder statistics. "Gone but not forgotten," someone scrawled.
Karen Cooper, the NET administrator, notes ironically that a crackdown on one of Model City's biggest industries -- the drug trade -- has also hurt legitimate businesses. "On Fifteenth Avenue you used to see people out [dealing] all the time," Cooper recalls. "A lot of these businesses survived off the people working in the streets. The guys hanging out on the corners, they gotta eat. They gotta buy stuff. So of course they would be those smaller stores' patrons. So now that that is gone, business is not what it used to be." She suggests that until new housing brings new customers to the area, many of Model City's remaining small businesses may not survive without financial aid from local government.
"They pulled everybody out very very fast. They tore the buildings down very very fast," remembers Loraine Hibbert, co-owner of Shrimp, Wings & Things, a take-out restaurant three blocks from Fly Head's tree-trunk memorial. "But they're putting them up very very slow." In fact the city has yet to begin construction. The few new houses that have risen are the work of small private contractors and local nonprofits.
Model City has been a model for failure since the Sixties. Initially it was a county entity, which planners carved out in response to President Lyndon Johnson's Great Society pipe dream. But only the easternmost portion of it falls within the City of Miami. To drive its perimeter take I-95 north to NW 71st Street, head west to NW Seventeenth Avenue, take a left, and head south to State Road 112, Model City's southern boundary.
The Section 8 housing-subsidies program, launched by the Nixon administration in 1974 and continuing today, did not prevent Model City from contributing heavily to Miami's status as America's fourth-poorest city in 1990. According to that year's census, almost half the neighborhood's 25,222 residents were living in poverty. Unemployment rates were at least 35 percent in most census tracts, with some tracts soaring above 65 percent.
One reason Model City has been a perpetual failure is that the area has also functioned as a model money pit. Over the years, millions of tax dollars have flowed into the hands of developers, some of whom were incompetent or unscrupulous, and none of whom were held accountable by city officials.
It was supposed to work like this: The city's Community Development Department (CDD) would receive financial grants from the U.S. Department of Housing and Urban Development (HUD). The city would then dole out this money, in the form of loans, to owners of apartment buildings, who in turn were supposed to use it for renovating their properties. The principal and interest paid back on the loans would then be added to a line of credit HUD extended to the city, which could reinvest the money in more initiatives to improve Miami's housing stock.
In exchange for paying down their loans and keeping their units affordable for the poor, the landlords were guaranteed a steady stream of income in the form of Section 8 rental payments. But there was one egregious glitch in the system. "The contract also said that the city had to do inspections on a yearly basis to ensure that the buildings were in a decent, safe, and sanitary condition," recounts Barbara Gomez-Rodriguez, a CCD assistant director. "The city failed to do that. So these buildings were very deteriorated."
The most notorious were the five apartment buildings known as Miami Limited II, located behind Southall's coin laundry, and a nearby seven-building complex called Miami Limited. Both were part of developer Art Martinez's extensive rental-property portfolio, which also included a building in Overtown and dozens more throughout the county. Martinez began operating Miami Limited in 1983 under a contract with the county's housing agency. Shortly thereafter he entered into a similar agreement with the City of Miami for Miami Limited II. Then came an astoundingly long period of negligence. "The city failed to do quality inspections for twenty years," Gomez-Rodriguez reports. Meanwhile Martinez pulled in millions of dollars in Section 8 rent.
In 1998, however, 150 angry women who were raising children in Miami II apartments infested with cockroaches and rats noisily marched into Miami City Hall and demanded change. Their case was bolstered by a few concerned public servants such as juvenile court Judge Thomas K. Petersen, who documented the conditions and sent letters of outrage to local commissioners and housing officials. The county soon canceled its contract with Martinez. The City of Miami did so a year later. "We went to HUD and said, 'Look, we need to cancel this contract. This guy is really lousy as a landlord. He's a slum landlord,'" says Gomez-Rodriguez, who joined the CDD in 1998. HUD officials agreed to provide vouchers so the 110 families living in Martinez's Miami Limited II could relocate to other Section 8 housing. City attorneys then began the slow process of voiding his contract. "You don't cancel a contract -- a very prosperous contract for him -- in two days," Gomez-Rodriguez explains. "He appealed, he got attorneys from Washington. So it was an ordeal we went through and it cost us."
Gwendolyn Warren, who took over as CDD director in 1998, when the department was in the middle of this crisis, estimates that Martinez received a total of three million dollars to renovate the five buildings in Miami Limited II. Martinez told the Miami Herald in 1999 that the apartments were "totally rehabilitated, brand-spanking-new in 1989 and '90," and blamed the subsequent deterioration on the tenants.
Martinez wasn't the only Model City slumlord to finally take some heat as the century came to a close. Four others were identified in a 1998 audit by HUD's Office of the Inspector General. Investigators found that over a period of fifteen years the city had failed to force the owners of 29 other low-income rental properties to repay about $10 million in loans. The Model City portion of that tab was more than $1.5 million. Had the city collected the principal and interest as it should have, at least $20 million would have been added to Miami's line of credit for future housing projects. (Nearly all this slipshod loan management occurred during the corrupt administration of Cesar Odio, who served as Miami city manager from 1985 to 1996.)
As if the lost money were not bad enough, in most cases the required renovations never took place. For example José Dearing, president of Ideal Rehab, received $560,000 in 1987 to fix up two Model City buildings, one at 1240 NW 61st St., the other at 6000 NW Twelfth Ave. He did not finish the rehab or repay one penny of his loan. Just last year the city took title to one of the properties but is no longer trying to collect the loan. The other parcel, according to county property records, remains in the name Ideal Investments, a company Dearing set up in 1997.
In another case, Kenneth Williams registered a company named Dalea in August 1991. Six months later he received a $410,560 loan to rehabilitate an apartment complex at 1601 NW 62nd St. He dissolved the corporation in October 1992. The city never recovered its loan and a private bank foreclosed on the property.
Similarly in 1992 the Community Development Department provided a $200,000 loan to Jorge Basulto and Rommel Chiriboga to rehabilitate a building at the corner of NW Seventeenth Avenue and 58th Street. They did not complete the rehab, and as of September 1 they owed the city principal and interest totaling $260,823. The two partners also owe the city another $305,000 for a loan they received in 1991 to renovate an Overtown property. The city finally filed foreclosure lawsuits this year to capture the properties.
In addition to the millions of dollars wasted, Model City's failed housing projects have taken a toll on the area's residents. Population figures from the 2000 census reflect Model City's public-housing meltdown. Between 1990 and 2000 the neighborhood's black population dropped by 2566. Model City business owners, however, don't need statistics to demonstrate how they've been hurt by the colossal failure of Miami's housing programs.
A slow death could be in store for Shrimp, Wings & Things. Loraine Hibbert, age 42, runs the place along with her niece, cousin, mother, and sister. Her 25-year-old daughter was another partner until sickle cell anemia claimed her life earlier this year. The take-out is adjacent to a set of vacant lots once filled by the Miami Limited apartment complex, and a short walk west of where Miami Limited II once stood.
From 1984 until last year the restaurant was called Nelson's Soul Food and attracted enough customers to warrant limited table service. "When business was good we had people on AFDC [Aid to Families with Dependent Children] and working people coming in, going out, calling in, going out," she recollects. "Business was pretty fast and pretty good." But when the demolition decimated her clientele, Hibbert reduced the menu, scaling it back to take-out only, and renamed the eatery Shrimp, Wings & Things.
Last year business was still good enough to allow Hibbert to buy a burst of television advertising. She and her relatives splurged, spending $250 for a commercial that ran locally for three months on the Black Entertainment Television channel. That would be too dear for this year. "We still have a few people living in the area that come," Hibbert sighs. "And we get a few that come from out of the area." This summer's heavy rainfall disrupted Shrimp, Wings & Things's direct-marketing strategy, which involves placing flyers on cars at flea markets, Walgreens, nightclubs, and movie theaters. "You don't want to go puttin' out flyers on nobody's car because you spend the money to buy the flyers and then they get all wet," she explains.
Hibbert breaks even some weeks, goes into debt others. It helps that her family owns the building, which also houses the P&A corner convenience store one door north and Bernice's Flowers one door south. Hibbert and her relatives scrape by thanks to a line of credit from her suppliers at Family Meat a few blocks north. "We learn to pull together around here when we have to," she notes. Cash flow on a typical day goes something like this: "If I order a hundred dollars of groceries [for the restaurant] today, and if I make $200, I go pay my bill. That leaves me with a hundred. If I make, say, $150 in the morning and $150 in the evening, then I make enough to pay off whatever meats I been getting in the morning, or maybe just buy some more meats if I don't owe them."
If hard times pull people together in Model City, they also prompt them to stay out of each other's business. Hibbert tries not to pry even into the affairs of her brother and his wife, who run the P&A convenience store next door. "I don't know really what's going on over there," she admits. "They claim they don't make enough money. Like I said, we don't try to put too much pressure on each other." That also applies to her next-door tenant Bernice who, owing to the dearth of customers, occasionally falls behind on the $365 per month she pays for the flower shop space. Although Hibbert could certainly use more income, she hasn't had the heart to raise the rent for a long time. "We know that there's no money around here," she says.
When she wonders why things have gone so wrong in Model City, Hibbert concludes it was the result of a profound "lack of interest" on the part of apartment owners and the public officials responsible for monitoring them. "One of the things I know is that the landlords who owned the property didn't have enough concern for their tenants," she asserts. "Maybe they were short on money, maybe they were having financial problems. But the buildings fell to where the people wasn't living in good conditions. The area got corrupted to where a lot of people's kids got killed."
As for city officials, Hibbert can only guess: "Maybe they were having their own personal problems or something. Maybe they should have came and interviewed a couple of people and found out what's going on in their life, what's happening with their kids. Ask how they can help them to make sure that their kids be successful and do right in life, do better in life."
Shrimp, Wings & Things and the area's other small retailers will have to scrimp for at least two more years while an ambitious new housing project evolves. In July 2001 the city commission created the Model City Community Revitalization Trust to usher in the construction of 400 to 500 single-family homes. City Manager Carlos Gimenez selected an assortment of public servants and private businesspeople to serve on the executive board. (They include Linda Haskins, the mayor's chief financial advisor; Shalley Jones, director of Fannie Mae's South Florida Partnership Office; Lucia Dougherty, a land-use lawyer whose clients include a variety of developers; Hector Brito, a general contractor and vice chairman of the Miami-Dade Housing Authority; and Patrick Range, Sr., co-owner of Range Funeral Homes.)
For the position of trust president the city manager picked Gwendolyn Warren, formerly director of the Community Development Department. Now instead of trying to collect money from deadbeats, she can concentrate on spending it. Plans call for the trust to spend a total $31 million to acquire 403 properties for the Model City home-ownership project. So far the trust has spent about eight million dollars in federal housing money to acquire 75 parcels in the area.
How many years will pass before displaced Section 8 tenants might return and move into a new, affordable house? "I'm banking on three," Warren predicts. "The first houses will be coming out of the ground in two years. The whole project will take five to ten years." Besides houses and revitalized commercial strips, she envisions the construction of a three-million-dollar "community technology center" where Model City kids and adults will learn to use computers, thus helping to bridge the digital divide.
Unaware of how long the project is likely to take, Loraine Hibbert modestly offers two ideas the city could use to help out in the meantime. One, buy her some advertising. Two, pay for renovations so she can be ready for the promised residential rebirth. "The city could help us remodel our buildings so they will be up to date," she reasons, "so when they do bring some people they will feel comfortable coming in and out of our businesses." She's afraid of receiving a loan, though, fearing it could be the first step toward losing her business. "If you can't pay it back it's a problem for your property," she says. "I'm just barely managing, but I would rather stay there than go into debt." Her main suggestion, however, is this: "Hurry up and build those houses!"
Before that happens, though, many other potential customers will be displaced as the Model City Revitalization Trust acquires and demolishes more apartment buildings.