By Terrence McCoy
By Allie Conti
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
Michael Wohl was in Las Vegas when Reuben La Brado called with the bad news. The owners of a piece of prime real estate the Miami developer wanted to buy had just voted to go with another offer. And not just any offer, but one tendered by a rival developer whose principals had once worked with Wohl. At this point it was April 11, 2002, and Wohl was looking at a year's work and millions of dollars the project would have meant -- down the drain. All because La Brado and his buddy Armando Escobar couldn't deliver the votes they'd promised. Wohl was, by his own recollection, "apoplectic" with rage.
"What did you do next?" a lawyer asked him a few months later during a deposition.
"Had a drink," replied the developer.
"After that?" the lawyer continued.
"Had another drink," Wohl answered, explaining that he was "so pissed with everybody" he didn't even want to talk to them about how his carefully laid plan had been seemingly hijacked at the last minute. And sometime after that, Wohl got even.
The words "prime real estate" and Opa-locka are not usually linked. Yet here in this tiny, impoverished city in northern Miami-Dade County is where the coveted land lies. Just west of the city's eastern edge on NW Seventeenth Avenue, the property comprises about 40 acres, most of which is actually underwater, part of a lake created decades ago from an abandoned rock quarry. Ironically what makes the property so valuable is its location in one of the poorest small cities in the state. The poverty rate in this city of about 15,000 people is 35 percent, and the per capita income is $9538 (according to U.S. Census figures for 1999).
Because of this, all sorts of federal, state, and local programs target Opa-locka for affordable housing, job creation, and other forms of economic stimulation. Mostly this occurs by providing a combination of subsidies, loans, and tax incentives to developers to encourage them to build there. Particularly savvy developers who are adept at navigating the myriad public agencies offering these funds can actually build major projects worth millions in profits almost entirely with public money, thus reducing their investment risk to pennies on the dollar. This was the case with the property lusted after by Michael Wohl, president of Pinnacle Housing Group, one of the largest affordable-housing developers in the state. But there was a problem. Somebody else got there first.
Pinnacle's corporate roster also includes chairman Louis Wolfson III, senior vice president Mitchell Friedman (a former county capital financing and development director), and executive vice president David Deutch. In the six years the company has existed, Pinnacle has become a major player in the somewhat murky world of affordable housing, garnering tens of millions of dollars in public funds from the state, county, and various municipalities to build a dozen projects. The company and its subsidiaries and affiliated companies also routinely give generously to political campaigns at all levels of government, from the tiny town of El Portal on up.
This is hardly unusual, as some of Pinnacle's competitors operate in similar fashion. But it does cause observers to reflect on the strange nature of this business the public subsidizes. "Affordable housing is like this subterranean ATM -- and only a few people know the PIN number," quips Kendall Coffey, a former U.S. Attorney in Miami now representing the owners of the 40 acres in a lawsuit against Pinnacle.
Michael Wohl is a short, bespectacled 53-year-old with wiry, reddish-brown hair and a bald spot in back. A round belly rides low and easy on his stocky hips. He's been in real estate nearly all his adult life, scion of a family with holdings in New York and South Florida. His manner in public meetings is pleasant, accommodating, and occasionally even obsequious. Those who've gone up against him in private, however, allege that Wohl's style can swing rapidly toward the profane -- especially when there's money on the table. "At first we couldn't figure it out, why he was so persistent about getting this property," explains Marcelo Ali, one of the owners of the 40 acres. "This property is worth tens of millions of dollars to Pinnacle in the long run. All of it, of course, public money. We're sitting on a gold mine."
Wohl wanted the property because it was adjacent to a smaller piece of land his company had optioned to purchase with the intention of building Serenity Lakes, a complex of 102 low-income apartments. Wohl's idea was to expand the project -- and the profits -- by combining properties. Both would be eligible for millions in subsidies and tax incentives. His roughly fourteen acres on the lake (only about six were dry land) were easily worth ten million dollars alone, and probably more than twice that if paired with the land next door.
But in mid-2001 the property was bought by backers of a small construction company based in Doral, which intended to build moderately priced townhouses that would be rent-to-own or sold directly. The company, called Fortex, was owned and operated chiefly by the Ali family, two brothers and a sister. Marcelo Ali, a commercial pilot, put up almost one-third of the $1.3 million purchase price. The rest was covered by two investors, Armando Escobar and his partner, Reuben La Brado. The pair had a number of businesses, mostly related to providing temporary employment services. They met the Alis when Grace Ali, who manages the company's day-to-day affairs, began renting office space from La Brado.
Soon they formed a corporation called Sailboat Cove to purchase the property. Marcelo Ali and Armando Escobar each controlled a 42.5 percent share. The other fifteen percent was split evenly between two other men, Ted Lyons and Henry Crespo, because of their political and community connections in Opa-locka. Crespo, a former city housing official, found the property for the group to develop. Lyons, a black Republican who recently lost a bid for office in the new city of Miami Gardens, was granted his share because he helped sign up 80 people in the area who made deposits on the units -- needed to obtain construction financing.
The idea was to build townhouses because that's what the community wanted. Sailboat Cove's partners made promises to county Commissioner Betty Ferguson and state Sen. Frederica Wilson (whose support they sought) that they wouldn't just build apartments. Home ownership, the ladies felt, was what a cash-strapped area like Opa-locka needed to increase the tax base and to attract upwardly mobile new residents who might take a healthy interest in the city's insular political culture. Similar sentiments were expressed by residents in Opa-locka and by neighbors whose homes lay across NW Seventeenth Avenue in a pocket of unincorporated Miami-Dade County known as Biscayne Gardens.
Grace Ali, born in Colombia to Argentine parents of Italian and Lebanese ancestry, describes her heritage as "South American mutt." A petite, attractive 40-year-old, she has wavy dark hair and large, wary brown eyes under a fringe of long lashes. She seems to subsist largely on Diet Coke, coffee, and cigarettes as she balances work with being a single mother to an energetic twelve-year-old daughter. Ali got into this line of work after watching her boss at the fence company where she used to work clean up after Hurricane Andrew. She thought: I could do that. She knew an engineer, José Perez de Corcho, who'd consulted on projects for the school district and other places around town, and asked him to join her. She approached her brothers and they formed a construction and engineering company.
After a few years they had a nice little business going. But the Sailboat Cove project was going to be the big one. They figured it would cost $17 million to build, but they expected to make about $3.6 million in profit once the 172 townhouses were sold. Things began to go wrong almost immediately.
For one, Pinnacle was determined to purchase the property and wouldn't take no for an answer. While initially Grace Ali and Perez de Corcho didn't want to sell, Escobar began pressuring them to get back the money he'd invested because he wanted it for another business deal. So the company tried negotiating with Pinnacle in hopes of partnering with them to build a project of mutual benefit. Ali asserts that Wohl wasn't interested in home ownership, only apartments, which would have meant breaking their promise to the community. Also, as happens in business, they couldn't agree on a price and the right terms. Eventually, in spring of 2002, the Sailboat Cove group cut off negotiations, and on the evening of April 11 rejected Pinnacle's three-million-dollar bid to buy them out.
But when Ali and the others tried to move forward with plans to build their townhouse project, possibly with another developer, roadblocks suddenly appeared. Earlier the same day Pinnacle had expected to win the property, Perez de Corcho -- a tall, slim Cuban American with a penchant for cowboy boots, God, and the NRA -- got a call from the engineer he'd hired to guide his project application through Opa-locka's Community Development and Planning office (actually a dilapidated trailer parked behind city hall). The engineer was sitting in the office of director Ervin Smith. Perez de Corcho: "He called me and said, 'Ervin wants to know why you're concerned about this project, since you don't even own it anymore.' I said, 'Excuse me? What do you mean we don't own it?'"
The engineer proceeded to inform Perez de Corcho that Smith had just shown him a project site plan submitted by Pinnacle that included Sailboat Cove's property. So Smith had taken out Sailboat's plan and application and substituted the Pinnacle plan for Serenity Lakes. Flabbergasted, Perez de Corcho had his attorney send a letter to the city notifying them that Pinnacle didn't own the property and they wanted to continue with their plan. They also sent letters to Pinnacle, complaining of the company's presumption.
Meanwhile, the four Sailboat shareholders were also exploring options to sell the property outright. A $2.75 million offer from the Gatehouse Group was too good to pass up, and they voted to accept, thus causing Wohl to drown his sorrows in a Vegas bar. It may seem odd that Grace Ali and her partners would be trying to develop the property and sell it at the same time, but because Escobar wanted his money, they felt they needed to move forward on both fronts to protect their interests. Ali and Perez de Corcho say they didn't realize that Escobar and Reuben La Brado were secretly meeting with Wohl to plot the sale of the property to Pinnacle. Thus, when the deal with Gatehouse fell through a short while later, Escobar immediately asked Perez de Corcho for a letter authorizing him to negotiate with Pinnacle again. Perez de Corcho wrote the letter, but stipulated that any agreement to sell had to be voted on by all four company shareholders.
Another developer was also interested in the property, and during a meeting at a realtor's office in May of last year offered $2.75 million to Ali and Perez de Corcho. But Reuben La Brado showed up at the offices halfway through the meeting and killed it. Grace Ali recalls, "He said to them: 'You're crazy to buy this. This property is worth no more than $1.84 million.' They immediately took their offer off the table. José wanted to kill [La Brado]. I told him to keep his cool." Then, the next day, Escobar secretly signed a sales contract with Wohl for $1.84 million. (La Brado doesn't remember things that way. "It's my word against theirs," he says. "Fortex has their version of events, [Armando and I] have ours.")
Ali and Perez de Corcho say they didn't learn about the secret contract until two weeks later. Again it was Ervin Smith in Opa-locka who broke the news. Smith told Perez de Corcho that this time he'd seen an actual sales contract, signed by Armando Escobar. A few days later the other three Sailboat Cove shareholders -- Marcelo Ali, Ted Lyons, and Henry Crespo -- filed suit against Pinnacle, which reacted by asserting its ownership of the property and threatening legal action of its own if the Sailboat partners didn't back down. Escobar's former partners are convinced he had a side deal going with Wohl. What else would explain why he'd sign for $900,000 less than the other offer and $1.3 million less than Pinnacle itself had previously offered?
Perez de Corcho claims that early in the game, back in mid-2001, Michael Wohl attempted to get him to sell out his partners and deliver the property to Pinnacle. He remembers the moment: "There was one time we're meeting and Grace wasn't there yet. And he asked me, 'José, what do you want?' And I said, 'Well, we told you, home ownership, Grace and I ...' And he said, 'No, no, no. Forget about Grace. What does Joséwant to get this project in our hands?' And right then Grace walks in. And this guy turns and says, 'Goddammit! Fuck! Sonofabitch!' just like that, about Grace. I got livid and walked out."
He pauses to let the old anger subside, studies his boots for a moment, then continues, more quietly but with the same intensity: "And then they had the -- my God! There's no honor amongst men. I mean, he could have either done two things -- taken me outside and let's get it going, or at least not ever call me back. But then he calls back again: 'Hi, we'd like to continue. We'd like to take you to breakfast at the club.' Unbelievable. The guy has no shame."
"Pinnacle has been after us for over a year and a half," Grace Ali adds. "Mike Wohl was calling me on my cell day and night. He wouldn't leave me alone. He didn't understand 'No thank you very much, we're not interested.'" Ali says that when Wohl's methods of persuasion didn't work, he sent an emissary, lobbyist Peter Bernal, to reason with them. "He came to see us," Ali recalls, "and said, 'Look, these people really want this property. Why don't you just sell it to them?' I told Peter: 'Tell Mike Wohl we're going to do our development whether he likes it or not.'"
It's strange that Wohl would send Bernal to lobby Ali and Perez de Corcho, but even more disturbing that Bernal would agree to do so. Bernal is a player in the local business and political realm, but he's also a long-time member of the county's Affordable Housing Advisory Board, which recommends public funds for low-income housing. Pinnacle frequently petitions this board for public money controlled by the county -- and has received millions from it over the past several years. Bernal is a large, nearly bald man with glasses and a fondness for guayaberas. His background is worth noting here. In 1987 he was a spokesman for Miguel Recarey, Jr., head of International Medical Centers, the nation's largest HMO at the time. Recarey was indicted in 1987 for conspiracy, bribery, and obstruction of justice, but fled to Spain, where he remains a fugitive.
Bernal's next brush with notoriety came in 1994, when his good friend state Sen. Alberto Gutman attempted to earn a million-dollar "consulting fee" for assisting in the sale of a local Medicaid HMO to Physician Corporation of America. At the time Bernal was a spokesman for the company and Gutman was, conveniently, chairman of the Florida Senate Health Care Committee. Gutman eventually went to federal prison.
Bernal then moved on to a position as board chairman of the Allapattah Business Development Authority, just in time to be on hand for the ABDA's role in the 1997 Miami vote-fraud scheme that finished the political career of Xavier Suarez, toppled Humberto Hernandez, and led to the 1999 felony voter-fraud case of Angel Gonzalez (subsequently elected a Miami commissioner, claro!).
In August 2002 Wohl took another approach. He created a company for the specific purpose of buying the mortgage note on the Sailboat Cove land and sought to foreclose on the property, even while claiming in the lawsuit that Pinnacle already owned it. Creditors began circling like a wolf pack.
As Sailboat Cove stalled, Pinnacle's Serenity Lakes project sailed smoothly, thanks no doubt in part to a lobbyist Pinnacle hired, Yolanda Cash Jackson, an attorney with the influential Fort Lauderdale firm Becker & Poliakoff. A most fortunate enlistment on Pinnacle's part, since Cash Jackson also happens to be the City of Opa-locka's lobbyist to the state legislature.
The money situation was looking good too. The city manager signed off on a $373,000, six-year, no-interest loan. The county's Affordable Housing Advisory Board approved $185,000 for the project, and the Florida Housing Finance Corporation approved more than a million dollars. The company also expected to qualify for several million more in tax credits.
Despite vehement opposition from neighbors, the city's planning board approved Serenity Lakes. The two board members who voted against approval were soon removed from their positions by Opa-locka city commissioners.
Page Shuff is a tiny sprite of a woman with white-blond hair, blue eyes, and a wicked cackle. A well-preserved 50-year-old, she's a retired dominatrix who has, in her estimation, "spanked, whipped, and paddled doctors, lawyers, and politicians from Washington, D.C., to Miami." Her house, where she lives with four rescued parrots, has a high fence and metal covers over the windows for privacy. Directly across Seventeenth Avenue is an earthen berm that marks the edge of the Serenity Lakes property owned by Pinnacle. Shuff says when she first heard about Pinnacle's plans for low-income apartments she decided to sell her house and get out. "I was going to leave," she recounts. "I was sick and tired of the crap that goes on in Dade County." She sold most of her furniture and put a for-sale sign outside her house. Then her elderly neighbors pleaded for her help. "They said, 'We need you.' So now I'm staying," Shuff shrugs ruefully. "They're 79 years old. They can't pick up their house and move like I can."
And so the battle was joined. Shuff had some experience with Pinnacle. She and other local residents successfully stopped a nearby Pinnacle project in 2001. The area is home to mostly middle-class families, a lively group that includes a mix of African Americans, Anglos, and various Caribbean islanders. The opposition to Pinnacle was led by Shuff and a core of other women, including schoolteachers Ronda Mims and Patrenia Dozier-Washington, county employee Anne Cates (a former chief of staff to Maurice Ferré at the county commission), and retiree Gloria Williams-Creighton. The women began collecting documents and contacting public officials.
Shuff kept an eye on the property across the street and claims that Pinnacle contractors arrived in bulldozers to knock down trees and push tires and trash into the lake, all without proper permits. "Every time they'd bring the bulldozers, we'd call the cops," she remembers, adding that the county's Department of Environmental Resources Management issued eleven citations and a stop-work order. "Then [Pinnacle] went back to Opa-locka and applied for permits and Mayor [Myra] Taylor came out and said, 'They're not doing anything wrong.'"
Sean Schwinghammer, at the time a vice president of Pinnacle and intimately familiar with the Serenity Lakes project, remembers things differently. He maintains that the developer had the right to clear the property, but the neighbors made his life hell every time Pinnacle tried to get any work done. "It was garbage and they called DERM and said we were clearing oak trees," he complains. "They came out and said, 'What are you doing?' They almost impounded [the contractor's] truck. They called the mayor. It was like that all the time. I've been doing this kind of work for years and I've never run into a community like this one. The things these people have done to me are unconscionable. I was almost arrested for walking on a site we had under contract. These are not my favorite people. This is a tough group. Don't believe everything you hear."
Shuff just laughs when told of Schwinghammer's reaction. She believes Pinnacle wanted to dump trash and dirt in the lake to build up the shoreline, thus making the buildable acreage a bit larger -- and more profitable. "They wanted to get it resurveyed to stake it to their advantage, but the surveyors wouldn't do it," she alleges. "The more I saw these people operate, it became obvious you could just smell a rat." According to Shuff, the worse the stink, the harder it became for residents to obtain public documents from Opa-locka. In several cases documents they had managed to get copies of later disappeared from public files. Planning director Ervin Smith was eventually fired. His successor, Al Tate, admits he couldn't find many key documents and fears the worst.
On a May visit to Opa-locka's planning department trailer, in search of the Serenity Lakes file, there isn't much to be found in it. In fact just requesting the file raises the eyebrows of the department secretary. "Well, are you for it or against it?" she asks cautiously. Soon the file is provided by the department's assistant director, Gerald Lee.
Considering the contentious and complicated nature of the project, its file is an unimpressively, even worryingly, slim manila folder containing very little actual information. Its contents include a version of the latest site plan for Serenity Lakes, plus a couple of letters from the developer. The original application and supporting documents aren't there, although they should be.
Lee seems weary of the whole business. "There is a lot of hubbub about it," he allows, although in his view it amounts to the not-in-my-back yard syndrome. "All it is now is a hunk of dirt next to a lake," he opines. "There's no reason not to do anything with it. I think it's a positive change. We just want the developer to comply with city zoning. Other than that, we can't tell them what to do on their own property."
As Lee is speaking, planning director Al Tate walks in. Tate is a tall, older fellow with a bit of a paunch, hair to his collar, glasses, and a winky eye. He follows up on Lee's comments. "People throw mud on the wall, you clean it off, and they throw mud again," he sighs, settling into a chair. "I don't mind. I've been through this before. There's always going to be opposition." Tate explains that he worked for the Opa-locka planning department years ago, was fired in one of the city's regular coups, then brought back in March 2003 by Mayor Myra Taylor after Smith's firing.
The conversation shifts to those neighbors opposing the Serenity Lakes project and their belief that the fix is in between Pinnacle and the city. Gerald Lee interjects: "Al, is the fix in for you? Because I'm not getting squat."
Tate pauses, then answers. "I've been here two months," he points out. "I'm not here to hide anything. I was brought in to bring things to light. I asked [Pinnacle] to bring in a new set of plans because I didn't have any here. Pulling the files, I don't have very much at all in them."
When Lee leaves the room, Tate closes the door to his office and assumes a confidential tone. "I don't know who to trust," he confesses, glancing back at the door. "There's a problem with all the files. I don't know how they let this get so bad." Tate reveals he's heard rumors that Smith, the previous director, had an unusually close working relationship with Pinnacle. He lifts his hands helplessly. "I just don't know," he says.
David Gonzalez, one of the two planning board members who voted against approval of Pinnacle's project, says that in the ramshackle kingdom of Opa-locka, it's often hard to determine whether strange things happen because of graft or simple incompetence. "When dealing with Opa-locka, it sometimes looks like they're trying to do something that's not right," he observes. "A lot of things are missing from a lot of files, but the problem is that everybody has access to those files, including people higher up than Ervin Smith. I think Mr. Smith knew a lot but he was doing what he was told -- to try to keep his job."
Shuff and her neighbors suspect that the initial application submitted to Ervin Smith by Pinnacle constituted fraud because it appears the signatures of the property's original owner, Byron F. Sherrill, were forged. When Grace Ali heard about that she had her attorneys hire a prominent handwriting expert, who determined the signatures "were clearly not executed by" Sherrill.
While it's not yet known who actually signed the documents, it wouldn't be completely out of character for Michael Wohl to cut legal corners in pursuit of a goal. In 1989 he gave up his license to practice law in Florida rather than fight Florida Bar disciplinary proceedings related to allegations he forged his clients' signatures on some documents in order to take their property, then lied about it to the bar. The bar also investigated him in 1988 for allegedly misappropriating the monthly mortgage payments of a client who'd asked him to deposit them into a trust account. That case involved forged signatures as well. He additionally relinquished his New York law license during disciplinary proceeding stemming from the same events.
Just because Wohl has been credibly accused of lying, cheating, and stealing in the past doesn't necessarily mean he, or someone else at Pinnacle, forged Byron Sherrill's signature. If forgery was in fact committed, the most likely motive would seem to be mere impatience. Sherrill wanted to sell his property and was more than willing to help Pinnacle get the approvals needed to close the deal. Later he did sign a new application, and those signatures are not in dispute.
The new application allowed Pinnacle to receive approvals for more than a million dollars from the state. "We think that based on all the fraud and misrepresentation, there should be a full investigation because it's public money they're using to do all this," Shuff demands. New Times has learned that the State Attorney's Office is looking into the matter, but former Pinnacle executive Sean Schwinghammer doesn't think they'll find much. "I can say things about Pinnacle that are negative, but there was nothing illegal," he maintains. "It was always done by the book. If you violate the rules in our industry, you're not allowed to practice for two years. We are not about to risk that for one small deal."
Wohl declines to answer questions about Serenity Lakes, citing the litigation between his company and the Alis. "They have no credibility," he snaps. But he does offer an opinion about the homeowners. "We've been incredibly responsive to their desires and needs," he asserts. "The bottom line is they don't want to see a rental development there. We're entitled to build a rental development there as a matter of law. Everything else is caca as far as I'm concerned."
In an odd twist, the chaotic nature of Opa-locka city government ended up working against Pinnacle, at least in the short run. At a meeting four weeks ago the city commission unexpectedly voted 3-2 against the Serenity Lakes project -- this after more than two hours of debate that included lawyers for the neighbors and several attorneys and experts hired by Pinnacle. At times the meeting bore only a passing resemblance to the quasi-judicial hearing it was supposed to be, as rules of procedure were applied somewhat whimsically by Mayor Myra Taylor, who voted for the project.
Michael Pizzi, an attorney representing some of the homeowners, won the competition for best legal floor show. Page Shuff offered up more documents she said had disappeared from the public files. Later her attorney was kicked out. José Perez de Corcho also had to be escorted outside after he protested not being allowed to speak. The previous day Perez de Corcho had learned that Pinnacle intended to run a road through Sailboat Cove's property for water and sewer lines. He was outraged to discover this inadvertently after months of trying to obtain public records from the city. In all the confusion, it was a shock to most when the commission at last voted the project down. "Geez, you don't see this very often," a slightly dazed Pizzi remarked afterward. "The little guy actually won!"
This round, at least. It's unlikely Pinnacle will accept defeat. "It ain't over till it's over," warns Wohl.