By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
By Terrence McCoy
By Michael E. Miller
By Kyle Munzenrieder
By Michael E. Miller
"We hired an independent consultant to evaluate the deal and an attorney to negotiate," he says. "We put together a package that included the cost of acquisition. About 80 percent of the people voted in favor and twenty percent against. And in that minority there were some people who were quite vocal."
The consultant Brooks refers to was advertised in POA literature as a "third-party independent expert" retained to "research, provide comparative analyses and a dollar valuation of the Clubs of Williams Island." But John N. Johnson does not have a real estate license either in Florida or in Georgia, where he lives. His Florida CPA license expired in 1989. The phone number listed for his Georgia business is obsolete.
The minutes from a POA clubs committee meeting in January 2003 record members deciding, "What will cause residents to want to act in favor of acquisition are greed and fear."
It seems that Johnson was hired to propagate this philosophy. His plan, which was obtained by New Times, stated that "we must convince owners that the sum being paid to the [developers] is not excessive, but rather eminently justified." He encouraged targeting "champions" who would lead the effort for a yes vote, and "bell cows" who would influence their neighbors.
But for the residents who opposed the deal, the financial details seemed poorly bargained. Some felt the price $22.5 million for acquisition and renovation was too high for unprofitable businesses whose buildings were in a state of disrepair. The purchase would result in a $180 monthly increase in maintenance fees plus a mandatory, $1300 annual health club membership for new residents, which they worried would depress property values. Their condominiums served as the loan's collateral and could be liened if the POA were to default on repayment. And there was the background of the three residents who negotiated the deal: Each had had questionable financial run-ins.
In 1983 shareholders of Warner Communications sued clubs committee chairman and current POA president Rod White, along with other Warner directors, for fraud and insider trading. In an SEC investigation White was cited for issuing "a series of false and misleading public statements that led the investing public to believe that Warner's operations would continue their unbroken pattern of dramatic growth," according to the filed complaint. The collective group of defendants ended up paying more than $18 million to settle the case. White did not return multiple calls seeking comment.
Harris Friedman was the second member of the clubs committee, and the POA's treasurer at the time the board decided to acquire the common areas. In 1989, as director of a Florida savings and loan subsidiary called the Enstar Group, shareholders sued Friedman and the other directors and officers for fraud and racketeering. Friedman and two other officers settled the claims against them out of court, and he was prohibited from holding office in any federally insured depository institution. Friedman also did not return New Times's calls.
In 1987 Jan Brooks was charged with criminal contempt by the SEC, and accepted a four-year suspension from trading stocks, and a $4000 fine as settlement. Following his settlement, six months after he had quit his job and sold his share of the firm he started, Brooks, Weinger, Robbins & Leeds, it was raided by agents of the Drug Enforcement Agency in a cocaine bust. "The young professionals at the Manhattan penny-stock trading firm allegedly sold cocaine in stairwells, traded drugs for insider stock tips, and routinely signed false names on important documents, among other offenses," reported a Time magazine article from April 1987. "After going to work for the firm as an assistant broker, one undercover agent claims she was soon approached by colleagues who tapped their noses and asked if she öpartied.'" Brooks was not accused of violating drug laws.
Brooks contends that the drug use had nothing to do with him and that it had proliferated in the six months following his exit from the company. "The only reason to write about that would be to make me look bad," he says. "It was purely coincidental."
As for the SEC settlement, "That was twenty years ago," he says. "I settled with the SEC after I retired with my partners. A settlement was the best business decision." Asked whether his past might conflict with his work on the POA, where he co-managed over $15 million in condo fees each year with supervision limited to the small number of residents who cared enough to look through the budget, Brooks said: "I've been elected every year for fifteen years. I'm not in a position where people feel I am not doing a good job. I don't see how that is relevant."
Residents approved the purchase of the island's tennis courts, spa, clubs, and restaurant by a four-to-one margin in late fall 2003. The Williams Island POA purchased the property for $17 million in early 2004 and held a "New Beginnings Party" to celebrate in April of that year. Residents speaking with the Miami Herald that night were filled with pride. "We are responsible for our own destiny," said one. "This will breathe new life in the place," said another.
Brooks, White, and Friedman were presented with plaques inscribed with the words, "For your heroic and successful efforts in the acquisition of the club facilities."