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A pungent odor permeates an empty mosaic-tiled room inside a shuttered motel at 304 N. Krome Ave. in downtown Homestead. Mildew seeps through the walls. "Before I owned this place, it was a haven for crack addicts and prostitutes," says the 43-year-old owner, Ernesto Perez, who bought the place for $610,000 two years ago. "The police chief begged me to make the owner an offer because the landlord was condoning what was taking place."
The motel is part of Perez's grand vision for revitalizing a sleepy historic business district. Over the past three years, Perez — through his companies Florida Education Center and Florida Education Centers of Homestead — has been amassing properties. In addition to the motel and three buildings that make up the Homestead campus of Dade Medical College, he also has an old country restaurant — Lucky's Pub & Grub — and the space that was once home to a McCrory's five-and-ten. One day, Perez boasts, the motel will be a dorm for students.
"I see downtown Homestead as College Town U.S.A.," he says. "We'll be able to attract students from the city [and from] the Keys."
A charismatic Cuban-American with gelled-back curly hair and a goatee, Perez is one of the most politically influential for-profit college owners in Florida. He abandoned a rock singing career — marred by a 1990 no-contest plea in response to raunchy accusations by an underage fan — and built Dade Medical College from a modest massage therapy school into an institution of higher learning that offers associate's degrees in nursing, physical therapy, and other medical fields.
During the past four years, he has been appointed twice by two governors to serve on the Florida Commission for Independent Education, which sets the rules and regulations for his industry. Perez and his wife have recently donated at least $100,000 to 21 PACS and candidates of both parties including Barack Obama, Mitt Romney, local U.S. Rep. Joe Garcia, New Jersey U.S. Rep. Bob Menendez, and U.S. Sen. Marco Rubio. Heck, Perez has even put some politicians on the Dade Medical payroll, such as state Sen. Rene Garcia and Nelson Hernandez, a councilman in Miami Lakes, which is home to another of the school's campuses.
But prosecutors and ethics investigators are probing Dade Medical's 2011 agreement to purchase city-owned land in downtown Homestead. Some students complain the school provides a poor education. And in February, the Florida Board of Nursing placed Dade Medical's nursing programs at its Hollywood and Miami campuses on probation. The alleged problem: a high failure rate among students taking the state nursing exam.
"I don't know how they are still in business," says Maria, a student at Dade Medical who asked that her last name be excluded. "The teachers aren't prepared for class, and the administration is a mess."
Adds her classmate Ruben: "The professors are inexperienced and disorganized. You are basically on your own. It's really disappointing."
Perez grew up in West Little Havana in the '70s and attended Citrus Grove elementary and middle schools. He dropped out of Coral Gables Senior High to become a rock star. "At least that is what I thought," Perez says. "I started singing when I was 12 years old."
Onstage he was Rhett O'Neil, the frontman for a hard-rocking band called Young Turk. In 1989, the group signed a six-figure deal with BMG Geffen. Following the release of their first album, Perez and his bandmates went on a U.S. tour. After a May 11 show in Oshkosh, Wisconsin, they returned to their hotel and partied with fans, including a 15-year-old girl who engaged in consensual sex with some of the band members. But under Wisconsin law, consensual sex with a minor is still considered rape.
The four Young Turk members were arrested two months after the alleged incident. Perez pleaded no contest to misdemeanor battery. He served six months in a Wisconsin jail following a failed appeal and today declines to discuss the matter, adding that it has no relevance to Dade Medical College or his plans for Homestead.
Indeed, the band broke up shortly after recording a second album with Virgin Records, and in 1993, Perez married his current wife, Sylvia. To make a living, he and his father formed a company that sold medical x-ray equipment. In 1999, he decided to open his own school teaching people massage therapy and x-ray machine technique. "I invested the money from the medical equipment company into the school," Perez says. "It took us three years to get accredited by the Commission on Independent Education."
His daughter was born in 2005, he says, and "Dade Medical really began to take off, so I had to focus on that... And the world doesn't need another rocker in his 40s."
Perez started his educational enterprise with just 50 pupils. Today, Dade Medical College has campuses in Homestead, Miami, Miami Lakes, Hollywood, West Palm Beach, and Jacksonville. The school employs more than 500 people and has an enrollment of more than 2,000 students. The two-year tuition ranges from $16,000 to $60,000 depending upon the program. Dade Medical targets Hispanics and African-Americans who cannot get accepted at traditional colleges and universities, Perez says. "Forget about having a good GPA. We're taking people who only have GEDs."
According to federal records, 84 to 91 percent of Dade Medical's pupils pay for their education with Pell Grants and federal student loans. In fiscal year 2010-11, Dade Medical collected $15 million in revenue from federal student aid programs.
Over the past four years, the school's growth has allowed Perez to buy new locations, acquire another college, and establish corporate headquarters in a posh office space in Coral Gables. In October 2009, Perez, through a holding company, bought three properties in Homestead for $433,400 and leased three floors in a nearby office building. The properties make up Dade Medical's Homestead campus. In 2011, Perez purchased three more buildings for a combined $1.6 million.
Dade Medical also moved its cramped Hialeah branch to a 40,000-square-foot space on NW 163rd St. in Miami Lakes. While seeking approval from the town, Dade Medical hired village councilman Nelson Hernandez as a financial consultant. Hernandez says he had no involvement in helping Dade Medical College with the city. Perez notes his company no longer employs Hernandez.
Also, Perez pays state Sen. Rene Garcia $119,000 annually as a government affairs consultant but insists the Hialeah politician has never helped him in Tallahassee.
The college CEO admits he raises cash for politicians to get their attention. "Whether you're running a hot-dog stand or a national conglomerate, you need access to these individuals if you want to engage the political process," Perez says. "But if you look at the amount of money we've contributed [to elected officials], we don't get a lot in return."
But investigators for the Miami-Dade State Attorney's Office and the Miami-Dade ethics commission are investigating Homestead Mayor Steve Bateman for allegedly pushing a sweetheart deal for Perez in 2011. At the time, Bateman was running for re-election and received at least 15 contributions of $500 each from Perez and people tied to Dade Medical College. According to public records, including emails, Bateman pressured Homestead government staffers and manipulated the process to help Perez purchase 3.5 acres of city-owned land — while steering Perez's real estate transaction to Bateman's wife, Donna, a real estate broker. Dade Medical agreed to buy the property for $328,000 — roughly one-third of its value as determined by an independent real estate appraisal.
Though the mayor abstained from the Dade Medical deal vote, he did not disclose that his wife's real estate agency would receive a commission or that she had represented the college in other purchases of downtown properties. Perez insists there was no quid pro quo. "We paid a fair price for that land given the state of the real estate market when we made the deal," he says. "I don't really know what [Bateman] did wrong when the rest of the council voted unanimously for it."
But, of course, the most important thing about any school is its students. Maria, who's enrolled in nursing courses, says she has taken out nearly $48,000 in federal loans to pay for classes during the past two years at Dade Medical. Yet she has attended classes where professors simply conduct PowerPoint presentations or read from a book. They don't engage the students or take time to answer their questions, she says. And if students complain to the administration, they are made to feel as if it's their fault for not learning anything.
Maria discovered last month that the Florida Board of Nursing placed Dade Medical's Miami and Hollywood nursing programs on probation owing to poor student performance on national exams. In Hollywood, only 38 percent of the Dade Medical students who took the license test in 2012 passed. In Miami, only 46 percent succeeded during the same period. State law requires for-profit schools to have passing rates that are close to the 89 percent national average. According to the most recent results provided by the Board of Nursing, 79 of 128 nursing students at Dade Medical's Homestead, Hollywood, Miami, and Miami Lakes campuses have failed since January 1.
Perez acknowledges the abysmal numbers, yet he proclaims Dade Medical will be off probation within a year. "Obviously, our passing rates are not where they need to be. But let's look at the positive side. In the last three years, we've helped 350 nurses get state certification," he says. "Our students are people who can't get into traditional schools... Obviously, it is more difficult to train those students."