From Knight Manor to Nightmare, Part 2

Thirty days. That's what City of Miami officials gave the developers of Northwestern Estates. Thirty days to move all the people from a soon-to-be-demolished housing project in Liberty City to acceptable housing. If the developers wanted to replace the project with new affordable homes, as planned, they first had to relocate everyone. And quickly. The clock started ticking the day the developers closed on the property.

That was in February. Nine months later the developers have razed the housing project, reducing what was formerly known as Knight Manor to a flat tract of gravel. But the 70-plus ex-tenants now live in apartments that, almost without exception, do not comply with federal guidelines governing relocation. And many thousands of dollars in city-administered federal funds the developers were supposed to have doled out to cover moving expenses and rent have not yet found their way into the tenants' hands.

"They have not relocated anybody into their ultimate housing or given them the money they have coming to them," says Miami Legal Services attorney Carole Fruman, who is helping several residents navigate the tortuous process.

City officials are so frustrated by the delays that they have frozen all the funding they'd promised the developers -- except for moving expenses -- until the relocation is finished.

New Times first wrote about Northwestern Estates in the June 13 cover story "From Knight Manor to Nightmare," which detailed how then-city commissioner Miller Dawkins had pushed through approval of the project despite a troubling lack of planning undertaken by its inexperienced principals. The primary private developer, a Fort Lauderdale concern headed by attorney Lawrence Levine, had never worked with public money before; the local agency with which Dawkins paired Levine, the Urban League of Greater Miami, had never been the lead partner in a development before. Nonetheless, Dawkins persuaded his fellow commissioners to give the group $4.7 million, with virtually no strings attached.

Dawkins, of course, is long gone, having pleaded guilty to federal charges of theft and bribery in Operation Greenpalm. But Miami officials are still scrambling to ensure that the money earmarked for Northwestern Estates is spent properly. Back in February, on the first budget submitted to the city, one of the Fort Lauderdale partners asked for a $70,000 brokerage commission even though he was not the broker involved. (The city didn't pay.) And the Urban League requested a "consultation fee" of $40,000, despite its status as a full partner in the project. (The city didn't pay.) Altogether, the Urban League requested $474,000 on its first trip to the city coffers for the project, New Times reported in June; after carefully reviewing each item, city officials paid out only $70,000.

From the outset, relocation was an obvious problem. Initially the developers budgeted only $180,000 to resettle everyone. After a city-ordered review by an experienced consultant, the amount was upped to $639,000, with a caveat that it could rise even higher. Since then, in memo after memo, city officials have complained that the relocation is not being carried out in compliance with federal law. Concerns include poor organization and planning, insufficient information, and substandard replacement apartments. "A woman with four kids can't be put in a one-bedroom apartment," explains Carole Fruman. "It has to meet housing-quality standards, have good plumbing, and be similarly located near schools and buses. Things like that."

In one specific instance, several former Knight Manor tenants who had moved into temporary housing did not receive checks from the Urban League in time to pay the rent. In an internal memo to Assistant Finance Director Phil Luney requesting the rent money, Assistant Housing Director Jeffery Hepburn noted that the emergency arose because of Urban League mismanagement. "To date, [the City of Miami] has been ... mailing the checks directly to the Urban League, and they in turn would issue checks to the tenants from their own account. However, these payments, although being made to the tenants, have not been made on a timely basis, which is one of the reasons that this emergency occurred."

Elsewhere in the memo, Hepburn explained to Luney that the Urban League's handling of the project was so poor that "[city] departments had to move in and assume the responsibility of relocating the tenants of this project to make sure that the benefits due each tenant are provided expeditiously."

Frustrated officials ordered the Urban League to hire an outside consultant to handle the relocation. The consultant, the Fort Lauderdale-based Urban Group, duly informed the city that "relocation costs for this project could exceed $1.2 million" -- money that will likely be paid by the city. Still, the city had reason for concern: "It has been several months since the developer engaged the services of the Urban Group as relocation consultants," Housing Development Coordinator Alfredo Duran wrote in a September 25 memo. "In our opinion there has not been any real progress made in successfully relocating the families of the Knight Manor project."

Oliver Gross, the Urban League's director of development, counters that the relocation is on track and predicts that the consultant will have everyone in a proper place, and paid in full, within three weeks. As for why the relocation was not completed in 30 days as mandated, he says that delays naturally occur in a complicated project of this scale. "It did not go off like planned, just by virtue of the project," he muses. "There's no reason other than the fact that things happen."

Even if the Urban League completes the relocation soon, they'll have trouble accessing the rest of their city money. The developers have yet to secure any significant funding besides that promised by the city, and with the project slated to cost $15 million, city officials have expressed some skepticism. After releasing monthly checks to the Urban League since February -- funds that covered not only costs but also the developers' profits -- they declined to issue a check in October, in part because of the housing brouhaha but also because of the continued absence of outside funding.

In his September 25 memo to Housing Director Elbert Waters, Duran summarized a June meeting between the city and the developers. City officials, he stated, had "informed the developer that no additional funds of any kind (excluding relocation and demolition) would be funded past [September] until such time as the developers provided evidence to the city that they had secured firm financial commitments from other private and/or public funding sources in amounts sufficient to complete the total development/construction of the subject project." By the end of September, Duran concluded, progress had not been made: "To date, the City of Miami has not been presented with any evidence of any commitments from other funding sources."

Duran says the developers subsequently secured one commitment: $225,000 from Dade County. They also presented to the city a letter stating that the Falls branch of NationsBank would consider underwriting a construction loan. "It is not a firm letter of intent," comments a wary Elbert Waters. "It is not what we want to see before releasing additional developers' fees."

Gross says he is not worried. "Things are moving as we had anticipated," insists the Urban League development director. "We feel as if we are moving at deliberate speed given the nature of the project. We feel very comfortable. Right now we have a very strong interest in terms of potential buyers. Things are moving quite well."

Jeffery Hepburn points out that it typically takes two years to acquire development dollars, a process the Urban League must condense into half that time. That's because another deadline looms: February 1997. If the development partners have not commenced construction by the one-year anniversary of the closing, they lose their claim on the project, which will be bid out to other interested parties. And if the city continues to hold back funding, meeting the deadline will be difficult.

Despite all the troubles, though, city officials believe Northwestern Estates is a solid venture that will help blighted Liberty City. "The City of Miami supports this project," explains Elbert Waters. "We are confident that this project will get built. But a few conditions must be in place -- have to be in place -- by February 1997.


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