The Blight Stuff
By most appearances, the area around Lincoln Road and the Miami Beach Convention Center was in the ascendant in 1993. Galleries, boutiques, restaurants, and bistros were proliferating along the pedestrian mall. The New World Symphony and the Miami City Ballet had made it their home. Condo conversions and world-class hotel renovations were all the rage along the Collins Avenue corridor nearby. The neighborhood had become a destination in its own right, rather than an afterthought to the neon-lighted entertainment district to the south.
According to city and Metro-Dade officials, though, it was a slum. That year Metro commissioners passed a resolution declaring the neighborhood "blighted." The action was based on a consultant's 1992 review of an angularly shaped area incorporating the convention center and its immediate vicinity, all of Lincoln Road, and the residential and commercial district lying between Washington Avenue and the ocean from Fifteenth Street to Dade Boulevard.
The city had hired the consultant to determine whether the locale was decrepit enough to be designated as a redevelopment district and thus become eligible for tax breaks and other state-legislated incentives. In his survey -- called a "finding of necessity" -- the consultant cited a variety of conditions to support a determination of blight.
City officials never concealed their primary motivation for seeking to establish the district: to finance the development of two convention hotels. The designation allows the city to skim off a portion of the area's property-tax income and to use it to support the sale of municipal bonds for capital-improvement projects there. Of the $131 million worth of capital improvements originally planned for the neighborhood, $50 million was to be earmarked for the hotels. (Both those figures have since risen substantially.)
City officials promised that the redevelopment designation would commence the final chapter of the city's glorious renaissance. More tourists would come. The city's coffers would overflow. Miami Beach's aura would glow round the world.
Despite the seeming incongruity of the "blight" stipulation for that portion of Miami Beach, there was nary a peep of opposition -- at least not immediately. But a 33-year-old Beach resident is now challenging the issue in court, thereby throwing into question the future of the city's ambitious redevelopment plans.
Rod Eisenberg, who owns 50 percent of a company that controls three properties in the redevelopment area, calls the designation "a gross abuse of legislative discretion." This past June he sued Metro-Dade County seeking to invalidate the designation. Eisenberg, who received a law degree from the University of Miami but hasn't passed the Florida bar in three attempts, represented himself in court. A judge dismissed the case on summary judgment this past September. "The complaint was totally and absolutely specious," declares Robert Dixon, first assistant city attorney for Miami Beach, which joined Metro-Dade as a defendant in the lawsuit. Undaunted, Eisenberg secured a licensed attorney and appealed the ruling; a hearing before the Third District Court of Appeals is scheduled for tomorrow, March 8.
In a brief filed with the court, Eisenberg says the creation of the redevelopment district -- officially called the City Center/Historic Convention Village Redevelopment and Revitalization Area -- was "based upon a false and misleading finding of necessity." Contrary to the report's conclusions of blight, Eisenberg contends in his appeal, the so-called City Center neighborhood was a bustling hive of economic activity and "in the midst of a dramatic and unprecedented revitalization."
This seeming paradox has struck others as suspicious, including Miami attorney Toby Prince Brigham, considered one of the nation's foremost land-use experts. "I don't believe, by any stretch of the imagination, you can call that neighborhood a blighted area," he says. "I believe the true motivation in declaring the area blighted was to raise money, and that's not the purpose of community redevelopment."
Eisenberg's attack may have temporarily halted the Beach development juggernaut, but city officials don't expect the trouble to last much longer. "I would anticipate a decision [from the appellate judges] in a very short period," predicts Dixon. For one, he argues, Eisenberg's argument rings hollow because he fails to offer specific statistics or studies to buttress his contention that the redevelopment area was experiencing an economic upswing.
Furthermore, the attorney adds, Eisenberg "ignores" the statute that enumerates the criteria for blight, including among many possible conditions the presence of building deterioration, unsanitary and unsafe conditions, drainage problems, closed buildings, vacant lots, and fire code violations. Of the 55 blocks in the study area, 51 met the statutory blight test, city documents indicate.
Eisenberg clarifies that he's not specifically contesting the details of the finding -- it would cost him too much money to conduct his own review, he says -- but rather the application of the statute. "It's intended to help economically depressed areas get out of the doldrums," he argues. "The bureaucrats have manipulated the redevelopment statutes in order to get money necessary to build the convention-center hotel." (No independent authority is required to review the city's findings or the Metro commission's vote of approval.)
The City Center district is the city's second redevelopment area. The other incorporates the South Pointe neighborhood below Fifth Street, which once was slated for near total demolition to make way for a $1.2 billion resort that never materialized. The plan's cudgel was the awesome power of eminent domain. (Under the law, the city may condemn property for a "public purpose," but it must pay fair market value for each property it condemns. Unlike transactions in the open market, however, the property owner isn't necessarily a willing seller, and he's forced to deal with only one buyer: the city. As a result, eminent domain proceedings often wind up in court.)
The City Center redevelopment plan only calls for the condemnation of a handful of parcels for the convention-center hotel site and an accompanying parking structure, says Miami Beach Commissioner Neisen Kasdin. Most of those properties have already been acquired. But attorney Brigham, an eminent domain specialist, says development plans can always be amended and the threat of condemnation will hang over the area. Furthermore, he says, while the city always has eminent domain in its arsenal -- redevelopment area or not -- the law is far more difficult to contest once a redevelopment area has been designated.
While Brigham has nothing to do with Eisenberg's action, he did represent the owners of the St. Moritz hotel, which was acquired by the city for the convention-center hotel site. During the acquisition process, Brigham launched a challenge to the redevelopment-area designation, but the city quickly agreed to purchase the property at a price favorable to the owners, he says.
Despite the fact that designation of the redevelopment area is a financial boon for his neighborhood, Rod Eisenberg says the blight designation is actually a stigma and has made his properties less marketable. The mere mention of the word blight has scared away a prospective buyer, he contends. But, he continues, self-interest alone isn't motivating him to take on the city. "My motivation is that I want to fight corruption and I believe this designation of blight was nothing but an act of corruption on behalf of overzealous bureaucrats who, at any and all costs, felt it necessary to build a convention center hotel."
Assistant City Attorney Dixon believes Eisenberg's intentions aren't so lofty but stem instead from his frustrations in two previous lawsuits against the city, both of which were dismissed. "I don't find him altruistic. I find him vengeful and a sore loser," Dixon asserts, adding that Eisenberg's "true motivation" is to interfere with the city's bonds for the redevelopment area. Indeed, according to Finance Director Robert Nachlinger, the city has postponed issuing bonds pending the outcome of the lawsuit.
City officials have accused the Eisenberg family of employing the son's litigation to another end: extortion. In a memo written this past December, Assistant City Manager Harry Mavrogenes describes a November meeting with Eisenberg and his parents regarding the family's offer to sell the city three of their properties in exchange for dropping the lawsuit. Wrote Mavrogenes in his memo: "I am not favorably disposed to continue this process. I consider it extortion . . . . "
Eisenberg vehemently denies he was trying to extort the city. "It's the city's only way of saving their whole case," he says. "They want to make me look bad. They want to make me look like I'm only in it for the money. I admit, yes, that I agreed to sell my properties to the city, but it was before I found a lawyer to take my case [on appeal]. Today I would never settle with the city. I hate those guys.
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