Longform

From Knight Manor to Nightmare

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Miami Legal Services attorney Carole Fruman is helping several residents secure the benefits to which they are entitled. In her fifteen years as a housing attorney, Fruman says, she has never seen a relocation program so poorly run. "It was a mess, an absolute mess, because nothing had been done in the order that it had to be done," she explains. "It has been my experience that there are occasions where relocations are not completely complied with, but I haven't run across one like this where virtually nothing has been done."

Oliver Gross, the Urban League's director of development, admits his organization was caught off-guard. "We underestimated the cost," he says. "We just underestimated that one." In a revised budget, the amount of money allotted to relocation rose from $180,000 to more than $500,000. Fruman believes that when the relocation is finally completed, the costs could be even higher.

In his memo to Elbert Waters, Duran also noted that in the first budget submitted to the city, developers' fees, general overhead, and administration costs totaled nearly two million dollars A almost half of what the developers foresaw in such payments for the entire project. The city's financial contribution to the project, meanwhile, amounted to less than twenty percent of the $15 million budget.

On the scheduled day of the closing, Assistant City Attorney Linda Kelly Kearson advised Waters that the developers had still not provided her office with any evidence that the project would be affordable to low- and very-low-income families and individuals. Without this assurance, she noted, the city could not legally transfer the money needed to pay for the land. The closing was suspended indefinitely.

In letters to city officials, Levine implored that the closing take place as soon as possible. Any further delays could jeopardize his agreement to buy the land, as had been the case with Tacolcy's ill-fated bid.

On the other hand, Levine was billing the City of Miami for his time. He is an attorney. And although he is the president of the development company -- and although he and the Urban League employed two other law firms to work on the project -- Levine submitted bills for $18,200 in fees.

In response, Kearson did not challenge his right to bill for his time. She did, however, complain that he had charged for services dating back to October 1994 A months before the city became involved.

Levine adjusted his billing hours accordingly and submitted a new bill: for $20,600.

"My law firm billed for the legal work performed on behalf of the project prior to closing. The work was provided with an expectation of payment and was approved by the partners," he says.

The closing finally occurred on February 15. The city paid the entire $700,000 purchase price, plus a $25,000 bill to cover closing costs. The itemized statement Levine submitted included $12,250 in "attorneys' fees." Kearson later wrote in a memo to Cesar Odio that the city had already paid two different law firms a total of $15,000 in fees for the closing. She wondered how Levine had justified an additional $12,250.

The haggling over money didn't cease with the closing. If anything, the friction escalated. The Urban League's first request for grant money arrived in late February, and on March 4, Duran sent his bosses a breakdown of each item requested.

Fort Lauderdale-based realtor William Murphy, one of Levine's partners in the venture, requested a brokerage fee of $70,000 for the Knight Manor sale. Duran noted that according to the sale agreement signed back in 1994, a different broker, John Mayers of Prudential Florida Realty, was to be the sole broker involved in the deal. Duran suggested the city not pay for this item.

The Urban League requested a "consultation fee" of $40,000. With the Urban League a full partner in the project, Duran wrote, "it appears that the consulting service is being made by the partnership to itself." He further noted that the City of Miami already provided the Urban League with a separate $50,000 grant to create affordable housing. He suggested that this item not be funded.

Architect Nelson Mallo, too, was asking for money; through the Urban League he has asked for $30,000 for architectural services to date. But according to the contract Mallo signed with the developers, the most the architect could possibly be owed was less than half what was requested. "Since no justification has been provided for the $30,000 requested, funding is not recommended," wrote Duran.

For something called "buyer's qualifications," the Urban League wanted $20,000. Duran declined to pay it.

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Robert Andrew Powell