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The Bitterness of Sugar Hill

Page 3 of 5

Eisenhart wondered in writing who exactly was supervising what had clearly become a disaster.

"I question whether the architect is scrutinizing the [contractor's] applications and certifications for payment adequately enough to assure project completion," he pondered.

The day after Eisenhart's memo, the insurance company that had written the policy guaranteeing Tecina would finish the job wrote an indignant letter to FHC demanding that the agency release the final payments. Its request appears to be based on the inflated conclusions of Middlebrooks, who apparently told the insurance company that the project was almost finished. Obviously it would be in the company's best interest if the project were indeed completed. "This last draw, according to your architect, brings the project to over 90 percent," wrote Michael Burton of United Surety Associates, Inc. "Common construction practices allow for a reduction in retainage at this point." (Retainage is the small fraction of contract monies held back from the contractor to ensure the contractor finishes the job.)

On January 9, 1997, Tecina was given a notice of default officially severing it from the job.

Almost two and a half years had passed since Tecina had signed on. Most of the money had been spent and less than half the work was done.

"We didn't know Tecina from a hill of beans," remembers John Hazelroth of Gagnier, Hicks Associates. "It was all so long ago. I sat in on some of the meetings when we were discussing various contractors, and Tecina seemed alright. But I remember that it was Middlebrooks, the project's architect, who was excited about Tecina -- about their engineering abilities. Middlebrooks seemed to feel that Tecina could take on some of the engineering for the project and save his firm some work."


Early in 1997 Coral Gables attorney Reginald J. Clyne was hired by FHC to negotiate a settlement with the insurance company to cover Tecina's shortcomings. More than nine months passed before the claim was settled, with the company paying FHC $300,000 on September 26 of that year. FHC refuses to say how much of the settlement was paid to Clyne as fees and expenses. During this time, work at the job site came to a standstill.

Tecina's failure and subsequent departure from the scene not only brought work to a halt, it created yet another pressing problem: FHC now owned an unguarded, half-finished, construction site in which they had invested a couple million dollars. The area required professional protection in a neighborhood where anything not fastened down would likely disappear.

So, departing drastically from any planned budget, FHC hired professional guards from Command Security Corporation of LaGrangeville, New York. It was the first of three companies to get the job.

In an August 21, 1997, letter from the security company to FHC, Command threatened to swiftly sue the agency for nonpayment of $11,759 for roughly one month of guard duty at the site. FHC promptly changed companies to Garrison Protective of Florida. They would later switch yet again to Equalizer Security.

Based on bills on file with the City of Miami, guarding Sugar Hill appears to have cost approximately $9000 per month -- about $100,000 per year. Over three years of delays, the project incurred security costs of between $200,000 and $400,000. FHC refuses to reveal where that money came from or exactly how much was spent.

The $300,000 settlement from the insurance company upped the entire project budget to build Sugar Hill to $2,646,000. It is unclear whether FHC received additional insurance money from the community center fire or for vandalism and burglaries that occurred at Sugar Hill, even though records indicate thousands of dollars were initially spent to insure the site. Yet as the money available for the project increased, the number of apartments to be built inexplicably dropped from 26 to 24.

According to a city inspection in February 1997, the project was far from finished. Still awaiting installation were handrails, light fixtures, landscaping, electrical outlets, air conditioners, closet doors, shelves, windowsills, floor coverings, toilets, bathroom sinks, interior doors, exterior stucco, and more.

No one had the courage to turn off the money spigot for a six-month project that had turned into a four-year debacle.

During the insurance-settlement negotiations, Clyne informed the city on May 30, 1997, that FHC intended to complete the project and asked the city to confirm that $546,128 remained available for the construction.

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Jacob Bernstein
Contact: Jacob Bernstein
Steve Satterwhite