Miami Commissioner Russell’s billion-dollar slush fund plan just died at the County
Experts have called the Commissioner’s West Grove CRA initiative “ridiculous” and a bait and switch.
The Miami District 2 city commissioner’s plan to divert hundreds of millions in tax money from the Omni neighborhood north of downtown Miami into a slush fund has just failed, amidst staunch opposition from the Chairwoman of the Miami-Dade County Commission, who also represents that area.
Two experts on the special tax districts known as Community Redevelopment Agencies (CRA) agree that Russell’s plan for the West Grove is ill-formed.
Chairwoman Audrey Edmondson controls the County’s agenda and bluntly opposes approving Miami Commission Chairman Ken Russell’s plan.
Dr. Owen Beitsch, Ph.D., FAICP, CRE is also a CRA expert and he called it “pretty ridiculous” that Commissioner Russell spent three years trying to expand the Omni CRA and filed a blank community redevelopment plan, which didn’t include a single project for the agency expansion.
Without a plan to spend the money on affordable housing, the funds from the new West Grove CRA area could be most easily spent on improving the neighborhood, which could intensify gentrification in an area with rapidly increasing land values, long before any affordable housing is built. Dr. Beitsch said that is a fair statement
Lawyer and CRA expert Frank Schindman says that Commissioner Russell’s CRA expansion is a “bait and switch” is intended to drain a total of $1.2 billion in property taxes from the general fund, but none of those funds would go to the West Grove.
Three years ago, Russell hired Schnidman to implement CRA reforms in 2016 after he served as the subject matter expert in a grand jury investigation, but he says the Commissioner made an “expedient” 180 degree turn from reform in order to push his current plan for the West Grove primarily for personal political gain.
“Ken is outdoing anything his predecessor Marc Sarnoff ever contemplated in misusing CRA funds,” says Schnidman.
“I have been a critic of the Omni CRA,” says Miami Commissioner Manolo Reyes, “because the economic development taking place in that district is market-driven, therefore we should get the agency’s funds back into the general fund by sunsetting the CRA. That’s why I voted against the extension of this CRA.”
West Grove CRA plan dies at County Hall
Chairwoman Edmondson took the time to join me in July on the Only in Miami Show on Jolt Radio and explained that she doesn’t believe the Miami Commissioner would really use the funds from his proposed Omni CRA expansion — which is inside of her district — to significantly help the West Grove.
“I’m not in favor of approving this expansion because for one thing, the current CRA community, the purpose of a CRA is to create economic development as well as build affordable housing,” began the County Commission Chairwoman, in explaining why Russell’s plan is dead on arrival. “He wants the money to go the West Grove to build affordable housing. The only housing that I’m aware of that has been built in the current Omni CRA area is an eight-unit re-development done by Arva Jain.”
(Author’s Note: In the past four years, Jain developed 44-units in five buildings with funding from the Omni CRA at Russell’s direction.)
“And that is not a significant amount for me to say, “Well, you have built affordable housing in the Omni district,” says Edmondson. “It will also take years before a new CRA in the West Grove can actually produce enough hedge funds to build affordable housing.” She continued:
“So what he’s going to do is take the money from the current CRA, put it over there, and he’s saying that he’s borrowing the money.
I don’t believe that either because it’s going to take a long time for them to build up enough money in the West Grove area.
Meanwhile there will be no affordable housing or economic development within the current Omni area.”
“These are some of the reasons that I am not for this. I cannot see myself allowing funds to move from one CRA area where nothing has been done, Johnny Winton was there, no affordable housing, then came Sarnoff, no affordable housing, and now we have Russell there and we get eight units,” the Chairwoman continued. “I also understand that the West Grove community came out to the meeting in force and I understand that they have a need for affordable housing.”
“The… Omni CRA, has not done what it was supposed to do. What it’s supposed to do for this particular area,” concluded Chairwoman Edmondson.
Without Chairwoman Edmondson’s assent, Commissioner Russell’s plan has little chance of passing the county commission, since she controls the agenda and can keep the item from ever coming up for a vote.
Russell’s expert calls his West Grove CRA plan a slush fund
I spoke extensively with Frank Schindman, an attorney and expert on CRAs, whom the Miami-Dade State Attorney’s Office brought in as their subject matter expert when investigating misuse of the agencies, and on my radio program as well.
He is a former distinguished professor of Urban and Regional Planning, and former John M. DeGrove Eminent Scholar chair, Florida Atlantic University. Schnidman practiced law with the international law firm of Greenberg Traurig after serving as director of the University of Miami School of Law Graduate Program in Real Property Development.
“When you look at the priority projects to be negotiated in the CRA’s original interlocal agreement, nothing is committed to the West Grove,” Frank Schnidman told me about Commissioner Russell’s plan.
“It’s a bait and switch,” says Schnidman.
The local government section of the American Bar Association just awarded Schnidman with a lifetime achievement award at its most recent national meeting in San Fransico.
“When there is any text about the West Grove it talks about example[.] Might,” he said forcefully in the radio interview. “There is no action word that says any of this would happen. What’s really sad about all of this is that when you go to the agenda package of what was actually submitted [to the City Commission for approval], it differs from the agenda package that was put on preliminary.”
The former law professor explained some of the technical aspects of Russell’s scheme, noting that the plan “that the [City] Commissioners got for the meeting [where they voted to approve the item] deletes paragraph 9, which says “West Grove to be negotiated, and it’s just left out. The interlocal agreement now doesn’t even mention the West Grove.”
In practical terms, it means that Commissioner Russell asked the Miami City Commission for a blank check and by a 3–2 vote they approved it after he threw in major sweeteners for two other commissioners.
In order to obtain city commission approval, Commissioner Russell agreed to send $28 million which should be only spent on affordable housing or economic development to the Bayfront Park Trust which he has publicly called “horse-trading,” in exchange for extending the Omni Comunity Redevelopment Agency for fifteen years and creating his child district in the West Grove neighborhood.
He agreed to send $28 million in Omni CRA funds to the Miami Bayfront Park Trust, whose Chairman, Commissioner “Crazy Joe” Carollo plans to use to fill in the environmentally sensitive FEC slip.
“I am against [filling in the FEC slip] for several reasons,” says former Miami Mayor Tomas Regalado, highlighting that it was one of Miami-Dade County Mayor Carlos Gimenez’s ideas for a soccer stadium, which he pushed without consulting the city.
“If we’re going to spend $28 million from the CRA, we might as well spend it doing seawalls around Biscayne Boulevard, because no matter what anyone says, rising seas are coming to Miami,” says Regalado. “To spend $28 million, which will not go to the general fund of the city… it’s a very, very bad idea.”
In July, at a public meeting in Edgewater, Russell weakly defended the move by telling local residents that “at least the money will stay in the district” when prevaricating that he opposes filling in the FEC slip — which would be an environmental catastrophe — after funding the entire project with the $28 million.
At that meeting the commissioner replied to my comments about his $28 million dollar maneuver in front of the assembled crowd, by disputing his support for Carollo’s plan, saying that “all of the other commissioners are in favor of filling the slip,” which means that his agreement to fund the project would effectively green-light the plan.
Additionally, as part of his West Grove plan, Commissioner Russell agreed to extend the life of the Southeast Overtown Park West (SEOPW) CRA, to win the vote of Commissioner Keon Hardemon, who controls that agency and has a long history of giving out dubious nine-digit corporate welfare checks to developers. Hardemon’s aunt is his bag-woman in his pay-for-play schemes, taking big bucks as a lobbyist (which is somehow considered legal) for any project that wants to earn his vote.
“When they expanded for the Museum Park, they made $16 million right away,” decried Frank Schnidman about Russell’s exacerbation of the unequal treatment of the West Grove. “They’re expanding to the Bahamian Village and changing the criteria from the toys for the rich or the tunnel… we’re going to give you money right away.”
“The reality of the idea $250MM for affordable housing is that it’s all going to go to Omni, none to the West Grove,” says Schnidman, who also believes that a lot of money from any time extension of the Omni CRA would accrue to poach businesses from nearby areas in the form of corporate welfare payments. “As far as the Bahamian or African-American section of the West Grove, [it’s as if the Commissioner says] ‘we’re going to take you in, but we’re not giving you a penny. We’re starting you with a separate trust fund, so you’re not going to have the money you need in order to do the things we say.”
An independent expert slams Russell’s plan
Dr. Owen Beitsch is an urban planning consultant and as well as an expert in urban design, who discussed the norms of CRA management and development with me for this story
“A blank plan indicates a lot of very vague thinking, certainly,” said Dr. Beitsch, who explained that the typical CRA formation process takes anywhere from six months to a year, he was puzzled that Commissioner Russell not only spent three years designing his plan but that his plan is little more than a promise to figure that out later.
“There are ADOPTED community redevelopment plans (CRP) associated with those areas, anything that isn’t a CRP is just a list of wishful thinking, about things that you think could be done, versus something well thought out that will be done,” Dr. Beitsch continued, explaining the budgeting process for CRAs, which is intended to set the roadmap for the district to follow. “A typical adopted CRP plan includes 6–9 items with a specific budget and list of things to which this budget would be directed. The idea is that out in the future, say every 5–7 years, you would then re-evaluate it unless your original plan is still sufficient.”
But Commissioner Russell’s no plan elicited an incredulous response from the urban planning expert during our phone interview.
“If you have no really good CRP, then it’ll be like a group of untrained horses trying to guide a wagon,” the expert says.
We also discussed the implications of establishing a CRA in the rapidly gentrifying West Grove, without an immediate plan or funding to create affordable housing.
Without a plan to spend the money on affordable housing, the funds from the new West Grove CRA area could be most easily spent on improving the neighborhood, which could intensify gentrification in an area with rapidly increasing land values, long before any affordable housing is built. Dr. Beitsch said that is a fair statement.
Beitsch also agreed that the normal way CRA formation and expansions work is to identify the affordable housing plans over those three years and present them with the plan when it’s adopted.
But that is not the case here.
“If it takes three years to build a CRA plan, they’re trying to figure out why they’re even doing it,” said Dr. Beitch, about Russell’s West Grove plan. “It’s pretty ridiculous. I can’t believe the city of Miami allowed it to continue.”
Conclusion
Commissioner Ken Russell’s plan to expand Miami’s Omni CRA into the West Grove appears to be on life support, considering its total lack of support at County Hall and the condemnation of local government experts.
However, in a late-August town hall held at Miami City Hall, the commissioner told one of his constituents who asked about the West Grove if he was going to ever do something about the pain caused by rapid gentrification and he replied that he’s “pretty optimistic” his CRA plan would be implemented.
“‘We’re just giving you the shuck and jive’ which is what’s traditional for that district,” Frank Schnidman said about Russell’s maneuvering with a ten-figure sum of Miami’s tax dollars in the conclusion of our radio interview in June.
I contacted Mr. Schnidman again today for comment on this story and he concluded forcefully:
“Ken is now participating in money laundering with the Omni CRA trust fund by moving a billion dollars of tax money there, which would let him spend it without any taxpayer oversight.”
The Coconut Grove Village Council is expected to discuss Commissioner Russell’s West Grove CRA plan tonight.
A phone call to Commissioner Russell for comment and numerous tagged tweets on Twitter have not yielded a response.
