Our Mayor, the Lobbyist

Commissioner Graber says that politicians who lobby often never have to utter so much as a word. "A former legislator who was a lobbyist -- and I'm not going to mention any names -- told me that you don't have to do much when you represent a client," recounts Graber, a physician who previously served in the legislature. "All you have to do is show up at meetings and sit there and stare. Your presence in the audience alone conveys a message. There are other ways to speak other than just language, and that is utilized a great deal."

Another developer who bid for the Holiday Lakes project and asked for anonymity, said Lieberman's work was done behind the scenes. "Pompano officials knew that if they alienated Ilene Lieberman, they would lose any hope of support at the county for the Swerdlow project," says the developer. "And that's why I think county commissioners shouldn't be allowed to lobby cities. If I'm a county commissioner, and you are looking to me to get money, what are you going to do when I ask you for a favor for a client?"

Lieberman insists that Pinnacle won the Pompano project because it had the best proposal, which included a community center and a promise to buy adjacent land for the project. But when asked to explain exactly what she did to help Pinnacle, she refers questions to Wohl, who, in turn, refuses to discuss the mayor's work, citing attorney-client confidentiality. "But I'll be happy to talk about our fabulous developments," he said before refusing to do so.

Occasionally, Lieberman surfaces publicly on the company's behalf, as she did this past December before the Broward County School Board. Calling herself Ilene Michelson, she tried to convince the board to let Pinnacle build a high-rise development rather than a park on the site of the historic South Side School in Fort Lauderdale. The school board instead approved the original park plan.

It was a rare setback for Pinnacle's Broward campaign. In addition to the Pompano project, the company has recently won the right to develop two projects in Hollywood, one in Pembroke Park, and another in Pembroke Pines. Combined, all of them are worth $20 million or more.

To be sure, Lieberman's lobbying of cities on Pinnacle's behalf creates an ethical minefield. But the way the company obtained the Pompano project is only the first part of the story. With a deal inked, the firm again began hitting up the public coffers -- and its methods have proven less than pristine. Let's say you want to build an affordable housing project for about $19 million. How do you do it? First, you obtain the land and about five million dollars in up-front HUD money scot-free. Then you get $6.7 million more in financing from selling federal tax credits given to you by the state.

Then pick up $9.2 million more in low-interest, county-backed tax-exempt bonds. And, on top of that, you apply for two million dollars in special state financing that you can pay back at the sweetly low interest rate of about three percent.

Add it together and you've got $22.9 million. The extra money you use either to pay down your low-interest debt or, perhaps, pocket some tax credits. That's all very nice, but the developer's fee is even better. When you build the place, you collect a cool three million dollars from the funding pot. And, on top of it all, you own the development, collect rents, and will likely get more public financing and another fat fee when you renovate down the road.

That's not a developer's wild fantasy, it's what Pinnacle has been planning as it builds its Pompano project. "It's a bad deal for the public because there is too much public financing going into it," says developer Jones. "How much money do you need? It's [Pinnacle's] own greediness, and the public has to pay for that greediness. With the HUD grant and the free land, the project cash-flowed very well with conventional financing."

Funding of affordable housing projects is almost absurdly complicated, and the veil of complexity often serves to shield such deals from public scrutiny.

In the case of Pinnacle Village, the figures given on various applications differ so widely that the discrepancies are relatively easy to spot.

Some of the most common incentives paid to affordable housing developers are the federal tax credits, which are allotted by the public Florida Housing Finance Corporation (FHFC). Developers who qualify are given dollar-for-dollar credits, which they sell to investors for cash. Pinnacle expects to receive about $6.7 million for the Pompano project. It also applied for eight million dollars in low-interest, tax-exempt bond financing from the county-controlled Broward Housing Finance Authority (HFA). The sum was approved by the county commission on October 28, 2003. (Lieberman dutifully abstained from the vote).