Our Mayor, the Lobbyist

At that point, total funding amounted to about $19.9 million, or nearly one million dollars more than the development was expected to cost. Yet, in March of this year, the company pulled still more public funding strings. First, in early March, it claimed that construction costs were rising (which they were) and asked the county HFA for $1.2 million in additional bond money. Interestingly, among the additional costs was a jump in projected legal fees from $55,000 to $291,853. (Lieberman denies she will receive any of that whopping increase).

A public hearing regarding the additional bond request was advertised in the Sun-Sentinel on March 30, 2004. The very next day, the company submitted an application to the state for two million dollars more in financing in a low interest SAIL loan. Those applications are signed by the developer -- in this case Wohl -- who, under penalty of perjury, promises that the budget is accurate and that the entire application is "true, complete, and correct."

But Pinnacle, clearly, was playing fast and loose with the numbers in the document:

The company listed the total development cost at $16.6 million in the SAIL application, which is about two million dollars lower than every other financial schedule that Pinnacle has submitted regarding the project. At the same time, the firm was complaining to the county about increasing construction costs.

Pinnacle also radically altered the amount of money it would receive from the tax credits. In a 2003 application to the state, the figure was set at $6.7 million. In the 2004 SAIL application, Pinnacle listed the amount at $3.9 million, a $2.8 million drop. So where were those missing tax credits going? To Pinnacle. In effect, the firm failed to mention millions in financing, while asking for $2 million more in government handouts.

The timing of the SAIL application is also highly suspicious. Pinnacle didn't list the extra $1.2 million in additional bond money it was about to receive from the county. This was crucial, since the state determines who gets SAIL money according to need and how much bond money they are already getting. The state places applicants in an "A" category, which almost assures they will be awarded the money, or a "B" category, where their chances are greatly diminished. According to the state formula, Pinnacle Village qualified as an A because the additional bond money wasn't included. Had it been listed, Pinnacle Village would have been relegated to the B list, jeopar-dizing the funds. Since then, HFA has notified the state of the additional financing, but the company's A ranking hasn't changed. "Our rules don't say anything about bonds coming in after the fact, but maybe there should be something in there about it," says state regulator Chris Buswell, the FHFC's credit administrator. "Maybe there is a hole that needs to be plugged there."

After reviewing the numbers, Barot, the rival developer, concludes: "This is unethical, in my opinion," he says. "Two different sets of numbers are submitted at about the same time, and they totally change."

When asked about the applications, Wohl declined to comment. "These are very sophisticated financing schemes," he said. "I'm not going to answer ... I don't want to talk about numbers."

But Pinnacle vice president David Deutch, the company's numbers guru, denied that his company deceived the state in the SAIL application, adding that his firm "would never trick, mislead, or do anything disingenuous." He says the $16.6 million development cost didn't include estimated construction increases because the contract hadn't been completed. And he contends the company only applied for the SAIL loan to provide "gap financing" should some part of the deal fall through.

Deutch acknowledges that the company, at one time, was holding back tax credits from the deal, but he points out that it has since decided to sell all of them and put the proceeds toward the project. According to numerous experts and state regulators, the idea of a developer keeping tax credits is highly unusual, especially since the Internal Revenue Service dictates that developers are only allowed to receive as many credits as are "necessary" to make the project feasible. Keeping credits, after all, would seem to enrich the developer rather than the development.

The Pinnacle vice president points out that the state hasn't yet allocated the SAIL money or the tax credits, and, even if his company had put false information in any state application, regulators would discover it. "If we were to put something ridiculous in an application, like it's only going to cost $20, the state has an underwriting process to ensure we don't get anything we don't need," Deutch says.

Any company found to have misled the Florida HFC, however, is subject not only to perjury laws, but also to being barred from receiving state money for two years. "We ensure that a deal doesn't get more public resources than it absolutely needs," says FHFC deputy director Steve Auger. "Our process is set up to make sure that developers do not get more money than is needed to do the deal."