Sure the taxpayers were screwed like a cork by that deal, but the giveaway was swell for JPI, the Texas development company that scored the land. And the money from the land is just part of, oh, about six million dollars the company is making from public coffers. There was, however, a slight catch: JPI had to hire a couple of lobbyists, Alan Koslow and Steve Geller, to help make the killing. If you follow Broward politics at all, you know both those names, especially that last one, since he's a state senator from Hallandale Beach. JPI certainly got its money's worth from its hired guns.
JPI's fleecing game began back in 2000, when it was chosen by Hollywood to develop a 250-unit apartment building on city-owned land by the Circle. The company called it the Jefferson, and it cost less than $25 million to build. The commission chipped in about four million dollars to make sure it was worth the company's while. It's not uncommon for local governments to give developers a little something, but four million dollars is pretty outrageous, especially since JPI wasn't even building affordable housing. These were luxury jobs.
Once built, the rental apartments, which were priced between $1,000 and $1,300 a month, didn't go as fast as JPI had hoped. So this past fall, the firm decided to cash in. It came up with a plan to sell the building for about $40 million to a Chicago-based company that specializes in converting apartments to condos. Before the millions could come pouring in, a little technicality had to be settled: JPI needed to buy the land under the Jefferson from the city, which was leasing it for a mere dollar per year.
That land, just short of an acre, is worth at least two million dollars, according to an appraiser hired by JPI. And there was no reason the city shouldn't have gotten every penny of that, since it held all the leverage. A move to condos isn't something that should be subsidized by the public. In fact, it subverts the original intent of the project, which was to draw young professionals downtown.
A responsible city would have terminated the lease, obtained independent appraisals, and sold the land to JPI at fair market value. You know, give the taxpayers their rightful piece of the profit. But it didn't go down that way. Instead, the city kept the lease in place and allowed JPI to commission all three appraisals. JPI then pulled a neat little trick: It ordered the appraisers to judge the value of the lease to the city rather than the land value.
Not surprisingly, the appraisals came back in October with the ridiculously low and disparate prices of $250, $10,000, and $58,000. That last figure was arrived at by Robert Lewis, a Hollywood appraiser who wrote that the land, without the lease, was actually worth $2,150,000. "However, due to the long term of the land lease (95 years remaining), the value of the leased fee interest held by the City of Hollywood increased only... to $58,000," wrote Lewis.
This past November 3, the city commission voted unanimously to sell the land to JPI for that very $58,000, to complete a taxpayer rip-off of about six million dollars when you include the previous incentives. The city also stole the public's power. The Hollywood charter dictates that voters must approve the sale of any land for $250,000 or more. The idea is that the city's ground is too important to be left up to corruptible politicians. The paltry price subverted that noble law.
Ah, Hollywood, the city of dupes, by the sold-out and for the developers. You have to hand it to JPI for hiring the right people, though. First there was Koslow, of the influential law firm of Becker & Poliakoff, which showers Mayor Mara Giulianti and other commissioners with thousands in campaign contributions and represents a host of developers who have all seemed, in the last few years, to make out with millions in incentives from the city. And then there was Geller, a politician who has pioneered the art of climbing onto developers' payrolls.
Koslow and Geller fall into separate categories. Koslow is a professional lobbyist. Therefore he's paid to make public officials corrupt. And he happens to be exceptionally good at his job, especially with a willing subject like Giulianti at the helm. What's not to like?
Geller, however, is supposed to be a public servant. So when he runs about shilling for developers, there's an immediate conflict of interest. I've been on a bit of a tear lately writing about county commissioners who moonlight as lobbyists for developers. I think the practice is unethical and, in some cases, illegal. Maybe Broward State Attorney Michael Satz agrees, but I seriously doubt it. I recently found out that his do-nothing corruption unit has begun an investigation of Ilene Lieberman and has already contacted elected officials regarding the case. Don't expect much from Satz -- his inaction regarding public corruption is perhaps the chief reason Hollywood politicians feel no compunction about ripping off taxpayers to help their developer friends.
There are some things to like about Senator Geller. He's a dominating type-A character with great energy, a regular spitfire. Some people call him charismatic, some say he's bombastic, others use the word arrogant. Whatever you call it, he's not afraid to speak his mind. He spoke it to me, in fact, for about two hours the other day. The Democrat, who has been a state legislator for the past 17 years, explained the JPI land deal the best way he could. But what he said couldn't have fooled a child -- just the Hollywood commission.
First, he noted that JPI has promised to pay $153,800 more annually for parking spots in the city's garage next door. "The city is getting a very good deal," he told me.
That's all well and good, but what the hell does it have to do with the price of gazpacho in Singapore? Even Geller admits that the new revenue is going to come from jacked-up fees to be paid by the new condo owners, money the city deserves regardless of the land price.
Geller also noted that the conversion to condos would increase property taxes for the city's downtown Community Redevelopment Agency. Bravo. Also completely off the point in any business negotiation.
And the senator insisted that JPI lost money on the rentals. "JPI was looking for their normal 20 to 22 percent rate of return and they reduced it to 18 or 19 percent for this deal, and they ended up not even making that," he said.
The numbers, however, indicate a tremendous profit. And the city, when it comes to the apartment deal, truly did lose millions.
Geller also profited on the Jefferson deal. A look at his financial disclosure shows that he netted a chilly $227,000 from his law practice in 2003, and he admits that almost all of it came from developer clients, most of them operating within Hollywood and Hallandale Beach. The same year, he made less than $25,000 from his work as a senator, which means that developers pay him almost ten times as much as the public does. The way to a man's heart may be through his stomach, but you get to a Broward politician's ticker only through his wallet. Wonder which job is closer to Geller's heart?
Just look at the senator's actions in Tallahassee. He spends a lot of time in Florida's capital fighting for his clients. He's sponsored legislation to give builders more rights to sue government and most recently led the crusade to wrest land-use control from the county. His top priority has been to give cities the power to put 50 residential units per acre on the beach, rather than the county standard of 25. Funny thing, Geller represents a bunch of developers who want to build high-density property on the barrier island, including the controversial 38-story Island Palms high-rise on Hollywood Beach.
He has a grand vision for Broward's beaches: Skyscrapers left and right. "Height can be your friend," he says of the buildings he wants on the beaches. "Tall thin good. Short squat bad."
Maybe so, but only in places that actually should have dense populations, like downtown areas. The beach isn't one of those places. It's for everyone, not just those who can afford to buy a condo in one of the developments that Geller represents. Ample hotel rooms and restaurants, sure. But jamming the oceanfront with high-rise residential buildings and local traffic will only help destroy the best reason to live in Broward County.
Geller's Giveaway, as Sierra Club president Rod Tirrell has dubbed it, has prompted the senator to go to war with the county on developmental issues. The battle reached an impasse in the state Senate during the last session.
I asked County Commissioner John Rodstrom, a staunch opponent of Geller's Giveaway, if he thought the senator's public work on behalf of developers constituted a conflict of interest. "That's not for me to decide," Rodstrom said diplomatically. "That's for voters to decide."
I told Geller that it wouldn't be a bit surprising if his developer friends paid him nice juicy bonuses for his legislative work in Tallahassee. He denied such a thing has ever happened. "Not only have I not gotten any extra money for that, you also have my word of honor -- and I swear on my children or whatever you want -- that I have not only not made a single dollar, but it has hurt me because I don't have as much time in my practice," Geller declared of his public service.
To illustrate his argument, he e-mailed me a mock 700-word newspaper story he wrote up -- at considerable effort, I have to presume -- that he headlined "Representative Norman denies unethical conduct."
The story highlighted all the assumed conflicts that I would have as a newspaper columnist should I become a legislator. For instance, Geller had me voting against a sales tax increase that "would have dramatically affected the financial stability of Representative Norman's employer," as he put it.
There were a few other examples that were even more strained, but you get the picture. Toward the end, he quoted Hollywood Commissioner Keith Wasserstrom calling me a "fucking liar." I could take that, but then Geller had Koslow saying I was ugly. Don't hate me because I'm beautiful, man.
This was all good, if slightly weird, fun and his basic point surely has some merit. But he's still missing the boat. First, as a public official, he shouldn't be lobbying governments that depend on his vote. It's a fundamental subversion of office. And second, while it may be true that all legislators have conflicts, they come in varying degrees. And representing clients who crowd the beach and hornswaggle tax dollars is as odious as it gets.
In the end, Rodstrom is dead right: It's for the voters to decide. They are basically shareholders in the business of government and when a city happily holds up its hands for a daylight robbery of its land, they ought to get mad not only at the officials, but at the lobbyists, especially if one is a senator.
And if they don't care, they'll get precisely what they deserve, which, in this case, will surely be more of the same.
