By Terrence McCoy
By Allie Conti
By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
Here's a tip for the wannabe land barons out there: The City of Hollywood is selling prime downtown land for peanuts. Just last month it gave away a $2.1 million tract of land on booming Young Circle for just $58,000. Get in on it while it lasts.
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.