Access Hollywood

To be a development star in Hollywood, it’s all in who you know, baby

"NewStar is very proud of the contribution it has made to the revitalization of Young Circle," Berman-Miller says. "My family and I are dedicated supporters of the arts. The $5,000 grant covered about 20 or 25 percent of what we personally spent on the installation of this public work of art."

Today, an intricate design of metal rods stands in front of NewStar. It looks like scaffolding, likely an accidental irony given the construction zone that has become Young Circle.

City Commissioners Sal Oliveri and Frances Russo (following) say they'll vote against the development deal. "The whole thing stinks," Russo says.
Colby Katz
City Commissioners Sal Oliveri and Frances Russo (following) say they'll vote against the development deal. "The whole thing stinks," Russo says.

Shortly after NewStar Realty received the $5,667 grant from Hollywood's CRA, Berman-Miller went to City Hall for her own private business deal. Partnering with MG3 Developer Group, a company whose principals are Brazilian developers, Berman-Miller submitted two development proposals to the city.

On June 23, 2005, Berman-Miller and MG3 proposed Tango Gardens, a development of 60 townhouses, including some affordable housing, on the city-owned land at Adams Street and 24th Avenue. Less than two weeks later, on July 5, 2005, Berman-Miller and MG3 submitted a proposal for Metro Hollywood, 87 to 118 condos, townhouses, and lofts to be built on the $6 million CRA land known as the Dixie Highway Project. The architect for Metro Hollywood is another familiar face at City Hall: Margi Nothard, lead designer of the ArtsPark.

In both proposals, Berman-Miller noted that she is a "licensed real estate agent with NewStar Realty." She did not volunteer the fact that she received her state license on May 31, 2005, about a month before she submitted the proposals.

Although Berman-Miller eventually resigned from her position with the city, she was in fact a city employee at the time both proposals were submitted, a clear conflict of interest. But due to Hollywood's lax ethics code for employees, she was legally able to play on both sides of the fence — something one city commissioner claims he wasn't aware of until now.

Miller's letter of resignation is dated July 17, 2005, but she claims that's a typo — she wrote it a month earlier, she says. Either way, her last date of employment was July 15, nearly a month after she asked to do business with the city.

"I didn't know that," Commissioner Oliveri says. "That's not appropriate. I certainly don't think that's ethical."

"To my knowledge, I have not violated any laws, ordinances, or ethics regarding conflicts of interest," Berman-Miller says. "I left the City of Hollywood on good terms and started a new career. I still care deeply about the city's future. There are no conflicts of interest."

According to City Attorney Dan Abbott, Berman-Miller is correct. "The city does have a Code of Ethics ordinance that, amongst other things, prohibits employee conflicts of interest," Abbott says. "In particular, the ordinance prohibits certain city employees from accepting private employment with entities who seek to do business with the city. However, the ordinance is limited to those employees who have a role in deciding whether the city will enter into a business relationship with the private entity. Ms. Berman-Miller, as director of Arts and Cultural Affairs, of course, had no city role in deciding which developers would be retained for redevelopment projects. There was, accordingly, no conflict of interest."

What's more, Abbott says, Berman-Miller's employment status with the city does not affect her development proposal for the Dixie Highway Project because it was submitted to the CRA, a separate legal entity. "Berman-Miller's city employment has no ethical bearing on CRA contractual issues," Abbott says.

Not every city works like Hollywood. In municipalities from Hackensack to Honolulu, city employees must adhere to a strict ethics code that prohibits employees from doing private business with the city for as long as a year after ending employment. The code is intended to prevent former employees from using contacts and relationships to win business that they otherwise would not have won and to avoid appearances of impropriety.

Hollywood residents with a vested interest in the Little Ranches neighborhood say that, even if Berman-Miller's proposals adhere to the city's ethics code, the whole deal smells foul.

"It ain't right," says Andre Brown, a retired city public works employee and Little Ranches resident. "She has absolutely no experience in development. She's just an insider. And they want us to trust her with cleaning up the neighborhood? I don't think so."

Two months after submitting a proposal with MG3 Developer Group for the Dixie Highway Project, Berman-Miller split with MG3 for the CRA project and submitted an almost identical proposal with state Rep. Ken Gottlieb, a Democrat. "This was a business decision," Berman-Miller explains, saying of Gottlieb: "We're acquaintances and prospective business partners."

To persuade the city to give her millions of dollars in incentives, "Cynthia had to hook up with somebody reputable — who was Ken Gottlieb," Commissioner Russo says.

A former Hollywood city commissioner, Gottlieb and his family have been involved in Hollywood business and real estate for generations. Gottlieb did not respond to several phone calls to his law office and a list of e-mailed questions.

For the Dixie Highway Project, no other company submitted a proposal for the project, giving the appearance that the whole thing was rigged for two political insiders.

Additionally, Berman-Miller and Gottlieb asked the city for an incentive package worth $8.2 million, which includes giving away the land that the CRA purchased for $6 million. The proposal estimates a net profit of $7.5 million, not including about $2 million in real estate sales commissions. In an e-mail to resident Maria Jackson, Berman-Miller confirmed that NewStar Realty would likely be the listing agent. She declined to discuss the $2 million in commissions with New Times.

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