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"We don't feel there are any conflicts of interest in this proposal," says CRA Director Neil Fritz, whose responsibility it is to negotiate final terms with Berman-Miller and Gottlieb.
Fritz claims that the CRA asked 14 developers to submit proposals for the Dixie Highway Project. They received just one proposal, from Berman-Miller and Gottlieb, he says.
"I really feel like I tried and failed," Fritz says. "I wanted more proposals."
But it's not hard to see why he didn't get a better response. Five of the 14 companies are associated with Berman-Miller or Gottlieb. Four of the companies Brenner Real Estate Group, Cornerstone Development, Lennar Partners, and Pinnacle Housing Group specialize in projects much larger than the CRA land can accommodate. And though one company contacted by the city now admits that it simply declined to submit a proposal for the project, another company claims it was never even contacted.
"Definitely, no one from Hollywood ever contacted me about this deal," says Tim Hernandez of New Urban Communities in Delray Beach. Hernandez says he always takes close looks at projects in which a city or CRA is willing to give away land or offer incentives. "Put it this way: Free land always gets my attention," he says.
There could have been some confusion about who was contacted, Fritz says. That's because the Dixie Highway Project was already in the works when he took over for Jim Edwards, who left the CRA to work for the private developer who purchased the Publix plaza on Young Circle. "There was definitely some miscommunication," Fritz admits. "This list is my impression of who was contacted by the CRA."
Besides, Fritz says, after winning preliminary approval from City Commission members for Berman-Miller's and Gottlieb's proposal in October 2005, the CRA ran a newspaper advertisement for the project for 30 days. "No one else responded," he says.
Fritz will begin final negotiations with Berman-Miller and Gottlieb this month. Berman-Miller's other proposal, for the Adams Street Project, is pending city approval. For his part, Fritz says he and the CRA will drive a hard bargain. "I'm not comfortable with the current proposal," Fritz says, referring to the proposed $8.2 million in incentives.
Once an agreement is finalized, which is expected to include a multimillion-dollar incentive package, the City Commission, acting as the CRA board, will vote to approve the project as early as this spring. It's likely to pass 5-2.
Commissioners Russo and Oliveri have vowed to oppose the development. Russo says it's an inside job, while Oliveri says he's tired of doling out incentives to wealthy developers.
But during an October 2005 CRA meeting, the only time the proposed development has been on the public agenda, the rest of the City Commission fawned over the project generally prefacing long compliments of Berman-Miller and Gottlieb with caveats that all tended to sound like: Well, I know it smells a little foul, but...
"I think it's going to be one of our best moments [in the city's history] when it's done," Commissioner Beam Furr said. "It's going to be a defining moment for this neighborhood. We're going to look back and recognize this as a turning point for this neighborhood... We're bringing this neighborhood back into the fold and saying, 'You know what? You can be part of this neighborhood.' Today, we need to pick someone we can trust, and we can do that. I trust Ken [Gottlieb]. I trust this company because they have their heart in the right place."
Furr, who did not respond to calls for comment, did not mention that he lives near the proposed development and that his property value could increase as a result of the publicly funded project.
Commissioner Keith Wasserstrom continued the praise: "I'm very happy that the Gottlieb-Miller team came together and came forward... I think it's ridiculous for people to suggest that because you're insiders, that's a strike against you. We have an ordinance on the books that tries to give preferences to local businesses. This is exactly what we're doing."
Commissioner Peter Bober, who said he didn't see anything unethical about the deal, did note possible repercussions of giving the project to Berman-Miller and Gottlieb: "I am concerned about the appearance of this deal, and when you're giving an incentive to the last bidder and they happen to be an insider, it creates a lot of questions and problems. The next time you want to do a development in Hollywood and you ask bidders to bid on the project, the people will not respond because they believe that they don't have a shot because the city awards insiders a preference. That is the issue that goes beyond this deal."
But Mayor Giulianti who at one point tried to keep Commissioner Russo's objections quiet by yelling: "Fran, take it easy! Stop it!" had a reminder for her fellow elected officials on the dais:
"On the issue of incentives, I do want to remind my colleagues that some people who say they do not support incentives... voted for a very large incentive for Mr. Steve Berman's project, Radius. Every single one. And that's right on Young Circle, next to the beautiful ArtsPark."
That is to say, the City Commission has plenty of incentives available for developers with the right names and political connections.
In Hollywood, that's just how business is done.