By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
By Kyle Swenson
By Chris Joseph
By Michael E. Miller
Maria Jackson and Helen Chervin happily give tours of their Hollywood neighborhood. It's not a tour you'll find in a promotional pamphlet. In fact, city officials admit that they "surrendered" this neighborhood a long time ago. But Jackson and Chervin haven't.
On a recent weekday afternoon, Jackson and Chervin, notebooks in hand, stroll down Adams Street, near Dixie Highway, about a half-mile south of Hollywood Boulevard.
"Look at that," Chervin says, pointing repeatedly with her right index finger.
At the other end of the street, two men are carrying a stained, queen-sized mattress. They drop it in front of someone's house, then scurry back to their beige Toyota Camry.
Chervin stuffs her notebook and papers under her left arm and walks quickly toward them.
"Helen will do anything," Jackson says. "Nothing scares her. Nothing."
"Hey!" Chervin yells as the men drive away, her hands waving indignantly. "You can't do that!"
For too long, this part of Hollywood's Little Ranches neighborhood has doubled as a dumping ground. Old tires, stripped computers, broken microwaves, and the occasional used condom line the curbs of Adams Street. Drugs have been a problem here for decades. About 15 years ago, the city erected barricades at the end of each street, including one at Adams Street and Dixie Highway. City officials believed that curbing traffic would curb drug sales as well. It didn't. City officials never anticipated that people wanting to drive through would simply cut off the barricade's lock, open the gates, and go about their business.
Today, the gate of the Adams Street barricade is flung open. Three rusty locks lie on the ground like fallen sentries. Someone maybe yesterday, maybe five years ago came through with bolt cutters. The city hasn't bothered to replace the locks, allowing cars to drive through just as they did before the barricades went up.
Myrnell Thompson knows that the barricades haven't stopped crime or kept unwanted people away. She lives on Adams Street with her 17-year-old son in a handsomely renovated Spanish-style home. Inside, she lives in peace. Outside, she lives in fear. "Any time I have to go outside, I tell my son," she says. "If I'm coming home from work at night, I call my son. He stands on the porch, waiting for me."
Thompson once witnessed several men hide behind the barricade. Curious, she watched them through the window. That's when she saw a young woman riding down the street on her bike. The men jumped out, pushed the woman down, and beat her, taking her money.
It was awful, Thompson says. Yet it wasn't particularly unusual for Adams Street.
"It's not safe here at night," she says.
But the City of Hollywood, intent on turning the Diamond of the Gold Coast into a manicured beachside community dotted with condominium towers, has plans for this street. Big, expensive plans. Since November 2004, Hollywood's Community Redevelopment Agency (CRA) has been buying up property, including a large apartment building and several houses, in an effort to rehabilitate this neighborhood. The CRA has paid roughly $6 million for nearly an entire block.
Now, Hollywood wants a developer to step in and build more condominiums. City officials say that a new housing development is the key to turning a crime-ridden neighborhood into a model of urban renewal. And they're probably right. Many residents, tired of seeing the neighborhood get worse every year, welcome any new project.
"It looks like a real slum," resident Kim Schmitt told city commissioners, expressing her support for a new development. "Who would want to live there? Who would want to live in that neighborhood?"
But some of the Little Ranches residents who keep a close eye on City Hall allege that elected officials are exploiting their predicament to reward political insiders. "The City Commission has not been honest with us about their true intentions," Chervin says.
From the beginning, one person seemed to be a shoo-in for the redevelopment project: Cynthia Berman-Miller, who until July 2005 was director of Hollywood's Office of Arts and Cultural Affairs. Despite not having any development experience, Berman-Miller, who received her real estate license less than a year ago, is positioned to win two development contracts with the city.
For one project, Berman-Miller has teamed with state Rep. Ken Gottlieb, who served on the Hollywood City Commission from 1992 to 1998. Berman-Miller and Gottlieb have asked the city for $8.2 million in development incentives, claiming that they can't make money on the project unless the city throws in cash and free land.
"This is an inside deal, and it's robbery for taxpayers," says community activist Howard Sher.
Political insiders doing business with the City of Hollywood is nothing new. In fact, Mayor Mara Giulianti is open about the fact that she likes to do business with familiar faces.
The most prominent lobbyist in Hollywood, for example, is Alan Koslow. Now employed by the law firm Becker & Poliakoff, Koslow was Hollywood's city attorney until he resigned following a 1991 scandal. Koslow had drafted a $50,000 settlement agreement for a city employee but declined to inform the commission that he was having an extramarital affair with the woman. Since then, Koslow has negotiated for tens of millions of dollars in incentives for private builders, including Radius developer Steve Berman, who happens to be Berman-Miller's cousin.
And there are other examples.
Miami architect Bernard Zyscovich hadn't worked on a private development in Hollywood until he was hired by the city as a consultant for redevelopment on the beach and U.S. 441. Now, Zyscovich is the lead architect for private developments at Marriott Ocean Village and Resorts and the Millennium Mall the sweetest projects on the beach and U.S. 441, respectively.
But for some, including at least one elected official, Berman-Miller's development proposals represent the most egregious example of insider dealing in Hollywood.
Hollywood's Young Circle is a mess. Where once there was a serene, well-manicured park in the middle of the hectic traffic circle, there's now a fenced-off construction zone. Concrete barricades divide traffic. Condominium towers that sparkle in architectural renderings are today still nothing more than concrete and cranes. The downtown part of Hollywood Boulevard, once a welcoming place for outside cafés, is now a dust bowl on windy days.
Hollywood still has a long way to go.
And yet, for as often as Hollywood has donned its hardhat in the past two years, the city is only in the beginning of its redevelopment efforts.
Focusing on the main thoroughfares Hollywood Boulevard, Federal Highway, Dixie Highway, U.S. 441, and Hollywood Beach Boulevard the city has in the past few years spent tens of millions of dollars to entice developers to build condos that even middle-class families can't afford. The public money has acted like rocket fuel on an already-burning-hot housing market. In 2004, the Miami Herald and Sun-Sentinel regularly ran stories about long lines outside of condo sales offices, particularly in Hollywood. The real estate bubble was blowing big and round in 2004. And the Hollywood City Commission had even more hot air with which to fill it.
Developer Steve Berman has arguably benefited the most from what some community activists term "developer welfare." Berman received an incentive package worth an estimated $8 million to $13 million in October 2003 to build La Piazza II. Less than a year later, in April 2004, Berman received yet another incentive this one worth $11 million to $14 million to build the Radius on Young Circle. The building quickly sold out, with two-bedroom units selling for more than $300,000. Koslow negotiated both deals.
And there's more to come. The city has already agreed to pay developer Charles Abele $11.2 million to redevelop the Great Southern Hotel. Koslow, who also represents the developer for this project, has asked the City Commission for a total of $25 million in incentives, which he will likely receive once the city's battle with pesky historic preservationists ends.
At its current pace, Hollywood's expensive face-lift will be substantially finished in less than ten years. City drawings show a Young Circle ringed with condominium towers. In the center, the ArtsPark (whose price tag has jumped nearly $10 million since inception) draws visitors with greenery and small arts- and education-related buildings. To the west, toward Interstate 95, mixed-use retail/office buildings rise two to three stories above Hollywood Boulevard.
It's a dream, but Hollywood city officials are devoted to realizing it. By the end, the vision could cost taxpayers more than $100 million, a conservative estimate.
What's more, Hollywood residents aren't the only ones paying for it. Because the city is financing its ambitious redevelopment projects through the CRA, taxpayers throughout Broward County are paying for Hollywood's transformation.
State law allows cities to create CRAs to revamp blighted areas. By creating a CRA, which acts as a separate legal entity, a city can freeze part of its tax base meaning that property taxes that normally would go to the county to fund, among other things, public education and roadwork, do not rise as property values increase. Instead, the increased tax revenue stays within the CRA. For this reason, many of the millions of dollars Hollywood has lavished on developers is money that would have otherwise gone into county coffers.
In 2003, a county auditor questioned Hollywood's ability to give CRA funds to private developers. Commission Auditor N.W. Thabit noted in a report that the Florida Constitution prohibits municipalities from giving public funds to private companies "when the public would be at most only incidentally benefited."
That never happened.
And Hollywood quickly built a reputation for being more than willing to subsidize prosperous developers with taxpayer money, especially for developers with the appropriate connections.
After a small but vocal group of residents, including Jackson and Chervin, began to complain to the City Commission and police about crime and drugs in their neighborhood, Hollywood officials began to view the Little Ranches neighborhood as a prime target for redevelopment.
The city already owned a vacant lot near Adams Street and 24th Avenue, and in late 2004, the CRA began to buy property on the east end of the block as well, near Adams Street and Dixie Highway, paying roughly $6 million for a large, rundown apartment building and two small houses.
The city and the CRA asked for proposals from local developers in March 2005. The city's project, at Adams and 24th Avenue, became known at City Hall as the "Adams Street Project." The CRA dubbed its proposed development down the block the "Dixie Highway Project."
One name became synonymous at City Hall with both of the proposed developments: Cynthia Berman-Miller. And that was unusual. Berman-Miller was not only a city employee but she lacked experience as a developer.
Berman-Miller is from a family that has followed two career paths: art and real estate. Her grandfather, Paul Silverthorne, was a well-known muralist in Miami during South Beach's Art Deco heyday. He worked on design projects for the Mary Elizabeth Hotel, Sherry Frontenac Hotel, Lou Walter's Latin Quarter, and the Fu Man Chu Restaurant.
While her grandfather became known in the art world, Berman-Miller's mother, Andrea Silverthorne, went into South Beach real estate. Her company, NewStar Realty, has since expanded from South Beach to Dadeland, Hollywood, Jupiter, and Naples. NewStar has more than $125 million worth of real estate listings on the market, a publicist for the company claims.
Despite the family's success in real estate, Berman-Miller initially followed in her grandfather's footsteps. In 1993, after earning an associate's degree in photography at Florida International University in Miami, Berman-Miller went to the University of Florida in Gainesville, earning first a bachelor's degree in liberal arts and then a master's in art history.
From the beginning, Berman-Miller concentrated on the administration rather than creation of art. While earning her master's degree, she worked as a coordinator for the Art in State Buildings program, acting as liaison between the state Department of Cultural Affairs and the University of Florida. In Gainesville, she successfully curated the first exhibition of Cuban art in Florida in 33 years.
Before moving back to South Florida, Miller served as board member at the Kentuck Art Center in Northport, Alabama. Her husband, Scott Miller, was an art professor at the University of Alabama. Together, they moved to Hollywood in 1997. Miller became an associate dean at Miami International University of Art and Design. His wife was hired as curator of education at the Art and Culture Center of Hollywood, a nonprofit gallery and theater on Harrison Street in downtown Hollywood. Less than a year later, Berman-Miller was promoted to executive director of the center.
She came at a perfect time for Hollywood. Fort Lauderdale's neighbor to the south wanted to distinguish itself as Broward's "City of the Arts." Hollywood's development strategy mirrored the ambitions of an unpopular high school kid buying expensive, trendy clothes at the local mall. Hollywood blended Richard Florida's Creative Class theory attract creative types with art and parks and more and boom times will follow with an erect-condos-and-people-will-buy-'em redevelopment effort.
Toward that goal, in early 2002, Berman-Miller and a group of business and civic leaders successfully lobbied Broward County for a $5 million parks grant to build ArtsPark in place of Young Circle Park. For more than a half-century, Young Circle Park had been home to dozens of large trees, benches, and an amphitheater. In February 2004, the bulldozers arrived. The city's plan for ArtsPark included a charter school, art studio, and a fountain. From conception to groundbreaking, the price tag jumped from $12 million to $21 million.
Berman-Miller was supposed to help make up the shortfall. In September 2003, she became director of the city's newly created Office of Arts and Cultural Affairs. Earning $40,000 per year, Berman-Miller became partially responsible for raising money for the financially troubled ArtsPark.
In a letter dated November 17, 2004, City Manager Cameron Benson explained to a developer that Berman-Miller "committed to bring in $1.8 million through fundraising efforts."
She was unable to meet the commitment.
"I have to admit that I am not aware of her raising any money for ArtsPark [as a city employee]," Commissioner Sal Oliveri says.
"She didn't raise a dime," Commissioner Russo echoes.
Berman-Miller says she simply wasn't able to raise funds as a city employee. "The [$1.8 million] commitment you refer to was a pledge by the combined leadership of the Art and Culture Center," Berman-Miller says. "Everyone involved in that pledge decided we needed more than $1.8 million, and the best way to raise this private-sector money was through a separate foundation for which I continue to work as a volunteer with many other volunteers coordinating the efforts."
For Berman-Miller, getting money from Hollywood has proven as worthwhile a task as getting money for Hollywood. In 2005, her mother opened an office of NewStar Realty on the south side of Young Circle, in a two-story office building. On the first floor, Silverthorne opened NewStar Gallery. On the second, she housed her real estate office.
Silverthorne hoped to capitalize on the blending of art and business in Hollywood. And the city agreed to help finance those efforts. On June 21, 2005, the City Commission, acting as the CRA, voted 5-2 to award a $5,667 grant to NewStar, with Commissioners Peter Bober and Russo dissenting. The grant was for NewStar to build an art installation outside its two-story office building. As director of the city's Office of Arts and Cultural Affairs, Berman-Miller was responsible for Hollywood's marketing and development of the arts, though she says she did not play a role in NewStar's grant application and did not attend the CRA meeting.
"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.
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.
"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.