A Million-Dollar Blunder
It took just three minutes for two city employees to make a dumb decision that will likely cost Fort Lauderdale's taxpayers more than $1 million.
On February 8, 1995, at precisely 11:25 a.m., city staff assistant Lori Milano sent assistant city attorney David Feldheim an e-mail asking for the go-ahead to demolish real estate developer Frank Ptito's future home on a prime piece of waterfront property on east Las Olas Boulevard, a historied piece of land where Johnny Weissmuller, a.k.a. Tarzan, is said to have once lived.
Ptito had already sunk about $600,000 into building the trilevel house on the property, and he planned to spend another $300,000 to finish it. Ptito was looking forward to moving back into his house after returning from France with his wife and young triplets.
At 11:28 a.m. on that day came Feldheim's reply to Milano to go ahead and destroy the house. Nine days later, the city had the partially built luxury house demolished. It was obviously a shocking development to Ptito, who got a call at 2 a.m. from a friend telling him his dream house was gone.
"After he told me he wasn't joking, I thought I was having a heart attack," Ptito recalls. "How would you react? It was unbelievable."
Not surprisingly, Ptito sued the city. Two weeks ago, a twelve-person jury awarded Ptito $630,000 for his lost house. The city will also have to pay Ptito interest on the $630,000, which his lawyer claims has grown to $200,000. Throw in Ptito's attorney's fees -- which Ptito estimated at more than $300,000 -- and the city is looking to take at least a $1.1 million hit.
It's a steep price tag for a screwup that appears to have its roots in the city's 1994 attempt to save money. That attempt led to the layoffs of almost all of the building department's knowledgeable inspectors and managers, a move that was made just four months before Ptito's house was leveled.
In all, ten building-department managers -- including those with the most expertise and experience -- were laid off. Milano, who isn't even a certified building inspector, was only a staff assistant in the department at the time, but she was forced to make major decisions in the department after the cuts, says city manager George Hanbury, who masterminded the slashing of the building department.
"She was assigned new duties," says Hanbury, who claimed at the time that the layoffs would save the city $4 million. "Certainly I was asking people to do far more than they had done before. We all had to do that. We were all going to have to absorb those additional duties and responsibilities."
In addition to the gutting of institutional knowledge, Hanbury, with the commission's approval, also merged the building department with the fire department in the hopes of streamlining city government and avoiding duplication of duties. At the time he claimed the merger would create "one-stop shopping."
It also created confusion.
"It was sort of a coup -- the building department was taken over by the fire department," said John McDonald, one of the managers who was laid off. "You had fire inspectors and management personnel who were never involved in these things, and they didn't know what they were doing."
McDonald was a certified building inspector and code enforcer with fifteen years' experience when his position was terminated. He served as the city's representative to the Unsafe Structures Board, which makes recommendations to the city commission on demolitions. Naturally, McDonald is a critic of the layoffs, and he says that as far as the Ptito fiasco goes, Milano was as much a victim as anybody. He points at Hanbury and the approving city commission as the real culprits.
"The building department is this big dragon, and when they laid off everybody, they cut its head off and put Lori up on top of it to ride the thing while it was thrashing around," says McDonald. "It wasn't Lori's fault. The ones who are responsible are the people who wanted to slash the money out of the budget in the first place."
To be sure Milano did the right thing in going to the lawyer Feldheim for confirmation that the decision to tear down the Ptito property was legally correct. Feldheim gave the approval based on the fact that there were no active building permits on the property and there was an old resolution passed by the city commission to demolish on Ptito's property.
Unfortunately that resolution was null and void.
The Ptito land, which alone is worth half a million dollars, is on the corner of Las Olas Boulevard and Gordon Street and is bordered by wide canals on two sides. Ptito bought the land during the early '80s and left it unoccupied during the early '90s when he temporarily moved to Paris. On October 29, 1992, a fire destroyed much of the home, and Ptito was left to haggle with his insurance company for a settlement before he could begin rebuilding
Meanwhile his neighbors started complaining to the city about the eyesore his property had become. It was also unsafe. So, after McDonald took the case to the city's Unsafe Structures Board, the commission passed a resolution on July 29, 1993, to demolish the house.
A month later Ptito finally had a contractor demolish the damaged structure, taking care of the resolution's order and thereby making it moot.
Soon construction was beginning on Ptito's planned new house, and things seemed like they were rolling in the right direction.
But the problems were just beginning.
Ptito, as it turned out, was very finicky in the way he wanted his house built and almost fanatic in his attempts to protect himself from getting ripped off by contractors. At one point he felt the subcontractors' prices were unfair, so he demanded to pick the subcontractors himself. There were disputes over payment schedules. The construction permit was ultimately surrendered by the contractor, who was so estranged from Ptito at that point that he didn't even tell him the permit was no longer good.
The delays in construction had neighbors complaining again -- vagrants were staying in the hull of the new house and the place was a general eyesore. To understand the relationship Ptito had with his neighbors at this point, listen to Ptito. "I knew they were complaining, but they were always complaining," he said during a phone interview from his home in France. "Those people have nothing to do but complain."
The gripes prompted an investigation by the city, leading to the disastrous decision to use the old resolution to demolish the new house.
One man who says he would have easily caught this obvious mistake was McDonald, who was instrumental in getting the original resolution to demolish the fire-damaged Ptito house -- before he was fired -- and who regularly oversaw the city's demolitions.
"I would have sent it back to the board," McDonald said. "The city would have had to pass a new resolution. Anybody who knew what they were doing would know that."
The city failed to notify Ptito in France that his new house was going to be destroyed on that February day.
"The neighbors were cheering," said salvager Glenn Bugsbee, adding that, because the roof was never properly sealed, mold was growing inside the house. "The city might have been wrong to do it, but they were doing society a favor."
Society, maybe; taxpayers, absolutely not. Ptito's attorney, Robin Campbell, said she offered to settle with the city for $550,000 before the trial, but they refused. It's a cost that now seems like a bargain.
Even after the million-dollar mistake, the city is considering an appeal to the decision -- a move that might just serve to jack up interest payments and attorney's fees further in a case in which the city is obviously at fault.
Robert Schwartz, the lawyer representing the city, isn't really arguing that the city didn't make the mistake. Instead he argues that because the city didn't seize Ptito's land, the case shouldn't be tried as a condemnation case but as a negligence case, which would put a $100,000 cap on the amount the city would be forced to pay Ptito.
Judge Estella Moriarty struck down that argument at the onset, leaving the jury little to decide except how much money to award Ptito.
"We won before it even began," Campbell said. "You don't want to think that the city is that ill-advised, that the left hand doesn't know what the right hand is doing, but... it just doesn't make sense."
Unless you factor in the building department massacre of 1994.
"Say you saved $5000 by replacing one [supervisor] with a fire inspector," he said. "Well, it's going to take more than 100 years of that to make up for that one mistake.
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