MORE

MOB Rules

Will hospital district chairman J. Luis Rodriguez (center) kill a $100 million taxpayer rip-off?
Colby Katz

The acronym used by North Broward Hospital District staff for the $32 million medical office building project -- "MOB" -- says it all. Meyer Lansky would have been proud.

As I wrote here November 6, the publicly funded district intends to pay a few big-wheel developers $170 million over 55 years for it, a throwaway of about $100 million. In addition, the district is set to spend more than $4 million upfront for the land across the street from the Broward General Medical Center, where it is to be built.

That the deal was hatched by former NBHD chief financial officer Patricia Mahaney, who was recently sentenced to 14 months in federal prison for embezzling money from the district, only solidifies its place in Broward's history of corruption. That she concocted it with her close friend and business partner M. Austin Forman, a consummate influence peddler, makes it an absolute classic.

Forman, who initially optioned the land for the MOB, claims he dropped out of the deal after the FBI began investigating. But he is still listed in state records as a principal of the company formed to make the deal, Andrews Avenue Properties and Investments, which he founded with long-time partner William Murphy. The only change listed in the records came in September, when Forman stepped down as registered agent -- and listed his brother, H. Collins Forman, in his place. Long-time downtown developer Terry Stiles, another Broward insider, is set to build the project.

At last Wednesday's board meeting, NBHD commissioners didn't complain about the MOB, which they approved in February 2002. Instead they groused about my column. Board chairman J. Luis Rodriguez announced on the dais that "the New Times article unfairly took a shot at everybody" and portrayed all board members as "crooks and cronies of the governor."

I didn't exactly say that last part, but I wouldn't object to the use of the term cronies, and I'm certain the Jeb Bush-appointed board approved a crooked deal. After the meeting, I asked Rodriguez, a lobbyist who abstained from the MOB vote because he'd worked for Stiles, if he thought the deal was justified. "I'm waiting to see that Fishkind report, which was done by a well-respected outside group," he said. "You have to look at it on its merits."

Ah, the Fishkind report, the document that is ballyhooed by district officials as proof that the MOB is A-OK. Orlando-based Fishkind & Associates was hired by the district to analyze the deal this past summer and came back with a glowing approval.

The endorsement didn't really surprise me; it's a dirty little secret that most consulting firms routinely color their arguments to match their clients' expectations. They want to get hired again, after all. And I've found that company president Hank Fishkind, an economist by training, is a mercenary of the first order.

When I started asking questions about the deal late last month, district spokeswoman Sara Howley told me that the Fishkind report proved the deal was kosher and that all I needed to do was put in a public records request for it.

I made the request on October 28 and was promptly stonewalled for two weeks. District CEO Wil Trower's assistant, Maryanne Wing, told me the report wasn't finalized. I informed Wing that draft reports were public information, but the district wouldn't budge. On November 12, I sent her a Florida Attorney General's opinion that stated point-blank that draft reports are public, and, later that day, they finally coughed up the study.

Only it wasn't a draft -- it was dated and signed on October 23, 2003, five days before I made the initial request. Gives you an idea how NBHD operates. It managed to lie, refuse to be accountable, and break public records laws all in one fell swoop.

Then I read the report and found that old Fishkind really outdid himself. The flimsy, seven-page study -- and I use that term loosely -- was clearly written from a developers' standpoint, rather than for taxpayers. He justified the deal by concluding that the $3.1 million annual lease seemed to represent a fair annual payment.

What he failed to mention was that the district -- which receives about $160 million in property tax dollars and $200 billion in federal Medicare/Medicaid funds -- was taking all of the risk associated with filling the building with tenants, otherwise known as "the hard part."

"The district has no construction or development cost risk," Fishkind wrote. "This is advantageous for the district, but it increases the risk to the developer."

Poor little developer. All such construction work must be bonded, though, so the developers aren't really taking much of a chance. Fishkind could have noted that the developers are taking a risk by paying to option the land, some of which has yet to be purchased. But that wouldn't have been true, either, because NBHD has quietly been handing Forman's partner, Murphy, some $25,000 a month to cover any option costs since March 2002. That's $525,000 so far -- and that money is gone whether they build the thing or not.

Worst of all, Fishkind never examined the unique way this project is being financed. Instead of taking a loan or floating bonds, the district is allowing the developers to play the role of financier. Had NBHD used a bank, the district could have owned the building outright in 20 or 30 years and paid a total of no more than $70 million instead of the $170 million it plans to pay Murphy and Stiles until 2060 or so.

District staff tell me they didn't want to finance the building traditionally because they feared it would affect NBHD's "A" credit rating.

That the district is so financially unsound it doesn't want to borrow money is no excuse to throw away $100 million to greedy developers. And if the office building is going to be such a big revenue generator -- as officials contend -- it would help the credit rating in the long run.

Fishkind, amazingly, didn't examine the crucial financing issue, writing only that the "unusual" 55-year lease was "advantageous to the district."

Because Fishkind offered no explanation for this fantastic conclusion, I called him about it. He abruptly hung up after a couple minutes, saying he didn't like the tenor of my questions. In lieu of his defense, I did some looking into his previous work and found that he has a long history of backing audacious developers' plans at the expense of the public.

Currently, he's best-known as a top cheerleader for the controversial plan by the St. Joe's Company to have state taxpayers finance a $210 million airport -- along with roads and infrastructure -- on its isolated property in the Panhandle. The plan stinks, but who cares? St. Joe pays Fishkind good U.S. currency.

Back in 2000, the Orlando Sentinel revealed that Fishkind wrote a report justifying an $84 million land price for a parcel actually appraised at just $8.8 million. According to the Sentinel, he was paid by a homeowners' governing district to conduct the study and, at the same time, was employed by the developer that was selling the land. Sweet.

Fishkind also sits on the governor's Council of Economic Advisors, which adds one more Bush connection to the MOB debacle. And it was general counsel William Scherer who recommended Fishkind's hiring -- the same Scherer who has strong business and political ties to Forman and Bush.

Fishy.

The good news is that the final contract hasn't been signed, so the MOB can still be rubbed out. Although there's no mass movement to kill it yet, the November 6 column generated some heat at last week's board meeting. A businessman named Roger Viele came to urge the board to kill the deal. Political activist Margaret Hostetter has written a flurry of letters denouncing the MOB to everyone from the governor to the commissioners. And the column also led Jane Kreimer, a long-time NBHD gadfly, to attend the meeting after a seven-month absence. The 80-year-old Pompano resident called me and said, "This thing makes me ashamed to be a Republican."

"Welcome back," Rodriguez said from the dais when he saw Kreimer, who admonished the board for its ties to Forman, among other things. At the end of the meeting, Rodriguez defended himself against my contention that a lobbyist shouldn't be chairing the district. "I think I bring something unique to this board," he said.

"You don't have to explain anything to us," Commissioner Steven Berrard consoled him.

Then Commissioner Cora Braynon piped in: "I believe it was a rapper who said, 'You can't touch this.' Well, you can't touch the North Broward Hospital District. We are tops!" Rah.

After the meeting, I tried to talk with district CEO Trower, who never returns my calls, about the deal. The mustachioed Trower, normally a mild bureaucrat, pointedly refused to shake my hand. "I'm not going to discuss it with you," he said, walking away. "You've had plenty of access to information, and you've chosen not to use it."

Hey, he may not be much of an administrator, but he's a master of irony.

Rodriguez, who actually seems to try to be accountable, said he was going to reevaluate the project. "Perhaps I didn't give [the MOB deal] the in-depth study that I could have," he said.

I dare say that none of the board members did -- and they were being fed information by an embezzling Forman business partner (Mahaney), a political insider with ties to Forman (Scherer), and the aforementioned Trower.

Regrettably, I failed to track down Scherer, who also doesn't return my calls. When I tried to find him, I learned that he'd already adjourned to a small cafeteria, where several commissioners and staffers eat together after every board gathering.

I tried to get into the cafeteria, which is in the hospital's executive suite of offices. The door was locked.


Sponsor Content