Hollywood's Got the Bends

For all the talk of political revolution, Hollywood's April 2 city commission was heading in the same direction as during the glory days of deposed Mayor Mara Giulianti: toward giving a developer a boatload of incentives and zoning concessions, despite a slew of unresolved problems.

The project is ArtsPark Village, a 25-story, mixed-use monstrosity that could dominate Young Circle for decades to come. It rose from the ashes of the Hollywood Art District (HART), the condo complex-theater-charter school that set a new standard for publicly funded money-pits in a city already famous for them.

Adding to the instant nostalgia at the meeting was Alan Koslow, the highly connected attorney who had shepherded so many other incentive-rich projects through Hollywood's approvals process. Koslow was speaking for Miami developer WSG, which wants to build ArtsPark Village. He was joined by old Giulianti ally Dick Blattner, a commissioner; Blattner savaged city staffers – the city manager, the planning director – who had failed to endorse the project, even though the commission had a four-vote majority in favor of it. "This should never happen again," Blattner said.

Blattner and others in the majority turned to City Manager Cameron Benson, asking him to use the Economic Development Roundtable, a panel of planning experts, to persuade WSG to make costly changes to its plans. Specifically, they wanted WSG to finally address residents' fears that ArtsPark Village was too tall, that it was not set back far enough from surrounding streets, that it lacked adequate parking, and that it was nothing more than the city's latest boondoggle.

But WSG had already considered and rejected such changes, which would have cut into the developer's profits. Besides, the developer had the votes to get the most profitable version of the project approved. If the city had adopted a set of zoning guidelines years ago, Benson and his staff might have been able to prevent this project from reaching Goliath proportions. Now it was too late. He was being sent on a fool's errand. The meeting, entering its seventh hour, was a farce.

Just after midnight, Benson cleared his throat. "I have to say this, get it off my chest," he began. The city gave him orders but no negotiating tools, he said. "There's no leverage, nothing to hang our hats on when we go to the table to negotiate this project."

Benson continued, "There was a history of what was supposed to happen" – he waved a fistful of papers, the zoning codes that were never adopted – "and if this didn't happen it would put you as a commission into a bad situation. That happened yesterday and is now floating over into the new day... I knew that this day was going to come, and you know what? No one listened to me."

They weren't going to start now. A moment later, commissioners voted in favor of the embattled project.

It's hard to say exactly when Hollywood's downtown redevelopment plan took a wrong turn, but the last time it seemed to be on the right track was 1998. That's the year the D.C.-based Urban Land Institute unveiled a study that called for a low-rise, pedestrian-friendly downtown in Hollywood, with no parking meters or big-box retail stores, like the Publix that has blighted Young Circle for decades. That study got a standing ovation from community activists. "Why didn't they hire these people 10 years ago?" one observer asked the Sun-Sentinel.

Now, 10 years later, the question is why the study by ULI – which has since orchestrated downtown revivals in Charlotte, N.C., Bridgeport, Conn., and San Bernardino, Calif. – was so casually dismissed. The person most qualified to answer, former Hollywood mayor Giulianti, did not respond to questions.

It was Giulianti who in 2003 embraced another downtown vision, by Miami architect Bernard Zyscovich, who was more willing to accommodate high-rise condos. Still, the Zyscovich plan provided at least a way to forge the zoning codes that Benson needed to keep developers at bay. Without them, commissioners essentially took the place of experts in negotiating with developers. Not only were the commissioners less qualified, they were also susceptible to the influence of campaign contributors, among others.

Against this backdrop, it's easier to understand the sequence of blunders that occurred next. Acting as the Community Redevelopment Agency, commissioners approved plans for HART by a developer named Gary Posner, who had never attempted a project nearly that big, and Patricia Peretz, whose primary qualification appeared to be having known Giulianti from working at the Hollywood Arts and Cultural Center. The city gave the pair millions in incentives and loans.

The ink had barely dried on the development agreement when Posner started knocking down walls at the Home building – without the consent of condo owners, who sued. Then HART purchased the Hollywood Bread Building's parking garage from a seller who wasn't the clear owner, prompting another lawsuit.

In 2004, Posner told the city he couldn't afford to build a new theater, which was one of the primary selling points of the project. He then missed the first deadline to pay back the city's loans. Posner's legal bills were rising, as were South Florida construction costs, at the same time the Florida condo market took a nosedive.

In 2006, HART finally went broke. The development group would not be paying the city back $3.5 million in loans. Only then did it become apparent that Posner and his partners had failed to get first mortgages on structures that were part of the project, despite having been loaned $1.6 million in CRA funds for that very purpose. So with those properties headed toward foreclosure, the city was in jeopardy of losing its investment altogether, not to mention control of the site's future use.

In this panicked state, Hollywood's Community Redevelopment Agency entered negotiations with the new developer WSG, leading to a May 2007 agreement for the firm to buy out Posner's group and pay back the city's $3.5 million loans, in exchange for which it would win exemptions from city zoning guidelines and collect 90 percent of the tax revenue generated by the project over the next 15 years – a figure that projects to $14.4 million based on current property tax rates.

At the April 2 commission meeting, WSG lobbyist Koslow cast his clients as heroes who only wanted a bit of profit in return for having rescued the city. For WSG to get that profit, the city would have to accept a project that was taller than what it had wanted, with less parking and smaller setbacks.

If it seems as though WSG has Hollywood over a barrel, it's not alone. The city is in a similar position with the Hollywood Academy of Arts and Science, the charter school that currently occupies the Home building's first three floors and is the last remnant of the HART project. The school was promised a new building on the same block when ArtsPark Village went forward, but charter school officials rejected other sites as financially troubled.

Hollywood schools were under-enrolled before the Hollywood Academy of Arts and Science was formed. Now the charter school looks like a luxury for a cash-strapped city. But if it's extravagant, it's also well connected: It's managed by the for-profit, Fort Lauderdale-based corporation Charter Schools USA, whose officers include prominent Broward County Republicans such as former county party chair Shane Strum and G.O.P. operative and Bush family friend Art Kennedy. When safety standards threatened the school's 2004 opening, a Republican-sponsored bill exempting charter schools from the safety standard was rushed through the state legislature and signed into law in the nick of time for the school's grand opening.

How a Republican school outfit wrangled a promised gift of land worth an estimated $9 million, without competition from other charter school operators, in a city controlled by Democrats, seems destined to be another Hollywood mystery. Giulianti, a Democrat, isn't talking. She's no more available to explain why the city is paying Posner's failed HART group $270,000 a year to run the same school through 2013.

Neil Fritz, the director of Hollywood's downtown Community Redevelopment Agency, said "it's not in the city's interest" to stop those payments, but declined to say why. Instead, he referred New Times to acting Hollywood attorney Alan Fallik, who said such a move could lead to HART suing the CRA.

In effect, Fallik said, the CRA told HART, "We're not going to hold you responsible" – for having broken your contract and squandered millions of city tax dollars – "as long as WSG performs."

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Thomas Francis