Incentivize This

In Hollywood, developers profit. You pay.

Say you want to build high-rise luxury condos with some shops downtown. Say the city is planning an $11 million cultural project next door as a draw for your development. Now say the city offers you $2 million to help get it jump-started and $8.1 million for the parking garage you're going to need. Oh, and if the venture fails, you'll get another $1 million just to make sure it was worth your while.

Or how about this: You can put up condos on another prime piece of downtown land and the city promises to waive $500,000 in permit fees and will hand you $6 million in cold cash just for finishing the project.

Get a shovel, you say. Let's break ground.

These deals are just two examples of development plans that the Hollywood City Commission has preliminarily approved for Young Circle. On four projects currently planned for the circle, the charitable city will give away nearly $28 million in incentives to developers. The risk involved in those ventures falls to the taxpayers, of course.

A small cadre of entrepreneurs will benefit, most of them clients of the fellow whom I affectionately think of as the Gordon Gekko of Hollywood, lawyer-lobbyist Alan Koslow. Complete with the dark slicked-back hair, he's a partner of Becker & Poliakoff, a law firm that bankrolls political campaigns and also serves as the paid lobbyist for the city.

But Broward County Administrator Roger Desjarlais is threatening to ruin the fun. A lot of the money to enrich Koslow's clients comes from Hollywood's Community Redevelopment Agency, which is funded primarily with county property-tax dollars (about $2 million a year). Desjarlais apparently doesn't believe greed is good. Or perhaps the administrator is himself driven by Gekko's ghost and just wants more money for the county empire. Desjarlais has long sought more control over development dollars, and it's no secret the county covets the millions in property-tax dollars that the new high-rise Diplomat Hotel on the beach will pay the CRA.

Whatever the motive, Desjarlais has taken aim squarely at Hollywood's CRA. Back in March, the County Commission approved the administrator's plan to audit all nine CRAs in Broward County. Hollywood was number one on the most-wanted list.

In a June 19 report, County Auditor Norman Thabit slammed Hollywood's CRA. He found that the city had broken several rules, including failure to file required paperwork and the hiring of two directors, who make about $262,000 between them.

Thabit, without going into much detail, also criticized the city for giving away too much CRA money to developers. He cited the Florida Constitution, which forbids public entities from benefiting private companies "when the public is only incidentally benefited."

Rather than call for specific sanctions against Hollywood, Thabit urged the County Commission to lobby the legislature to restrict the use of CRA funds to aid private development. Such a law may sound fundamental, but in Florida, where providing outrageous favors to dubious developers has become a time-honored, almost religious tradition, it's radical stuff.

Hollywood is ponying up a posse to attack the audit. Mayor Mara Giulianti promises that the city's lawyers will prove the report is a pile of bunk. "The county has spent hundreds of millions in incentives," Giulianti said. "So for the county to say that to us seems disingenuous to me."

It's an interesting point, but it's also a logical dead end. The mayor seems to have missed a lesson, something about two wrongs.

And there is no denying that Hollywood right now is the incentive king for development. Here are four examples of high-rise projects, all including luxury housing units and retail space, already approved:

Jefferson at Young Circle. Texas developer JPI completed this $70 million project last fall. Hollywood subsidized the project to the tune of about $4 million. The city also borrowed an additional $2.5 million to help pay for a $6.5 million, 645-space parking garage at the site. Hollywood got 210 spaces, which doesn't sound so bad until you consider that the property already had a 221-space city parking lot. So the city, in effect, paid $2.5 million to lose 11 spaces.

La Piazza II. This project, by developer Steve Berman, includes 500 condos in the northwest quadrant of Young Circle. Hollywood has offered to pay Berman $8.1 million to build a parking garage. Of the 670 spaces, the city will get a mere 170 (which means Berman will benefit to the tune of about $6 million). The CRA will also pay Berman $2 million cash. If the project isn't successful, the city agrees to give him $1 million for his trouble. Final approval for the project is expected July 15.

Young Circle Commons. This $50 million project will include luxury condos, retail space, and a parking garage where the historic Great Southern Hotel now stands. Incentives to the developer, Miami-based Southern Facilities Development, include at least $600,000 for land, $1 million in permit fees and utility improvements, and $3.8 million cash upon completion.

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Bob Norman
Contact: Bob Norman