A public corruption probe into a $1 billion deal to overhaul Miami Beachs Convention Center District may entangle a developer considered the front-runner to land the project.
Investigators want to know why CMC Group, run by one of South Floridas top high-rise developers, paid $25,000 to a firm headed by an ex-con suspected of working in cahoots with the citys purchasing director.
The purchasing director, whose job was to oversee the bidding, was forced to resign when city officials became concerned that he was possibly rigging the process by assembling his own development team.
Their concerns focused on the directors dealings with Walter Garcia, whose company, Peninsula Development, received the $25,000.
In a statement issued Friday, CMC Group acknowledged paying Garcias company for time and expenses that Peninsula said it incurred during a month of talks about forming a team to bid on the convention center project.
There were no further talks between Ugo Colombo, CMC Group founder, and Garcia after the latter mentioned his ties to members of Miami Beach city staff, according to the statement.
Garcia has been under criminal investigation since late March, when city officials discovered emails between Garcia and then-purchasing director Gus Lopez that suggested the two men were recruiting their own team to bid on the 52-acre redevelopment plan.
Among the correspondence: proposed contracts between Garcias company and third parties (CMC was not one of them), and a cost breakdown that included a projected $6.73 million consultants fee for Garcia.
Garcia and Lopez have denied wrongdoing, and neither has been charged. But an investment banker, Manny De Zarraga, told The Miami Herald that the men met with him to try and secure financing for the convention center redevelopment.
Lopezs bosses believed he leaked unreleased information about the project to Garcia, giving him an unfair advantage over competitors. They forced Lopez to resign on March 30 and handed over the emails to Miami Beach police, who weeks ago raided Lopezs home and Garcias office.
A CMC Group spokesman said the companys attorneys met with prosecutors to discuss Garcias Peninsula Development.
CMC Group is a central player in a highly touted team of bidders that includes Cirque du Soleil, Portman Holdings and the owner of Bal Harbour Shops. The group, called Portman-CMC, just received the highest score from the citys evaluation committee and was recommended as one of two viable redevelopment partners.
The city has proposed expanding the convention center, building an 800-room hotel, and possibly razing public structures including City Hall in favor of shops, condos, parks or restaurants. The idea is to transform an outdated facility into a world-class attraction in the heart of South Beach.
A vote by the Miami Beach City Commission on which teams make the final cut could come as soon as September.
CMC group maintains that its dealings involving the Miami Beach Convention Center are open and transparent.
But elected officials, while not condemning the development team, say investigators interest in the payments raises questions.
I dont think we should move forward if there is something wrong, said Mayor Matti Herrera Bower.
Colombo, the Ferrari-racing developer behind Epic Residences and Hotel in downtown Miami and the Grovenor House in Coconut Grove, spoke to The Miami Herald last week about his dealings with Garcia. At the time, he said he was unaware of any $25.000 payment.