Miami

Wynwood to get locally owned micro-brewery, with help from government loan

 

crabin@MiamiHerald.com

Wynwood soon will be home to a locally owned micro-brewery that is pledging to hire 12 employees and retrofit a building in the gentrifying Miami neighborhood.

And the consultant responsible for helping the start-up Wynwood Brewing Co. receive the city’s first Community Development Block Grant loan in more than a decade is Barbara Gomez, who six years ago lost her job in Miami directing the office of community development during a conflict-of-interest scandal. She was ultimately cleared.

Gomez earned $40,000 from the deal, which gives the father-and-son team who own the private brewing company a $420,000, seven-year interest-free loan with no payments the first two years. The loan funds come from the federal government.

Wynwood Brewing Co., which would be the neighborhood’s first micro-brewery, is owned by Luis C. Brignoni and his father, Luis G. Brignoni. They have promised to use the money to purchase equipment, including a truck, and to upgrade water lines. In its application for the loan, the company said it needed the money because of “unforeseen rehabilitation expenses to the main factory.”

The company, which is retrofitting a building at 565 NW 24th St., has also agreed to meet specific hiring conditions. It must hire 12 employees with salaries up to $14.42 an hour within two years, and more than half of them must be local residents.

The Brignonis also have agreed to forfeit equipment and or personal properties, including their homes, if they don’t meet the loan repayment requirements. No payments are due the first two years, then the loan is paid off in quarterly installments over the next five years with no interest.

It’s the first time Miami has given loans — instead of grants — since the crash and burn of Miami Capital in 1999, a private, nonprofit bank the city used as a go-between to lend federal block grant money. The city ended its association with the bank shortly after the FBI began an investigation that same year.

The city found Miami Capital had an excessive default rate of 37 percent, spent too much on expenses, didn’t thoroughly review loan documents, and failed to hold borrowers to the terms of the loan.

Now, Miami will oversee its own loan operations. Federal guidelines allow the city to lend the money at between zero and 3 percent interest.

With grants, if a recipient meets all the requirements, repayment is forgiven. Loans must be repaid.

Gomez, introduced to the Brignonis by former city commissioner and public relations executive Rosario Kennedy, helped the family fill out the loan application, the younger Brignoni said.

“That was pretty much the scope of her work,” Luis C. Brignoni said.

The application is a complicated 46 pages filled with biographies, a business plan, a breakdown of how the money will be spent, and spreadsheets of projected revenues and expenses.

Gomez wasn’t present during several meetings between the Brignonis and Commissioner Michelle Spence-Jones. The commissioner represents the Wynwood district.

George Mensah, the city’s community development director, and Spence-Jones’ chief of staff, Neil Shiver, said Mensah suggested the Brignonis seek the loan.

“Community development came up with the idea. They said if you qualify, this is what we can do,” Shiver said. “It’s a solid business plan and a good proposal.”

Mensah confirmed he suggested the plan. He and Gomez both said they see it as a win for the city, which can lend the federal funding out again after it’s paid back.

“The city lends it again and again. It helps everyone,” Gomez said.

In March, Miami was warned by the U.S. Department of Housing and Urban Development that if it didn’t spend its community development allotment soon, it could be cut off from more than $6 million in federal funding typically used to bolster anti-poverty programs.

Miami has since been spending the money, and Mensah said though he hasn’t heard directly from HUD, he believes the city is back on good footing with the federal agency because Miami received a significant allocation last week.

It’s the second time in recent months Gomez has successfully consulted with a private company on how to collect hundreds of thousands of dollars of public money from the city of Miami.

Less than three months ago, as reported in El Nuevo Herald, Gomez helped developer Ortelio Marcelo secure $563,212 from the city to build six affordable townhouse-style apartments called Parkview Apartments II.

In both instances, Gomez was welcomed by city managers who witnessed her tearful departure during a chaotic episode in 2007. That’s when a Miami Herald investigation detailed botched affordable housing projects, including loans that were not paid back for decades, and cronyism.

The Herald investigation reported that Gomez had steered more than $1 million in city contracts to companies that employed one of her ex-husbands within weeks of his release from federal prison, where he served time for drug smuggling and jumping bond. The investigation also found Gomez had funded a nonprofit that employed her son, and that she had misled HUD about the conflicts of interest.

Gomez was fired after refusing a demotion and salary cut. HUD determined a year later that there was insufficient evidence to charge her with a conflict of interest.

As for her involvement in getting the loan for the brewing company, which paid her fee, Miami Mayor Tomás Regalado called it “totally technical.”

“I don’t believe she got involved in the politics at all,” he said.

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