The transfer of four multi-million dollar public-housing projects from Carlisle Development Group, which is under federal criminal investigation, to another private firm hiring 15 of Carlisle’s employees, can proceed, Miami-Dade County Mayor Carlos Gimenez said Tuesday.
His administration made no negative findings in its “due diligence” research of Atlantic|Pacific, the Miami-based builder that would take over the rental-apartment projects from Carlisle, which is suspected of defrauding the U.S. government over affordable-housing subsidies.
Miami-Dade will now seek approval from the Federal Transit Administration and the U.S. Department of Housing and Urban Development, which must sign off on the deal because some of the projects received federal funding.
“In all the information collected, no derogatory information was found as to Atlantic|Pacific,” Gimenez told commissioners in a memo Tuesday.
The review shed some light on the agreement between Atlantic|Pacific and Carlisle, which had to sell the four projects because it could not obtain private financing while it was under investigation, sources familiar with the agreement have told the Miami Herald.
As part of the sale, Atlantic|Pacific will hire 15 Carlisle employees with experience in affordable-housing development in general and in two projects, the Northside Transit Village in North-Central Dade and the Seventh Avenue Transit Village in Liberty City, in particular, according to Gimenez’s memo. The two other projects are Island Living in Overtown and Lincoln Gardens in Brownsville.
“We are very pleased with the results of the due-diligence review and excited to begin development on these properties in order to meet the needs of our community,” Randy Weisburd, Atlantic|Pacific’s chief operating officer, said in a statement Tuesday.
County commissioners voted for the transfer in September, with little scrutiny into Atlantic|Pacific’s ability to finance and oversee the projects, which have been partly financed by $48 million in taxpayer money and other government funds. The transfer was conditional on the results of the due-diligence review and approval from the federal agencies. The Miami-Dade inspector general is monitoring the deal.
The Herald revealed in May that a federal grand jury in Miami is investigating Carlisle, which is suspected of bilking the government by padding construction costs to generate higher tax credits. Carlisle’s attorney has said the company is cooperating and expects to be vindicated.
Commissioner Audrey Edmonson, who sponsored the transfer measure, said it was key for the county to complete its review quickly so federal agencies could weigh in and no project funding would be lost.
“I’m just happy that that’s behind us now, and we can move forward with these projects,” she said.
Gimenez said his administration reviewed public records as well as “voluminous” documentation provided by Atlantic|Pacific, including financial records, tax returns and the proposed agreement between the firm and Carlisle. While Atlantic|Pacific did not give the county a copy of that agreement, calling it confidential, it allowed the mayor’s and county attorney’s offices to review it in person.
The agreement showed “an arm’s length transaction” between the two companies, Gimenez’s memo said. The other records showed Atlantic|Pacific is financially sound, and its bank, Wells Fargo, confirmed it is preparing to close on the financing for the two transit village projects by the end of the year, the mayor wrote.
As for the 15 former Carlisle employees, they will bring knowledge on the projects they have already worked on, Gimenez wrote. He added that the county has reviewed documents provided by Carlisle related to the grand jury investigation.
“However, there has been no evidence presented to the County that any employee or other person at Atlantic|Pacific is under investigation or that any employee or other person moving from Carlisle to Atlantic|Pacific is under investigation,” Gimenez wrote. “In fact, an affidavit has been provided by Atlantic|Pacific attesting that they have no knowledge of any criminal investigation targeting any of the fifteen employees.”
At least 10 of the former Carlisle employees, including former vice presidents and project managers, were identified in the attachments to Gimenez’s memo.
None of them mentioned Carlisle in blurbs outlining their work experience.