A company represented by Homestead’s former mayor is negotiating to reopen the city’s long-shuttered bowling alley, which is now dark, vandalized, stinking of mold and riddled with rats.
The company proposes to pay one-fifth the value of the land, as determined in an appraisal one year ago.
And yet, with a 3-2 vote, the City Council last month directed City Manager George Gretsas to negotiate a contract with Elite Real Estate Investments, one of three companies vying for the property at 111 S. Homestead Blvd.
Elite Real Estate is represented by Steve Shiver, who is not only a former mayor but a former Miami-Dade County manager.
The property is tied in with a previous, controversial land deal that also involved Shiver.
In a much-criticized transaction, Shiver convinced a previous City Council, acting as the Community Redevelopment Agency, to buy a patch of dilapidated housing in the city’s depressed southwest section from him for $1.9 million. To cover the cost of the real estate, the CRA borrowed money from the city.
The repayment plan was highly unusual: The city said it would sell the bowling alley, hand the proceeds over to the CRA and then the CRA would use that money to repay the city.
To make the city whole, the bowling alley would have to sell for at least $1.9 million.
Now, Shiver has stepped forward as a representative for the potential buyer of the bowling lanes, although for far less than $1.9 million.
In its initial bid, subject to negotiation, the company offered $500,000 in cash with a $50,000 deposit, according to city records.
Elite has proposed an ambitious plan to renovate the bowling alley and run it as a recreation complex in conjunction with the adjacent Days Inn. The company’s plans include bowling lanes, a restaurant, a fitness center and a video arcade.
“The person most vested in the success of your property would be the person most vested in the property next door,” Shiver told the council.
Carlos Sanchez, a surgeon and also Elite’s owner, also owns the adjacent Days Inn.
The council took the decision at its October Committee of the Whole meeting.
The vote, however, was not a final decision to sell the alley to Elite. Rather, the council directed staff to negotiate a contract with the company. The agreement will come back for approval at a date to be announced.
Vice Mayor Stephen Shelley and Councilman Jon Burgess cast the two dissenting votes.
“I am still not satisfied with the purchase prices,” said Shelley before the vote was taken. “I don’t want this to be seen as a land grab.”
A 2012 report by Quinlivan Appraisal pegged the bowling alley’s value at $2.6 million.
Burgess said that $2.6 million “would probably be $3 million today” because Homestead values are rising after years of decline.
Councilwoman Judy Waldman disagreed, noting that the appraisal was based on the most profitable use of the property, which is not as a bowling alley.
“The building has just been sitting there and every day and every year that goes by, we are just losing more and more money,” said Waldman. “When you restrict a property for a certain purpose, that price is not going to be the same price if you just put anything on that property.”
The other companies vying to scoop up the 4.5-acre property were The Approach Entertainment Center and KSY Family Irrevocable Trust. Approach proposed to buy the site for $850,000, city records show.
KSY offered $500,000 with the sweetener that the city would retain a 20 percent interest in the property, according to city records.
Council members who voted in favor of Elite gave varying reasons: Waldman said she was not confident Approach has the financing for the project; Patricia Fairclough-McCormick said Elite plans a comprehensive recreational facility that will include more than bowling alleys, and the company also has the needed money to buy and renovate the property.
Through the years, Homestead has made several unsuccessful attempts to sell the property. One developer pulled out of the project likely because the rat-infested and repeatedly vandalized building needs a lot of work.
The bowling alley would seem to have been ill-fated from the beginning. About a year after it was built, Hurricane Andrew destroyed it. Although it reopened later, it has been shuttered since at least 2007.
In discussing the proposed deal with council members, Gretsas emphasized that the money was far less than the city needed to pay back the loan for borrowing the shotgun property.
“Your books basically say, somebody owes you $2 million, so if you sell it for $500,000, you are short that $1.5 million,“ Gretsas told the council at the October meeting. “The two pockets here, the left and the right pockets, they are both your pockets.”
He added: “I think it might be an easier thing to ask yourself the question, ‘How much are you willing to subsidize bowling for?’”