Former U.S. Rep. Carrie Meek, who sponsored legislation creating Miami-Dade's affordable housing construction fund, is shown measuring a window frame at a Habitat for Humanity work site. She worries about the Housing Agency's use of the money. (Raul Rubiera/Miami Herald) Part 1 photos

OFFICE COMPLEX

Millions spent to house agency
The Housing Agency dipped into a fund meant to provide homes for poor people to build itself a new office complex.

While thousands of families scoured the county for an affordable place to live, the Miami-Dade Housing Agency funneled $5 million to a project that promised a 157,000-square-foot building in South Miami.

But it wouldn't house the poor.

The lucky tenant: the Housing Agency.

With the blessing of county commissioners, who have promised repeatedly to ease the county's dramatic affordable housing crisis, the Housing Agency in 2003 quietly financed a new office building by dipping into a pool of money set aside to put low-income families into homes.

Now, the project is more than 18 months behind schedule and an estimated $8 million over budget. Worse, the Housing Agency paid the $5 million -- but no office has been built.

"For them to be spending a scarce source of funds to house their own program, as opposed to housing poor people, is outrageous and quite possibly illegal," said Florida Legal Services attorney Charles Elsesser.

In 1999, Hometown Station Ltd. won the rights to build on land adjacent to the South Miami Metrorail station. Three years later, the Housing Agency chose the site for a new office complex. Hometown Station would build it, but developers asked for $5 million up front as an "equity investment."

To pay it, the Housing Agency dipped into the county's surtax fund, even though state law says counties can use the fund only to "help finance the construction, rehabilitation or purchase of housing for low-income families."

Surtax dollars, generated from taxes paid on commercial property sales, go to developers who build and renovate affordable housing or to low-income families that need mortgage loans to buy homes.

Assistant County Attorney Shannon Summerset defends the Housing Agency's decision, saying counties can use surtax money to cover administrative costs.

"You can't carry out the program without administrative dollars," she said.

But housing advocates say the money is clearly earmarked to buy homes for the poor -- not to finance a $27 million office complex for the government, replete with a bronze statue from Italy that cost just under $300,000.

"To have this money not being properly handled is a travesty," said former U.S. Rep. Carrie Meek, the Democrat from Liberty City who sponsored the legislation that created the surtax program. "Who said this money would be a relief act for the Housing Agency?"

Making matters worse: Years have passed and nothing has been built. Now, the project is stalled and county officials say they will ask the development team to return the $5 million.

Hometown Station's general partners include developers Otis Pitts and Raul Masvidal and a handful of limited partners, including developers Oscar Rivero and Alben Duffie, who are both involved in other troubled Housing Agency projects.

In a March 2006 e-mail obtained by The Miami Herald, Leland Salomon, of the county's General Services Administration, pointed out the county's lease agreement with Hometown Station demands that the money be used only for construction of the office complex.

Among other things, Salomon questioned why $60,000 was paid to Hometown Station's Masvidal for project supervision four months before the county ever agreed to the deal.

Salomon also asked why the Housing Agency's money went to pay expenses at the two parking garages on the site -- for maintenance, elevator work, cleaning services -- when Hometown Station gets paid by the county to maintain one of the garages and gets fees from drivers at the other.

Masvidal said he was paid in advance of the deal to cover the time he spent negotiating with banks, architects, engineers and the county.

He also claimed the deal allowed him to spend the county's money any way he saw fit. Masvidal points to Hometown Station's contract with the Bank of America, which provided the bulk of the money for the project. That contract, he said, allowed for spending on "other costs and expenses" relating to development.

He also said the bank oversaw the spending of the Housing Agency's $5 million, and that the county had approved a budget outlining the way the money would be spent.

But county officials say the lease with Masvidal is clear: The money must be used for construction.

Cynthia Curry, senior advisor to County Manager George Burgess, calls Hometown Station's spending "totally irresponsible."

Hometown Station disagreed: "The county approved the budget . . . and wired the money with that understanding. Why are they now questioning it?" said attorney George McArdle.

Pitts blames project delays on problems not disclosed by the county and last-minute changes made by the Housing Agency.

"Everyone loves you during the honeymoon, but when you find these conditions, somebody has to provide additional resources," he said.

Regardless, county officials insist the tax dollars were not spent properly.

"Clearly," Curry said, "the use of the $5 million was not within the context of construction."