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Empty lot for sale at the NW corner of SW 10th street and 1st avenue.(Walter Michot/Miami Herald)
Published: June 3, 2007
Developer resells land, doesn't build
One developer that received city funds to build affordable homes took a different road to making money -- reselling the property.
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Their mission is to help provide homes for people in Miami who can least afford them.

But with waiting lists for housing continuing to swell, one community development corporation funded by the city took advantage of skyrocketing real estate prices and flipped land at a hefty profit -- without building a single affordable home.

And another is poised to do the same.

In Allapattah, Jubilee Community Development Corp. spent $380,000 in city funds between 2000 and 2004 on a proposed 44-unit housing project called Pueblo del Sol. But Jubilee abandoned the project in 2005, selling the land that had cost $270,000 to a developer for $1.8 million. A trash-strewn lot is all that remains.

Four miles away, the East Little Havana Community Development Corp. started drawing $370,000 in city funds in 2004 for an 80-unit complex called Brickell View Terrace. But the group has decided to sell the land -- and now stands to reap a $3.5 million profit.

"The saddest thing I have to say is I'm not surprised," said Denise Perry, executive director of the Power U Center for Social Change. "These [community development corporations] establish themselves on the theory of being available to the people, like the people's access to development, and they turn those so-called good intentions into profit."

City housing director Barbara Gomez said she has created new policies to discourage other builders from flipping land. New contracts will require groups to pay a 6 percent penalty on city money if housing is not developed, and give the city a 20 percent cut of land-flip profits, she said.

Gomez also wants the city to bar groups that flip land from applying for new money for five years.

But because the city failed for years to create those policies, Jubilee and East Little Havana were allowed to draw down hundreds of thousands of dollars at a time when Miami struggled with one of the nation's most severe affordable-housing shortages.

Both groups defend the land sales, saying that rising construction costs made it difficult to build for the poor.

East Little Havana's executive director, Anita Rodriguez-Tejera, also said that unexpected cost overruns at another affordable project it was developing forced her to sell the land. She blamed the city and county for a lack of financial support.

"As a result," she said in an e-mail to The Miami Herald, "all development plans . . . were terminated."

Instead, she said, the group recently decided to partner with the for-profit Pinnacle Housing Group, which has proposed building 119 affordable rental units on the site.

Under the deal, Pinnacle would pay East Little Havana $3.7 million for the land, which cost the group $280,000 in 1998.

So far, however, nothing has been built -- Pinnacle is trying to win state housing money. East Little Havana has not returned the city's cash.

Jubilee, however, repaid the city $380,000 in July 2005 -- five years after the group started to draw city money. Jubilee also repaid $120,000 in overhead and salaries paid by the city.

It wasn't the first time Jubilee flipped land meant for affordable housing. In 2002, it received a $500,000 low-interest loan from the state for a proposed 63-unit project near Jackson Memorial Hospital.

Two years later, Jubilee sold the site, which cost $607,000, to a concrete-pumping magnate for $2.1 million.

Jubilee Executive Director Francis Gudorf would not comment.

Despite the land flip, a city loan committee awarded Jubilee another $866,000 in 2005 to complete an elderly-housing project in Overtown that's years behind schedule.

Gomez said she's fighting to stop Jubilee from drawing any of the new money until the group discloses how much it profited from the land flips.

Miami Herald staff writer Debbie Cenziper contributed to this report.

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