Published: June 26, 2007Liberty City
Biotech bid stung Opa-locka
Before he pitched a biotech park for Liberty City, developer Dennis Stackhouse wooed Opa-locka with a similar dream -- and the city is paying.

Long before his companies received millions in poverty money for a floundering biopharmaceutical park in Liberty City, developer Dennis Stackhouse vowed to lure the trendy biotech industry to another distressed area of Miami-Dade County.

The city of Opa-locka sold land to Stackhouse's company in the heart of downtown at a bargain price -- $1 a square foot. Local leaders gave the company tax breaks worth hundreds of thousands of dollars. A county antipoverty task force kicked in $2.2 million.

Like the proposed Poinciana Biopharmaceutical Park in Liberty City, the Town Center building that Stackhouse constructed in Opa-locka was supposed to attract a biotech firm to the job-hungry community -- transforming its blighted downtown into a vibrant urban core, teeming with jobs, industry and more tax dollars.

But seven years after Stackhouse showed up in Opa-locka with elaborate plans and promises, there are few new jobs, little new tax revenue -- and no biotech firm, a Miami Herald investigation found.

In fact, Town Center remained mostly empty for the past three years -- until the Opa-locka City Commission decided to relocate City Hall there in March.

The cost to Opa-locka taxpayers: $400,000 a year in rent.

Meanwhile, Town Center's other tenants include:

• The nonprofit social-service agency of an Opa-locka city commissioner who voted to give Stackhouse's company tax breaks while her charity worked out of his building rent-free.

• A day-care center managed by a woman who pleaded no contest last year to defrauding the state's social-service agency.

• Former congresswoman Carrie Meek's foundation, which received free office space in the building.

With no biotech firm in Town Center, the city -- saddled with the highest millage rate in the county -- is slated to become Town Center's largest tenant and even looked into buying the building for an estimated $12 million, although the property is assessed at just $6 million, records show.

For the past three years, the four-story building with Moorish flourishes and accents has been the headquarters from which Stackhouse launched his efforts to gain commitments for more than $30 million in public money for his projects in Opa-locka and Liberty City.

''That rich man has received more from this community than any of the local businesses,'' said former Opa-locka City Commissioner Steve Barrett, whose wife runs a modest restaurant down the block.

Stackhouse arrived in South Florida on the heels of a bankruptcy case in Boston involving one of his businesses. The case lasted three years and involved more than $20 million in defaulted loans and debts.

In 2000, he founded a development company in Opa-locka, a city in North Miami-Dade, where street names and buildings are inspired by 1001 Arabian Nights and more than half of the residents live in poverty.

In September 1999, the Opa-locka City Commission voted to sell a 10,000-square-foot lot of ``surplus land . . . for the benefit of the City and to encourage economic development in the downtown area.''

It was supposed to be a catalyst for revitalization in a city that hadn't seen a major commercial development in 15 years.

Four months later, the City Commission approved the sale of the lot to a Stackhouse company for $1 a square foot after he proposed building a mixed-use development that would include retail space and badly needed affordable housing.

''Once the downtown is revitalized, that will radiate outside of the city,'' Stackhouse said in his application.

The project was supposed to create 30 jobs and generate $20,000 a year in taxes, records show.

But even before construction began, city commissioners eliminated that potential tax revenue by voting in 2002 to give Stackhouse a break on $250,000 in property taxes.

A year later, the developer dramatically altered his plan. Instead of a project that would include housing for the poor, he decided to build an office building.

He said the new development, called Town Center, would bring the lucrative biotech industry to the struggling city by attracting a Massachusetts-based firm called MediVector. Now, instead of 30 jobs, Stackhouse said he would create 70.

Based on the new plan, a county antipoverty task force chaired by U.S. Rep. Kendrick Meek gave Stackhouse a $2.2 million loan in 2004 for medical equipment to help lure MediVector to Opa-locka.

''Town Center is an integral part of the negotiations to bring MediVector, Inc., to Miami-Dade,'' wrote Kishore Rao, fiscal policy coordinator for the task force.

But MediVector didn't move to Opa-locka.

Stackhouse said that MediVector had a contract with Eli Lilly -- a multibillion-dollar pharmaceutical company -- to work on drug trials but that the deal had fallen through. That prevented MediVector from making the move, he said.

MediVector's president, Api Rudich, would not respond to questions.

USE OF COUNTY FUNDS

With MediVector out of the picture, Stackhouse used the county's money instead to pay down a $1 million construction loan for Town Center, an additional $800,000 for direct construction costs, and $100,000 on lawyers and consultants -- including Opa-locka's former Assistant City Manager Ed Brown, who received $25,000 from the Town Center project, according to receipts that Stackhouse submitted to the county.

For the past year, Stackhouse's company has failed to make payments on the loan and owes Miami-Dade $140,000, records show.

His company also has more than $50,000 in federal tax liens on the building because he hasn't been paying his employment taxes, records show.

Now, three years later, he says MediVector will anchor the biopharmaceutical park two miles away in Liberty City.

When the building in Opa-locka finally opened in 2003 -- nearly four years after Stackhouse's company acquired the land -- more than 60 percent of it was vacant, although he claimed when he applied for the county loan that the building was 92 percent preleased.

The largest tenant when it opened was a preexisting day-care center managed by a woman who would later plead no contest to charges that she reaped thousands more in state dollars by inflating the number of children in her care.

Because Stackhouse failed to attract new businesses to Opa-locka, then-Vice Mayor Terence Pinder moved to rescind the lucrative tax breaks for Town Center.

But Pinder was overruled in a 2-2 vote in 2005.

Voting in favor of Stackhouse's company: City Commissioner Dorothy ''Dottie'' Johnson, whose nonprofit had been receiving free rent in Town Center for months.

AN ETHICS FINDING

The Miami-Dade Commission on Ethics and Public Trust found that Johnson violated county ethics rules by voting in favor of the tax breaks while receiving free rent, but the commission didn't take formal action because it had allowed her to cast a previous vote related to zoning for Town Center.

Johnson said she assumed that the commission's ruling on the zoning issue applied to all votes she would cast related to Town Center. She said she didn't see a conflict of interest in her vote on the tax breaks because she had not taken a salary from the nonprofit or held a vote on its governing board.

''I'm a tenant just like everyone else,'' Johnson said at the time.

According to canceled checks and Ethics Commission files, Johnson's nonprofit social-service agency also received three $600 checks dated the same day from 1010 Massachusetts Avenue, LLC., one of Stackhouse's companies.

In an interview with an Ethics Commission investigator, Stackhouse was evasive about his involvement with the company.

''He did say he was familiar with the entity 1010 Massachusetts Avenue, LLC . . . but refused to elaborate,'' the investigator's notes say. ``He denied 1010 Massachusetts was affiliated with Town Center or its employees.''

According to corporate records and court documents from Massachusetts, however, Stackhouse is the sole officer of 1010 Massachusetts Avenue, LLC.

The same company, along with a handful of other entities controlled by Stackhouse, donated tens of thousands of dollars to Opa-locka politicians since 2002 -- including nearly $10,000 to Mayor Joseph Kelly, who was elected last November, and more than $4,000 to Johnson, who is now vice mayor.

Now, instead of spawning new industry and dozens of jobs, Town Center is home to Opa-locka's City Hall, the largest tenant in the building.

Last October, Johnson -- the commissioner who received free rent from Stackhouse's company -- sponsored a resolution to move City Hall to Town Center. The measure also included an option to purchase the building for an estimated $12 million. It passed unanimously.

Johnson declined to comment.

Mayor Kelly said the city's interest in purchasing the building is on hold while the city waits to see the impact of tax cuts proposed in Tallahassee. But he said the city has benefited from relocating to Town Center because it needed the space and the maintenance cost at the old City Hall was too high.

He also pointed out that a public library opened in Town Center recently and said that has created educational opportunities for residents.

''I just want to make sure that citizens get the best services for the money,'' he said.

Opa-locka's former mayor, John Riley, who received two $500 contributions from Stackhouse's companies in 2002, said Stackhouse quickly became a power player in the city.

''For a person who has been here for such a short time, Stackhouse has got a lot of politicians in his corner,'' Riley said.

Miami Herald staff writer Robert Samuels contributed to this report.