Bayside lease referendum a boon for Liberty City Trust

The Liberty City Community Revitalization Trust reports its spending to the city, but some leaders and wary watchers wanted more strings attached to the private money set to flow to the trust from Bayside.

07/05/2014 12:00 AM

07/05/2014 7:22 PM

When Miami voters head to the polls next month and consider a plan to expand Bayside and build a 1,000-foot tower on the edge of Biscayne Bay, they will also be voting on a deal to invest $20 million in the inner city.

Nothing on the ballot will say as much. But a last-minute agreement approved by the city commission and hashed out between Commissioner Keon Hardemon, the operators of Bayside and SkyRise Miami developer Jeff Berkowitz means that if voters grant Berkowitz his tower, the Liberty City Trust also gets millions.

Should the referendum pass, $200,000 annual payments will begin to flow from Bayside and Berkowitz to the city’s quasi-independent trust and continue throughout the life of the 99-year lease. Hardemon said the private money will fund affordable housing, development and the creation of jobs in a neighborhood torn by violence.

The commissioner, however, has faced criticism for not tying more strings to the dollars, given lingering allegations that previous contributions from Bayside to a separate minority-oriented non-profit were used as a “slush fund.” Meanwhile, the Liberty City Trust — controlled by a volunteer board on which Hardemon’s uncle sits as a member — is still putting distance behind its own troubled history.

In an interview last week, Hardemon said he negotiated funds on behalf of the trust because he believes the best use of Bayside’s money is in Liberty City, the community where he was raised. He said his faith in the organization has nothing to do with his uncle, Roy Hardemon, who was appointed to the board by a city manager long before the commissioner was elected in November.

“We need investment in the Liberty City area,” said Hardemon, who delayed the approval of key Bayside lease agreements last month to negotiate the deal. “Right now, we have carnage in Liberty City.”

The Liberty City Trust has been tasked with creating affordable homes and jobs and forging community bonds since it was established by the city in 2001. At one time, the organization had millions in assets, but today, city documents show that the organization lost most of its city funding and is cash-strapped.

“There’s very few dollars left,” said CEO and president Elaine Black.

At the moment, neither Black nor Hardemon said they have any specific plans on how the trust should spend the new-found money, should voters approve the Bayside lease. But Black says the trust has been successful when given the resources. In a presentation this fall, she told commissioners that the quasi-independent non-profit has fostered the development of 500 affordable housing units in Liberty City and helped place hundreds of people in homes in the neighborhood.

Still, the trust has its demons. Commissioners changed the group’s name in 2006 after its predecessor, the Model City Trust, was found by auditors to have mismanaged millions. Black says those were different times, and essentially a different organization. She says the trust no longer owns and sells properties, instead “facilitating” projects by working as a middle man with developers to help secure funding or permits, and works to ensure that jobs and homes are available to people in Liberty City.

But ahead of a vote last week to approve an agreement to steer annual payments to the trust, Commissioner Frank Carollo asked whether the city should establish stricter benchmarks for the trust’s spending, saying that the organization’s finances have been questionable in the past. Hardemon responded that such safeguards are already in place because the group has to report its finances to the city.

“There’s no villain in the language” of the deal, Hardemon said. “There’s no lack of responsibility.”

The trust, however, is wading into a financial relationship with Bayside that has its own murky history.

Since the 1980s, Bayside has contributed money to a minority participation organization linked to the city and established to issue loans to minority-owned businesses and dole out scholarships. The Miami Bayside Foundation has received millions through the partnership.

But in the mid-2000s, IRS filings show that the foundation was doing little with the money it received. Its spending during that time is the subject of an old but ongoing state attorney’s office investigation into whether money disappeared under a former executive director, Dwayne Wynn, who could not be reached for comment.

The Bayside Foundation will receive $350,000 a year from Bayside under a minority participation agreement that stands to benefit the trust. Current Chairman Nathan Kurland said the organization has moved past its troubles.

But former chairman Bob Powers says the non-profit was so broken when he was appointed to the foundation’s board that he couldn’t get Wynn to turn over foundation documents, including where its money was kept. Powers said he had to visit banks around Miami with an attorney’s letter to find the dollars.

Kurland said the foundation has no issues with the Liberty City Trust. But Powers said commissioners should have learned from the past about the need for safeguarding the money flowing from Bayside for public purposes. “What it’s going to be is a slush fund,” he said.

Hardemon, who plans to seek legislation limiting how much money can be used for executive salaries, says the money will be well spent. Black said everything the trust does is recorded, made public and presented to the city.

“We want to ensure the dollars are spent appropriately,” she said. “Every penny is accounted for.”

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