Homestead's quest to reopen an old bowling alley may end up costing the city.
This week, the city will vote on a plan to sell a piece of municipal property at one-fifth of its appraised value — in exchange for a guarantee that the property will serve as a bowling center for at least eight years. The eight-year pledge comes from a former Homestead mayor and county manager, Steve Shiver, who represents the buyers and has been involved in a number of controversial business dealings with the city over the years.
If this deal sounds unusual, the background is even more so.
Here is the history:
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The property in question is a dank, rat-infested facility bowling center at 111 S. Homestead Blvd. It ended up in city hands sometime after Hurricane Andrew caused havoc in Homestead in 1992. It has remained shuttered since the mid-2000s. Various attempts to reopen it have stalled.
Enter Shiver, who represents a company called Elite Real Estate investments.
Elite is offering $500,000 to buy the property and guarantee that it reopen as a bowling alley — which has been the city's stated desire — plus a fitness center and video arcade.
As an alternative, Elite has offered to pay $800,000 if it can do whatever it wants with the property.
The problem is the price. Not only is it far below the appraised value of $2.6 million as of 2012, but it is far below what the city needs to pay back its debt.
The bowling alley’s sale is tied to an unusual prior land deal involving the city’s Community Redevelopment Agency, 4.2 acres of depressed real estate and, coincidentally, Steve Shiver.
Back in 2007, Shiver persuaded the CRA to give him about $2 million for the 4.2 acres, known as the “shotgun property” because of the small, rundown shotgun-style houses that stood there.
The CRA, overseen by City Council members and funded through a special tax on properties in a portion of the city, didn’t have the money, but the parties came to a circular solution: The CRA would borrow the $2 million from the city, then, at some future date, the city would sell the bowling alley and give the proceeds to the CRA — which would in turn give it back to the city as repayment on the debt.
It’s as if you gave someone $20 who owed you that amount so that person could then pay the money back.
“That was the intent of the original transaction,” said City Attorney Richard Weiss.
Still, it seemed that it could work because of the property's high appraised value.
Unfortunately, the $500,000 offer on the table would leave the city about $1.5 million short of what it needs to give to the CRA in order to have the CRA pay the city back.
Although $500,000 is better than nothing, not everyone on the commission agrees that the transaction makes sense.
“I don’t think it’s a good deal for the city,” said Councilman Jon Burgess. He favors initiating a less restrictive bidding process that would allow developers to bring proposals that don’t involve bowling.
The proposal from Elite came up in December as the city was reeling from the arrest of its mayor, Steve Bateman, on still-pending corruption charges. At that time, Councilwoman Patricia Fairclough-McCormick pulled her initial support and called for the city to put out a formal solicitation. The city then asked for proposals, including the provision that the property would have bowling for at least eight years.
Elite principal Carlos Sanchez, who owns the Days Inn next to the bowling alley property, said at that time he did not plan on reapplying for the land. But he's back, and so is Shiver, using his contacts to push for the necessary support. A recent City Council vote on the proposal ended in a tie.
Shiver told the Miami Herald that Elite is simply putting forth a proposal that fits the city's criteria.
“They wanted to guarantee bowling for eight years,” he said. “We’re doing what the city asked.”
A 2010 audit of the CRA by the county ripped into its business practices, including several transactions involving Shiver. The shotgun-property purchase was among the items singled out.
After the CRA bought the land, it had to pay to relocate residents, and then it had to pay to raze the dilapidated housing. Several years later, the land still sits empty, and there has been no great clamor by would-be buyers to redevelop it amid Homestead's still-depressed real estate climate.
“I’m not going to go into the intricacies of that deal. That’s just not my topic,” said Shiver, when asked to review that history. “We’re here to give the city what they asked for.”
Should Homestead take the $500,000 offer, it would essentially be paying a subsidy to have bowling at a time when most bowling alleys have closed.
Burgess said he hasn’t sensed that residents are itching for bowling's return.
“If there was a strong bowling community,” he said. “I think we wouldn’t have had to close down the old one.”
This week’s City Council meeting, where the matter may be decided, is scheduled for 6 p.m. Wednesday at the William F. “Bill” Dickinson Community Center, 1601 N. Krome Ave.