Roberto Datorre, longtime president/CEO of the Miami Beach Community Development Corporation, resigned earlier this month amid a city review that found “fiscal and operational discrepancies” — including $300,000 in double billing related to an affordable housing development.
Law enforcement and the U.S. Department of Housing and Urban Development have been involved in an investigation for months, according to a Dec. 16 memo written by City Manager Jimmy Morales and obtained by the Miami Herald on Friday.
On Dec. 5, Denis Russ, now the acting executive director of the CDC, informed the city administration that Datorre submitted his resignation effective immediately. Datorre had been the executive director for over a decade. Efforts to reach him on Friday were unsuccessful.
The CDC does housing and community redevelopment programs in Miami Beach. It is not a city agency, but through the city, it receives federal funds, including community development block grant (CDBG) dollars.
The city launched a review of CDC financial matters earlier this year. Two city officials quit and a third was fired — in addition to Datorre leaving the CDC.
Morales' memo stated that the CDC had been “unable to provide satisfactory explanations to issues raised” that related to the London House Apartments, an affordable housing development that is supposed to be completed in March.
The memo, sent to Mayor Philip Levine, stated “we hope to inform you of actions that may need to be considered in the coming weeks to safeguard certain City assets and funds.”
Levine said that Morales is “taking proactive steps to root out all corruption. … I’m sure the more we dig the more things we will find.”
According to Morales’ memo: in May, Anna Parekh, the city’s former director of Real Estate, Housing and Community Development, approached an employee and asked him to sign timesheets for the Neighborhood Stabilization Program — though he didn’t work for the program. Parekh was fired on May 23.
The Miami Herald wrote earlier this year that Parekh was fired after HUD notified the city that it hadn’t followed the timeline for spending $500,000 in federal HOME money.
On July 31, the city staff met with Rocio Soto, an employee in the housing and community development division who was asked why she and Parekh routinely processed reimbursement requests from the CDC without back-up documentation such as canceled checks. Some of her answers contradicted what the city found in emails; Soto quit after the meeting.
On Sept. 23, Brian Gillis, a community development specialist who administered the city’s CDBG program, submitted his immediate resignation.
The city review focused on discrepancies in invoices submitted by the CDC in 2011 and 2012 for a grant related to the London House Apartments. The apartments, located at 1965-1975 Washington Ave., were acquired using city redevelopment agency funds. Among the receipts submitted by the CDC were architectural and insurance costs that dated back four years before the execution of the city’s contract for funding.
After finding that HUD rules were not followed, city staff members met with representatives from HUD’s Miami office and told HUD that the city was working together with law enforcement. The Miami-Dade state attorney’s office and HUD are investigating.
City Commissioner Edward Tobin, who claims he often had urged more financial oversight of the CDC, said that HUD officials have been reviewing Miami Beach files for several months. Tobin said that Morales had told him he believed the review was “going in the direction of a criminal matter.”
Records show that the city reimbursed the CDC for expenses also paid by the Florida Housing Finance Corporation in the amount of almost $300,000, Morales’ memo stated. The city has asked the CDC to return the London House Apartments to the city.
The city had awarded about $1.3 million in neighborhood stabilization funds to the CDC, which has received about half that amount so far “and has yet to provide a full accounting of the funds advanced,” according to Morales’ memo. If the project isn't completed by March, HUD could deem the city in default. The total amount of liability the city faces — when all of the various federal pots of money toward the project are combined — is about $1.8 million.
CDC chair Jack Johnson responded to the allegations in a Dec. 20 letter to the mayor and commission. Johnson wrote that the allegations “are baseless and remain in dispute, we want to assure you that we are and will continue to cooperate fully with the City in inquiries regarding our organization and its work.”
Johnson’s letter did not make clear whether Datorre was asked to resign: “At its meeting of December 12th, the Board of Directors accepted the resignation of Roberto Datorre who served as President for some 14 years. This occurred in the course of Board — Executive performance review, evaluation and communication. The Board has established a committee to initiate the search for successor executive leadership.”
Johnson told the Miami Herald that it was a “mutual parting of the ways.”
Russ, the CDC’s community development director who took over as acting director, is one of the founders of the CDC and has been involved for decades. Russ told the Miami Herald that he had not been contacted by law enforcement.