‘We’ll have to sort this out.’ $10 deal for $10M in county housing land may get smaller

For the price of $10, Miami-Dade commissioners this week agreed to transfer 32 county-owned lots worth $9.8 million to a developer for building affordable-housing projects.

The strategy behind the near giveaway to a non-profit partner of longtime developer Palmetto Homes isn’t new: Miami-Dade has given away hundreds of surplus lots over the years to developers under deals that let the county take back the land if no low-priced homes get built on them. Once built, the homes must be sold under county rules that cap prices at $205,000 and limit buyers’ incomes.

Yet the size and value of the portfolio up for a transfer Tuesday caused a stir, with some lots valued on county tax rolls at more than $1 million. “These aren’t the little smaller properties that we’re talking about,” said Commissioner Jose “Pepe” Diaz. “These are massive, big properties.... This is a lot of money.”

After the Miami Herald reported on the value of the portfolio, which wasn’t included in the legislative package given commissioners Tuesday, Diaz said he regretted supporting the sale. “I did not know it was nine-point-something million dollars,” he told commissioners during a meeting Thursday. “Honestly, I wish I could have voted no at this point.”

Audrey Edmonson, the outgoing chairwoman of the County Commission who sponsored the legislation behind the sale, said it didn’t make sense to single out this deal for scrutiny since the county gives away land for less vital needs than affordable housing.

“When it comes down to affordable housing, that’s something we need in this community. I’m doing my best to get it done,” she said.

Documents and interviews show a bumpy process for clearing the nearly three dozen lots being sold under a proposal sponsored by Audrey Edmonson, the outgoing chairwoman of the commission. A memo from the county’s Internal Services Department asking if other agencies had use for any of the parcels was only circulated the afternoon of Oct. 1, leaving two full business days before Tuesday’s vote.

“We typically give more notice,” Tara Smith, the county’s Internal Services director under Mayor Carlos Gimenez, said in an email. “This item was prepared by the County Attorney’s office... and we did not receive enough notification from them to allow more time.”

Even though, Smith said the county has transferred valuable surplus land in the past in the name of affordable housing. “When I see high-value properties conveyed for affordable housing, I’m not surprised,” she said. “Where there are opportunities for county properties to be used for affordable housing, they’re used.”

Emails released Thursday through a records request show county lawyers wrote Internal Services with the list of 32 properties Sept. 18, about two weeks before the memo went out to county departments. The county’s Public Housing Department scrambled after the vote to have one of the $1 million properties dropped from the deal, since they’re tied in federal regulations governing former public-housing sites.

“There was a transfer yesterday that could prove to be exceptionally problematic,” Darrell Davis, a division director at the agency, wrote assistant county attorney Shannon Summerset-Williams on Wednesday morning. “Your immediate response would be appreciated.

Housing Director Michael Liu said one of the most prime pieces of property in the portfolio — a two-acre lot at 2828 NW 23rd Avenue in Miami’s Allapattah neighborhood and valued at $1.2 million — shouldn’t have been included in the legislation. That vacant parcel once held part of the Elizabeth Virrick housing complex, funded by federal dollars, Liu said the federal Department of Housing and Urban Development would need to approve its transfer to another owner.

“You can’t give it away for 10 bucks,” he said. We’ll have to sort this out.” Two other parcels in the portfolio face similar challenges, with a combined value of about $2.7 million. Removing them would bring the value of the portfolio down to about $7 million.

Along with skipping the standard two-week notice for county departments, Miami-Dade also opted not to comply with public-notice requirements for the pending sales. Those require signs be posted on properties notifying neighbors of a potential housing development on them, but commissioners waived that rule as part of the Edmonson legislation that passed unanimously. The county did advertise the hearing that was held before commissioners voted to transfer the land.

In an Aug. 17 letter to Edmonson, Palmetto executive Tashala Knowles asked to obtain the 32 lots, which are scattered across Edmonson’s district in the northern part of Miami and the neighborhoods north of the city. Knowles outlined plans to convert the unused land into a series of three-bedroom, two-bath houses and some apartment complexes that, along with being affordable, would meet state energy-efficiency standards to be declared “green buildings.”

“This project will create desperately needed housing and home ownership with the county,” Knowles wrote. “Additionally, this project will create a plethora of jobs and apprenticeship programs for the residents and business by hiring small and community-based contractors and small businesses within the county.”

Launched in 1995, Palmetto has been involved in past affordable-housing projects. That includes Overtown’s 11-story Island Living apartment complex, which opened in 2016 as a project by Atlantic Pacific, one of the county’s largest affordable-housing developers.

Barbara Jordan, a county commissioner representing Miami Gardens, praised Palmetto before Tuesday’s votes for homes built in her district. “The quality of the development is outstanding,” she said. Knowles was not available for an interview Wednesday.

In an interview, Edmonson said it was unfair for the Palmetto deal to get more scrutiny in a county government that has sold land in no-bid deals in the past — to affordable-housing developers, but also to the David Beckham soccer group, businesses and non-profits.

“They were giving away multimillion-dollar parcels to the Cuban Museum,” Edmonson said, referring to a 2014 commission vote endorsing a museum dedicated to Cuban exiles on waterfront county land behind the AmericanAirlines Arena. Edmonson opposed the museum plan, which remains stalled.

“What’s the difference?” Edmonson said Wednesday, referring to the museum land. “Because it’s me?”

Most of the lots in the Palmetto portfolio resemble the small parcels of county-owned land that Miami-Dade typically offers to developers in $10 deals, such as a 1,000-square-foot parcel off Northwest 62nd Avenue valued at $11,693.

Developers bear the expense of getting them ready to build, including electricity and water hook-ups. They’re free to keep the profit on a sale, but county regulations cap prices at $205,000 and buyers can’t earn more than 20% over the county’s median income (currently about $59,100). If nothing gets built within two years, Miami-Dade can take back the land.

“All of those [properties] have reverter clauses,” Commissioner Rebeca Sosa said during Tuesday’s meeting. “That’s the best protection we have.”

The portfolio included four properties valued at more than $1 million by the county’s property appraiser. That included a 14,000-square-foot vacant lot in Wynwood, one of Miami’s fastest-growing entertainment spots. While smaller lots can be used for single-family homes, Palmetto can convert larger lots to apartment complexes offering moderate-rent units under a county program restricting how much landlords can charge when building on county land.

Housing advocates have pushed Miami-Dade to be quicker in converting surplus land to affordable housing, noting many of the parcels handed out in $10 deals languish as builders receive multiple two-year extensions to launch construction. With commissioners holding sway over how land is disposed of in the 13 districts, advocates see Miami-Dade’s land inventory as ripe for a more open, competitive process that would let developers compete to show their ability to deliver.

‘There’s no doubt public land needs to be used for affordable housing, and it’s got to be expedited because we can’t wait,” said Annie Lord, executive director of Miami Homes for All. “If we have greater transparency, and if there is a unified strategy of what to do with public land, I think there’s a lot we can do to maximize it.”

Though Diaz raised objections about the proposal Tuesday, he voted for it that day and said he only was asking questions to make sure county land in his district in the Doral area could be transferred as quickly.

Edmonson, who leaves office in November because of county term-limit rules, said she didn’t object to the questions from Diaz, who remains in office through 2022.

“OK, Commissioner Diaz, you can go ahead and make sure they treat you the same way in your district that they’re treating me,” Edmonson said Tuesday. “I understand what you were saying.”

This story was originally published October 7, 2020 at 8:22 PM.