Miami-Dade County’s public housing office is investigating whether a developer with ties to the scandal-plagued Carlisle Development Group hid millions in existing funds for a Liberty City housing project in order to secure a superfluous multi-million-dollar county grant.
Atlantic Pacific Communities applied in late June for $3.3 million in county surtax funds for the second phase of its Seventh Avenue Transit Village. County records show the developer claimed to have $31.5 million already in hand or committed, and needed the grant to complete the $34.7 million project.
But the county recently became concerned that Atlantic Pacific omitted a newly secured $2 million city loan from its application as well as $2.6 million in funds that went unspent from the first phase of the project. Michael Liu, Miami-Dade’s head of public housing, says his department is now “investigating what appears to be a lack of disclosure of significant sources of funding for the project.”
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“As to intents and motives, we can't really discuss that or have an opinion on that at this point in time,” he said. “However, on its face, the $4.5 million that wasn’t included in the application, apparently, raises many questions as to whether this was more than just perhaps a slip of the pen or a scrivener’s error.”
In a statement Monday, an Atlantic Pacific spokeswoman said the developer has not been contacted by the county on the issue, and attributed any discrepancies to fluid financing and construction costs related to an increase in the number of housing units in the project. “Ultimately, whether we build 100 units or meet our goal of 134 units of affordable housing, all sources of financing and costs will be fully transparent to all parties,” spokeswoman Jessica Wade Pfeffer said.
The county probe comes at a highly political time for Atlantic Pacific, which is fighting to win a $287 million rebuild of Liberty Square, Miami’s oldest and most prominent public housing project. The Seventh Avenue Transit Village is located just five blocks to the east on 62nd Street.
The $4.5 million that wasn't included in the application raises many questions as to whether this was more than just perhaps a slip of the pen or a scrivener’s error.
Michael Liu, Miami-Dade public housing director
Atlantic Pacific won the top score in October from a Liberty Square selection committee, but concerns about one committee member’s scoring that skewed heavily toward Atlantic Pacific prompted a legal review that has delayed a recommendation to commissioners from Mayor Carlos Gimenez. Meanwhile, several county commissioners are supporting a proposal to have the county investigate past projects by entities tied to Carlisle Development Group, which transferred employees and four projects to Atlantic Pacific Companies in 2013 amid an investigation into tax credit fraud that prosecutors say netted two Carlisle executives millions in kickbacks.
“A number of those agencies may still be out there under another name with the same people involved,” Commissioner Barbara Jordan said last week during a committee hearing on the proposal. “We want to be sure the county is not being taken for a ride on any of those projects if those people have reconfigured themselves as another entity.”
Carlisle’s transfer of projects and employees to Atlantic Pacific was well known at the time, and reviewed and approved by Gimenez’s administration, the county inspector general and the federal housing authority. None of Carlisle’s employees who made the transfer were implicated in the federal fraud investigation, and the Seventh Avenue Transit Village was among the projects transferred.
I do know there's a lot of political maneuvering.
County Commissioner Audrey Edmonson
That’s why Commissioner Audrey Edmonson, who represents Liberty City and has been a big supporter of Carlisle’s projects, says the sudden scrutiny of the developer appears to be political.
“If there's something that’s found [to be wrong] I’ll be the first person to say ‘Let’s do this over again.’ But a lot of this is just rumors,” said Edmonson, who worries politics will delay affordable housing projects in Liberty City. “I do know there's a lot of political maneuvering in reference to Liberty Square.”
Atlantic Pacific’s biggest competitor to win the rebuild of Liberty Square, Related Urban Development Group, has picked up on the company’s troubles. Last week, Albert Dotson, an attorney and lobbyist representing Related’s affordable-housing arm, argued in a letter to the county’s housing department that questions about discrepancies in Atlantic Pacific’s Transit Village grant applications should be cause for concern given the developer’s ties to Carlisle. He also noted that the city of Miami — which tipped off the county to the discrepancies in Atlantic Pacific’s grant applications to the city and county — has declined to close on its $2 million loan after seeing the company’s latest financing for the project.
Still, city officials say it’s not unusual to pull back on a loan commitment after a developer’s costs and finances become more concrete and appear to show city funding is no longer needed.
Pfeffer, the Atlantic Pacific Communities spokeswoman, said the company has been vetted and remains transparent. She disputed that Jordan’s proposal even applied to the developer. “We would welcome the opportunity to review the particulars of the various subsidy applications we have submitted in the past year with the county,” she said.
Liu, the county’s housing director, said he’s doing his due diligence to ensure county funds are spent appropriately. He said a third party, whom he declined to name, is helping the county review the issue.
“Bottom line,” he said, “we just want to make sure the county's affordable housing resources are used in a way that we can maximize the number of units that are built and that are used fairly, and that there are no abuses to the program.”