As a former Miami city official, politically connected construction consultant Ola Aluko boasts years of experience putting together complex development deals and handling millions in government grants.
But in one small land deal that turned a six-figure profit, Aluko’s role was curiously obscured.
A few years back, he bought a small tract of vacant land in Overtown for $39,000, creating a shell company to do it. Six months later, the shell company filed paperwork installing a new manager — a 23-year-old Miami woman. The next day, the company flipped the parcel for $150,000.
The new buyer?
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St. John Community Development Corporation, a venerated Miami nonprofit — whose president happens to be Aluko. Today, St. John is pursuing a tax-subsidized affordable housing project on the site.
The sale of the parcel at 1643 NW First Ct. underscores the blurred lines between Aluko the businessman and Aluko the head of a prominent nonprofit developer in one of Miami’s poorest neighborhoods. It’s a role he has used to obtain millions in government money for St. John CDC, which in turn has paid his consulting firm hundreds of thousands of dollars over the past six years.
The revelation of the land deal comes one month after the Miami Herald chronicled St. John and Aluko’s role in Town Park Plaza North, a troubled taxpayer-funded condo renovation project in Overtown.
St. John’s board chairman insists Aluko made no money off the sale because he gave the profits back — only after board members learned about his purchase of the land. Still, public-corruption investigators came knocking more than one year ago and their probe remains ongoing, the Miami Herald has learned.
Aluko did not return repeated calls and e-mails from the Miami Herald for this story.
Meanwhile, the land remains vacant.
Earlier this year, Aluko requested nearly $6 million in public funding for a 24-unit apartment complex dubbed St. John Village Homes II from Miami’s Omni Community Redevelopment Agency. The city-affiliated agency, which invests taxpayer money into combating slum and blight, has not committed any funds, but close to $1 million in federal and county surtax dollars have been separately allocated to it.
The land is part of seven parcels along Northwest First Court that St. John hopes to one day turn into housing.
St. John had for years been trying to buy the parcels that make up most of the block.
County records show that in October 2012 Aluko used his name to create a limited liability company called 1643 NW 1st Ct., which is the address of the purchased lot. Aluko was listed as the registered agent and the shell company’s mailing address comes back to a West Kendall Mail Mart, a private mail service company.
Weeks later, the shell company bought the property for $39,000 from Sabrina Jackson, a former Miami police officer, and her husband, who were getting divorced. Neither could be reached for comment.
Forming LLCs to buy land is not unusual, but what happened next was curious.
Six months later, state records show the company’s registered agent was changed to “Desiree Durham” – a 23-year-old woman from Miami. One day later, the shell company, listing Durham as the “sole manager,” sold the property to St. John for $150,000.
Aluko’s knowledge of the deal is documented in one way: He signed the deed as a witness. Whether Durham actually signed it or had anything to do with the transaction remains unclear – her signature doesn’t resemble one penned on an unrelated court document filed years earlier. Reached by phone, Durham repeatedly hung up on reporters. She didn’t return repeated phone calls or text messages.
St. John Board Chairman Nelson Adams III acknowledged the sale was a “convoluted transaction” but defended its ultimate outcome. Still, he says the board didn’t initially realize that Aluko bought the land in late 2012.
Ola was acting in the best interest of the CDC trying to procure a property we had been desirous of acquiring for many years.
Nelson Adams, St. John CDC chairman
He said the CDC didn’t have the money at the time to buy the property, so Aluko essentially bought the land for St. John without letting the board know. Six months later, the nonprofit did have the money, although it shelled out more than triple what Aluko paid for it.
“Ola was acting in the best interest of the CDC trying to procure a property we had been desirous of acquiring for many years,” Adams said.
He offered to have the nonprofit show the Herald documentation outlining the board’s handling of the deal. St. John, however, never produced the documents.
Adams could not explain why Aluko needed to put Durham’s name on the shell company, or even create the corporation to begin with.
“I don’t know who she is or what role she played,” Adams said.
And it’s still not clear why St. John was willing to pay so much more than Aluko did.
Another longtime board member, Will Miller, who became the vice chair the year of the sale, recalled the land purchase but said he knew nothing about the behind-the-scenes financial maneuvering by Aluko.
“This is the first I’m hearing of this,” Miller said when informed by a Miami Herald reporter; a St. John board meeting is scheduled for Wednesday. “I guess I’ll find out more then,” he said.
The Miami-Dade State Attorney’s office declined to release records related to its case, citing the “active criminal investigation.”
A lawyer for St. John on Monday defended the non-profit, stressing the agency “did not make one penny off this transaction.”
“St. John CDC committed no wrongdoing in acquiring 1643 N.W. 1st Court and has fully cooperated with the State Attorney's Office to bring this inquiry to an end,” attorney Margot Moss said in a statement.
The 52-year-old Aluko was ousted in 2010 as the head of Miami’s capital improvement department amid allegations his employees were inflating the price of projects. He claimed he tried to blow the whistle, while the city countered that he failed to reign in his workers. He was eventually awarded a small settlement by the city.
Aluko rebounded with St. John, the nonprofit that is affiliated with a namesake Baptist church, and has expanded his enterprises.
Between 2011 and 2015, tax documents show St. John has received nearly $12 million in direct government grants, funding an array of well-regarded low-income rental complexes around Overtown.
At the same time, Aluko’s private firm, Odua Group, has earned more than $900,000 from St. John for administrative and construction management services, according to tax records. That includes an annual salary of $85,000 last year for serving as the nonprofit’s president.
Odua itself has received close to $1 million in payments directly from the city of Miami and the Southeast Overtown Park West Community Redevelopment Agency. Those payments have been for work done with St. John, and other vendors on publicly subsidized projects.
The relationship between St. John and Aluko’s private company is tangled.
On state records, websites, letterheads and tax documents, Aluko lists himself as St. John’s president – but in an interview with the Herald in May he insisted his private company, Odua, is actually the nonprofit’s head.
“I can see how it can be kind of confusing,” Dana Moss, St. John’s outside accountant, said of the arrangement.
And Odua Group has billed taxpayers for work done by St. John employees. That’s something Aluko mentioned in that same May interview, although minutes later, he suggested the work was done after hours.
It requires a lot of compliance and oversight.
James Kelly, law professor
Adams says the arrangement is a “win-win-win” because it allows St. John to benefit from Aluko’s experience, while allowing him to still work with other companies.
But James Kelly, who teaches community development law at Notre Dame Law School and has represented nonprofits, says Aluko’s arrangement with St. John is a “peculiar approach that is not common among nonprofit organizations.”
Kelly said consultants are often brought in to advise nonprofits, but rarely to run them. And while hiring an experienced, well-connected businessman like Aluko could reap major contracts for the nonprofit, the arrangement also presents clear pitfalls.
“It requires a lot of compliance and oversight,” Kelly said. “Even if it is worth their while, the constant need to police the agreement — and make sure there is no use of charitable resources to [improperly] benefit the for-profit — makes it very challenging to make this kind of arrangement work.”
The IRS also prohibits non-profits from “self-dealing,” and the land sale could potentially jeopardize the organization's tax-exempt status, Kelly said.
“The organization is supposed to use all its resources to fulfill its charitable mission,” Kelly said. “The IRS has very strict rules preventing just that kind of thing.”