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HomeMy WebLinkAboutSubmittal at 02-17-2021 PZAB Mtg - Public Comment - Eastside RidgeFAMILY ACTION NETWORK MOVEMENT H USING CORA TY E FF T 1 F C MONO THE Little Haiti does not have the space to handle two mega developments and approving this project will demolish more accessible housing than it creates. In order to address this, the following must happen: At least 750 units of on -site affordable housing at 60% AMI and below with 99 year affordability term At least 50% of units of workforce housing units capped at 80% AMI with 99 year affordability term Affordable and Workforce housing distributed first to Little Haiti residents who will be displaced by the development $100 million dollars to Capital Contribution Fund to provide loans to non-profit affordable housing developers and to promote organizations and community groups dedicated to increasing community land ownership initiatives Moving assistance of up to $5,000 provided to Design Place residents who wish to relocate off -site 9 0 0 9 4 0 0 0 4 0 0® 9® too 9 9 4®@ 9 ea 4 9 4 0® 9 et 4 9 4 69 0 6696 9 4 9 9 9 9 9 9 9 0 9 9 Eastside Ridge is not in the character of Little Haiti. The average income of Little Haiti's residents is $24,000 and business owners within the community lack support & investment. In order to address this, the following must happen: No less than 40% of the construction contract value to be awarded to subcontractors that are Certified Minority Enterprise(s) with first priority to businesses in Little Haiti No less than 25% of construction jobs giving priority to Little Haiti residents at a working wage No less than 40% of permanent jobs giving priority to Little Haiti residents, at a minimum enhanced living wage of $15 an hour, which will increase based on the employee's expertise Unskilled and skilled laborers with minor or insignificant non-violent felony records will not be denied employment solely based on criminal record Job training, management opportunities, commercial lease opportunities, small business incubator with grant funding, a ban on big box stores Performance bond with community beneficiary to ensure compliance with community benefits agreement 0 0 0 9 660 4 9 9 0 4 9 9 9 9 0 4 0 66 Ole 60 0 9 4 9 9 60 4 9 9 60 9 9 9 9 0 4 0 9 0® 0 0 9 06 4 9 4 0 0 9 9 0 4 0 0 4 9 0 0 T Approving Eastside Ridge, will lead to the Toss of one of the last affordable areas in Miami for working people and will irrevocably damage the culture and character of the Little Haiti community. In order to address this, the following must happen: 25 % of retail space designated to small businesses and restaurants that are approved of by community organizations Significant contribution to benefit CBOs whose principle mission and impact is serving the Little Haiti area to preserve the character of the Haitian -American community 20% equity of all revenue to go towards community programs such as a youth center, senior day care, nutritional center, indoor gymnasium, playground, community garden and pool Further contributions towards job training, a trade school, literacy programs, bookstore and theater Reduce the scale of the project Support for public schools within Little Haiti The total valuation of the project must be in writing and disclosed All agreements and updates to the community benefits package must be in writing and disclosed on the Eastside Ridge website Prepared for FANM February 17, 2021 This document is presented to highlight the major flaws in the Eastside Ridge Development Agreement and presents questions that are left unanswered by the agreement. Finally, it presents possible language to address the concerns of the community and strengthen the community's ability to enforce the terms of the agreement. Relocation Assistance: What it says: Questions: What it should say (draft language): 12 months prior to the demolition SPV Realty will stop leasing rental units as they are vacated. Those 1. Where will people go if there are no more vacated units on the property? 2. How much time will be given for All residents of Design Place will be guaranteed to be relocated to an empty unit within the Design Place complex (of comparable bd size/sq footage/price), or provided with assistance in locating and moving into a temporary rental unit of (of comparable bd size/sq footage/price) during all phases vacated units will be tenants to decide if they will want to of the project in which tenants will need to be vacated from reserved for and offered to move out, or take one of the vacated the premises. residents of those buildings units temporarily? proposed to be Tenants will be given at least 120 days' notice before the demolished in connection with the construction of unit needs to be vacated. Project Phase 1. Vacated rental units will 1. What if you have no lease/existing SPV Realty will not terminate tenancies for No Cause and will be made available to rental agreement? guarantee to not institute any No Cause evictions for the said duration of the development of the project. residents at the same terms 2. Will Eastside Ridge commit to not of their existing rental terminating tenancies and leases during All tenants, both month -to -month and leased tenants, will be agreement. all 4 phases of the project? able to lease new units for relocation at their current rent price. 3. Will units be made available in the All tenants will be offered new Lease Agreements where end same unit size and square footage? terms are tied to completion of Eastside Ridge project and offer of a new rental unit in the completed project. Moving assistance provided to those residents of Design Place that opt to relocate to vacated units elsewhere on the Properties. 1. Is there a minimum/maximum amount that can be provided? 2. How will people be reimbursed for these costs? 3. Will assistance be provided if tenants need to relocate elsewhere, not on the Design Place property? For example, what if there are not enough vacated units at the same bed size in Design Place, and the tenant needs to find transitional housing outside of Design Place. Will they still be Moving assistance provided to those residents of Design Place of up to $5,000. Eligible tenants will include any tenant, with lease or month -to month tenancy, who are asked to leave at any phase of the Eastside Ridge development process regardless of where they need to relocate to, even if it is outside of Design Place complex. allowed to take advantage of relocation assistance and move back in once the unit is made available with a 2 year lease at the previous rental price? Relocated residents will 1. What does "a first" mean? All Design Place residents forced to leave their units due to be given a first the Eastside Ridge development process and/or construction opportunity to relocate 2. Will residents relocating at any phases at any Phase of the project, will be offered available units to Phase 1 of the of the project be able to locate only before they are offered to the general public, once completed project, once complete. within that phase, or will they be able to at any Phase of relocate at any time throughout the 4 the project. Phases? Units must be of comparable bedroom/size/sq footage/price to units they resident in before they were relocated due to Eastside Ridge Development. Residents who decide to relocate from the existing apartment complex to the Project allowed to lease a new unit in the Project at their existing rent for no less than two years. With the assistance with moving costs. 1. What does "allowed" mean? There should be a guarantee. 2. What if you do not have a current lease with the building? 3. What if you were not able to be relocated out of your unit into another Design Place unit? Since there is no guarantee that everyone will be relocated or provided a comparable bedroom size/square footage/price given unit within the Design Place complex at every phase of the project? All Design Place residents, whether they were relocated within the Design Place complex or outside of it, or were not relocated at all, will be guaranteed an offer of a unit of comparable bedroom/size/sq footage/price to units they resided in before they were relocated due to Eastside Ridge Development, at the same rent price/agreement for no less than five years. Capital Contribution: What it says: Questions: What it should say (draft language): Accordingly, Owner and Developer agree to invest up to $10,000,000 (the "Capital Contribution") for use by Little Haiti's non-profit civil society organizations subject to the following terms. 1. How much will the project cost in total (estimated)? What percentage of that does this $10 Million represent? 2. On Community Benefits Summary/Matrix, Eastside Ridge says they will give $23 Million to the city in Accordingly, Owner and Developer agree to invest $100,000,000 (the "Capital Contribution") for use by Little Haiti's non-profit civil society organizations subject to the following terms. Regardless of how many units/stories are approved to build. This is a promise and a showing of dedication to the Little Haiti community and investment in preserving the Community that currently exists. • improved Park Land. That's $13 Million more than what is in Capital Contribution and almost double the max amount allowed to be spent on Affordable housing. Why is Eastside Ridge not making more of a commitment to provide affordable housing as they are to provide greenspace? 3. Invest "up to" is also a maximum? Is the community not guaranteed to receive $10 Million? *This amount is based on the 2017 Bal Harbour Shops expansion that included a $100 million public benefits package. This figure also takes into consideration that the Developer owns the land and therefore the profit ceiling on this project is very high Up to $7 million of the 1. "Up to..." means that potentially only At least $100 million of the Capital Contribution will be set Capital Contribution will be $500,000 could go to Affordable aside as a revolving fund to help build or renovate affordable set aside as a revolving fund Housing. It is a maximum, not a housing in Little Haiti. This revolving fund will provide loans to help build or renovate minimum. Why is there not a separate to non profit affordable housing developers and promote affordable housing in Little amount set aside for Affordable organizations and community groups dedicated to increasing Haiti. This revolving fund will provide loans to non-profit affordable Housing? 2. What does "at the lowest rates community land ownership initiatives. *This amount is based on the 2017 Bal Harbour Shops housing developers at the possible" mean? Who decides what is expansion that included a $100 million public benefits lowest rates possible to possible? Who has the final say? package. This figure also takes into consideration that the retain non-profit status Developer owns the land and therefore the profit ceiling on under Federal and State law, and subject to other terms to allow continued reinvestment in Little Haiti. this project is very high With the exception of the 1. How will Board vote on who/how With the exception of the board appointee selected by the City board appointee selected to distribute the money? Commissioner, the Owner and Developer will hold a series of by the City community meetings (at least 5) in which they will invite Commissioner, the 2. Hoe will the developer go about community stakeholders and allow the community to decide Owner and Developer selecting the members of the 7 through a mix of voting, conversation, and debate who will will appoint the members of the seven -member board. member board? 3. Will the community be able to have a say on who is on the board? Will serve on the Board. Vacancies on the foundation's governing board will be filled by a majority vote of the Board's remaining members. Vacancies on the Design Place residents have a foundation's governing board will be filled by a majority vote of the representative on the Board? Board's remaining members. The costs of foiuiing 1. So there will not be $10 million total The costs of fotniing the board, creating and recording the board, creating to go into the community. Why doesn't governing documents, establishing contracts with a and Eastside Ridge subsidize the costs of community foundation..., and all future operations of the recording governing managing this Board and fiiture seven -member board's management of the Capital documents, establishing operation? Contribution shall be covered by the Eastside Ridge project contracts with a and will not impact the total amount given in Capital community Contributions. foundation..., and all future operations of the seven member board's management of the Capital Contribution shall be paid out of the Capital Contribution. What it says: Workforce & Affordable Housing: Questions: What it should say (draft language): Owner and Developer agree to set aside no less than 10% of the total residential dwelling units constructed at the Property as Workforce Housing. 1. In the Community Benefits matrix, Eastside Ridge says 10% of units (up to 315 units). However, Eastside Ridge is requesting approval of 3,370, which would be approximately 337 at 10%. Why are there 22 units missing from this estimation in the 2019 Development Agreement? Owner and Developer agree to set aside no less than 25% of the total residential dwelling units constructed at the Property as Workforce Housing. "Workforce Housing" means a Dwelling Unit, owner occupied and/or rental housing with a purchase cost, value, or monthly rental rate, as applicable, equal to or less than the amounts established by the applicable standards for those individuals whose income is between 60 percent and 140 percent of the Area Median Income 1. Workforce Housing 60% - 140% AMI means that certain rent amounts/prices can be set at different levels depending on a person's income between 60% and 140% AMI. There is no guarantee that Eastside Ridge needs to offer units to folks with lower incomes. So all units could be rented to families at 140% AMI. - 140% AMI = 2p/$102,480k (rent price 2br. $2,880) - 60% AMI = 2p/$43,920k (rent price 2br. $1,234) 2. Will you say what bedroom sizes you will offer at Workforce costs? Will they all belbr or will you offer 2/4 br options at Workforce housing? 3. Wil you offer any units at actually affordable housing for the community. Below 60% AMI? At what bedroom size? "Workforce Housing" means a Dwelling Unit, owner -occupied and/or rental housing with a purchase cost, value, or monthly rental rate, as applicable, equal to or less than the amounts established by the applicable standards for those individuals whose income between 60 percent and 80 percent of the Area Median Income. There is currently NOTHING written in the Development Agreement regarding Affordable Housing onsite. 1. Folks earning minimum wage make approximately $17,500 a year. The average income of Little Haiti residents is $24,000. Will you offer any units at Affordable rates for families between 20% and 50% AMI? Owner and Developer agree to set aside at least 750 units of affordable housing at 60% AMI and below with a varied distribution of lbr - 3br size. What it says: Job Creation and Employment Opportunities: Questions: What it should say (draft language): The Owner and The Owner and Developer shall require their general Developer shall require contractor(s) to assign a minimum of 40% of the their general construction contract value to subcontractors that are contractor(s) to assign a minimum of 5% of the construction contract value to subcontractors that are Certified Minority Enterprise(s). Certified Minority Enterprise(s). Additionally, the Owner and Additionally, the Owner and Developer shall require their Developer shall require general contractor(s) to hire qualified subcontractors in their general contractor(s) to accordance with the Tiered Priority Areas by first seeking use all commercially subcontractor(s) having offices in the first Tiered Priority reasonable Area, before expanding their search to the second area, and so efforts to hire qualified forth. The Developer's general contractor(s) shall attempt to subcontractors in fulfill this requirement within the first priority area for at least accordance with the Tiered 60 days before expanding its search to lower priority areas. Priority Areas by first The general contractor(s) may expand from the second priority seeking area to the third and so forth only after search in each lower subcontractor(s) having offices in the first Tiered priority area for at least 30 days. Priority Area, before expanding their search to *For enforceability purposes, language is needed for the the second area, and so imposition of penalties paid into capital contribution forth. The Developer's fund every time Owner and Developer move down a general contractor(s) shall attempt to fulfill this requirement within the first priority area for at least one month before expanding its search to lower priority areas. tier The general contractor(s) may expand from the second priority area to the third and so forth only after search in each lower priority area for at least two weeks. Owner and Developer Owner and Developer agree that at least 25% of the labor for agree that at least 25% of the Redevelopment of the Property will consist of Little Haiti the labor for the residents and that at least 50% within tiers 1 - 3. Redevelopment of the Property will consist of City of Miami residents and that *For enforceability purposes, language is needed for the at least 40% of the labor for imposition of penalties paid into capital contribution the Redevelopment of the fund every time Owner and Developer move down a Property will consist of tier Miami -Dade County residents. In connection with all employment opportunities available in connection with the operation of the Property, including the commercial components of the Property, Owner and Developer agree to recruit and hire employees who are residents of the City or County according to the Tiered Priority Areas, with a goal of having 10% of the workforce employed by Owner and Developer at the Property to be residents of the City or County. Owner and Developer will apply all commercially In connection with all employment opportunities available in connection with the operation of the Property, including the commercial components of the Property, Owner and Developer agree to recruit and hire employees who are residents of the City or County according to the Tiered Priority Areas, with a goal of having at least 50% of the workforce employed by Owner and Developer at the Property to be residents of tiers 1-3. Owner and Developer will apply all commercially reasonable efforts to identify qualified employees in the first Tiered Priority Area for no less than 60 days before expanding its search to the second reasonable efforts to identify qualified employees in the first Tiered Priority Area for no less than 60 days before expanding its search to the second Tiered Priority Area, and so forth. Tiered Priority Area, and so forth. *For enforceability purposes, language is needed for the imposition of penalties paid into capital contribution fund every time Owner and Developer move down a tier Owner and Developer shall require each tenant conducting business at the Property to make best efforts to recruit and hire employees who are residents of the City or County according to the Tiered Priority Areas, with a goal of having 10% of the workforce employed by Owner and Developer at the Property to be residents of the City or County. Tenants will be required to seek qualified employees in the first Tiered Priority Area for a reasonable time before expanding its search to the second Tiered Priority Area and so forth. Owner and Developer shall require each tenant conducting business at the Property to make best efforts to recruit and hire employees who are residents of the City or County according to the Tiered Priority Areas, with a goal of having at least 40% of the workforce employed by tenants of Owner and Developer at the Property to be residents of tier 1 - 3. Tenants will be required to seek qualified employees in the first Tiered Priority Area for a reasonable time before expanding its search to the second Tiered Priority Area and so forth. *For enforceability purposes, language is needed for the imposition of penalties paid into capital contribution fund every time Owner and Developer move down a tier Eastside Ridge/Miami World Center Compariso Item to Compare Eastside Ridge - Present Miami World Center- 2019 Bal Harbour - 2017 Total Sq. Ft 958,320 sq. ft 815,000 sq. ft 803,864 sq. ft *340,387 square feet Expansion to the already 463,477 square feet Retail Space Not specified 300,000 sq. ft 340,387 sq. ft Rental Units 3,000 2,000 N/A Hotel Space Not specified 1,7000 N/A Anticipation Project Valuation Undisclosed 1.33 Billion Dollars 400 Million Dollars Valuation of community Benefits $36 million Not specified $100 million Eastside Ridge Benefits EAs"rsiDE RIDGE SPECIAL AREA PLAN COMMUNITY BENEFITS SUMMARY SUMMARY DESCRIPTCON* ESTIMATLI" VALIFJCOST Over the ccrurDe. of the project's construction, the Owner will provide 510 rnillitat in seed Community Foundation 8r funding to a 501(c)(3) or similar established fund or nonprofit foundation dedicuted to I Affordable housing , oerv'tng Mialni. 57 million of the 510 million will be a involving fund for affordable $10,[1tM1.ff170 housing: Tro_flcy Infrastructure Owner willprovtde laud and cunstmet two trolley Stops on site _ g9OU pDO' Right of Way Improvements i Owner will contribute funds for unptovements along all rights -is f wry abutting the -__ Abutting ibe Protect 'property. 52_500,000 Park Dedication & Owner will cone to the City of Miami 2.7 acres of inr rovedi hnjrrnvenient Y Y p park land. 3_3,n00,Ot10 Community Space TOwmer will make available up to 2,000 square feet of office and community gatterin for urination() use. " . $12Q,ofl(7 MPD Substation ' Owner will lease for 51.00 to the City of Miami up to 2.000 square feet of'space for substation. :F40,000 Y30,.60.000,00 Train Station Owner swill us hest commercial efforts for the location and approval of a station on site. workf ,ne housing Ten porccnt of all units built on the property (up to 315 units) will be managed and i operated as Workforce lfoustng,__.„_ l.- ....__._ on__ Reloea0nn Aasisiance for Assistance to Design Place Residents displaced byythe new construction will be ' Design Place Residents _ provided._., Jolt Fall's & Teaming Job opportunities will be provided, Local Iliriog Commitment Up to 25% of all eonslmction jobs will he set aside for residents of the City of Miami j for Construction lobs with list priority In residents of Little Haiti. Up to 40%n of all construction jobs will he se[ aside for Huron -Dade County_ residents. Local hiring Commitment ; Up to IO'* of the permanent jobs with the Owner will be set aside for residents of Little' for Permanent Jobs Haiti, Commercial tenants will be encouraged to hire up to lOr of their labor from within Little fluid. Civic Space Owner will provide approximately 22.05- of the lot area as open plazas accessible to the j neacffin ore sobfect m teams of flu: bust fkvdapawm Anima,,, approved by the Cit1 Commistion EASTSIDE RIDGE SPECIAL AREA PLAN ADDITIONAL BENEFITS SUMMARY SUMMARY SCIlirTION4 Projected Increase in Properly Tax Revenue i $14,050,448 Non -Recurring Labor Income Generated I $480,375,000 Recurring Labor Income Generated 1$106,657,300 Building Permit Fees 1 $3,007,500 Citylnipact Fees 1 $10,125,407 School Board impact Fees 1 $3,986,048 SUB TOTAL $637,158,036 GRAND TOTAL °Amounts are upproximuie and subject ro configuration of fatal approved SAP. MRSiff45H424 SIRM,S,^0,35 Miami World Center Benefits 4,40,114.1111ri, Sel 0-11, 670,24 56 2 The Miami Woridcenter Development is a privately owned project that is slated to be built in the blighted area of the Park West Community Redevelopment Area. The multi -phase project will feature approximately 765,000 square feet of retail space, 300 hotel rooms, 2,000 apartments and condominiums and a mall with 50,000 square feet of retail space. in exchange for the fax rebate TIF Agreement, the CRA and Miami Worldrenter developers have agreed to an Economic incentive Agreement with the following community benefits: AMOrni W6r1dCePter. will 0.3 skiUed laborers during the construc- rlQn phases of the prolect, giving prlority to re5idenes living within the CRA Redeveiopment Area and then the Ovortown community. 'Ji Miami Worldcenter anticipates that the project will be constructed in multiple phases with an anticipated development value of One Billion Thirty -Three Million Dollars ($1,033,000,000.00). Miami Worldcenter further anticipates that their anticipated development will generate approximately Twelve Million Eighty -Seven Thousand Dollars ($12,087,000.000) in incremental TIF for the entirety of Phase I, beginning on January 1, 2018. The Economic Incentive Agreement is subject to annual CRA, City and Miami -Dade County Budget Approval. Provided that the planned phases are substantially completed annually, the CRA agreed to pay back to Miami Worldcenter www.MiamiCRA.com/seopwcra 819 NW 2" Avenue, Miami, FL 33136 Email : C:RA'@?miamigov.com Main: (305) 679-6800 Fay; : (305) 679-6835 0' Twitter r<'Ci .cn Ii: miCRA Bal Harbor Benefits After listening to those concerns, Whitman Family Development sweetened its offer to the village. Its development agreement would include funding for: An environmentally -sustainable, hurricane -protected village hall and public parking garage to replace the current village hall. A gift of 2 acres of the nearby Fairfield and SunTrust properties for any use the village chooses. • The redevelopment of the village's public works lot into a waterfront park. ▪ The village's Art in Public Places program, a new public plaza at the mall, and pedestrian enhancements such as wider sidewalks and landscaping along 96th Street and Collins Avenue. The developer said the value of its expansion would increase the Bal Harbour Shops' annual tax contribution to make up about 20 percent of the village's budget. I COLUMNS I FRANCISCO ALVARADO 1 NOVEMBER 16, 2012 1 2:57PM SUPPORT US V On its website, Design Place at 5175 NE Second Court is billed as the Design District's most desirable Miami condo rental community for young professionals, graduate students and small. families. But a local. organization that fights unfair housing practices is suing SPV Realty, a New York company that owns the 500-unit apartment complex, for allegedly making Design Place undesirable to African - Americans. SPV Realty principal George Dfouni. says he has not seen the complaint, but denies his company is redlining African -Americans. "The allegations are false," Dfouni says. "You can't discriminate, especially in Miami. We have Asians, Hispanics, and African -Americans at Design Place." In a lawsuit filed today in Miami federal court, HOPE Fair Housing Center claims it sent three African -Americans and three Anglo Americans to Design Place in. October to find out how they would be treated by SPV rental agents. Accorc court documents, the results were startlingly racist. ing to For example, India Bazemore, a 47-year-old African -American woman working for HOPE, claims she inquired about renting a one -bedroom or two -bedroom apartment on October 19. Bazemore alleges the leasing agent informed her no units were available and -that she would need to submit a $1,195 deposit and $25 application fee to be put on a waiting list. The agent gave Bazemore an application, but did not give her any forms to fill out while she was in the leasing office. The same day, a 28-year-old white female named Erin Lewis also went to Design Place to inquire about a two -bedroom unit. Lewis claims the leasing agent told her two units were available and had her fihl out a form that included a question about how soon she wanted to move in. Lewis also said the agent was eager to give her a tour of the office apartment model and Design Place's amenities, as well as have her fill. out the application. Lawsuit Filed Against Design Place In Miami For Discrimination. The lawsuit also alleges the African -American renters were quoted higher rental rates than their Anglo counterparts and that SPV Realty publishes advertisements that show a preference for white tenants by only showing white people in the ads. "I call this discrimination by design," says HOPE President Keena J. Robertson. "Housing discrimination of any kind is unacceptable." Dfouni insists his company does not treat any potential renters differently because of skin color. "We qualify people based oncredit reports and background checks," he says. "We talk to former landlords to find out if they are good tenants. That is how we base it." Follow Miami New Times on Facebook and Twitter @MiamiNewTimes. RELATED TOPICS: Use of this website constitutes acceptance of our terms of use, our cookies policy, and our privacy policy The Miami New Times may earn a portion of sales from products & services purchased through links on our site from our affiliate partners. ©2021 Miami New Times, LLC. All rights reserved. CALIFORNIA RESIDENTS: California Privacy Policy I California Collection Notice I Do Not Sell My Info I COLUMNS I FRANCISCO ALVARADO I NOVEMBER 16, 2012 1 2:57PM SUPPORT US On its website, Design Place at 5175 NE Second Court is billed as the Design District's most desirable Miami condo rental community for young professionals, graduate students and small families. But a local organization that fights unfair housing practices is suing SPV Realty, a New York company that owns the 500-unit apartment complex, for allegedly making Design Place undesirable to African - Americans. SPV Realty principal George Dfouni says he has not seen the complaint, but denies his company is redlining African -Americans. "The allegations are false," Dfouni says. "You can't discriminate, especially- in Miami. We have Asians, Hispanics, and African-Am.ericans at Design Place." In a lawsuit filed today in Miami federal court, HOPE Fair Housing Center claims it sent three African -Americans and three Anglo Americans to Design Place in. October to find out how they would be treated by SPV rental agents. According to court documents, the results were startlingly racist. For example, India Bazemore, a 47-year-old African -American woman working for HOPE, claims she inquired about renting a one-bedroomor two -bedroom apartment on October 19. Bazemore alleges the leasing agent informed her no units were available and that she would need to submit a $1,195 deposit and $25 application fee to be put on a waiting list. The agent gave Bazemore an application, but did not give her any forms to fill out while she was in the leasing office. The same day, a 28-year-old white female named Erin Lewis also went to Design Place to inquire about a two -bedroom unit. Lewis claims the leasing agent told her two units were available and had her fill out a form that included a question about how soon she wanted .to move in. Lewis also said the agent was eager to give her a tour of the office apartment model and Design Place's amenities, as well as have her fill out the application. Lawsuit Filed Against Design Place In Miami For Discrimination. The lawsuit also alleges the African -American renters were quoted higher rental rates than their Anglo counterparts and that SPV Realty publishes advertisements that show a preference for white tenants by only showing white people in the ads. "I call this discrimination by design," says HOPE President Keena J. Robertson. "Housing discrimination of any kind is unacceptable." Dfouiii insists his company does not treat any potential renters differently because of skin color. "We qualify people based on credit reports and background checks," he says. "We talk to former landlords to find out if they are good tenants. That is how we base it." Follow Miami New Times on Facebook and Twitter @MiamiNewTimes. RELATED TOPICS: Use of this website constitutes acceptance of our terms of use, our cookies policy, and our privacy policy The Miami New Times may earn a portion of sales from products & services purchased through links on our site from our affiliate partners. ©2021 Miami New Times, LLC. All rights reserved. CALIFORNIA RESIDENTS: California Privacy Policy I California Collection Notice I Do Not Sell My Info NOV. 30, 2013 Why Run a Slum If You Can Make More Money Housing the Homeless? By Andrew Rice Shelter properties owned or controlled by the Podolskys and their associates. Photo: Andrew Rice; Cassandra Rose Tannenbaum (203 W. 145th St.) The Continental Ilotel, a turn -of -the -century pile on West 95th Street, was a vintage flophouse. In the sixties, a man could pick up the phone, dial L find a bed there for a few bucks a night. It was never a place for nostalgia, and over the years it filled with drunks, vagrants, and deinstitutionalized • hotel did serve a function: providing a reservoir of dirt-cheap housing. As recently as a few years ago, the Continental's tenants, protected by rent re $330 a month on average. So, in 2005, the owners sold it for $3.1 million to Jay and Stuart Podolsky, brothers with an unsentimental eye for the po The Podolskys had been active players in Manhattan real estate since the roughneck days of the eighties, when landlords all over the Upper West Si( tenants from single -room -occupancy properties like the Continental. Few were as ruthless as Zenek Podolsky and his sons Jay and Stuart, who beca and tabloid villains —"terror lords," the Post called them. But they were only a particularly blunt instrument of inexorable market forces. As gentrific thrived, amassing a fortune fished from the bottom. The Podolskys' flagship company, Amsterdam Hospitality, operated boutique hotels —mostly old SROs that they repositioned for tourism —but their everything from Coney Island oceanfront to Grand Concourse tenements. "They are very effective at finding adaptive reuses," says a competing hote expedient." They acquired the Continental and two adjoining SROs to add to a discount chain. It was renamed the Fresh Hostel and marketed to Et Such transformations are a fact of economic life in an increasingly smooth -edged city —think of the Breslin, a Gramercy fleabag, recently converted the Continental became a flash point. The SRO Law Project mounted attacks, alleging an escalating pattern of pressure on rent -controlled tenants. were as fetid as a spring -break crash pad —online reviews referenced vomit and bedbugs —but the young tourists would pay $50 to $120 a night for more they trashed the place, the less tolerable the living situation became for the less profitable holdout tenants. The housing activists organized protests, engaged politicians, and provoked a raid by the city's Buildings Department, which discovered numerous i a haphazard wooden bridge constructed between two buildings. An inspector scrawled: "Discontinue illegal occupancy forthwith!" After much litig; agreed to shut down the hostels. It turned out, however, that they had found a more profitable angle: the homeless. In July 2011, a nonprofit called Housing Solutions USA was into: 95th Street hostels as its address. The charity's board was made up of Podolsky employees and contractors, including a lawyer who contributed a $7 costs. Instead of fighting City Hall, the Podolskys were shifting their tactics, turning an antagonist into a customer. Catering to the city's demand foi property could produce revenues like a perpetually booked hotel, with none of the amenity expenses. In August 2012, Housing Solutions won an "emergency" contract to operate a shelter on West 95th Street, which has since expanded into a five -yea] city pays $122 a night —or more than $3,600 a month —for each cubicle -size room to Housing Solutions, which in turn directs rental income back ti the Continental's holdout tenants found themselves living in a homeless shelter, renamed Freedom House, that reeked of urine, marijuana, and chat hit upon a coldly self-sustaining business model: They created the homeless supply and profited from the shelter demand. Homelessness is a perpetual crisis in New York. Since a judge's decision created a legal right to shelter in 1981, the city has consistently struggled to for its poorest citizens. During Mayor Bloomberg's tenure, the homeless population metastasized, reaching a record level of 52,000 in September. T explanations, including policy decisions, such as the elimination of rental -subsidy programs. But the most compelling one is familiar to all: It's hard affordable lease in New York. Market -rate rents have risen sharply, even as incomes have shrunk and the number of rent -regulated apartments has ( units can cost as much as $ 2,500.) This viselike dynamic has squeezed one out of every 150 New Yorkers onto the streets. Bloomberg's critics —including Bill de Blasio—have cited this figure as one of the mayor's most profound failures. To a few, though, it has represente will spend almost $800 million on shelters this year, $200 million more than in 2010, and it relies heavily on outsourced providers. `Any of us can 1 simply;' said one shelter operator, "and say it's a growth business:' Photo; Andrew Rice; Cassandra Rose Tannenbaum (1233 White Plains Rd., 2263 Adam Clayton Powell Blvd ) In contrast to Bloomberg's customarily technocratic, market -based approach to governance, the shelter system is niled by opaque deal -making and agreements. Quality varies wildly. Some shelters are run by respected nonprofit social -service agencies, others by private companies, which operate • oversight. "The for -profit guys come and buy a hotel, empty it out, and say to the city, 'Hey, we can get you the rooms tonight; " says George McDone Fund, a nonprofit shelter operator, and a recent candidate for mayor. "It's all about business, and it's big money. It's not nickels and dimes; it's hund] The city government does not publicize the addresses of shelters, citing the privacy of its homeless "clients." But a list obtained via a Freedom of Infc the industry is dominated by a handful of competitors. There's Shimmie Horn, whose father, a notorious slumlord, willed him an empire of hotels.] investors who administer a portfolio of tenement shelters from an unmarked office above a Brooklyn laundromat. Most players operate through she men, obscuring their interests, and the Podolskys are particularly secretive. But the evidence suggests the family is among the largest shelter provide expanding aggressively. Altogether, public records indicate that the Podolskys own or control close to 40 shelter properties, which house at least 1,300 homeless families, al: total. (Families now make up the vast majority of the homeless population.) A calculation based on city records suggests that the Podolsky-related sl rents in the range of $90 million since 2010. The story of the family business traces back to a Coney Island kosher butcher shop and a hardened patriarch. Zenek Podolsky was born in Poland in was killed at Treblinka. He later recounted, in a testimony for the Shoah Foundation, that he survived the Holocaust by working for the Gestapo as crew commanded by the Jewish Police. His job involved traveling "city by city, cleaning out the Jewish neighborhoods" after their occupants had bee me a torch," he said, "and made me in charge of opening up the safes:' After the war, Zenek and his wife, Fanny, immigrated and opened the shop on Mermaid Avenue. Podolsky spent his workdays cutting meat, evening clubhouse, and weekends acquiring Coney Island rooming houses. Between 1970 and 1978, according to a document filed by District Attorney Rob( unrelated case years later, "almost all were burned down in over 125 suspicious fires." Podolsky was never charged with a related crime, and he profit condemned the properties for urban renewal. Podolsky used the condemnation windfall to expand. Every Friday, he and his seven children talked real estate over Sabbath dinner. The family phil the name of a company it used to acquire one Brooklyn building: Fountainhead Associates. There and elsewhere, the Podolskys clashed with tenant each other: In 1984, Zenek sued his eldest son, Abraham, over ownership of some properties, and the two traded accusations of fraud, forgery, and 1 took their father's side in the bitter feud, which resulted in an unhappy division of assets. Zenek acquired his first Manhattan property, the Belfar Hotel on West End Avenue, for $350,000 in 1980. The city soon brought suit, citing tenant deficient heat, vermin, and frequent fires, one of which killed a man whose death was classified as a homicide. In a court filing, Jay Podolsky, the bui suggestion of his involvement in the arson "an innuendo which is totally false," but the family ultimately paid a fine and agreed to properly maintain In 1983, the Podolskys and another family partnered to purchase three connected buildings on West 77th Street. What happened next caught the at office. According to prosecutors, after some preliminary hostilities with tenants, the Podolskys hired "professional vacators," a gang that traveled Ma truck, rendering buildings unlivable. A leader called "Bear" was allegedly installed as the superintendent, and apartments were filled with hustlers, ! Tenants reported frequent burglaries and harassment. One elderly woman died of pneumonia in an unheated room. The vacators received $600 for They were friendly with all three Podolskys, prosecutors claimed. When Zenek visited, Bear would wash his Cadillac. In 1984, Morgenthau indicted the gang and twelve landlords, making front-page headlines. The Podolskys cut a deal to avoid serious prison time, p: felonies, including grand larceny and coercion. After Zenek offered evidence in a corruption case against another member of the Coney Island clubl: and -limousine commissioner, and agreed to grant the buildings to the Coalition for the Homeless, he was sentenced to 90 days, his sons to probatio nearly rioted in the courtroom, the Post reported, shouting, "Scum!" Photo: Andrew Rice; Cassandra Rose Tannenbaum (515 W. 148th St ) "It's haunted them for the rest of their lives," says David Satnick, attorney for Jay and Stuart, who claims his clients, then in their twenties, had little schemes. "They were children, and they were told, basically, 'You either plead to the entire indictment or your father goes to jail.'" Dispirited, Zenek management. "I thought these kind of tactics stopped when the Nazis were defeated," he complained, according to a doctor's report filed in court. H The Podolsky brothers continued to buy SROs: the Park View Hotel on iloth Street, another on Central Park West. At every turn, they did battle wi and tenant groups, who complained —in a prelude to today's argument —that the landlords were allowing the city to use them as a dumping ground early nineties, outrage about filthy "welfare hotels" drove the city to shift emphasis to programs operated by nonprofits. But this policy change, along administration's hostility to tenant rights, opened a new marketplace for the Podolskys. Once emptied of the indigent, the welfare hotels could beco: The Podolskys, with a partner, signed a cheap long-term lease for a hotel near Times Square primarily occupied by Senegalese street merchants. Th, reopened for tourists as the Ameritania, run by a manager imported from the Catskills. The Ameritania was soon clearing millions in annual revem acquisitions, like the downtrodden Karachi Inn (rebranded the Amsterdam Court), a Gramercy SRO now called the Marcel, and the Empire Hotel i The boutique business was just one example of the brothers' aptitude for speculating at the margins. "There has to be a huge payoff," a former emplt means going to the properties no one else will touch:' A decade ago, they snapped up tenements in Crown Heights and Bed-Stuy; right now, they ar, foreclosure for a Harlem condo project. The family's holdings are now worth many hundreds of millions of dollars. A Goldman Sachs bond issue va] alone at nearly $400 million. Amsterdam Hospitality remains a tight -knit firm, employing many Podolsky siblings, spouses, and children. Jay is in charge of strategy. ("Like, here former employee, "and how can I turn it into something profitable?") His older brother "Stewie," a bearded tough -talker with a taste for Italian spor acquisitions. They are active in Jewish charities, and their children have branched into fashionable enterprises like nightclubs and handbag design. East 57th Street and has a house in the Hamptons next to a friend, billionaire John Catsimatidis. Jay's family lives in a townhouse on West 64th Stn often gathers at Jay's summer place in Westhampton Beach, a Charles Gwathmey-designed mansion. I was told it was a bargain, that the previous c was damaged in a fire. The Podolskys take pains to keep a deniable arm's length from the shelter business. It operates behind a firewall of arcane lease arrangements and ii companies, many of which have been placed in the maiden names of the brothers' wives, Shirley and Sharon. "It may appear that it's all in the famil; claims the structures reflect both the brothers' status as "passive owners" and the wives' interests as independent investors. "Stuart and Jay have mu what their wives are doing in their business." (During a legal dispute over a hotel purchase in 1999, a court -appointed referee found it "credible" tha real players" in the disputed transaction and that their use of their wives' maiden names in that instance "was to avoid state/city scrutiny" owing to t The Podolskys don't deal with the city; they lease the shelter buildings to companies run by Alan Lapes, a building contractor who has long worked buildings are not owned by Mr. Lapes," Satnick says. "They are owned by the Podolsky family in one way or another." But Lapes, a blustery guy, serve lightning rod. Over the years, his facilities have been investigated by the police (over criminal activity by a manager and tenants in a Times Square li dubbed the "Hell Hotel") and cited by the city comptroller's office for safety violations and bookkeeping irregularities. In a recent e-mail, Lapes calk [stories] that are on google and for the most part are not true" and said journalists should "look for the good in all of the hard work that I do to help At most of Lapes's facilities, the city reimburses the landlord directly via uncontracted "per diem" payments. Facing criticisms, DHS has recently bet contracts with nonprofits, often under emergency procedures allowing expedited approval. Perhaps as a result, Lapes has ceded his emissary role to Its chief executive, Robert Hess, served as Bloomberg's commissioner of homeless services until 2010. "As Jay [Podolsky] is using Alan to be his froi the former manager of a Podolsky shelter called the Washington Hotel, "Alan is using Robert Hess." Although Hess said in an interview that he had "no knowledge" of involvement by the Podolskys in the nonprofit, the board roster listed on its tax rc their business associates. Via a complicated merger, Housing Solutions took over contracts belonging to Aguila Inc., a troubled nonprofit tied to a B oversaw services at almost all the Lapes shelters. Hess and Lapes were often seen visiting the Amsterdam Hospitality offices during Housing Solutic Blabbermouth Social, an Internet firm co -owned by the sons of Stuart and Jay Podolsky, designed its website. "There were so many places to connec Felcon, a former Blabbermouth employee. "Hess couldn't be in the dark." Hess, who earns at least $250,000 annually, has since capitalized on city demand for new shelters, boosting the nonprofit's revenues to $57 million officials have said there is no conflict of interest in his dealings with the agency he ran for four years. The Podolsky shelter business has two prongs. There are a dozen or so Manhattan hotels, some of which the Podolskys have owned since the Koch e collection of outer -borough residential buildings that operate as "cluster" sites —basically, apartments rented by the city to house homeless families. cluster encompasses fourteen locations in the Bronx. All but one of the buildings are owned by the Podolskys. - The cluster shelters still typically open under per diem arrangements, providing minimal social services. In a deposition last year, Hess said that the "rather lengthy and cumbersome procurement process," allowing the shelter system to expand and contract "like an accordion." But it's controversia operate with scant oversight. In a recent decision, a state judge likened the city policy to "a CIA black op, spending unbudgeted funds without appal Typically, cluster units are mixed into rent -regulated buildi Avenue, a six -story apartment building in the Bronx cluste arrival of the homeless came abruptly one day in 2009, wii knock at the door. "I knew that they were going to throw rr Torres told me later. She could do the math. An unemployf lived in the building for decades, she used a Section 8 subs on the three -bedroom that she shared with her two childre by plastic flowers and a menagerie of caged tropical birds.' landlord about four times that for shelter units. Torres tried to organize her neighbors. The landlord count and eviction notices. The buyouts started at around $1,00( relocation, but most tenants left, weary of conflict and shoi elevator broke down so frequently it made the Buildings D offenders. Torres's elderly mother fell on the stairs and bro "The living situation there was not suitable for any human Webster, who arrived at the building on Intervale Avenue i year in high school. Garbage was piled to the second floor t were giant rats everywhere. But the Websters had no choic situation: They were homeless owing to eviction from a for supposed to be for emergency stays, but the family ended t two years. Like all the shelter residents, Webster possessed economic value. "I know they put a price on us," he said. "V $3,200 a month" Of course, for much less than that amount, the city could b modest but decent apartment. In fact, the city's approach t include rental subsidies for its poor residents, allowing the head of the line for federal Section 8 vouchers. But Blooml believing that it created an incentive for poor households t The administration's replacement, a short-term subsidy, w state budget cuts in 2011. From top to bottom: Zenek Podolsky, Jay Podolsky, and Stuart Podolsky. Photo: Patrick McMullan (Stuart Podolsky) The courtyard at 941 Intervale Avenue in 2010. Photo: Andrew Webster "It's literally the biggest policy mistake of the Bloomberg administration," said Patrick Markee, a senior analyst for the Coalition for the Homeless, it from Section 8 vouchers. "It's the keystone of why family homelessness has exploded?' The cluster system has been the target of persistent criticism, in part because it appears to create more homeless people. In June 2012, Torres found of her apartment saying that her lease was about to be terminated. The letter was written in legalese, but it seemed to say there was a problem with Soon afterward, an eviction action was filed in court. There is little doubt that this was a strategic decision. Last year, a federal bankruptcy proceeding related to a dispute between the Podolskys and the another building in the Bronx cluster offered an unusual glimpse into the workings of their shelter business. Lapes filed a sworn affidavit, disclosing of a company called We Care Housing. It appears that We Care's only purpose is to take over leases on vacated units, serving as a pass -through for n majority of this income, the affidavit disclosed, went directly to We Care and its owners: the Podolsky wives. "We Care was essentially a start up with no assurance of long-term success," Lapes wrote. But he said the company had excelled, taking over 55 unit and further expansion was projected as the city increased placements. The company, Lapes claimed, had become "a stable business with a good futu In our conversations, Lapes declined to explain the justification for this ornate financial structure. But the comptroller's office has repeatedly investi of funds to shelters owned by the Podolskys. In October, Comptroller John Liu cited their nonprofit administrators for an "appalling record" and "re for millions of dollars spent," singling out undocumented payments to the Bronx cluster. In 2011, the Bronx cluster spent nearly $10 million of public funds, 75 percent of which went to rent —a proportion that is typical for Podolsky prop( by industry standards. Little of the money appears to be reinvested in the buildings' upkeep. Liu's most recent audit found that since last December, cluster units failed DHS inspections more than 80 percent of the time, typically for "hazardous conditions:' Some tenants say they suspect the landl "It's the same pattern as the eighties," says housing activist Larry Wood, of the Goddard Riverside Community Center. Once again, buildings are em government itself is playing the role of vacator. "They are forcing out people," Torres said. "I think they are making lots of money." Residents of the Intervale Avenue shelter say its security has always been lax. One Sunday evening last December, a child playing with matches igni+ stowed beneath a first -floor stairwell. The blaze quickly spread through the building. There were no hallway smoke detectors, DNA Info reported, a fire extinguishers were empty or broken. Six people were injured, two severely. In the chaos, thieves made off with the few valuable belongings man3 had. The Websters, along with the other homeless clients, were relocated. (After Andrew graduated, he took a job at Starbucks, and his family found a Ile Carmen Torres stood in the cold night, her bare feet singed, she knew she had little choice but to return. "I don't have a place to go;' she told me soon apartment is $1,400." After the fire, Torres brought her dilemma to Rafael Salamanca, the district manager of the local community board, who called a public meeting. At of her charred hallway for an audience that included an executive from Housing Solutions. "These are not livable conditions," Salamanca said. He se "refused to let me know who the landlord is." "I'll find out," the executive promised. "I have a contact person:' But Salamanca never got an answer. Torres's lease termination, notarized by one of the Podolskys' office attorneys, was signed by the building's regis Follman. But when Salamanca sought out his office address, at another shelter, he got nowhere. It later turned out that Torres had met the elusive IV offered to buy out her lease, but she knew him as "Mike." Jae London, the former hotel manager, told me that Podolsky shelter employees are encow and fake e-mails" in order to conceal their affiliations. "They are terrified of DHS finding out that Alan Lapes doesn't own any of the properties, thal Jay Podolsky," London said. 'Alan says that the Podolskys are out of the business, they have nothing to do with it, which is a lie. They never went any London worked at the Washington Hotel for thirteen year; fired after a confrontation with a DHS caseworker over fat outraged belief that he was taking the fall for his neglectfii account of systematic mismanagement. He produced invoi the constant involvement of Amsterdam Hospitality execu check that was signed by Jay Podolsky. London, who went Washington" at work, says his facility housed the homeless tiny, often windowless cells so narrow that you could stand either wall. London's management duties sometimes included unusua: he attended meetings of the SRO Law Project on the order needs me to go to a community meeting, use a fake name," briefed Lapes on a street corner about plans to oppose the Continental Hotel and later attended a protest masqueract activist asked London to speak to the press, but when the c instead praised Lapes. The activist, Yarrow Willman -Cole, naive," she recalled. Sometimes, such ploys have consequences more serious th frigid February morning, I met Torres at the Bronx Housin housing advocates call an "eviction mill?' Tenants are not e: swallowed in a black parka, carried her creased legal docui In the hallway, the landlord's lawyer, Vadim Goldshteyn, gi can do is give you until the end of the month to leave." Win her case to the judge, Steven Weissman, he cut her off. "Mr staying in the apartment," he said. "The landlord wants yoi The building's management company sent Torres a letter c A room at the Washington Hotel shelter. $19,899 in back rent. But it turned out this was because th Section 8 payments after a failed building inspection —in c landlord's own neglect. Obviously, this was not a proper justification. After Kathleen Meyers, a Legal Aid attorney, was alerted and intervened, the e Torres is now one of the last rent -paying tenants in her building, which was renovated after the fire. I wanted to ask the architects of Bloomberg's homelessness policy why the city continues to do business with the Podolskys, but DHS officials declin Privately, however, current and former agency employees advanced a rationale. The city needs beds, and it has to seek them from the willing supplie inhabit the bottom reaches of the real-estate market. Like many creations of the Bloomberg era, the shelter system is now under reassessment. Liu tried to block the West 95th Street shelter contract, th and the facility remains open for now. Last month, after protests from Carroll Gardens residents, Buildings Department inspectors descended on ar building slated to become a 170-bed shelter. Its front window is now pasted with a VACATE sign, warning of conditions "imminently perilous to life De Blasio has promised to reform the city's "disastrous and broken homelessness policy," reinstituting rental subsidies and ending the cluster progra has also been embarrassed by reports that he raised more than $35,000 from shelter landlords and contractors linked to Hess and Housing Solutio: Hess threw the candidate a fund-raiser, attended by Lapes, who exploited a loophole to give twice the legal limit. De Blasio returned some of the coi rejected any suggestion of improper influence. The Podolsky's business model, however, has outlasted many mayors; it has proven as persistent as the problem is intractable. Last week, a federal s rise in homelessness in New York last year, even as the population dropped nationally. On West 148th Street in Harlem, workers recently began subs into cubicles. Winter is corning, and it promises to be a lucrative season for the Podolskys. Map: A $90 Million Shelter Empire The city declines to publish the addresses of homeless shelters, making their ownership difficult to determine. But information gathered from various explanatory note below) suggests the Podolsky family and their associates control close to 40 facilities, some through direct ownership, others througi agreements with Alan Lapes. And the network is expanding: A controversial Brooklyn shelter is currently awaiting final approval, and other Podols, poised for conversion.