What Foreclosures? The Imperfect Storm

In today's Miami Herald, a headline trumpets Property Values Rise For The First Time in Years.  Pedro Garcia, the affable Property Appraiser for Miami-Dade County has reported a statistically insignificant variance in the total property value as he, Pedro Garcia and Pedro Garcia alone, calculates the value.   

The innumerate Herald reporter then wrote a breathless story about how property values are rising based on this statistical insignificance, instead of staying flat, as based on Pedro Garcia's dishonest and manipulated data.   

You see, Pedro Garcia, unlike any other property appraiser in the country, ignores the sale prices of foreclosed home.  Just cuts them out of the calculations.   This means that Pedro can cry, "Oh frabjous day, callooh, callay" when his nonsense verse is published by the Miami Herald without question.   

Before you rush out in the heat with that For Sale sign, consider this, one third of the properties in North Bay Village currently listed for sale on Trulia are in some level of foreclosure.  These properties will not only sell for considerably less than their value but you won't know about it.  You'll just wonder why your house is still sitting on the market after six months.   

The real estate interests are of course deeply invested in hiding the truth on foreclosures to keep prices up.  The banks would rather you didn't know.  The municipal and county governments can collect more of your money by claiming your house is worth more than it is.  

All of them win by maintaining this pricing fiction.   

But what does the Herald gain?  A few more ads? Or are they too far gone to even care about reporting?  The Miami Herald was never one of the world's great newspapers but they used to have some pride in getting it right.    

Kevin Vericker

June 30, 2012

Paul Vogel Passed Away (updated)

The City Website announces Paul Vogel passed away last night after a long illness.

SERVICES:  Thursday, June 28, 2012 – 1:00 P.M.
                  Blassberg Rubin Zilbert Funeral Home
               720 - 71 Street
               Miami Beach, FL 33141
 INTERMENT:  Immediately Following Services
                    Lakeside Memorial Park
                    10301 NW 25 Street
                    Doral, FL
 Rest In Peace - Our Good Friend

Kevin Vericker
June 27, 2012

An Emissary from Scott Greenwald Writes

Did you think that the support for the strip club was limited to one out of town poser and people on Scott Greenwald's payroll? Well, no. Below is the text of an email that was sent to the commission by one Al Blake, an outspoken fellow from North Bay Island, currently vice chair of the Budget Oversight Board, and a man whose outrage knows no bounds when it suits him. The only edits I have made are line breaks for readability. All spelling and grammatical errors are the author's. I unpack it below the quote.

"Good evening Mayor, Vice Mayor and Commissioners: I write to all of you tonight as a friend to you and emissary of Scott Greenwald. Since we have the ongoing law suits, it’s very difficult for him to sit and talk to each of you. So he asked me to present some alternatives for Isle of Dreams and see if anything excites you for the City. If you chose individually not to reply to me, that’s your choice. However, if there’s something that can be done, then at least we may have a starting point. I’m not paid nor hired to do any of this other than I know Scott and he knows my thoughts as to try to find something that’s agreeable to our Commission for that parcel of land. I know we have ongoing lawsuits with probably more to come and that a lot of money will be expended by our City on these cases. In fact, does anyone know how much we’ve spent so far? I for one, would like to see all of that ended and a nice project go up for our city. He basically feels he has 4 choices to go with that make sense for him as the developer and also might make sense for us in the City. These are:

1. Current project that is being discussed- Obviously NOT GOOD

2. Build a 2 story building only for the strip club- smaller scale- Still NOT GOOD

3. Use the existing building for a hip-hop club, similar to what Barchetta’s was on the weekend- Not what we want

4. Build a residential building with commercial units on bottom- different that the standard condominium, maybe a showcase building for NBV with different design-maybe 40-50 Stories- Yeah, I know, taller than we currently have but that’s all for discussion as to how, what and when.

Personally, I think it opens a new discussion. This can be discussed with our high priced attorneys, who will be the ONLY beneficiary if we continue to fight. For the record, I have always believed that if anyone fits our code with all T’s crossed and I’s dotted, then we must allow it since it’s the LAW. If not, why even have it on the books.

However, in my days, if anyone presented something that was not wanted or acceptable to the commission, we tried to figure out what else could be done. That’s what a Commission does in trying to figure out what’s best for their City. As a resident and taxpayer, I would hate for our CITY to continue to spend MUCHO $$$$$$$$$ without trying to see what else we can do, especially if it’s ultimately allowed by our code of land use ordinances but we just don’t want it. At least now, there’s some options to consider that after a lot of discussion could offer a win-win for all us and a savings of MUCHO $$$$$$.

What do you think? The door is open. Whether you like the Developer or not, he owns a parcel and has the right to develop it. Let’s make it happen for the benefit our beautiful City. So that’s it from me. If you think you want to go further , I’m sure we can after speaking with the attorneys. Have a good night and take care. Al "

Let's unpack this.

The T's are not crossed nor are the I's dotted.  In fact, the T's and the I's are Missing.  

Options 1 & 2 -  Build the strip club.  What this conveniently ignores in exactly the same way that the original application ignored is the presence of a school within 500 feet of the club.  Greenwald's measurement studies, flawed studies, only measured to the child care center, which is significantly further than the licensed vocational school across the street.  The unchallenged ordinance specifically prohibits building within 500 feet of any licensed school.   

That the then city planner Alex David approved it without noting the presence of a school was an egregious oversight but had the plans passed, the city would have been on the hook for major liability.  

So there's no reality to this.  A strip club can't be built there.  

A Hip Hop Club?  

Actually there is nothing to stop Greenwald from developing a Hip Hop club, a Big Band club, a disco, a restaurant, a retail plaza, an office park.  Interesting that "Hip Hop" was the only alternative presented.  Are people afraid of Hip Hop?  I'm a bit old for it (and so are you probably) but there was no anti hip hop sentiment that I was aware of.  So build one.  

A 50 Story Condominium

I'm sure the banks are lining up to finance that project.  It would bend code but man, it would be interesting to see where the money would come from.   Get the financing and I'm sure the city will be willing to talk.  

How do we know it's over?  

It's so weird that this keeps going on.  The plans can't work.  The parcel is less than 500 feet from a school, there's no demand locally and it's time to give it up.  Some investments work, some don't.  The city has already provided Scott Greenwald with enough corporate welfare by putting our city offices in the otherwise vacant ground floor at the Lexi at considerable cost to the taxpayers, tolerated his non-payment of taxes on parcels throughout the city, and not enforced basic maintenance on the abandoned lots at 7914 through 7918 West Drive.  

It's unfortunate that one developer has not done well here but it happens. This does not require emissaries, agents, quislings or other influencers.  The taxpayers didn't break it, the city can't fix it.  It's time to let this go.  Enough already.  

Kevin Vericker

June 25, 2012

Special Commission Meetings

The commission has three special items that they had promised to address in separate commission meetings during the month of June.

Two of them are time sensitive - the audit and the charter revisions.  The law is that the audit must be submitted by June 30.

But the mayor will not be able to meet next week and so we go into the next budget year and the next election cycle with no commission review of the audit nor the proposed charter revisions.

It seems three of the commissioners, the  Lim Kreps and Dr. Vogel, are unavailable owing to prior and current commitments, Lim having already scheduled a vacation, Dr. Vogel having de facto retired from the commission a year ago and Ms. Kreps having certain vague but imperative notions that prevent her from doing her job.

Now I'm not particularly bothered about the Charter Review.  The changes suggested are trivial and punitive in nature, so why take the time?

But the audit matters.  Finance is the most important function of our commission.   And the funny part about the finance issue is that it is the area that our mayors, both appointed and vice, ignore the most.  Did I say "funny"?  I meant "unbelievable and incompetent".   Eddie Lim is of negligible importance to the commission and Dr. Vogel is long away, but Ms. Kreps needs to step up, now and do her job.  No excuses.

And the third special item - the commission consideration of the revisions to the Adult Entertainment Ordinance.  They should do it but since there are no applications for a strip club, that can wait until the July meeting.

Kevin Vericker
June 23, 2012

Let's Talk About Real Estate

This year's report from the county appraisers indicates that they believe property values will not fall further in North Bay Village.  No growth, but stays the same.  

In spite of the many (re)published PR pieces in the Herald, the housing market in Miami has not recovered.  It may have flatlined but that is due really to one major factor - the banks have slowed down the rate of foreclosures and are holding on to repossessed properties longer.  The shadow inventory created by these properties is out there.  As quietly as possible, banks are trying to clear them off their books without sounding too big an alarm.  If they dump them all at once, it will quickly deflate the prices further and that does not help the banks.

At the current rate it could be years before this inventory is at a realistic level.  That does not even take into account the number of people who are "upside down" on their house, making the mortgage but knowing that they owe more than they could get by selling.  This pent up supply will want to get out from these mortgages when they can.

The problem of course is national, global really, and there is no local solution for this, but there are local actions that our commission should be taking now as top priotity.

1. We need a foreclosure registry.  When a bank enters foreclosure action against a homeowner, many Florida cities require them to register the action with the city and pay a fee around $500 so the city does not get stuck with the cost of maintaining the property.  The foreclosed properties at 7914 - 7918 West Drive are health hazards adjoining our park and eyesores driving down the neighborhood prices just as one example.
2. The building at 7525 East Treasure Drive has to be addressed.  That block cannot recover as that large abandoned 10 story building looms over the street.  This building is typical of the housing bubble stupidity.  This was a full occupied, large comfortable apartment rental building with amazing views.  I lived there when I first moved to North Bay Village and it's a shame this housing stock was lost.
   
   Not only is the building a major drag on the ambiance of the street, the mere fact that there 160 housing units noted as foreclosed and abandoned makes our city much less attractive from a statistical point of view.  It greatly inflates the appearance of dereliction in terms of abandoned and unoccupied houses in North Bay Village.
3. There is a proposal for a "re-occupancy" certificate process that would require a property changing hands to be inspected, at a cost to the seller, to ensure that the house meets current code.  The natural outcome would be that the house would need to be brought up to code at the time of the sale.

The re-occupancy is part of a good idea. Re-occupancy certification will give the buyer a clean slate to start out with on their purchase, sort a starting line for future coding issues. It will improve public safety by making sure residences are up to code. And it will fund the coding.

It will only work though if it is part of a larger code program. North Bay Village code enforcement over the years has been erratic, often suspiciously lax, and in 2005 when City Hall suffered major damage, many of the permit files were lost.

The re-occupancy will only work if it is a part of an overall code improvement that needs to contain at least three components – education, amnesty and certification. Residential codes are often difficult to understand and it's not always obvious when a permit is needed so it's easy to imagine that work will go on in pure ignorance. The city does not offer any publicized code compliance workshops and should start doing that.

The web page presence needs to be beefed up. Coding should reach out to the residents.

There also needs to be an amnesty period. Perhaps the city could allow residents to hire a code inspector to certify on the same criteria as a re-occupancy certificate, correct the code violations found without penalty and move forward from that point.

Only when the city has made this service open and accessible to the residents should the final step, enforcement, be put in place.

The commission now has two jobs – hold the line on spending and taxes, and stopping our properties from plunging further. Anything else is a distraction.   

Kevin Vericker
June 19, 2012

Are things looking Up?

At Tuesday's marathon commission meeting, commissioner Chervony pulled me aside and said with laughter in his voice but no mirth in his eyes words to this effect.  "Has hell frozen over?  I never thought I would see the day of you praising the mayor on your blog."   I replied somewhat defensively (and maybe pompously) that when people do the  right things, they deserve the  right credit.   

One good thing about writing a blog like this is that you get "do overs".  You get the chance to put out more fully what you meant and that's what I want to do today.  

In public life, business, social and certainly political, we should make our rational judgments on who to trust based on two things - our understanding of the reasoning presented and the effect of acting on the requested item.   Now that oversimplifies since all of these have significant smaller components - what is the history?  are all the relevant data presented?  are there other effects that action could have - but in broad terms, public trust comprises transparency and benefit.   

Our contentious commission meeting this week worked painfully towards those standards.  It fell short but it's a great start.  

Chervony spoke in detail about his complaints, frustrations and concerns with the city manager and supported his views with specific examples to illustrate his position.   Blumberg supported this view and added examples from the meeting itself where there were serious incomplete lacks in the information that the commission needed.  

This was true transparency.   The reasoning was laid out, there maybe should have been more public discussion with the city manager but questions were asked and answers sought.   Both commissioners then went to their request for action - based on what they have seen and presented, they believed the best course of action was to fire the city manager.  

The mayor disagreed with the conclusion that the city manager should be fired.  It was clear that she too was frustrated by the incomplete information and she did offer a valid alternative opinion on why the problem persists, but never denied the problem.  

What she concentrated on mostly was the second part of the trust equation - what would the effect of firing the city manager be on the city?   The mayor specifically stated her concerns that the budget would suffer, the city's reputation would take another strong hit and that the issues presented, while real, did not support the drastic action.   

This was true judgment.   Nowhere were accusations of hidden agendas tossed around.  the circumstances and effects were agreed at least in broad terms, and the mayor came to a different conclusion as to the right course of action.  

The motion to fire Dennis Kelly tied and failed to pass.   

The process was good. To see the three commissioners openly and transparently discussing a politically charged and sensitive subject with clarity and shared reasoning chips away at my cynicism.   It is a sign of their growing maturity.  

The commission has to take this attitude to the next step - finding compromise that lets things move forward.  The good news is that if people are transparent, the compromises tend to find themselves.  

Let me propose a "would have been better if" course of action.   

First of all, I agree with the mayor on retaining Kelly.  My own interactions with Kelly have been constructive and useful.  He gets credit in my book for that.  And I believe he has been spending his time clearing up two solid years of horrendous interim mismanagement of the city.  Kelly has the skills to do it but it takes time.  

More importantly, the budget matters and he has brought on a Finance Director who for the first time has published and explained a defensible summary of the city finances.  (There is a major omission on capital funding but I'll cover that in another post.)   We have to get that budget right.  It may be our last chance considering what is coming down in the public sector next year.  Kelly is our best bet.  

A compromise, a different course of action, would have been the best next step.  Commissioner Chervony should have proposed a vote of no confidence.  In our system, that serves as a stark warning to improve.  That should have contained specific, measurable, agreed outcomes to restore confidence, and have come with consequences if not achieved.   I have no doubt that it would have passed since three of the four present shared equal frustration.   

Overall, the commission gets an "A" this week for transparent discussion of difficult subjects and open discussion of disagreed effects.  

To get an "A" for the term, the commission now needs to work on how to move forward and I am starting to believe they can do that if they apply themselves.   

So, that's my long answer to Commissioner Chervony's "Did hell freeze over?"  Nah, no ice cubes in Hades but maybe a little bit like the first cool days in fall.   We can get there.  

Kevin Vericker

June 14, 2012

  

Longest Meeting Ever

It's 2:15 AM and the Commission meeting just adjourned.   There was a lot covered and much to say but I'm tired so I'll hit the three big points.

1. The Federal Court rejected Scott Greenwald's lawsuit today, saying that he didn't have standing to sue since he has no active application for a strip club. Greenwald has 30 days to appeal it but this is good news.
   
2. The Commission voted unanimously to remove him from the Budget Oversight Board.  
   
3. Commissioners Chervony and Blumberg voted to fire the city manager over a variety of contentions.  While agreeing that the issues are real, Mayor Leon-Kreps and Commissioner Eddie Lim voted against the firing, meaning the motion died.   There will be a great deal more to say about that.  

Job well done to the city for the legal defense against the strip club and for fixing the Budget Oversight issue.  

Oh, and Miami lost some of sort of basketball game.  I'm going to bed. 

Kevin Vericker

now June 13, 2012 

Action and Reaction

Let's start with some good news. On Tuesday, there is to be a discussion of removing a member of the Budget Oversight Board, Scott Greenwald. This is a needed move. Greenwald is suing the city to force us to grant a strip club license in violation of our code, he is by far the biggest tax deadbeat in our city, owing over $1.5 million dollars in unpaid taxes, and is the city's landlord. He has no business on the Budget Oversight Board. 

 The mayor gets credit for having the political courage to put this on the agenda and she needs your support. If you want to see the city run more for the residents than the contributors, show up on Tuesday and let our commission kmow that they do not stand alone when they go against entrenched interests. If you cannot get to the meeting on Tuesday, or even if you can, take a moment to write to the mayor Connie Kreps and thank her for putting this forward. Her email address is cleonkreps @ nbvillage.com. 

 Seriously, take a minute and thank her. I have often disagreed with the mayor but we can't be the sort of people who do not support when she gets it right. 

 You'll notice I called this piece "Action and Reaction". The other night I was watching the "Daily Show" and Jon Stewart did a piece on the faux outrage in the presidential election, where partisans are saying bringing up someone's past actions is not "fair". 

 Of course it's ridiculous. We trust people based on what they say, how they present themselves and what they've done. If any of these are off, most importantly what they've done, we have no good reason to trust them. 

 I mention this in the light of the strip club revision proposed by the city attorney. The ordinance revision is good. It's clearer, more solid than the previous version, and addresses many of specific problems that the city had in the last hearing. 

 My mistrust is not of the ordinance but of the city attorney's previous actions. Let's face it. They did not really step up to the plate in the past. 

 Some examples: 

 In the first go around of the hearing, way back in October 2010, the city attorney approved an attempt to convene a second meeting after P&Z rejected the proposal for a strip club. It was only when the audience objected that the attorneys "remembered" that the Sunshine Law requires a meeting have notice.  

 The city attorney in that same month approved a dual special meeting of P&Z and the commission to push through the strip club and instructed the P&Z board that they had to vote "Yes". It was only the citizens again who demanded it be stopped. 

 In 2011, the city attorney was unfamiliar with the measurement requirements of the ordinance and unwilling to offer an opinion on the scope of the city planner's discretion. 

 So when the city attorney last month proposed the revision to the ordinance, then refused to answer questions about the revisions even when directed to by the chair, it was a bad move.  Now we are being told, "just trust us." but we are missing the experience of confidence with the city attorney on this subject.    

I understand there will be a special meeting to discuss the new ordinance. If it does not have a sponsor who is not the city attorney, then it needs to be tabled. I hope that a commissioner will take up sponsorship so there can be proper and full discussion. The city attorney should not be sponsoring legislation at all, no matter how good the piece is, as this one appears to be. 

 Below is the agenda for Tuesday. And again, don't forget to let the mayor know you support her move to take Greenwald off the Budget Board. 

 Kevin Vericker 

June 9, 2012 6-12-2012 City Commission Meeting Agenda