Pearyng through the looking glass … Key West optical illusion fairy tale real estate clinic

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Peary Court 2Peary Court

Peary referendum wording

From the let’s do it side, The Key West Citizen, my interjected thoughts in bold italics:

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Saturday, February 6, 2016

Residents sound off on Peary Court buy

BY GWEN FILOSA Citizen Staff
gfilosa@keysnews.com

One way or another, Peary Court is headed for sale, one of the complex’s residents told her neighbors the other day, advising them to support the city’s plan to buy it.

“It’s either going to sell to the city or a developer,” Jennifer Phillips told about 50 people gathered Thursday at the Ferry Terminal for a meeting sponsored by the political action committee Housing First. “At least we have a chance.”

Er, Jennifer, Key West Housing Authority Director Manny Costillo said during Jimmy Weekly’s Peary Court town hall meeting in the ferry terminal last year,the developers told him, if the city does not buy Peary Court, they will upgrade it and rent it out at market rates, and they will use their 48 building rights, the city gave them, to add 48 more units, which will be rented out. Costillo said the same thing during a later city commission meeting. I was at both meetings. By the way, Jennifer, what is your job? Where do you work? What do you do there? What is your annual income? Don’t you think the Citizen’s readers and the voters need to know that?

At issue for Key West voters March 15 is whether to direct city leaders to try to buy the 157-unit Peary Court in Old Town for up to $55 million, a referendum that stipulates the city will pay off the mortgage using only rents from the town homes.

That sale price calculates to $350,000 per home in a coveted Old Town location that three years ago was being planned for demolition and redevelopment.

Voting “yes” means the city will own the property and the housing authority will likely manage the rentals. It also means the developers who bought the 24-acre parcel in 2013 for $35 million will bank up to $20 million in profit.

No, voting yes authorizes the city to buy the property for up to $55 million purchase price – IF THE CITY OBTAINS THE UP TO $45 MILLION, PAYABLE SOLELY OUT OF RENTS, FINANCING SPECIFIED IN THE 2ND PEARY COURT REFERENDUM’S WORDING. THE TWO REFERENDUMS PASS TOGETHER, OR THEY FAIL. EVEN IF THE TWO REFERENDUMS PASS, THEY ARE NOT MANDATORY, THE CITY COMMISSION CAN CHOOSE NOT TO BUY PEARY COURT.

City Commissioner Jimmy Weekley, who is a PAC member, urged the crowd to imagine Peary Court selling to new developers instead of the city.

“Where is there opportunity for you to find another place?” Weekley asked.

Come on, Jimmy. What new developer would want to by Peary  Court after the repeated thrashings the current developers received from you and the other city commissioners and the mayor and your Historical Architectural Review Commission? At your own Peary Court town hall meeting last year, where Key West Housing Authority Director Manny Costillo did all the talking for you and the city purchasing Peary Court, Manny said, if the city does not buy Peary Court, the developers will upgrade it and rent the units and build the 48 new units and rent them.

City leaders looked into buying the former military housing in 2013 but said they were hamstrung by the Navy’s private seller’s condition they sign a confidentiality agreement that would have violated public records laws.

This is not entirely accurate. There was discussion of how the city could bid for Peary Court and not violate Florida’s Sunshine Law. However, it probably would not have appealed to the Navy and its Balfour Beatty partner to enter into a contract to sell Peary Court to the city, contingent on the outcome of a voter referendum authorizing the city to make the purchase. 

Now, they’ve agreed to tap $10 million from county land authority funds, Key West’s take of the bed tax from hotels, for the down payment and plan to borrow $46 million. The extra $1 million is to cover closing costs and create a contingency reserve.

Hmmm. Contingency reserve. Thinking they were going to tear down the 157 units and build new units, the developers did not maintain the 157 units, but kept collecting rents on them. Further along in this post today at goodmorningkeywest.com is a detailed list of what the city will have to fix, if it purchases Peary Court. The list does not include any water damage Peary Court units might have suffered during Hurricane Wilma’s tidal surge which flooded the low-lying areas of Key West and wreaked havoc in thousands of homes here. The Peary Court units were built on concrete slabs. They sit right on the ground.

If voters strike down either of the two ballot questions — one about whether the city purchases it and the other whether to go out to bond — the city’s Peary Court plan stops, said PAC co-chair MaryBeth McCullough.

“It’s done, it’s dead in the water,” McCullough said. “If you don’t vote yes, it’s done. If you vote yes and it passes, there’s no guarantee it’s going to be bought.”

On Friday, city staff hadn’t determined whether the sole bidder on its financing package, Centennial Bank, had met all the conditions.

Not true. The sole bank’s bid clearly does not meet the referendum’s wording: that the mortgage be repaid solely from the rents. Centennial Bank wants the financing to be backed by the city itself. All along, the purchase has been represented by the city officials to the public as the city will not be liable for the mortgage, and if the mortgage is defaulted, the mortgage lender can only look to Peary Court for getting its mortgage repaid.  It never dawned on the city officials, or their financial advisers, that no bank would agree to lend the city money to buy Peary Court, secured only by the property itself. That the banks did not go for the city’s proposal can only mean one thing: the banks do not think lending the purchase money to the city on the city’s terms was a good investment for the banks. Even now, the city officials had not gotten the message: if it’s not a good investment for the banks, then it’s not a good investment for the city.

Centennial submitted an offer for the $46 million mortgage but asked the city to back up the loan with something other than rent payments.

Actually, Centennial asked for the city to guarantee the loan out of the city’s own treasury, because the last thing Centennial, or any bank or lender, would want, is to have to foreclose and end up owning Peary Court. Gosh, just look at all the homes banks foreclosed a few years ago in the Florida Keys, many of which homes the banks still own. One might wonder if  Centennial will cave in to back room pressure and agree to lend the money to the city on the city’s terms? In that regard, Centennial is headquartered in Conway, Arkansas, near Little Rock. It is known to make shrewd loans. Historically, its Chairman personally reviews major loan and approves them, or rejects them if he does not like them, even if his management want to make the loans. I was told that by Todd German, who worked several years in Key West for Centennial Bank.

The referendum, however, wouldn’t allow that. Finance director Mark Finigan on Friday asked the bank if it would reconsider but hadn’t received an answer by the workday’s end.

City staff can always re-bid the financing after the referendum, if it passes, Finigan said.

Yes, the city can do that. But my goodness! Why not the City Commission just pulls the referendums from the ballot and tries to get the city’s ducks in a row first, for a change? Peary Court is not going anywhere. The developers don’t have another buyer. And, my goodness! The city could put its new homeless shelter in the soon to be vacated city transit terminal across Palm Avenue from Peary Court, which would devalue Peary Court substantially, and put the developers into an even bigger hole, and maybe persuade them to sell Peary Court to the city for a lot less than $55 million :-). But even if that scenario did not play out, who else would buy Peary Court from the developers with the city’s homeless shelter right across the street?

Also last week, the city’s plan to inspect 19 Peary Court homes before the referendum hit a wall: The company that agreed to do it for up to $30,000 said it wouldn’t do the job for the $15,000 city commissioners approved for the work.

Another political promise broken: all along the city officials promised the public there would be an inspection and the results would be made available to the public before voting started.

Peary Court, where two-bedroom, one-bath town homes run for $2,400 a month, isn’t anything fancy, several residents say, but for Key West, where it’s not uncommon for people to cobble together an apartment out of two rented rooms with no kitchen, it’s a find.

That’s been Jimmy Weekly’s argument, to make $2,400 a month rents, plus utilities, be affordable housing. Perhaps the referendum wording should be changed from Peary Court to Peary Court Commune.

With central air conditioning, car ports, closets and measuring over 1,000 square feet, Peary Court apartments stand out over many rented dwellings in Key West, said resident Craig Gray, who recalled the dilapidated Old Town rental he had before.

“I could see through the walls,” Gray said. “Everyone who has lived in Key West has had those places I’m sure. No windows — you have blinds, screens [like] you’re living outdoors.”

Are you sharing the rent and utilities with other communal members, Craig? If so, how many other communal members? 

Gray, an artist who lives at Peary Court with his wife, a hospital employee, said Peary Court is an opportunity the city can’t pass up.

What is you two’s combined annual income?

“Eventually somebody will redevelop it and we’ll all be living out on Big Pine (Key),” Gray said.

The 1995-era Peary Court homes suit Donna Windle just fine.

“We’re very comfortable with it,” said Windle, a PAC member who lives at Peary Court. “We’ve got a lot of space, a lot of green space. It seems very private. You don’t hear sounds through the walls.”

Donna’s a Realtor, who never met a developer she did not like. She, and many other citizens and politicians and city officials like her, are the reason Key West sold out to development, which led to heaps of affordable housing being torn down and replaced with far more expensive housing. I dunno, I’m having a hard time fitting a Realtor into my definition of workforce. Below is a link to a document Jimmy Weekley furnished the Key Wets City Clerk last year, breaking down the Peary Court tenants by their jobs. I am having a hard time fitting most of those tenants into my definition of workforce: the poor working stiffs barely able to afford a place of any kind to live in Key West.

https://drive.google.com/file/d/0B6CIxVRXBk88YW1tWEtfUHB0a2s/view?usp=sharing

During the PAC meeting, a few voices called out against the referendum, suspicious of the $55 million sales price and one woman saying government shouldn’t be a landlord.

But the naysayers were told by other residents they were incorrect or lacking facts, or not seeing the big picture.

“Look at Key West Bight,” Weekley said in response to the government comment.

When another woman stood up to ask whether anyone in the room would pay $350,000 for a Peary Court unit in its present state, her would-be Norma Rae moment tanked.

“That’s cheap!” someone called out. “Yes!” another said.

Well, by golly, defeat the referendum and put a homeless shelter across the street and bludgeon the developer into selling Peary Court units, or the whole shebang, for a lot less than $35o

gfilosa@keysnews.com

The Shadow knows

From the skeptic side,

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Key West the Newspaper (thebluepaper.com):

Feb052016

 

bag of money

by Naja and Arnaud Girard…….

Donald Roberts lives in Peary Court with his mom Ruby.   They rent one of the 48 deed restricted “affordable” units. Their situation is puzzling. With a combined annual income of under $55,850, they qualify for “low-income affordable workforce housing.” Their rent should be $1,571/month, yet they pay around $2,400/month. At that price, their 2-bedroom deed restricted affordable unit at Peary Court is pretty much market rate.

So what happened to the hard fought victory that nearly four years ago “saved” 30% of Peary Court units for affordable workforce housing?

It was May 29, 2012, and the Planning Board had previously recommended the city rezone Peary Court (a former military housing enclave) without requiring the soon to be private owners to provide any affordable housing.

Public outrage descended upon the City Commission. It was almost an historic moment; one of the Commission’s greatest hits. Most remarkable: the passionate pleas of those 7 women who so captivated reporter Mark Howell that he published a piece entitled, “The Seven Women Who Spoke,” in Solaris Hill. Seven Key West mothers coming down to “tell it like it is” to seven City fathers awkwardly sitting on the dais. And the battle was won. In exchange for higher density and some additional building rights, the would-be developers were to abide by the code and provide 48 of the 157 existing units as deed restricted affordable housing, effective immediately upon transfer.

In a November 14, 2012  letter found this week in city files, City Planning Director Don Craig informs developers of the city’s interpretation of how the workforce housing code would apply to the property,

“In conclusion, it is the determination of the City Planner in conjunction with the City Attorney that the proposed development for the Peary Court Housing project must meet the requirements of the Work Force Housing Ordinance inclusive of: 16 low income affordable units and 32 median affordable units. Alternatively, and as encompassed by the Ordinance a mix of low, median, moderate and middle income may be provided up to a mixture of 32 low income units and 16 middle income units…

Please use this letter as City’s determination as to how the Work Force Housing Ordinance is to be interpreted for new multi-family residential development inclusive of the Peary court Housing project. This determination should be used to guide the Development Agreement and Development Plan application for the Peary Court Housing project.”

Today this translates into rents of $1571/month for low-income units and $1965/month for median-income units. Yet, according to several Peary court tenants interviewed this week, the deed-restricted units are being rented for around $2400/month.

Here’s what happened:

After everyone went home, satisfied with having protected the common good, the developers filed their formal deed restriction declaration with the County Clerk, translating those 16 low-income and 32 median-income units into 48 “moderate-income” units renting for roughly $2400/month. The city accepted the deed restrictions without question and two weeks ago the City Commission went along with the deal when they authorized adevelopment agreement for Peary Court that carried over the more lucrative “moderate-income” assignments.

Considering the rental rate difference, the shift to the moderate-income denomination for all 48 units could have produced a windfall of nearly one million dollars for the developers over the past three years.

So here comes the million-dollar question: Did the City violate its own laws and sign an agreement with a developer that is contrary to land development regulations and if so is that agreement legal?

According to Florida Statute 163.3231 “a development agreement and authorized development shall be consistent with the local government’s comprehensive plan and land development regulations.”

In New Jersey, tenants in deed-restricted housing sued their landlords for having overcharged them for rent. The Court found in their favor and ordered the tenants to be reimbursed– not just for the excess rent, but for three times the excess rent. The legal concept is called “treble damages.” It’s similar to Florida Statute 772.11 where the victim of civil theft is awarded three times the value of his actual damages.

Peary Court tenants are not alone. According to the Housing Authority there are 202 privately owned deed restricted units in the City of Key West. Commissioner Sam Kaufman recently pointed out a report that showed that as many as 40% of those privately owned deed restricted units may be in violation, either by renting (or selling) to people whose income is too high (not qualified for the affordable housing) or by charging more than is allowed under the affordable housing guidelines.

City Attorney Shawn Smith is currently working with city staff to audit those privately owned deed-restricted units for compliance.

3 Responses to “Key West: Your Landlord May Owe You For Overcharging For Rent”

  1. They should know by now that their corruption will be brought to light! They should know The Blue Paper will eventually find out. Or perhaps the people running the show are just stupid or intimidated?

  2. Naja for mayor, Arnaud for city attorney, of Key West!

  3. Hmmmm . And just what was the city going to charge if they bought them ? Yep $2400.
    Now where do they sit with a bank ?

    And with a lawsuit likely to follow nobody will be stupid enough to buy them.

    I think the city best try to buy THE BLUE PAPER before they uncover any more corruption.

    Hope the voters are paying attention. Until I found this paper I suspected corruption but nothing like has been uncovered. One huge mess if the feds get called into this.

 

Feb052016

 

question mark

by Martha K. Huggins, Ph.D……..

A burning question was finally asked on Wednesday (2/3/2016) in a Key West CitizenEditorial—“Who is White Street Partners?” Well, that’s the wrong question if you’re after Peary Court’s current owners. Peary Court Holdings, LP (a Delaware limited partnership)– registered in Florida as a “foreign partnership”– is Peary Court’s owner of record. However, in fact, the current partners with financial interests in Key West’s Peary Court–who together constitute its owners, include: Peary Court Holdings, LP; White St Partners; and the Wexford Spectrum Fund, a hedge fund managed by Wexford Capital (Greenwich, CT)[i] You can look up each of these entities, but I do not recommend doing so after a big meal and too many drinks: This is a complicated set of entities, sub-entities, and derived entities.

skeleton danceRemember the “Skeleton Dance”? : “The thigh bone’s connected to the hip bone. The hip bone’s connected to the backbone. The backbone’s connected to the neck bone,” and so on.[ii] That’s what it’s like to trace the holding companies, corporations, and Principles, now involved in one way or another with Peary Court.

Peary Court Holdings, LP is a ‘Foreign Limited Partnership.’ A ‘holding company,[iii]’ such as Peary Court Holdings, LP, controls—“usually through a majority shareholding, another company or companies.[iv] A holding company “is a business that doesn’t do anything itself,” [v] it owns investments, such as stocks, bonds, mutual funds,…real estate, … private businesses, or…anything of value.”  Warren Buffet’s Berkshire Hathaway is perhaps the best-known holding company.”[vi]

Peary Court Holdings LP, as its name suggests, is a limited partnership (LP), which means that it delegates “management control [to its members, who] share the right to use partnership property, share the profits of the firm in predefined proportions, and have joint and several liability for the debts of the partnership.”[vii] A holding company’s “limited partners: (1) cannot, in any way, control or participate in the management[viii] of the partnership (otherwise they will lose their limited liability protection), (2) are liable only up to the sums invested by them, and (3) cannot withdraw their investments without the consentof the general partners.”[ix]

Peary Court Holdings, a “Foreign Partnership,” was created in one state—Delaware—which is not the state where Peary Court Holdings needs to do business–Florida. This renders Peary Court Holdings a ‘foreign-designated’ US business. Once so registered Peary Court Holdings can seek investors from anywhere, including internationally.

Peary Court’s current owners—form an unequal triumvirate consisting of Peary Court Holdings, LP; White St Partners, LLC; and the Wexford Spectrum Fund. They are in a power relationship with one another, within which, ‘Some animals are more equal than others.’ To wit: Peary Court Holdings calls the shots as the triumvirate’s “general partner.” It very likely holds a majority of White St Partner’s original financial investment in Peary Court, the property. For its part, White St Partners has “limited partner” status—an outcome that White Street seemingly considers an acceptable constriction of its previous role in managing and controlling Peary Court property. In compensation, the diminishing of White St Partners’ control over Peary Court property was traded for their getting out from under some financial losses created when they were blocked from accomplishing a ‘Millionaires’ Paradise’ on Peary Court land. Likewise, White St Partners gained enhanced liability protection in the event that new financial looses or other liabilities crop up.

Who are White St[x] Partners?

Super wealthy Brazilian, Paulo H. Tavares de Melo, and his two executive-level associates, Nelson Stabile[xi] and Victor Ballestas,[xii] are the Principles in Tavares de Melo’s Integra Investments, LLC and Integra Real Estate, LLC. Paulo Melo’s Integra Real Estate joins Everett Atwell’s Ironwood VG, LLC to become the corporate foundation of White St Partners. We’ll talk later about Wexford Spectrum Fund, the third entity in Peary Court’s ownership.

Key West’s own, Everett Atwell, the local face of White St Partners, is a KeyWester to the core: Born and raised in Key West, a graduate of Key West High School, Atwell left the Island briefly to get a Bachelor of Science degree in electrical engineering. Graduating from Notre Dame University, Atwell returned to Key West, becoming “Director of Substation engineering for the City of Key West electric utility. … Capitaliz [ing]… on his local knowledge to acquire …waterfront real estate. [Atwell then]…. Partner[ed with]…KeysCaribbean properties.”[xiii]

Never mind that Atwell’s notorious “Watermark” project—the poster child for bad planning and ignoring laws, “became a center of controversy in 2005,” even before construction had begun. Watermark’s neighbors objected to the size of the proposed development, saying it was out of scale with the surrounding community and violated height restriction code. When “construction of 32 luxury town houses stalled in the wake of the real estate market crash and economic downturn,…one model home stood deserted in the midst of an empty lot surrounded by an 8-foot-tall construction wall.” And Atwell’s Cortex Corporation was facing its fourth foreclosure.  In 2009 Wachovia Bank filed bankruptcy proceedings against Everett Atwell’s then company, Cortex Acquisition Group, LLC. Facing default on its Wachovia $15.3 million loan to build Angler’s Reef[xiv]–a high-end gated community located at mile marker 85—Atwell resolved, “”to spend 10 to 12 months trying to sell the homes.””

As for Atwell’s Cortex Acquisition Group—Atwell was listed in late 2012 as head of Atwell Holdings[xv]–that entity was “administratively dissolved” by 2013 or 2014.”[xvi] Between 2011 and 2014, Atwell co-managed Ironwood VG, a limited liability corporation whose “management” he shared with Denise Atwell (Ann Rozelle was the entity’s “registered agent).”[xvii] In 2014, Ironwood VG fell into “administrative dissolution,” which in corporation legal-eze means that a limited liability corporation ‘kinda’ still exists even though it doesn’t. Here’s how such a somewhat liminal status comes about: if a corporation does not submit its annual report to Florida State by May 1, the entity gets a $400 fine; if the fine is not paid by the third Friday in September, the entity is “administratively dissolved” by the state. Such an ‘inactive’ corporation “continues its corporate existence [but]…may not carry on any business except that necessary to wind up and liquidate its business….” The corporation’s director is personally liable for [all] debts, obligations, and liabilities of the corporation….”[xviii]

question mark

I have a burning question: Can Peary Court Holdings LP legally list Everett Atwell’s Ironwood VG, LLC as a corporate limited liability corporation of White St Partners, when Florida State has administratively dissolved Ironwood VG?[xix]

White St Partner’s Paulo Tavares de Melo,Chief Operating Officer of his own Peary Court-related corporations–Integra Investments and Integra Real Estate –is  the wealthy scion of an old and very rich Northeastern (Pernambuco State) Brazilian family. Paulo Melo, who “holds an MBA in finance from the University of Miami and a Bachelor’s Degree in Business Administration from Nicholls State University,”[xx] was chief executive officer of his family’s Brazil-based conglomerate, Grupo Tavares de Melo.[xxi] Connected to his native Brazil by the family’s money that, as Integra’s own website statement confirms, flows from northeast Brazil to South Florida. As Integra’s web pitch explains, in 2001, after Paulo Melo had established his own investment company in Miami,

“Paulo…started investing in real estate opportunities for [his Brazilian family’s multinational,] Grupo Tavares de Melo, one of Brazil’s leading privately held conglomerates. From 2001 to 2008, Paulo spearheaded the group’s [Grupo Tavares de Melo] initiatives and completed multiple successful investment cycles [in Miami] through a land banking business model. In 2009, as the Florida real estate market became abundant with opportunities, Nelson Stabile joined Paulo Melo to enhance the team’s execution capabilities and pursue a more comprehensive investment strategy.”[xxii]

Paulo Melo’s “land banking business model,” involves “the practice of aggregating parcels of land for future sale or development,” usually through “quasi-governmental entities created by counties or municipalities to effectively manage and repurpose an inventory ofunderused, abandoned, or foreclosed property.[xxiii] Land banking is ripe for such real estate scams as when, “large areas of Florida swampland…were… sold as suitable for real estate.”[xxiv]

In 2007, Paulo Melo’s brother, Marcelo Tavares de Melo, then head of the Grupo Tavares de Melo’s northeast Brazilian enterprises, was jailed for corruption. After almost a decade of investigation by Brazil’s Polícia Federal (roughly like the FBI), Marcelo was charged[xxv]with being the king-pin of an illegal cartel—dubbed the “Gasoline Cartel”–that had been manipulating, upwards, the price of gasoline sold to gas stations and at the pumps. Marcelo Tavares de Melo’s family’s business “controls innumerable gasoline-related businesses, including the Ello-Puma gasoline distribution company in northeast Brazil.”

northeast brazilThe price altering of gasoline resulted in the cost of gasoline raising as much as 127% within a 24-hour period, which negatively impacted bus passengers and car drivers’ pocket books in some of Brazil’s poorest cities.

Now, let me be clear: Paulo Melo’s brother’s involvement in an illegal gasoline price fixing cartel that enhanced the Grupo Tavares de Melo’s revenues, would have no negative implications for Paulo Tavares de Melo’s Integra Group’s Miami operations, if his Integra, LLC were not investing Grupo Tavares de Melo’s money in Florida real estate. However, it appears that such investment may have taken place: This question of ‘fruit of the poisonous tree’ could be a serious concern for Florida and the US government corporate regulators. Was ‘bad money’ involved in the purchase of Peary Court? We may never know without further investigation.

Wexford Spectrum Fund

The final entity associated with Peary Court’s ownership, the Wexford Spectrum Fund, is a hedge fund managed by Wexford Capital (Greenwich, CT).[xxvi]   According to a CliffWater[xxvii] 2011 Report, Wexford Capital LP …was founded by Charles Davidson and Joseph Jacobs in 1994. The firm currently manages $7.0 billion, including $4.6 billion in three hedge funds.” One of these, Wexford’s Spectrum fund, in 2011 had assets amounting to $3.8 Billion. By including a corporate hedge fund — ‘which is a limited partnership of investors that uses high-risk methods, such as investing with borrowed money, in hopes of realizing large capital gains’ —in the ownership of Peary Court property, the new owners of Peary Court property are faithfully retaining the ‘snatch, grab, and sell’ business practices of White (Street’s) Partners whose business model links piracy and capitalism. The triumvirate will be well-served by account executives at the Wexford Spectrum Fund. Being “relatively unregulated, hedge funds…are best known for using more sophisticated (and risky) investments and techniques.” This to me smacks of ‘high-risk’ sport!

Peary Court’s triumvirate—a pack of quick-buck, slight-of-hand, investors who don’t even really trust one another, must unload their “white (Street) elephant” : Will voters keep Key West government from becoming a sucker to high-risk piracy capitalism?

~~~~~~~~~~~~~~~~~~~~~

[i] See “Ownership Certification”:
http://www.cityofkeywest-fl.gov/egov/documents/1453745141_58428.pdf

[ii] http://supersimplelearning.com/resource-center/skeleton-coloring-page/

[iii] http://www.encyclopedia.com/topic/Bank_holding_companies.aspx

[iv] http://legal-dictionary.thefreedictionary.com/Holding+Company

[v] Ibid

[vi] http://www.joshuakennon.com/how-a-holding-company-works/

[vii] Limited partnerships: https://en.wikipedia.org/wiki/Limited_partnership

[viii] A limited partnership (LP) is usually formed by “at least one general partner (or full partner) and at least one limited partner (or nominal partner). General partnerscontroland manage the partnership, and are jointly and severally liable for all its debts andobligations.   Limited partners (1) cannot, in any way, control or participate in themanagement of the partnership (emphasis added to distinguish between of their own entity and of the Holding company)…otherwise they will lose their limited liability protection, (2) [Limited partners} are liable only up to the sums invested by them, and (3) cannot withdraw their investments without the consent of the general partners.”

[ix] http://www.businessdictionary.com/definition/limited-partnership.html

What started out as White Street Partners changed at some point to White St Partners–to look up the latter you’ll need to use the name as just written.

[xi] Nelson Stabile[xi], “received his Master’s degree in Engineering and Construction Management from Florida International University, with a Bachelor’s degree from the University of Miami in Business Administration, with a concentration in International Finance and Marketing. Stabile who is fluent in English, Spanish and Portuguese,” may have Latin American roots as well. KeyWesters who attended the HARC meetings that eventually killed Paulo Tavares de Melo’s dreams for Peary Court, may remember Nelson Stabile. A seasoned real estate developer for Integra, and active in eight other Miami companies, Stabile also heads his own Miami-based general construction company, Estrutura, LLC.

[xii] Victor M. Ballestas, not listed among White Street Partners’ members, is however, a finance and real estate executive Integra. Slected in 2012 as one of the Miami region’s “100 Power Leaders,” Ballestas has a Bachelor’s degree in Finance from Florida International University and a Master’s degree in Real Estate Finance. Described on Integra’s corporate site as having been “Immersed in the real estate industry for most of his life,”[xii] Ballestas cut his teeth on buying up and turning around “distressed properties.” In 2012, Ballestas–along with Stabile and Tavares de Melo—when they were Principles in yet another LLC–Biscayne Brickell, LLLP (a Limited Domestic Partnership), scored big from the foreclosure of Miami’s 14-story Chase Bank office building. The building was “surrendered…[to Biscayne Brickell] in a deed in lieu of foreclosure.” That is, the ‘underwater’ Chase Bank sold its $16.5 million dollar loan to Biscane Brickell, “which took ownership of the building in exchange for forgiving the… building’s …loan debt.” Biscayne Brickell, LLLP, which was “Managed” at the time by Victor Ballestas, Nelson Stabile and PauloMelo, was described in the press as “affiliated with the Brazilian investment group Integra Solutions….”[xii] In its 2014 Florida State corporate filing, Biscayne Brickell, whose registered agent was “BCRA, LLC,” contained Paulo Tavares de Melo’s signature. I could not find any solid finance information about Biscayne Brickell, a private holding company.

[xiii] See what it now has: http://www.keyscaribbean.com/ownership.php

[xiv] Angler’s Reef “community is located on Old Highway and the Atlantic Ocean at mile marker 85.

[xv]http://search.sunbiz.org/Inquiry/CorporationSearch/ConvertTiffToPDF?storagePath=COR%5C2010%5C0422%5C77093219.tif&documentNumber=P00000105379

[xvi]http://search.sunbiz.org/Inquiry/CorporationSearch/ConvertTiffToPDF?storagePath=COR\2012\1025\40797269.Tif&documentNumber=L01000009378;http://search.sunbiz.org/Inquiry/CorporationSearch/SearchResultDetail?inquirytype=EntityName&directionType=Initial&searchNameOrder=CORTEXACQUISITIONGROUP%20L010000093780&aggregateId=flal-l01000009378-38532427-dbfe-49ed-b08d-ddf4bba8cda2&searchTerm=Cortex%20Acquisition%20Group&listNameOrder=CORTEXACQUISITIONGROUP%20L010000093780

[xvii] http://search.sunbiz.org/Inquiry/CorporationSearch/GetDocument?aggregateId=flal-l11000023524-3cc4da5c-961e-4251-95d5-9bdbcbd06a62&transactionId=l11000023524-004d005b-cb8c-46c4-b094-5204e87b549a&formatType=PDF

[xviii] Houghtonpa.com/administrative-dissolution-in-florida/

[xix] http://search.sunbiz.org/Inquiry/CorporationSearch/GetDocument?aggregateId=flal-l12000026626-706392a9-a454-452b-93eb-b3a6689b0550&transactionId=l12000026626-c03c3efb-2e54-46d6-9c64-c67c8260cb70&formatType=PDF

[xx] http://www.integrafl.com/v1/index.php/paulo-tavares-de-melo

[xxi] Grupo Tavares de Melo: http://www.tavaresdemelo.com.br/pt/

[xxii] http://www.integrafl.com/v1/index.php/company

[xxiii] https://en.wikipedia.org/wiki/Land_banking

[xxiv] Ibid, see reference ‘xxiv’ for more such scams

[xxv] http://acertodecontas.blog.br/atualidades/pf-pede-e-justica-mantem-prisao-de-marcelo-tavares-de-melo-e-mais-tres-empresarios/

[xxvi] See “Ownership Certification”:
http://www.cityofkeywest-fl.gov/egov/documents/1453745141_58428.pdf

[xxvii] http://data.treasury.ri.gov/dataset/96dcb86f-e97e-4b05-8ce2-a40289e477a6/resource/ff46cbd7-ccaa-4fb5-a178-18d22a613f67/download/Wexford-Cliffwater-Investment-Due-Diligence-ReportRedacted.pdf

4 Responses to “Who Owns Peary Court?”

  1. Do some of these guys remind me of the drug company hedge fund guy who raised the price of an AIDS drug by 5000% recently? Opportunists or pirates? Do we just accept that this as the way big business only cares about its investors and show them our money? ( The 55 million )

    Thanks for doing the research. We are not amused.

  2. ms Martha the ‘hydra’ you researched was surely tedious and beyond the reach until it seen your detailed and refined scrutiny. i cheer you with a many hats off and a bow dear lady for a most excellent investigative report. wjm

  3. Dear Dr. Huggins, Wow! Again a phenomenal piece! So much info to process… The list of “legal” capitalist shenanigans is endless and numbs the mind. Something tells me the average Key West City Commissioner is not up to playing ball with the likes of the “White Street Partners”..Our dear bubbas are way out of their league…They might as well be dealing with Martin Shkreli…https://www.youtube.com/watch?v=YmmKj7-O3Kk
    Again, thank you for your brilliant research and insight into this and other corporate state sanctioned abominations…..

  4. Thank you, Martha. These folks and their locations and backgrounds needed to be made public. Don’t know about you, although maybe I can make a good guess, but I’m having trouble getting all choked up inside for these poor, hapless investors/developers’ (the people, not their lawyer’s paperwork) predicament, but you left out who has been advising them: our own Jim Hendrick.

    I don’t know why the local mullet wrappers and news outlets still are not pointing out that the Peary Court developers’ profit, by their own calculations, is at least $32 million in the deal: $55 million sales price, less $35 million they paid for it, plus the 48 free “affordable” building rights the city GAVE the developers, which the developers valued at $12 million during the “negotiations”. All according to Key West Housing Authority Director Manny Costillo at City Commissioner Jimmy Weekley’s Peary Court purchase town hall meeting. Manny said he told the developers the city could not earn rent off of the 48 building rights. So the developers said, okay, they keep the 48 building rights and build 48 rental dwellings at Peary Court, and the city can have the rest of Peary Court for $55 million. The city’s crack negotiating team, consisting of Costillo, Jimmy Weekley and City Manager Jim Scholl, say okay. The city’s crack negotiating team agrees to the developers’ asking price for the existing 157 units, and the 3 units which had burned and could be rebuilt. The developers keep the 48 building rights, which are “called” affordable building rights, which they intend to use to build 48 new units on the Peary Court land, whether the referendum passes or not. It came out during the 2nd most previous city commission meeting that the 48 building rights effective are for 48 new MARKET RATE units. Also during that commission meeting, it was explained by Donna Bosold, representing the developers, with her husband and business partner Jim Hendrick sitting beside her in the audience before she went to the speaker station, that the new 48 units would be built in clusters throughout Peary Court. That also was explained by City Commissioner Margaret Romero. Until then, the mayor and other city commissioners and the public had thought the 48 new units would be built on 2-plus acres inside of Peary Court, not scattered all throughout it. Until then, Commissioner Weekley had maintained Jim Hendrick was not representing the developers. In fact, Hendrick represented the developers before the city’s Historical Architectural Review Commission (HARC), and he has represented them ever since. In fact, anyone who does business with someone represented by Jim Hendrick gets fleeced. He’s that smart, clever and good at what he does. Michael Milier, a local architect, lives in one of the Peary Court units. Miller sits on the HARC board. He was chairman of the HARC board when Jim Hendrick represented the developers before HARC. Miller told me the developers did not maintain the Peary Court units after purchasing them, the buildings have mold, and the $55 million price is too high. The buildings are mostly wood frame and plywood, which termites love. Termites are a problem everywhere in Key West. Manny Costillo said at public meetings that all of the appliances in the units probably need replacing. I suppose that’s stoves, refrigerators, dishwashers, washers and dryers, air conditioning units, etc. For $55 million, the city at the very least should have gotten all of Peary Court, including the 48 building rights it had GIVEN the developers.

Next skeptic today:

Wilma

Subject: 9ft of Wilma Water on Olivia Street
From: Colby Fisher <colbyfisher@gmail.com>
Sent: Thursday, February 4, 2016, 2:11 PM
To: Naja Girard <editor@thebluepaper.com> and others

Hello Everyone,

My neighbor, Jerry, from across the street on the 1400 block of Olivia
Street told me that the Wilma water peaked at the crest of the asphalt
in front of his house. That is a bit higher than 9 ft. and is just 5
blocks to the south of Peary Court where the Palm Avenue buildings are
at a 6 ft. elevation. Aren’t the rest of the Peary Court buildings at a
7 ft. elevation?

Better yet, we have Rick Boettger included as a recipient in this email.
He too would have first hand knowledge of how high water peaked in the
Meadows/Peary Court neighborhood.

It is important to remember that there is no history of any damage being
recorded in the insurance records at Peary Court because it was federal
property. There was no record of ANY damage occurring at ANY federal
property from Wilma, but as you can see if you go through the photos at
the link below, the photos say something entirely different:

https://www.facebook.com/naskeywest/photos/a.10153692579797012.1073742035.155287397011/10153692581977012/?type=1&theater

Colby

I told my lady Kari last night, that I had lived off and on in a home in Key West, which took in 3 1/2 feet of seawater during Hurricane Wilma’s tidal surge. Imagine what that did to the sheet rock and what was behind it, er, electrical wiring and plumbing. And mold set in, Kari said. Yep. And I’m the owner and want to sell it today. I tell prospective buyers about all of that?

Last skeptic today, Rick Roberts, aka Raccoon:

raccoon

Subject: Fairy Tale Court revisited

Fairy Tale Court

Raccoon here…

Look, the women that writes about the citizen meetings and such in the paper is concentrated again on Fairy Tale Court.

Sometimes the city MO RONs just won’t give up. They are mutating…

Look, my ranting about Fairy Tale isn’t incorrect (see I can do a double negative just like the leaders). The folks that want to buy this wonderland for the $90,000 a year downtrodden have done exactly what I thought they would start doing. They are now going to just be investor/owners so it appears they are getting out of the rental business. They think the law is designed to let Key West Housing Authority rent to low income folks, senior citizens, etc. It is, I suppose. But when did KWHA get the authority to classify luxury subdivision land, with $2400 a month rentals, leased to $90,000 a year income to qualify “workforce” citizens? They do not have that authority under Florida law, and they cannot provide the shielding from litigation by private enterprise because they are the damn government.

Let me educate the kiddie astronaut teacher, the grocery store owner, the former car parts king, and their cronies on how they can get away with providing workforce housing at Fairy Tale Court to their downtrodden $90,0000 friends. They can do it by talking to their friend – old developer Singh, who believe it or not, is OBAMA APPROVED:

Obama Key West

Pritam leasing workforce housing for profit in Key West property is like the idiots from Fogerty’s that lease Waterfront Brewery from the City of Key West. Both are competing public entities, who competitively sell against fellow public entities. Although Florida law and Federal law allow for stuff like HUD, when you swim upstream into $90,000 a year income rentals that ain’t legal anymore if you are the taxing government.

The chances for getting a bank loan don’t improve though. A bank may still loan $35.000,000 based on land value. Pritam may well become the master renter of the property for profit. He wouldn’t be required to call renters affordable renters or workforce housing recipients, he wouldn’t be subject  it, to Florida or Federal law aimed at low income housing. A bank wouldn’t go for the $45,000,000 loan because Pritam would need about $5,000 a unit times 157 to bring them up to a $2400 a month rental price. That’s $785,000. Not a terrible amount, Pritam might even factor that into the master lease.

But that all presumes a bank would lend the city $45,000,000 based on land value and then the city would come up with $20,000,000 more to pay the current private industry owners. Why in the hell would the city do that? Make nothing, and maybe pay a loan back on land. That housing would need replaced in a few years. So add that cost on too. Nothing in this makes any sense at all.

And why would the banks loan the money? They know it doesn’t make any sense for the city. And why would the current owners not approach private industry to sell it, they know no bank will loan to a renting city. Why would they even entertain a delusional city, it’s a waste of their time. Add in the fact no sane citizen will vote for this crap.

Peary Court is not Fairy Tale Court when the developer/owner is allowed to tear it all down to land and turn it into a resort or luxury housing like Shark Key or even Raccoon Key (that’s correct, there is no Key Haven).

Go back to being a city government of pompous fools. There is no need to try to fleece the flock under the false pretense of “workforce housing”. Banks won’t go for it, citizens won’t vote for it. Just give it up…

Raccoon out…

My first wife with my tail after the divorce…

Racoon's ex

sloanbashinsky@outlook.com

sloan hat

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