Subprime Fallout: Liberty City family squats in home they lost to foreclosure

April 18, 2010

March 05, 2009 By: Paola Iuspa-Abbott

Mary Trody

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fter being evicted from their foreclosed Liberty City home, Mary Trody, her mother and their extended family lived out of a delivery truck and a van.

View the multimedia presentation on Mary Trody and her struggle to survive as nomads

They used the bathrooms at fast-food restaurants, showered at a friend’s house and braced themselves for an extended period of homelessness.

But after being uprooted for three days, they had a homecoming of sorts. Two grassroots groups, the Miami Worker Center and Take Back The Land, helped the family return to their foreclosed home — as squatters.

Trody, a low-income housing activist with the Miami Worker Center, agreed in part to move back into her old house in late February to send a message to the mortgage industry.

“They need to know we are hurting … we need help,” said Trody, 42, who helps support the family with about $100 a week she earns as a part-time stock clerk at Winn-Dixie.

The family also receives about $1,100 worth of food stamps a month, said Trody, whose husband is looking for work after losing his newspaper delivery job more than a year ago.

Trody said she agreed to become a squatter because she feared her family — including her mother, husband, two daughters, a son-in-law and four grandchildren — would be scattered among several homeless shelters.

“I prayed to God,” she said as she stood in the mostly unfurnished living room of her former home. “I was so scared. I didn’t know what to do.”

HOMELESS HELP

As South Florida endures a wave of residential foreclosures, thousands of families are being displaced. Some end up on the streets or in shelters.

Max Rameau, founder of Take Back The Land, says he has helped eight homeless families move into vacant foreclosed or government-owned houses since October 2007. This is the first time he’s helped a family move into the same home it lost to foreclosure.

Rameau said the home was unlocked and was not forcibly entered.

“We think it is morally unacceptable to have vacant homes throughout our community while there are people living on the street,” he said.

Real estate broker Rick Suarez, who manages foreclosed homes owned by Fannie Mae, said Take Back The Land’s has good intentions, but breaking into bank-owned homes is wrong.

“It is definitely trespassing,” said Suarez, president of Castle Realty in Miami. “It is utterly incorrect and what they are doing is totally illegal. I know they are trying to help people but …. It is sad, really sad.”

Trody’s mother, Carolyn Conley, owned the home on Northwest 137th Street and Eighth Avenue for almost two decades. In January 2005, Conley refinanced the house with a $119,000 loan, according to Miami-Dade County public records. She used the proceeds to pay off two mortgages and to pay bills, Trody said.

“My mom didn’t know what she was signing,” Trody said. Her mother was not available for comment.

The mortgage payment, which totaled about $1,000 a month, became too expensive for Conley. In May 2006, she stopped making payments. They didn’t make a house payment for about three years before being evicted.

American Home Mortgage Servicing began foreclosure in March 2007. The Irving, Texas company is the loan servicer for U.S. Bank, the trustee for investors who own pooled loans including the Conley mortgage.

By last November, Conley owed $151,000 on the mortgage, which the family couldn’t pay. Soon, the lender was awarded ownership of the home and on Jan. 5, Miami-Dade Circuit Court Judge Michael Genden authorized the family’s eviction.

As spokeswoman for American Home Mortgage said the company offered the family an undisclosed amount of money to pay for their relocation.

“We will again offer this relocation assistance,” said Christine Sullivan in an e-mail response to questions.

Jennifer Wendt, a U.S. Bank spokeswoman, said the trustee isn’t involved in the foreclosure process.

“The servicer of the loan is who would be responsible for managing the foreclosure process, and in most cases, they would also handle the selling of a home after it’s in foreclosure,” she said.

DAILY FEARS

Trody worries each day the police will come to kick the family out. That’s why they haven’t furnished the place. They sleep on the floor and heat food in a microwave that sits on the floor.

Rameau said he’s careful to explain to families the risk of becoming squatters.

“At some point, the bank is going to come around,” he said. “The laws on trespassing and squatting right now aren’t keeping up with reality.”

Families he works with often live as squatters from three to eight months, until they save enough money to rent a place or are evicted, Rameau said.

Squatters face charges of trespassing, burglary, loitering and prowling, said detective Rebeca Perez, a spokeswoman for the Miami-Dade Police Department.

Police officials wouldn’t comment on how the department handles homeless people living in a foreclosed house, but Perez said “each situation is unique and the circumstances, offense committed, would determine what charges, if any, would be filed.”

So far, no squatters Rameau has worked with have been arrested, he said.

Trody says the foreclosure and eviction have been stressful on the entire family, especially her children and grandchildren.

“I hate it,” said Annie Thomas, Trody’s 14-year-old daughter.

“I try not to think about it. I use the time to build stuff,” she added as she sat on a backyard tree swing she built from a plastic milk crate.” [Cont.]

To read the entire article, visit http://www.dailybusinessreview.com



Paola Iuspa-Abbott can be reached at (305) 347-6657.

Mary Trody photo by Paola Iuspa-Abbott

Copyright © 2009, ALM Properties, Inc.

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Miami Worldcenter: How a sparkling vision became a morass of debt

April 18, 2010
December 23, 2009 By: Paola Iuspa-Abbott
Miami Worldcenter

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he Miami Worldcenter, one of South Florida’s most ambitious mixed-use developments, has become the backdrop of a legal and financial soap opera, casting doubt on the future of the proposed project near downtown Miami.

New York investor Harvey Silverman, 68, and partner Marc Roberts, 50, had close to a father-and-son relationship that blossomed when the economy was growing and money was flowing.

Now the partnership is going through a break-up, highlighted by unpaid loans and accusations of fraud and broken promises.

The project continues to be plagued by foreclosures and lawsuits, and even if the joint venture resolves its problems, some observers doubt the complex will ever rise on the collection of empty lots and rundown warehouses in Miami’s Park West neighborhood.

Last month, a company led by Roberts, a former boxing promoter, lost one of the parcels that make up the site to foreclosure.

And in September, Naples-based Orion Bank, now operated by Louisiana-based IberiaBank, sued four companies led by Roberts to recover $26 million it loaned them three years ago to buy 15 parcels in Park West.

Roberts did not reply to a request for comment. Alan Rose, his West Palm Beach lawyer, declined to comment on the pending litigation.

Silverman didn’t respond to a request for comment through his lawyer Thomas Decea in New York. Decea declined to comment on the pending litigation.

LOSS OF NET WORTH

From 2005 to 2008, Silverman, who had a net worth of about $300 million in 2007, borrowed nearly $78 million so Roberts could assemble 25 acres in Park West for the site of Miami Worldcenter. The money also helped pay for Roberts’ living expenses, according numerous federal lawsuits filed in New York and South Florida.

By September 2008, Silverman had lost millions in the stock market and failed real-estate ventures. A month later, he stopped funding Miami Worldcenter as well as Roberts’ “lavish lifestyle,” according to the lawsuits.

In a number of suits and countersuits, each says the other breached contracts and should be held responsible for paying $78 million owed to several banks.

The developers say Miami Worldcenter would transform eight blocks into nearly 12 million square feet of stores, offices, hotel rooms, convention space, condos and restaurants west of the American Airlines Arena and south of the Adrienne Arsht Center for the Performing Arts. The complex would extend from Northeast Sixth to 11th streets and from North Miami to Second avenues.

In 2004, Roberts came up with the plan, and Silverman agreed to provide the financing. Roberts’ job was to manage the business, buy land and look for equity partners and investors.

Roberts soon recruited Boca Raton developer Arthur Falcone as an equity partner. Roberts and Silverman own 50 percent of the project; Falcone, CEO of the Falcone Group, owns the other 50 percent.

Once Silverman and Roberts stopped paying for their share of the project, Falcone’s company picked up the tab.

“My group has been funding the difference,” said Falcone, whose company is not involved in the legal battles between Roberts and Silverman. “I can’t get into the details of our operating agreement, but we’ve been handling it from our end.”

Falcone said he is prepared to wait for better times while the group seeks construction financing.

“The Miami Worldcenter was always more of a long-term hold,” he said on Monday. ”We have to wait until the market changes. Right now it wouldn’t be the right time [to develop it]. But we are still picking up pieces.”

In September, a group affiliated with Falcone, PWV Group 1 Holdings, closed on the purchase of 27 parcels to be part of Miami Worldcenter. The price was $39 million. Roberts and Falcone had the parcels under contract for more than a year at a price tag of $88.7 million.

The deal went through after the seller, troubled Africa-Israel, slashed its asking price by about $50 million.

The September purchase came even as the Roberts-Silverman partnership was in disarray. Roberts sued Silverman in Florida in May for allegedly breaking a 2004 oral agreement to fund the Miami Worldcenter. Silverman countersued several weeks later, claiming Roberts had “perpetrated a massive fraudulent scheme.”

He argued that Roberts extended lines of credit that were in Silverman’s name but negotiated by both partners. Silverman said he did not agree to the extension.

Roberts replied that Silverman wanted him to use some of the joint venture funds “to maintain a lifestyle commensurate with that of their other partners,” according to court filings.

Roberts was to pay Silverman back with profits from the completed project, according to the suits.

Roberts also said he never extended lines of credit without Silverman’s approval. He said Silverman signed every bank document and received financial statements that kept him up to date on the joint venture’s bank accounts and loans.

First Bank is suing Silverman and Roberts in New York to recoup $30 million on a defaulted line of credit tied to the Miami project.

Silverman recently settled with Deutsche Bank, which sued to collect $20 million of a delinquent loan, also tied to the Miami Worldcenter.

LONG ASSOCIATION

When the two met in 1988, Roberts was raising money for Triple Threat Enterprises, a company that represented professional athletes in New York. Silverman invested in the business and obtained a line of credit to pay for Roberts’ personal and business expenses, according to court documents filed by Roberts.

Silverman repaid the line of credit when Roberts took the company public and made a profit.

In 1995, the partners followed the same successful strategy when Roberts launched Worldwide Entertainment & Sports Corp.

CURRENT TROUBLES

Now, more than a decade later, things are far different.

Roberts faces battles with lenders over Miami Worldcenter. He guaranteed four loans made by Orion Bank between 2005 and 2006 to buy 16 parcels in Park West.

He defaulted on the loans totaling $26 million in April after he failed to pay the interest and property taxes, according to the lender’s lawsuits. The suits also name Falcone as a guarantor.

Roberts and Falcone are fighting the suit while waiting for the housing market to rebound. “For now, we are looking at cleaning up this situation with Orion Bank,” Falcone said.

Roberts and Falcone received another setback last month, when lender C&H Land Corp. won a foreclosure suit on a 5,000-square-foot parcel in Park West. A company led by Roberts, 717 NE 1 LLC, defaulted on a $3 million promissory note in January. A foreclosure auction is set for July.

Miami attorney Ron Isriel, who represented C&H in the suit, said Roberts and Falcone made no effort to try to save the land. Meanwhile, Park West property owners says the mostly vacant parcels are an eyesore.

“It is another failed project with disastrous consequences to the neglected Park West neighborhood,” said Park West property owner Brad Knoefler. [Cont.]

To read the full article, visit http://www.dailybusinessreview.com


Paola Iuspa-Abbott can be reached at (305) 347-6657.

Copyright © 2009, ALM Properties, Inc.


Jorge Perez’s project a case study in how market failed

April 18, 2010

December 18, 2009 By: Paola Iuspa-Abbott

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hen Miami condo developer Jorge Perez built Icon Brickell during the housing boom, he planned to make a $350 million profit on a $5 million cash investment. After all, he had pre-sold nearly 90 percent of the 1,796 condos, and closings were set to start in late 2008 and early 2009.

Lenders fell over themselves to lend money to one of the most successful developers in the country.

Today, Perez’s reality couldn’t be more different as most of the contracts fell apart and nervous lenders are pressing for resolution of defaulted loans. In his book, “The Billionaire Blueprint for Real Estate Success: Powerhouse Principles,” Perez wrote that with Icon, he wanted to build the “largest endeavor in Florida history.” But instead he may have created the largest real estate debacle and a symbol for a meltdown that fueled one of the worst declines since the Great Depression.

The future of the mostly vacant condominium at the mouth of the Miami River is uncertain as Perez and his construction lenders work to figure out what to do with the distressed project. Perez told the Wall Street Journal on Wednesday that he was close to reaching a friendly agreement with his lenders, a syndicate of banks led by HSBC and Bank of America.

On Thursday, Perez confirmed to the DBR the bank negotiations, but fell short from saying whether he would surrender the project to the lender. He owes nearly $700 million in construction loans.

“We are presently in what we hope, are the final stages of negotiating an arrangement with the lending group,” he wrote in a statement. “We are, at this point, not at liberty to disclose the terms that are being negotiated with the lenders but expect a resolution in the very near future; hopefully, within the next 30 days.”

Perez said he hoped the agreement would not interfere with the condo sales. So far, nearly 120 units have closed.

“[We] expect to close hundreds more in the next few months, as a result of the increase in demand due to price decreases and financing made available by the lending group.”

As a result of the negotiations, Perez, chairman of the Related Group of Florida, could give up the 2 billion-square-foot Icon to the lenders.

It happened before.

In July, he handed over 370 unsold units at CityPlace South Tower in West Palm Beach to a group of lenders led by Toronto-based Bank of Nova Scotia. Related owed nearly $119 million in delinquent construction loans. Perez agreed to a friendly foreclosure, and Bank of Nova Scotia put his company in charge of the condo sales and leasing for a fee. Nova Scotia took title to the CityPlace condos in Aug. 31 through a foreclosure auction.

Perez didn’t return a phone call seeking comment by deadline.

A failed strategy

Whether HSBC and Bank of America will keep Perez on board is unknown.

Some real estate experts aren’t sure Perez is applying the right strategy to sell Icon units.

Walter Defortuna, chairman of Miami-based Fortune International Realty, said Perez is more concerned with closing existing contracts than attracting new buyers. Defortuna said the buyers who signed contracts at the height of the market won’t close until they can figure out what the current value of Icon units.

“But to do that, you need new buyers, people coming from outside,” he said. “Even if you give the original buyer a discount, they won’t close because they don’t know what the market value is.”

Perez recently began offering a 30 percent discount to the original buyers, hoping to entice them to the closing table. But Defortuna said the discount won’t be enough for someone who signed a contract for $800 a square foot three years. The unit will still be overpriced in today’s market.

Real estate consultant and former builder Tony DiTocco said the discount will help some buyers since they will need to bring less cash to the closing.

Still, focusing mainly on the original buyers may not be the right thing to do, DiTocco said. Many of them are making less money than they used to and can no longer afford the purchase, DiTocco said.

Related projects also attracted a large volume of investors who planned to flip the condos and that is not longer a viable business plan.

Defortuna said he met with Perez a month ago and proposed taking over the sales of one of the three towers and bringing new buyers.

“But he said he wasn’t ready,” Defortuna said. “He thinks he has a unique project that could never be duplicated” so sale prices shouldn’t be cut significantly.

Defortuna said prices need to be reduced to a point where units will sell.

“Most buyers out there are opportunity buyers,” he said. “You don’t need to give the units away. You just need to establish the market value for units to move.”

But developers do not always have the flexibility to reduce sale prices without the consent of the construction lender. Lenders often predetermine the minimum sale price for each unit and need to approve any sale below that figure.

DiTocco, president of DiTocco Consulting in Fort Lauderdale, said lenders are increasingly becoming more flexible in reducing sale prices.

“It depends on each individual negotiation, but [to banks] it is better to get what you can get than it is to hold your guns and not sell anything at all,” he said.

Condos at Icon used to be marketed at around $650 per square foot but prices have come down to $360 per square foot, said Defortuna, who recently brokered several sales at Icon at the lower price.

Defortuna said he would like to be put in charge of sales at Icon. He would start by marketing the project in phases to create a demand. If buyers see that they have nearly 1,800 condos to choose from, they may delay their decision to buy.

“They will say ‘if I don’t buy today, I can buy tomorrow or the day after,’ ” DeFortuna said. “That’s the worst thing that could happen to a developer.”

Defortuna, who earlier this year helped sell out 1060 Brickell in less than three months, said Icon’s worst problem when it comes to attracting buyers is its density. Currently, 80 percent of condo buyers in Miami come from Latin America. Yet, high-end projects in Latin America have no more than 50 units.

“No one in Latin America perceives a project with 1,800 units as high end,” he said. “In Latin America only government projects have large density.”

So many of those buyers don’t want to pay high prices for a unit at Icon, he said.

Icon’s interior design is also a problem in a battered housing market because many buyers consider it gaudy. Its oversized statues, mirrors and pool furniture cause some buyers to “hate” the project, Defortuna said.

But Icon resident Jaret Turkell likes the building very much. He is renting a unit from the Related Group and pays almost $1.95 per square foot monthly, when he used to pay $2.25 per square foot in South Beach for a less luxurious condo.

“They are slowly releasing units into the [rental] market, and as soon as they are released, people are snapping them up very quickly,” said Turkell, a commercial real estate broker with Holliday Fenoglio Fowler in Coral Gables.

His company is currently working with Perez in the negotiations with the bank, said Turkell, who is not involved in that deal.

HFF early this year unsuccessfully tried to find a buyer for Viceroy, a luxury boutique hotel within Icon’s three-tower project.

“Icon is going through growing pains right now,” Turkell said. “But in three to five years, Icon will be the signature building in Miami’s skyline.”

Paola Iuspa-Abbott can be reached at (305) 347-6657.

Copyright © 2009, ALM Properties, Inc.


SNOWBIRDS SEEK VOICE ON TAX ISSUE

April 18, 2010
South Florida Sun-Sentinel – Fort Lauderdale, Fla.
 
Author: Paola Iuspa-Abbott
Date: Mar 19, 2007
Start Page: B.1
Section: LOCAL
Text Word Count: 1014
Snowbird Phyllis Turek, who lives part-time in Davie, said she doesn’t expect the same concessions as full-time residents, but thinks seasonal residents should get some credit for owning a home and paying year-round for services they use only a few months.

“Nobody cares about us,” she said. “We are a money machine.”

Turek recently attended a town hall meeting on property taxes to complain about the tax burden on homeowners like her. When she saw an opportunity to speak out, she seized the moment. “All my venom came out,” she said.

She is not alone.

Part-time resident David Shafer says many of his Coconut Creek neighbors can no longer afford to spend winters here.

“People in my community are saying that when the market picks up, they are selling,” said Shafer, who has been coming to his condo in Coconut Creek for 22 years. He and his wife, Ruth, also talk about selling and buying a winter home in Arizona or California.

The seasonal owners may have a great deal at stake as the Legislature debates property tax reform, but their voices appear to be largely absent. Small-scale efforts have sprouted, but nothing on the scale of those launched by permanent residents. Among snowbirds, efforts to get organized are rare in Palm Beach and Broward counties.

Major homeowners associations — from the Broward Coalition, which represents more than 100 condominium and homeowner associations, to the Alliance of Delray Residential Associations, which represents 64 communities west of Delray Beach — haven’t created committees or appointed board members to lobby on behalf of snowbirds. Many seasonal residents don’t vote in Florida and lack the political power, said Dominic Calabro, president of Florida TaxWatch, a nonprofit government watchdog and research center for taxpayers.

“They are not involved in the political process,” he said.

Unlike Florida’s permanent residents, snowbirds don’t qualify for a property tax break and a cap in the annual increase in property taxes. Full-time homeowners receive a $25,000 reduction in the assessed value of their primary homes, known as the homestead exemption. Also, their annual increase in assessed property values and taxes is capped at 3 percent.

A variety of proposals to revamp the property tax system are under scrutiny in Tallahassee. One would roll back tax rates to 2001 for all Florida homes, including those owned by snowbirds, and limit future tax increases to what’s needed to keep pace with population growth and inflation.

The Florida League of Cities, which lobbies on behalf of 412 municipalities in the state, is pushing for a 10 percent cap increase on the part-time residents’ homes, said John Wayne Smith, the league’s assistant director of legislative and public affairs.

Smith said he traveled the state attending town hall meetings on property taxes but did not encounter any organized movement by snowbirds.

“It is very difficult to get organized,” said seasonal resident Gil Lachow, who lives west of Boynton Beach. Lobbying efforts in Tallahassee are costly, he said. “Besides, they have no interest in listening to us because we don’t elect them.”

Lachow is a founder of the Palm Beach Snowbirds Umbrella Organization, aimed at exchanging ideas on social events.

“The two-tier tax system is very unfair,” Lachow said. He pays $7,431 in taxes, up from about $3,600 in 2000, when he bought his home. His next-door neighbor, who bought his house at the same time for about the same price, pays $3,826 in taxes because of the homestead exemption, according to public records.

Canadian snowbird Dory Kilburn is determined to get Florida legislators’ attention. She joined a group in Boynton Beach collecting signatures for a petition calling for tax reform. Most of the 2,500 condominium owners in the Boynton Intracoastal Group are seasonal residents overwhelmed by rising property taxes. “Don’t get me wrong, I want to pay taxes,” she said. “But I don’t want to pay 17 times what my neighbors pay. It is shocking.”

Kilburn and her husband saw property taxes on their Ocean Ridge condo jump 41 percent from 2005 to 2006. “I put on hold the remodeling of my kitchen because I don’t know how high taxes are going to be next year,” Kilburn said.

Kilburn is one of the few snowbirds trying to find a voice in a world of politics unfamiliar to them until now.

Florida had about 818,000 seasonal residents in 2005, according to the University of Florida’s Bureau of Economic and Business Research, and their economic contributions are substantial.

Seasonal residents in Broward County were expected to pay $227 million in 2006 to help cover the costs of county government, area schools and municipal services, compared with $97 million in 2001, according to South Florida Sun-Sentinel analysis of county tax data.

Of the states popular among Canadian snowbirds, including Arizona, Texas, Nevada and California, Florida is the only one where members of the Canadian Snowbird Association complain about a disparity between property taxes paid by full-time and part-time residents, said Gerry Brissenden, the group’s president.

The inequality is rooted in the 1992 constitutional amendment that sets the 3 percent cap on property tax increases for primary homes, he said. During the hot real estate market of the past four years, the cap saved a lot of money for many homeowners, but snowbirds saw their tax bills in some cases double and triple.

Todd Bonlarron, the Palm Beach County legislative affairs director, said county commissioners listened to snowbirds and he will lobby for a cap of up to 10 percent on the increase of property taxes on non-exempted properties.

State Sen. Ted Deutch, D-Boca Raton, said he hasn’t been approached by snowbird groups, but is aware of their situation.

“The tax burden has shifted and a lot of snowbirds are leaving Florida at a time when Baby Boomers are considering where to move,” he said.

Paola Iuspa-Abbott can be reached at piuspa@sun-sentinel.com or 561-243-6631.

 Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.


MASTER ASSOCIATION WON’T OPPOSE ‘FRIENDLY LAWSUIT’ FOR INDEPENDENCE

April 18, 2010
South Florida Sun-Sentinel – Fort Lauderdale, Fla.
 
BOCA DEL MAR AGREES TO CUT TIES WITH THREE SUBDIVISIONS
Author: Paola Iuspa-Abbott
Date: Jul 25, 2007
Start Page: A.1
Section: News
Text Word Count: 593
 

Three subdivisions in the sprawling Boca Del Mar community could soon get what they have been fighting for: independence.

For nearly two years, residents of Boca South, Heatherwood and Marina Del Mar have been trying to break away from the Boca Del Mar Improvement Association, which controls the smaller associations.

But now attitudes are changing: The master association has agreed not to challenge a lawsuit to sever ties for good.

“It would be a friendly lawsuit,” said attorney Kenneth Zeilberger, who represents the three subdivisions.

Boca Del Mar has almost 10,000 homes and about 90 subdivisions spread over 2,350 acres stretching from north of the Broward County line and east of Florida’s Turnpike. The master association maintains roads and green space among the subdivisions. The three communities, along with Rio Del Mar Estates, are separated from the rest of Boca Del Mar by Military Trail. The four subdivisions were annexed by Boca Raton in 2004. The city maintains their medians and open spaces and city police patrol the area.

Residents in the three communities, with about 160 homes, claim they barely receive any service from the master association, despite more than $16,000 they pay annually in maintenance fees. Most of that money, they said, benefits the thousands of Boca Del Mar homes west of Military Trail in unincorporated Palm Beach County.

Boca Del Mar Improvement Association board members said they provide some services such as lighting but it is unclear how much it costs the master association.

In South Florida, communities often group under umbrella associations, and breakaway disputes similar to Boca Del Mar’s happen frequently, said Bill Raphan, the state assistant condominium ombudsman.

Residents of a retirement community west of Delray Beach have a similar situation on their hands. Tuscany Condominium Association is trying to cut ties with the Kings Point Condominium Association, he said. Tuscany is frustrated with how the master association is handling repairs to damage caused by Hurricane Wilma in 2005.

Boca Del Mar Improvement Association didn’t oppose the secession, but required that 90 percent of Boca Del Mar approve it. In contrast, homeowners in the three subdivisions argued they needed 90 percent of the owners living in each of their communities.

Both parties reached a middle ground.

“We have come to an understanding,” Marina Del Mar Estates Homeowners Association President Ronald Sayles said. Boca Del Mar Improvement Association President Paul McDermott said the separation will benefit Boca Del Mar.

“It is to our advantage to release them because it costs us money” to provide services, he said.

Still, McDermott said, the subdivisions need to sue the master association to terminate their required membership in the Boca Del Mar Improvement Association. His board, he said, would not fight the lawsuit.

The lawsuit would seek to amend each of the four homeowner associations’ documents to allow 90 percent of its homeowners to vote to leave the master association. It would also seek to cancel membership to the master association, Heatherwood President Paul Wallace said. His association, Marina Del Mar and Boca South are waiting for Rio Del Mar to join them in the proposed lawsuit, he said.

Wallace said years of efforts finally have paid off. “It was a lot of work.”

Wallace has no plans to create a new master association with the other three subdivisions.

Paola Iuspa-Abbott can be reached at piuspa@sun-sentinel.com or 561-243-6631.

Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.


Developer takes fact-finding mission to Haiti

April 17, 2010
March 04, 2010 By: Paola Iuspa-Abbott

J.R. Bergeron
Haiti reconstruction: Reporter Paola Iuspa-Abbott’s two-day trip to Haiti

Daily Business Review staff writer Paola Iuspa-Abbott recently accompanied South Florida construction executive J.R. Bergeron to Haiti, where he launched an intensive effort to obtain reconstruction work in the earthquake-torn nation. In this first in a series of articles, she describes how Bergeron established ties with a Haitian business partner who will be critical and help him gain a role in rebuilding.


When construction executive J.R. Bergeron climbed the steps of a chartered jet at Fort Lauderdale Executive Airport, he was less than two hours and 720 miles away from meeting his future business partner, one of Haiti’s most prominent businessmen.

DBR TV: J.R. Bergeron positions himself to gain contracts to help in Haitian reconstruction

Bergeron had never before felt compelled to visit or do business in Haiti, the Western Hemisphere’s poorest nation. But things are different now. Bergeron — like other American business owners and executives — hopes to land a contract to help rebuild the nation devastated by a Jan. 12 earthquake.

It’s still uncertain how successful he’ll be, but the two-day trip in late February called for every bit of luck, diplomatic skill and business savvy that he could muster.

After the earthquake killed nearly 300,000 people, left 1.2 million homeless and destroyed thousands of buildings, the international community pledged billions of dollars to help rebuild the country. On March 31, donor nations will gather in New York to unveil a reconstruction plan that is expected to launch a scramble for contracts.

When that happens, Bergeron wants to have a Haitian partner in place to help him navigate the complex Haitian political and business systems.

“If you are not tied in with the way Haitian people do business, you won’t be able to do business here,” Bergeron said. “Doing business in Haiti is very difficult.”

Bergeron, the 40-year-old president of Bergeron Emergency Services in Fort Lauderdale, wants to build 150,000 temporary residences to shelter families while their homes are being rebuilt. Eventually, he would convert the temporary structures into permanent offices and government buildings.

He is also seeking a contract to offload donated rice and sugar from ships arriving at Port-au-Prince. The U.S. military is transferring that job to civilians.

Soon after the Haiti earthquake, Bergeron, also owner of Bergeron Land Development, looked to partner with other U.S. companies in various fields that would complement his businesses. He has since lined up asphalt providers, home builders, engineers, architects, crane operators and other construction-related companies.

Bergeron briefly considered chasing international funds to temporarily house about 1,000 children on a cruise ship and to build schools. He dropped that plan in favor of helping to rebuild more than 150,000 homes, office and government buildings destroyed by the earthquake.

He quickly discovered that vying for contracts would require a big investment and that there are no guarantees — even with a Haitian partner. He says since mid-January he has spent more than $150,000 ramping up his Haiti initiative — with more spending ahead.

“You are looking at well over half a million dollars’ worth of personal investment to get to the table and [you] may not ever get a job,” he said.

As the corporate jet landed at Port-au-Prince’s airport, Steeve Khawly — a member of a prominent Haitian family and soon to be Bergeron’s partner — waited by a folding table that served as an immigration counter. A half-hour later, Bergeron and his entourage of eight hopped aboard Khawly’s two SUVs.

The convoy headed to Khawly’s downtown Port-au-Prince office over bumpy roads filled with trucks operated by the United Nations and various humanitarian groups.

Khawly’s office complex, secured behind green iron gates, had been reduced to one building after the earthquake destroyed the second structure.

After two hours of negotiations in a room filled with Bergeron aides and Khawly’s family members, the two emerged as partners.

“I am committed to you no matter what we do,” Bergeron told his new partner. “Now, as far as getting prices and things … until we have a scope of services of what we are doing, there is no telling what they’ll end up being. But when we get a contract, then we’ll sit down and negotiate what we are going to do.”

Khawly said he welcomed the American’s expertise and needed equipment to take on the task of rebuilding the country’s most damaged areas, including downtown Port-au-Prince. He said his main goal is to hire and train Haitians to help with the reconstruction effort.

“People here need work to make money and be able to buy their own food,” he said.

The Khawly family boasts a critical asset: its own port in Port-au-Prince.

“Their port is crucial for me to get my equipment in and out,” Bergeron said.

In addition to the port, the Khawly family owns tracts of land; a rice importing business; a cement plant; a metal recycling company; a construction firm; a heavy construction equipment rental business; and three gas stations.

The Khawlys also will provide a valuable knowledge of the culture and their political ties. Two weeks ago, for example, the family introduced Bergeron vice president Brian Thomason to Haitian Prime Minister Jean-Max Bellerive.

Khawly, the president of the family businesses, often commutes to Weston, where his wife and three children live. Although his Florida home is not far from Bergeron’s family ranch, the two had never crossed paths.

For his part, Bergeron has plenty to offer. He has two lobbyists reaching out to officials of the Clinton Foundation’s Haiti earthquake relief efforts and the U.S. Agency for International Development. He also has close to $25 million worth of road construction equipment, plus capital.

Other American companies seeking contracts are also sealing partnerships with powerful Haitian families. Mobile, Ala.-based DRC Group, like Bergeron’s operation an emergency services company, joined forces with the Vorbe family, which owns V&F Construction, one of Haiti’s largest road construction companies.

DRC helped recover victims from the wreckage of the Hotel Montana, where Lynn University students and faculty and U.N. workers died when the structure collapsed.

After negotiating with Khawly, Bergeron’s marathon meet-and-greet session wasn’t over. From Khawly’s office, the SUVs headed to Haiti’s central police station, one of the few government buildings left standing and the temporary office of Haiti’s government ministers. There Bergeron briefly met with Minister of Culture and Communication Marie-Laurence Jocelyn Lasseque and Minister of Haitians Living Abroad Edwin Paraison.

At the station, Bergeron bumped into singer and philanthropist Lord Kinomorsa “King Kino” Divers, a self-described “representative” of the Haitian people.

Divers said many American companies are headed to Haiti to sell services but few offer any concrete solutions.

“Why don’t you build 75 houses so the people can see them and if they like them, you can build more?” Divers asked, adding that the international community would be more inclined to award housing contracts for a product that Haitians want built.

“Let’s do it,” the brash Bergeron replied. “I am willing to make that investment. I know it’s worthy.”

Bergeron said he would fund a pilot project to be built on land Khawly owns across from the U.S. Embassy. Khawly agreed.

During his visit to Port-au-Prince, Bergeron also met with members of USAID and the U.N.’s World Food Program, which are helping distribute rice and sugar to Haitians left homeless by the quake.

Bergeron and Khawly want to take over port logistics for food distribution when the U.S. military leaves. One of Bergeron’s team members is Beyel Bros., which has an office in Riviera Beach. Beyel already provides barge, crane and tug boat services to the U.S. military at different ports across Haiti.

“That’s why we pick team members like Beyel, with strategic connections,” Bergeron vice president Thomason said.

A LUCKY BREAK

How Bergeron got to Haiti had more to do with luck than a calculated move by the construction executive.

Last month, he placed a newspaper ad seeking experienced construction workers to go to Haiti to help with the cleanup. That got the attention of Miramar resident Guy “James” Vulcain, Khawly’s cousin.

[Cont.] To read the full article, visit http://www.dailybusinessreview.com
Paola Iuspa-Abbott can be reached at (305) 347-6657.

J.R. Bergeron photo by Paola Iuspa-Abbott

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