Town blames rival for blocking big-money detention center. Now it wants $150 million.

PEMBROKE PINES — A long-running feud has finally made its way to a courtroom, where six jurors will decide whether Pembroke Pines is to blame for blocking a lucrative detention center from being built in Southwest Ranches.

In a lawsuit filed nearly a decade ago, Southwest Ranches claims Pembroke Pines cost the town millions by refusing to provide water and sewer service to what would have been one of the nation’s largest immigration detention centers.

Had the deal gone through, the center would have been built on land surrounded by Pembroke Pines, where critics objected loudly to the notion of a prison going up nearby. For Southwest Ranches, the failed detention center represents lost money. For Pembroke Pines, it was a battle won.

The trial, partly delayed by the pandemic, got underway Monday and is expected to take two weeks.

Town Attorney Keith Poliakoff says he plans to argue that Pembroke Pines owes Southwest Ranches more than $150 million in damages.

The case hinges on whether Pembroke Pines had the right to back out of an agreement with Southwest Ranches to provide water and sewer service to the site, and also to not interfere with the town’s efforts to lure the detention center.

Corrections Corporation of America, a Nashville-based private prison contractor, had planned to build a 1,500-bed detention center near U.S. 27 and Sheridan Street.

Had the detention center been built, Southwest Ranches expected to collect $1.6 million a year plus $350,000 in annual property taxes.

No regrets

Poliakoff says Pembroke Pines officials campaigned against the center, breaking an agreement to not interfere with efforts to lure the facility to town.

On Monday, Pembroke Pines Commissioner Iris Siple said she has no regrets.

“It was not a good project for our community,” she said. “We would feel the brunt of all of it. This was wrong project, wrong place.”

Attorney E. Bruce Johnson, who is representing Pembroke Pines in the trial, could not be reached for comment.

The dispute sparked a wave of litigation over the past decade that led to mounting legal bills for both municipalities.

Southwest Ranches has set aside $225,000 to cover the cost of the two-week trial, Town Administrator Andy Berns said.

Pembroke Pines officials could not say Monday just how much the city has spent in legal fees related to the failed detention center. At one point, Pembroke Pines had at least three law firms on retainer.

On Monday, Commissioner Angelo Castillo declined to say whether taxes might increase for Pembroke Pines homeowners if the city were to lose at trial.

Mounting legal bills

But during a public meeting in March 2012, Castillo acknowledged the possibility of taxes going up to cover the cost of litigation.

“If people’s property taxes go up, I think they’ll understand we’re doing everything we can to keep this out of their city,” he said at the time.

Jack McCluskey, a longtime Pembroke Pines resident, says he wouldn’t be surprised if taxes increase should Southwest Ranches win the case.

“But I don’t think they will win,” he said. “I don’t think Southwest Ranches stands a prayer.”

In June 2011, federal officials with U.S. Immigration and Customs Enforcement announced they had tentatively chosen Southwest Ranches as the spot for a new detention center.

A public outcry ensued, with Pembroke Pines residents saying they feared the center would bring more crime and lower property values.

In March 2012, the Pembroke Pines commission voted 3-2 to cancel a contract promising water, sewer and fire-rescue service to the land.

By June 2012, federal officials announced they were scrapping plans to build the facility in Southwest Ranches.

Two months later, Southwest Ranches announced plans to sue its neighbor.

“I don’t expect we will lose,” Poliakoff said. “I think the jury will find that Pembroke Pines interfered with the facility coming to Southwest Ranches. And ICE has already said it was a primary factor in the center not coming to Southwest Ranches.”

Link: Town blames rival for blocking big-money detention center. Now it wants $150 million.
Auther: SUSANNAH BRYAN

Selling out post-Surfside collapse

Buyers seeking warm weather and the amenities of oceanfront living have often sought out more affordable units in older buildings along South Florida’s waterfront. But now the supply of those condos may be dwindling.

Developers, facing little to no inventory of undeveloped waterfront land, are increasingly targeting bulk buyouts of these buildings. And unit owners are more likely to embrace those offers, especially in the wake of the Surfside collapse of Champlain Towers South that killed nearly 100 people.

Although an official cause of the collapse has not been identified, unit owners and the condo association were aware of critical structural problems, including leaks in the pool deck and cracks in the concrete. The building had just begun $15 million in major repairs required to receive its 40-year recertification.

The collapse triggered Miami-Dade County, various cities and individual buildings to order inspections of older buildings, prompting condo associations to deal with issues they may have previously ignored or delayed indefinitely. If they don’t, their building may be declared unsafe and ordered evacuated, with residents unable to return until properties are brought up to code.

But not all unit owners can afford the often costly repairs. Enter developers who can offer bulk buyouts above market value. Since the collapse, investors have been identifying buildings to bid on, and industry experts predict deals will surge once more structural and engineering reports come in.

The price a developer is willing to pay is determined by the project that can be built on the site. Still, the more divided unit owners are, the less likely they are to come to an agreement. And while developers will likely offer more to a unit owner than an individual buyer might, it may not be enough for the seller to afford a similarly located and sized condo, especially in today’s market.

However, the unit owners also are unlikely to be able to afford repairs if they want to stay.

“We’re not talking about putting film on windows. We’re talking about foundations and rebar. It’s going to be very expensive,” said Bilzin Sumberg attorney Martin Schwartz. “You can tell people they have to be in a safe building, but where are they going to get the money from?”

Florida law requires more than 95 percent of unit owners to agree to terminate a condo association, which can be a challenge for bulk investors looking to redevelop a property.

“You’re not dealing with one seller. You’re dealing with multiple sellers,” said Taylor Collins, a principal at Two Roads Development, which just completed its first bulk buyout. “It’s a very emotional process. A lot of times, people realize the building is at the end of its life.”

Recent deals

Two Roads brought in the Related Group as a joint-venture partner to acquire Carlton Terrace, an oceanfront condo building in Bal Harbour. They paid about $130 million for the 88-unit building this summer. But the partners were not the first developers to attempt the deal. Carlton Terrace had been on the receiving end of roughly 10 offers over the years, sources say.

To find these deals, developers are tracking the market. Two Roads has a map of buildings that are 30, 35 and 40 years or older on the water in Miami-Dade and Broward counties, with a zoning map overlaid to determine what can be built on the property, as well as the price it is willing to pay unit owners to acquire the building.

“Sometimes, if we really like a building and think it’s going to come to market in three to five years, we’ll start buying units today,” Collins said.

Mast Capital, a Miami firm led by Camilo Miguel Jr., paid more than $100 million to acquire La Costa, a 124-unit oceanfront building in Miami Beach starting in May, with plans for a luxury condo tower on the site. After the June collapse in Surfside, the La Costa building was declared unsafe by Miami Beach and was ordered evacuated. 

Following the collapse, developers may have an easier time convincing unit owners to sell, experts say.

“The sales pitch is enhanced, unfortunately, by the safety factor,” said attorney Bill Kramer of Morgan Real Estate. “If you’re living in a $200,000 condo and it’s going to cost $100,000 in repairs, could you possibly afford it? It kind of doesn’t make sense.”

Insufficient reserves

Multimillion-dollar estimates for major repairs don’t come out of thin air. Condo associations, under pressure to keep monthly fees low, will often defer maintenance and postpone projects. Florida law allows associations to waive funding reserves for projects greater than $10,0000 by a simple majority.

“That’s why you hear of huge special assessments to fix the things they knew they would have to do,” Kramer said.

He and others expect the law regarding reserves will eventually change. Since the Surfside collapse, a number of buildings have hired firms to complete reserve studies.

“The reality is there has never been a total regulation of these buildings to actually make the repairs. It’s very likely that as associations are being forced to make repairs, they are not going to be able to,” said attorney Keith Poliakoff of the Fort Lauderdale-based Government Law Group.

Oceanfront properties, especially, are on the receiving end of “tremendous wear and tear,” Schwartz said. And many of the owners in older buildings have fixed incomes.

Divided house

David Cohen, an executive at the property management firm AKAM, said that the challenging part of a buyout is still getting enough unit owners on board, calling it a “public relations battle.”

Longtime Related executive Carlos Rosso, who left the firm last year, is familiar with the process. Rosso owns units at Bay Park, a waterfront building in Edgewater that is dealing with two offers from competing groups, each for $150 million.

“For elderly people who have lived in these buildings for such a long time, it can be a very traumatic experience, particularly accelerated with what happened with Champlain Towers [South],” Rosso said, citing both the financial and emotional aspects.

Sellers will have to change their lifestyles in many cases, giving up their waterfront views and communities they’ve built with their neighbors.

“It takes time, a lot of patience, but at the end of the day, it’s the reality,” Rosso added. “And I think people need to take advantage of this hot market and move on. As they say, you never go broke on profit.”

At Bay Park, a 254-unit building that was constructed in 1961, unit owners are facing roughly $10 million in concrete restoration work and other repairs required to bring the 13-story building up to code.

Both Bomel Companies, a Los Angeles developer, and Miami-based Aman Group, a firm led by investor Vivian Dimond, are trying to convince unit owners to sell. Bomel has secured contracts with about half of the owners, but that deal wouldn’t close unless it gets more than 95 percent of unit owners.

The building is emblematic of the dilemma individual owners of older properties are facing. Some don’t want to sell and would pay to make the necessary repairs. Others can’t afford the repairs. And some are investors looking to make a profit. But unless they come together, a bulk deal won’t happen. And if they don’t complete the restoration work, the city could eventually shut Bay Park down.

“People are going to be more reluctant to stay in these much older buildings that have deferred maintenance issues, particularly when they are the target of a condo termination,” said Berkadia broker Scott Wadler. “They may be more incentivized to walk away, to sell their unit.”

Condo associations are increasingly hiring brokers and property management firms to streamline the process and avoid bidding wars that divide sellers.

Mika Mattingly, a Colliers broker, is working with broker and investor Arden Karson on condo termination deals, encouraging owners to be a “united force, because that’s where you have the most bargaining power,” Mattingly said. “Developers will really appreciate that because they don’t have to scramble later.”

In some cases, sellers can double the market value of their units by banding together, Karson added.

“They’re not building any more beachfront. If you want to be in prime locations, you’ve got to look at these older buildings that have run their useful life,” said Collins of Two Roads. “You’ll never get a higher price. If you come together and sell it to a group as a developer, you’re going to hit a home run.”

Link: Selling out post-Surfside collapse
Auther: Katherine Kallergis

New Plan To Preserve Doc’s Heads to Delray City Commission

Rendering of the new Doc’s

With one iconic Delray Beach institution—Old School Square—in play, the fate of another goes before the city commission today.

That would be Doc’s, the retro burgers-fries-soft ice cream restaurant just north of the intersection at Swinton and Atlantic avenues. Last year, the city rejected a proposal that would have preserved Doc’s in exchange for allowing a three-story office building on the adjoining property that faces West Atlantic Avenue. The developer, which owns both properties, is back with a new version.

It has two parts, both of which are on the agenda for today’s meeting. The first would place Doc’s on the Local Register of Historic Places, ensuring that no owner could tear down the building and, say, put up a McDonald’s. The second would allow construction of that office building on land now home to a Dunkin’ Donuts.

The linkage is important. Commissioners opposed the previous version in large part because—without the historic designation—there was no guarantee that the developer would preserve Doc’s after getting approval for the office building. Designation would ensure Doc’s continued existence.

“This is the next step in the evolution of Doc’s,” said Neil Schiller, the attorney who represents the developer. Regarding the changes since last year, Schiller said, “We believe that we have done what we said we would do.”

Though there would be much debate about the proposal anyway, another factor could be the developer. It’s Steve Michael, who originally proposed the project known as Midtown that has become Sundy Village under different ownership. Some critics believe that Michaels didn’t pay due consideration to the historic properties within the project.

With Doc’s, Schiller said the new proposal “softens” the Art Deco architectural style that some found off-putting. Doc’s itself will be “more prominent when you’re looking west from Old School Square.” Michael, Schiller said, will hire “a restaurant group” to run Doc’s. Schiller said the developer also has reduced the square footage of the office building.

Critics might complain that Doc’s would be part of the overall project, not a free-standing building. Schiller responds that this plan “keeps Doc’s Doc’s.” And Delray Beach needs more office space. That’s one reason the Downtown Development Authority supports the project.

Some commissioners might try to have it both ways, by supporting the designation while opposing the land-use change. The designation vote comes before the land-use vote. But without the office building, there is no project—and no guarantee of keeping Doc’s Doc’s.

This is the first reading for the three proposals. If they advance, there will be a presentation and public comment at the second reading. If the land-use items fail, the project dies.

Commissioner Ryan Bolyston opposed the first version. He called this one “great,” even though he would have preferred Doc’s as a stand-alone structure.

But Boylston emphasized that linkage. If you want to save Doc’s, he said, “You can’t have one without the other.”

I-95 toll lanes coming soon

Toll lanes on Interstate 95 south of Palmetto Park Road could be open very soon.

The Florida Department of Transportation (FDOT) expects completion of the $102 million stretch from Southwest 10th Street in Deerfield Beach to south of Glades Road this fall. An FDOT representative said Monday that work should be done Oct. 29 “weather permitting.” On that schedule, toll collections for that section would begin “later this year.”

Two lanes in each direction will be for drivers willing to pay for the exclusivity. Prices will be much higher during rush hour and lower during off-peak times. Other drivers will have three lanes northbound and southbound.

The other Palm Beach County phase, costing $148 million, will extend the toll-lane format to Linton Boulevard. According to FDOT, the work is nearly 60 percent done, with completion estimated in late 2023. Part of the work involves replacing the overpass at Clint Moore Road. The representative said the new structure should be in place next summer.

A key feature of the I-95 work is the new interchange at Glades Road. It is a Diverging Diamond Interchange, which will require drivers at times to be on the left side of the road. Traffic engineers believe that the unusual design will allow more vehicles to move more quickly through one of the county’s biggest chokepoints.

FDOT estimates that the new interchange will be ready in late 2022 or early 2023—again, “weather permitting.” But the representative said other work on Glades Road would continue until late 2023.

Holocaust exhibition in Delray

Beginning Wednesday and lasting until Nov. 17, the Delray Beach Library will host a timely, significant exhibition.

It’s called “Americans and the Holocaust,” the touring version of the exhibition that opened in April 2018 at the United States Holocaust Museum in Washington, D.C. After its debut in Delray Beach, the tour will continue to 50 other libraries in the U.S. until 2023.

Espcially since the murder of George Floyd last year, there has been discussion throughout the country about America’s history when it comes to oppressed and marginalized people. This exhibition continues that scrutiny.

As a news release states, “Based on extensive new research of that period, ‘Americans and the Holocaust’ addresses important themes in American history, exploring the many factors—including the Great Depression, isolationism, xenophobia, racism and antisemitism—that influenced decisions made by the U.S. government, the news media, organizations, and individuals as they responded to Nazism. This exhibition will challenge the commonly held assumptions that Americans knew little and did nothing about the Nazi persecution and murder of Jews as the Holocaust unfolded.”

During its time in Washington, the exhibition generated much debate. Here is a review from the HistoryNet website:

“Americans and the Holocaust” highlights evidence of American apathy and racism toward not only Jews but African and Asian Americans within its own borders—including legalized segregation, Jim Crow laws, and Japanese-American internment— as well as indifference to news reports of the Nazis’ increasingly violent anti-Semitic rule.

“Through interconnecting rooms, visitors can explore a timeline of historical displays featuring coverage of Nazism through American newspapers, newsreels, and film that evidences the mounting pressure for Washington to respond as Hitler’s bloody campaign peaked. Each section contains interactive displays, photos, videos, documents, and short documentaries on wartime views of Nazism.

“As news headlines spotlighted Nazi Germany’s ill treatment of its own citizens throughout the 1930s, the Roosevelt administration stayed uncomfortably silent. One possible reason for that is shown in a display of a 1938 poll revealing that two-thirds of Americans believed that German Jews were either ‘entirely’ or ‘partly’ to blame for their own persecution.”

TimberTech Tournament

Despite Florida’s recent, deadly COVID-19 surge, organizers of next month’s TimberTech Tournament in Boca Raton promise something “more like a traditional tournament.”

Because othe pandemic, fans could not attend last year’s event at Broken Sound’s Old Course. Spectators will return for the Nov. 1-7 event along with what Eddie Carbone of Pro Link Sports calls “a full force of volunteers.” Those are the generally anonymous people without whom tournaments would falter. Organizers held a media event on Monday.

TimberTech, which makes products for decks and other exterior structures, signed a three-year deal to sponsor the event through 2023. The tournament, part of the PGA Champions Tour—once known as the Senior Tour—has been played in Boca Raton since 2007. Boca Raton Regional Hospital continues to be what Carbone calls the “primary beneficiary” of the event.

For most of its history, the tournament was held in February. The tour changed its format—again because of the pandemic—and this year’s event will be the second of three to cap the season. The top 36 finishers will go on to the Charles Schwab Cup Championship in Phoenix.

Carbone said AZEK Building Products, TimberTech’s parent company, wants to be “the first zero-waste tournament” on the tour. Specifics, he said, will come soon. Carbone said TimberTech has partnered with the Solid Waste Authority of Palm Beach County.

Cat Control in Delray

In recent years, feral cats were an issue in Boca Raton, bringing out passionate cat people. Now Delray Beach is talking about cats.

On today’s city commission agenda is approval of $25,000 to consider the type of trap/spay/neuter/release program other cities have adopted. The staff memo cites “concerns raised about community cats and the need to respond humanly (sic) and proactively.” The city would work with Palm Beach County Animal Care and Control, the Peggy Adams Animal Rescue League and Purzzilla Cat Rescue, Inc.

The memo cites the county’s ordinance for controlling “community cats.” They must be on private property. All such cats shall be vaccinated against rabies, sterilized and implanted with a tracking microchip. And all “caregivers shall make reasonable attempts to remove young kittens from the field for domestication.”

Good luck.

Link: New Plan To Preserve Doc’s Heads to Delray City Commission
Auther: Randy Schultz

Ministerial privilege: Would Tony Blair’s transfer tax loophole work in the US?

Pandora Papers reveal the former PM’s slick trick for avoiding £300K in taxes on his London townhouse

Tony Blair avoided property transfer tax on a £6.45 million townhouse. Can American buyers do the same? (Getty, iStock)

Last year, Americans bought $1 billion worth of whisky and $6.5 billion of vehicles from the UK. But this week’s Pandora Papers leak revealed another British export that might hook wealthy Americans: creative tax avoidance.

On Sunday, the Guardian reported that former Prime Minister Tony Blair dodged more than £300,000 in property transfer taxes when he and his wife purchased a £6.45 million London townhouse. Nothing they did was illegal: the couple simply exploited a loophole in British tax law that doesn’t levy stamp duties on business purchases the way it does real property acquisitions.

In 2017, the Blairs set up a British company and used it to acquire an LLC registered in the British Virgin Islands, which owned the townhouse. The Blairs then dissolved the BVI firm, bringing the property under their company’s control without ever technically purchasing the townhouse itself.

In the U.S., with its sea of shell companies and authorized signatories — and its rich tradition of tax avoidance — could an intrepid buyer pull a similar stunt?

“Can that be utilized here? It depends on what state,” said Chris Curtis, an attorney at Chaves Perlowitz Luftig who specializes in estate planning and trusts and frequently helps clients set up offshore companies for their assets. The structure is particularly popular for foreign buyers of American property, who receive much lower estate tax exemptions when they die than U.S. citizens do.

In New York, buying a controlling interest — 50 percent or more — in a property-owning company constitutes a real estate transfer. Even if the shares are acquired in separate transactions from different sellers — say, 25 percent in June and another 30 percent a year later — so long as the shares add up to a controlling interest, it’s transfer tax time. The state adds up all shares acquired within three years of one another.

A particularly shrewd buyer may set up separate LLCs and divvy up his shares between them, so that no one company owns a controlling interest. But still, under New York’s tax code, LLCs must disclose their owners. Even if the LLC is owned by another LLC, the disclosures must continue up the ladder until an actual, warm body is revealed.

As of April, REITs and publicly-traded companies who are members of an LLC no longer need to name their shareholders in this filing. It’s unclear whether that would allow such a multi-company workaround.

Even though Blair’s scheme wouldn’t pass legal muster in New York, that doesn’t mean it could never happen.

“It’s a ‘catch ‘em if you can’ mentality,” said Ross Levine, a founding partner at Schwartz Levine Stark. With anonymity so commonplace in New York property ownership, it’s ultimately up to the lawyers preparing the owner’s forms to ensure proper disclosure. That can get tricky when LLCs stack up like Russian nesting dolls.

Still, personal incentives might outweigh potential tax savings.

“Even if you have it layered, there could be a trace back to that person — if, of course, it’s papered,” said Levine, referring to a document such as an amended operating agreement, which would explicitly lay out what percentage of the company each shareholder owns. “But who the hell wouldn’t want that papered?” he said.

Even a fraudster would want proof of ownership when it comes to an asset as large as a building. “If you’re spending millions of dollars, you’re going to want a paper that shows you have an interest in that property,” said Levine.

Curtis and Levine agree that there’s nothing inherently wrong with stashing assets in LLCs. But there’s room for abuse.

“The system isn’t necessarily broken, but it does rely upon the fiduciaries to honor the tax code and do the right thing,” said Levine.

California’s system works largely the same as New York’s, triggering a property transfer tax when a person buys 50 percent or more of a property-owning LLC. It also leaves a similar onus on self-reporting, which means Blair’s scheme would be illegal, though not impossible, in the Golden State.

“It’s an honor system somewhat, because there’s no deed that’s filed when you buy an LLC. But you’re required to pay the property tax unless there’s an exemption,” said Brad Cohen, partner at JMBM in Los Angeles.

“I don’t advise people to cheat their taxes just because there’s a good chance they’re not going to get caught,” he added. “And there’s people that’ll charge a lot less than me to tell them that.”

As is tradition, things are a little more freewheeling in Florida.

In theory, the state has required sellers to file a disclosure with the Department of Revenue any time someone buys a single-purpose LLC that owns real estate for at least five years. In theory, the department then loops in the local property appraiser, who — in theory — applies the proper transfer taxes.

“In practice, very few follow the law, and could get into serious trouble if they were found to have violated the law,” said Keith Poliakoff, founder and managing partner of Government Law Group in Fort Lauderdale.

Just as in New York and California, the loophole no longer exists, but enforcement often hasn’t kept up with buying activity. The fallout has been particularly brazen in Florida.

“There’s no way around the law, but the reality is people don’t tend to follow the law, either because people don’t know the law exists, or they’re trying to commit an illegal act,” said Poliakoff.

Especially during the pandemic, with out-of-towners descending on Florida, Poliakoff has noticed sellers coaxing unaware buyers to just purchase their ownership LLCs. With lax enforcement and unwitting buyers, some may be breaking the law without even knowing it.

“People buy drugs illegally all the time too. Both are breaking Florida law,” said Poliakoff.

Link: Ministerial privilege: Would Tony Blair’s transfer tax loophole work in the US?
Auther: Joe Lovinger

City Commissioner Joins Government Law Group As Partner

Fort Lauderdale-based boutique firm Government Law Group announced on Friday the addition of a City of Parkland commissioner to its ranks.

Jordan B. Isrow moves to the government-affairs outfit as a partner. He recently worked as general counsel for international cosmetics contract manufacturer Oxygen Development LLC and sat on its executive committee.

“We welcome Jordan to Government Law Group where he will be a valuable resource in assisting our clients with their business and legal needs,” founding partner Keith Poliakoff said in a statement. “From his time as general counsel to his significant experience litigating in state and federal court, to his role as commissioner for the City of Parkland, Jordan brings a wealth of experience and wide-ranging perspectives to Government Law Group and its clients.”

In his role at Government Law Group, Isrow will handle complex litigation, corporate counseling and representation of municipalities.

“I thoroughly enjoyed my role as general counsel at Oxygen Development and wasn’t looking for other opportunities,” Isrow told Law360 on Monday. “However, when I learned two powerhouse attorneys and former colleagues, Keith Poliakoff and Neil Schiller, were joining forces to start Government Law Group, I realized this was the perfect platform for me to leverage my diverse experience in business, law and government to help build something special and assist a broader array of clients in accomplishing their goals.”

At Oxygen Development, Isrow oversaw the company’s legal department and was responsible for its global regulatory compliance and risk management initiatives. Additionally, he helped manage contracts, craft policies and implement operating procedures.

Before serving as general counsel at Oxygen Development, he worked as a litigator at Berger Singerman as well as Arnstein & Lehr LLP, as the firm was known at the time. He also previously served as an assistant attorney general in the New York State Office of the Attorney General, where he worked out of its social justice division in its litigation bureau.

Isrow currently serves as District 2 Commissioner for the City of Parkland. The commissioner role is an elected position that helps create the city’s policies and appoints a city manager to oversee daily operations. Isrow’s term as District 2 Commissioner runs until November 2022. He earned his bachelor’s degree from the University of Florida and his law degree from the University of Miami.

The Government Law Group was launched in April by four former Saul Ewing Arnstein & Lehr LLP attorneys: government affairs lawyers Poliakoff and Neil Schiller, trial lawyer Alan G. Kipnis and land use and eminent domain lawyer Richard Dewitt. The firm has offices in Fort Lauderdale and West Palm Beach.

–Editing by Dave Trumbore.

Link: City Commissioner Joins Government Law Group As Partner
Auther: Matt Perez

Are you ready for a 3D-printed house? They’re cheaper, stronger and long-lasting, developers say

The three-bedroom, two-bath home has a corduroy-patterned exterior, rounded corners — and a cement pour that oozed from an industrial-sized toothpaste tube. And most intriguing of all, it comes from a 3D printer.

When the house is finished around November, Kyndra and James Light, a husband-wife development team, will be asking between $175,000 and $225,000 for the 1,440-square-foot dwelling.

The printed homes are said to be quicker to make, stronger, and resistant to such Florida hazards as mold, hurricanes and flooding. And most crucial of all: They seem poised to offer affordable housing in a state where many have forgotten there can be such a thing.

But to see for yourself, South Floridians will need to saddle up and head for Tallahassee to inspect the house, which the Lights say is the only permitted 3D-printed home in Florida.

We’re all becoming used to hearing about such 3D printed objects as face masks, jewelry, jet engines, construction equipment and even guns. It’s a method of developing a three-dimensional object, layer by layer, through the use of computer-generated designs.

The 3D homebuilding process is similar, but the printer itself looks less like those becoming more common in workplaces, and more like an oversized car wash. The printers weigh almost a couple of tons, cost between $500,000 and $700,000, and include sophisticated computer programs to control construction. They feed instructions to racks — which can range in size from 10 feet long by 10 feet high, to 100 feet by 100 feet. Attached to the racks is a spout, which goes back and forth over the site directing the premixed cement according to the design. The mix then hardens into a concrete structure.

“Make no mistake, these houses are not your average test models,” said the Lights, owners of Precision Building & Renovating, which is based in the state capital. “The finished product is far superior in strength, durability, and efficiency.”

3D-printed homes could be the answer to Florida’s long-standing affordable housing shortage. But Tallahassee developers James and Kyndra Light, who say they are building the only permitted 3D home in the state thus far, say it will take a wider availability of printing technology for the homes to take hold in the market. (Precision Building & Renovating,/Courtesy)

From coast to coast, 3D-printed homes are gaining ground as a possible alternative to making housing more affordable in cities roiled by exploding prices and thinning inventories. The idea is to cut production time and labor costs and sell solidly built homes at prices that lower-income earners can afford.

Other 3D home projects around North America include:

  • A two-bedroom, two-bath printed home in Riverhead, N.Y., listed this summer at $299,999.
  • Four homes in Austin, Texas, that were scheduled for occupancy over the summer.
  • 15 “eco-friendly” homes being built near Palm Springs, Calif.
  • And In Mexico, a 3D-printed neighborhood for families living on $3 a day.

Approval in Tallahassee

The Tallahassee home project has attracted lots of attention from a visitors including state lawmakers, as well as support from the city, Kyndra Light said.

“The City of Tallahassee has been extremely supportive of the project,” she said. “We made sure we did our homework so we presented them with something that was a viable option.”

James Light said the couple spoke frequently over two years with city code officials, commissioners and local agencies.

“Tallahassee being the state capital, there are a lot of representatives up here — that kind of helped,” he said. “That was a spark of interest: ‘Hey, here’s a solution to a major problem I have.”

That problem is affordable housing.

The project is funded in part through the City of Tallahassee’s affordable housing construction loan program. Once completed, the home’s price will be capped at 80% of the area’s median income.

The cost to maintain the home will be less than a standard wood-frame home, the Lights said.

“Wood breaks and wood rots, especially here in the South,” James Light said. “In time, we will be able to offer investment opportunities for families that are more accessible, and with a longer range of return.”

The printing machine used by Printed Farms of Wellington, whose workers and equipment laid out and poured the mix for a 3D printed home under construction in Tallahassee. (Precision Building & Renovating,/Courtesy)

Wellington firm in the vanguard

While no 3D homes appear to be on the immediate horizon in South Florida, the company that poured the concrete for the Tallahassee project is based in Wellington, and has several Florida projects in the works, the owners said in an email.

Jim Ritter and Fredrik Wannius, co-founders of Printed Farms, accepted delivery of their first printing machine in August 2020 from Denmark.

The “closed shell construction system,” Wannius said, “produces a hurricane-, flood-resistant building taking sheet rock out of the walls and using an almost water-impermeable print material.”

“The material arrives in super sacks and is loaded into a silo,” he added. “The material is mixed [in the system] with water and pumped into the hopper of the 3D printer.”

He said a 1,540 square foot home can be produced in two to three weeks, depending on inspections, roof system and whether exterior window and doors are installed.

“This is from forming the slab to covering of the roof, he said. “We can print the walls in four to five days.”

Wannius said his firm has not encountered any local building code problems to date,

“Our buildings have superior materials and are stronger than most current building methods,” he said.

He added that the firm intends to build a luxury 4,500 square foot house on the Intracoastal Waterway in Lake Worth.

“We are approved for design and moving forward on structural engineering,” he said. “This will prove that building high-end and luxury homes is cheaper and better quality then conventional. We feel we are more resistant to mold, hurricane and flood. Our freedom of design makes the cost much lower because curves don’t add expensive forming costs. This home will have the first 3D-printed pool.”

Wannius said Printed Farms is also in negotiations to build a two-story house in Tampa for a client, and is looking to build a single-family home for the University of Miami, an AirBnB for another client and a luxury horse farm in 2022.

“Those projects have been hand-picked from 600 requests since February,” he said.

South Florida may have to wait

Despite the rising levels of interest, real estate and development experts in Broward, Palm Beach and Miami-Dade counties said would-be buyers in the region will probably have to wait at least two to three years before 3D homes make a significant splash in the tri-county area.

“The housing industry hasn’t changed its overall methods of building homes in the past 50 years,” said Brad Hunter, president of Hunter Housing Economics in West Palm Beach. “Innovations like 3D and modular construction will start to gain popularity.”

“I think that there’s going to be an accelerated pace of innovation in housing in the next five to 10 years,” he said.

Mike Pappas, CEO of The Keyes Co. real estate services firm, agreed that 3D has a future.

“I think we are in the embryonic stage. The car is just starting to run,” he said. “There are people who are betting big on it. They are seeing this as the future. I heard the strength of the building because of the poured concrete is actually stronger than a typical home.”

The biggest potential holdup is that local building codes do not address 3D homes, lawyers told the South Florida Sun Sentinel.

“There are differences between us in the tri-county area and the Tallahassee neighborhood where that couple built their home,” said Fort Lauderdale attorney Keith Poliakoff of the Government Law Group.

The main difference is that hurricane-vulnerable South Florida is in a high-velocity wind zone. Projects need statewide or local approvals to ensure they meet stringent building codes.

“While the technology is novel … it’s still a little bit off for them to be commonly used throughout the tri-county region for hurricane reasons and the ability to build larger structures,” Poliakoff said.

But Kyndra Light said 3D homes can arrive on a mass scale faster if builders, developers, regulators and others act in concert to make them happen.

“If we can all lock arms and walk down the Yellow Brick Road, so to speak, that is what it will take,” she said.

Link: Are you ready for a 3D-printed house? They’re cheaper, stronger and long-lasting, developers say
Auther: DAVID LYONS

Before Surfside tragedy, neighboring tower faced opposition, delays over construction impact

Eighty Seven Park’s footprint moved closer to collapse site following sweetheart deal with Miami Beach

After the construction of Eighty Seven Park (Google Maps)

When developer David Martin acquired the Dezerland Hotel, a former Howard Johnson’s that was built in 1951, his plan was to restore the North Beach building to its original glory. The stakes were high for Martin, as the project would mark his first oceanfront development.

The property, on the northern border of Miami Beach next to Surfside, was not designated historic. And less than a year after the 2013 purchase, a Martin-led entity hammered out an agreement with the city of Miami Beach that increased the project’s footprint, expanding it closer to the Surfside border and just feet from Champlain Towers South.

Publicly, plans also changed: Now Martin’s development firm, Terra, and its partners would build a luxury condo tower called Eighty Seven Park on the hotel site. Opposition, delays and questions regarding the proximity of the building and the effects of its construction on Champlain Towers South would follow, years before the collapse of the Surfside tower next door.

As part of the deal with Miami Beach, the company developing Eighty Seven Park, 8701 Collins Development LLC, agreed to pay the city a voluntary contribution of $10.5 million, tied to Miami Beach giving up 87th Terrace, a 50-foot-wide street separating the adjacent properties.

Some believe the land was transferred to the developer in a way that violated the city charter.

Preservationists opposed the demolition of the Morris Lapidus-designed hotel, as well as the vacation, or ceding, of 87th Terrace. Residents of Champlain Towers South didn’t like that Miami Beach was giving up the street and its public parking.

Construction of the Renzo Piano-designed Eighty Seven Park at 8701 Collins Avenue reverberated next door, causing Champlain Towers South to shake, according to residents’ accounts cited in lawsuits and interviews, and 8701 Collins Development is named among defendants in lawsuits filed by survivors and family members of victims after the collapse.

Though the National Institute of Standards and Technology’s investigation into the June collapse of Champlain Towers South is ongoing, engineers, architects and other experts have said the construction of Eighty Seven Park did not cause the fall. Champlain Towers South had a number of major structural issues that went unaddressed for years.

But residents were worried even prior to construction of Eighty Seven Park about the condo project’s impact on their aging building.

“We’re concerned that where before we had the street as the buffer from the existing lot, now that the city has sold that to the developer, it brings the action so much closer to our building,” said Champlain Towers South unit owner Alberto Manrara during a March 2015 Miami Beach Design Review Board meeting.

Manrara sold his sixth-floor apartment, which overlooked Eighty Seven Park, in April, just two months before the northeast portion of Champlain came crashing down in the middle of the night on June 24, killing 98 people.

In a statement, 8701 Collins Development said that “construction of Eighty Seven Park did not cause or contribute” to the collapse, and that the calamity was caused “by factors wholly unrelated to the construction of Eighty Seven Park.”

Martin and Terra declined to comment through a spokesperson.

In 2019, Terra, alongside Bizzi & Partners, equity investor New Valley and other partners, completed Eighty Seven Park, where the most expensive unit, a penthouse, sold for $37 million last October.

Out of the public eye

Since the collapse, Martin, who has worked hard to build his reputation as a sustainable developer, has been laying low. The Coconut Grove-based company he leads with his father, Pedro Martin, stopped promoting its projects throughout Miami-Dade and Broward counties. That includes a luxury condo it is building, alongside developer Russell Galbut, at the entrance to South Beach, and a new mixed-use office project in Bay Harbor Islands.

Peter Zalewski, a condo market consultant and investor, said Martin was in “acquisition mode” at the beginning of the last cycle. He and his father founded Terra in 2001, but the company has grown dramatically over the past decade, building Quantum on the Bay, 900 Biscayne Bay, Grove at Grand Bay and a number of projects in suburban cities such as Doral and Pembroke Pines.

In 2013, Martin called developer Gil Dezer, whose family owned the Dezerland site, requesting a tour, Dezer said. The Terra-led entity ended up buying it, allowing the Dezers to make a huge profit.

Champlain Towers South and the adjacent 87th Terrace property before

“He built a very expensive building there. We didn’t see the values he saw,” said Dezer, whose family paid about $7 million for the property in the late 1980s, a few years after Champlain Towers South was built. Terra purchased it for $65 million.

At the time Terra was negotiating the purchase of the Dezerland, the developer was building Glass, an 18-story luxury condo building in South Beach. In 2020, the Glass condo association sued the developer, contractor John Moriarty & Associates and subcontractors over a litany of alleged construction defects. Moriarty also built Eighty Seven Park.

Years earlier, in 2014, associations at Quantum on the Bay also sued an affiliate of Terra, alleging the developer cut corners during construction of the nearly 700-unit development.

The development agreement

Miami Beach’s code requires that voters approve any sale of city-owned waterfront land.

But the Terra-led 8701 Collins Development LLC, which acquired 87th Terrace from the city, did not have to get residents’ approval. The loophole came in the form of a 12,000-square-foot sandy plot of land sandwiched between 87th Terrace and the beachfront. The original survey of the land, dated June 1919 and signed by early Miami Beach developer J.H. Tatum, identifies it as one of many tracts now owned by Miami-Dade Public Works.
The city’s analysis of its charter, as part of its agreement with the Eighty Seven Park developer, found the same. Spanning just over 18,000 square feet, 87th Terrace is not oceanfront. The city found that vacating the plot of land or right of way served a public purpose by enhancing pedestrian access to the beach, increasing property taxes and beautifying North Shore Open Space Park, which is immediately south of Eighty Seven Park.

Street or alley vacations are common across the country, experts say. Attorney Keith Poliakoff, managing partner of Fort Lauderdale-based Government Law Group, said the alleys or dead-end streets no longer serve the purpose of housing utilities that they had when municipalities mapped them out years ago.

But critics of such actions say the process results in a giveaway to developers. In South Florida, residents have increasingly spoken out against them. The Coral Gables commission recently rejected plans for a mixed-use development downtown as a result of an overwhelming public outcry, due in part to a proposed vacation of an alley.

“We feel extremely strongly that vacations of city right of ways shouldn’t be happening without going through a voter referendum, as it is in the city charter,” said Tanya Bhatt, past and acting president of Miami Beach United, a volunteer activist organization.

Land use attorney Gloria Velazquez, a shareholder at the law firm Nason Yeager, called the Miami Beach agreement unusual because it tied the vacation to the $10.5 million voluntary contribution, instead of the overall project approval. Another attorney said the development agreement was “terribly worded” by suggesting the $10.5 million was a payment for the vacation.

The vacation, in the form of a perpetual easement, allowed the Terra-led entity to take over most of the alley. It left space for a pedestrian walkway to the boardwalk and beach that the developer built and was responsible for maintaining, eventually handing maintenance over to the condo association. The Eighty Seven Park condo tower, which has an underground parking garage, is on the southern half of the oceanfront lot.

Impediments

Eighty Seven Park’s construction was delayed early on. Generally, project delays are common, the result of a combination of overambitious developers, a longer-than-expected financing timeline, and a push for positive publicity.

In the case of Eighty Seven Park, the developer’s LLC financed more than 90 percent of the $65 million purchase with a loan. When 8701 Collins Development sought demolition approval of the Dezerland, instead of a restoration, North Beach residents protested.

They called the change a “bait and switch,” said Daniel Ciraldo, head of the Miami Design Preservation League. A lawsuit filed in 2016 by a debt brokerage seeking a commission from the developer shows a Terra affiliate planned to redevelop the site before it had even closed on the 2013 acquisition.

The vacation resolution and the development agreement with the city of Miami Beach were finalized in 2014. The developer would be in talks with the Champlain Towers South residents and its association years later.

As part of the agreement, 8701 Collins Development LLC was required to receive a full building permit by Sept. 3, 2016. That month, the developer requested a one-year extension of the building permit deadline, citing the governor’s declaration of a state of emergency over the Zika outbreak.

Once construction was finally underway in 2017, residents of the adjacent Surfside tower, who were likely aware of problems with their building, were again voicing their concerns about Eighty Seven Park.

At a February 2018 Miami Beach Design Review Board meeting, the city postponed a vote on modifications to the site plan and approval. Attorneys for Eighty Seven Park and the group of Champlain residents who were concerned about the project spoke in favor of the continuance to the following month. In March 2018, the Terra-led entity withdrew its request, which dealt with perimeter walls and fences, according to a recording of the meeting.

In emails sent to the town of Surfside, Champlain Towers South board member Mara Chouela complained that residents were “concerned that the construction next to Surfside is too close,” including that the workers digging at Eighty Seven Park could be damaging the structure of Champlain.

Developer Edgardo Defortuna, whose Fortune International Group has built and sold a number of high-end condo buildings in Miami-Dade, said in an interview with The Real Deal in June that when it constructs a tower, Fortune will install a vibration monitoring device on nearby buildings to ensure that the work is being done safely.

The crisis communications firm hired by Eighty Seven Park’s developers after the collapse did not respond to a question about whether the developer installed such a device at Champlain, where residents said construction caused their units to shake.

During construction, which involved digging piles deep into the site, debris was also landing in the pool and on the pool deck of Champlain, clogging up the driveway and front entrance with sand, emails show. Concrete trucks were illegally parking in a city-owned lot, according to emails between Terra and Miami Beach.

The developer offered the Champlain Towers South association a $400,000 payment in 2019 if unit owners agreed not to publicly oppose the project and accept longer hours of construction, the Washington Post reported in July. But the association did not accept the settlement.

The Champlain property manager wrote in an email exchange with Surfside that year that “money doesn’t seem to be an issue” for the developer, suggesting Eighty Seven Park would pay the $5,000 fines for the debris and continue to allow workers to let it land at Champlain.

After the collapse of Champlain Towers South, Eighty Seven Park remained closed for more than two and a half months to residents who did not sign waivers. It reopened in mid-August. The partial collapse and the controlled demolition of the rest of the Champlain building in early July created instability on the site that led that portion of Collins Avenue to remain closed for a much longer period than initially expected, out of fear that the street would cave in.

The National Institute of Standards and Technology’s investigation into the collapse involves going through the history of the building and town code, evidence reservation, geotechnical and structural engineering and more. An August Miami Herald investigation found that the original design was flawed, adding to damning structural and engineering reports that had already been made public by the town of Surfside. Investigators have said they will look at all possible causes and contributions to the collapse.

“You have an old, antiquated building, and you have a brand-new tower with underground parking being built less than a street away,” Zalewski said. “It would be impossible to not look at Eighty Seven Park’s impact, if any, on the collapse of the tower.”

Link: Before Surfside tragedy, neighboring tower faced opposition, delays over construction impact
Auther: Katherine Kallergis

Real Estate Journal: Developers circle downtown Hollywood

Overlooked by developers for decades, downtown Hollywood is finally attracting more projects, leading to more residents and businesses in the city.

While Fort Lauderdale to the north and Aventura to the south boomed with new towers, downtown Hollywood and its historic Young Circle didn’t see much major development. While that kept rents more affordable than in other cities, the city’s tax base didn’t benefit from the greater property values, and local businesses missed out on new customers.

But that’s quickly changing. And Young Circle is at the center of it all.

After completing the Circ Residences and the Circ Hotel in 2018, developer Chip R. Abele Jr. is building the Block 40 apartments and retail project. BTI Partners is moving forward with two major developments.

Mayor Joshua Levy said the planning started 20 years ago with a master plan by Miami architect Bernard Zyscovich, followed by a Regional Activity Center (RAC) passed in 2016 that allows for high-density, mixed-use development on the eastern side of the city.

“What we are seeing on Young Circle today is significant progress in the master plan vision that looks to create a neighborhood around the circle with high-rise towers,” Levy said. “But without the developers who have the wherewithal to construct these buildings, the plans are just drawings on paper.”

Jorge Camejo, director of the Hollywood Community Redevelopment Agency (CRA), said the RAC allocated 16,000 units of density in the area. The CRA has incentive programs for development there, as it awarded property tax rebates to both the Circ and Block 40. Camejo said a project that follows the master plan and contributes to the economic development of downtown could qualify for incentives.

Shiv Newaldass, the city’s director of development services, said it will fast-track permits for developments and new restaurants that help downtown.

“Hollywood is being established as the next place to be,” he said.

Coming to Hollywood

For more than a decade, the largest development sites on Young Circle were tied up in litigation or owners unwilling to sell. Older, unused buildings, while considered historic, sat in disrepair. Undaunted, Abele, CEO of GCF Development, moved forward with his projects.

He started working on development around Young Circle about 20 years after he was approached by a lobbyist, Abele said. He liked that Hollywood is halfway between Miami and Fort Lauderdale, so it seemed poised to be the next center of development.

“The city of Hollywood is in an amazing location for an urban downtown,” Abele said. “We see a lot of demand for residents here, and that will push demand for retail.”

Noah Breakstone, CEO of Fort Lauderdale-based BTI Partners, said he has over $500 million in development lined up for downtown Hollywood because it’s in an ideal location, near the beach and Interstate 95, with the ArtsPark at Young Circle providing space for recreation and events.

“People want to walk to the park or the ocean or restaurants,” Breakstone said. “People are yearning to be outside and enjoy that space.”

Development wave

BTI Partners recently tore down the old Bread Building and expects to start construction of 362 apartments with ground-floor retail near the end of the year. In the second half of 2022, Breakstone hopes to break ground on an even larger project on Young Circle: two 35-story towers with 802 apartments, plus retail and offices.

Rents will be less than in downtown Fort Lauderdale, but higher than Hollywood’s existing housing stock.

“When looking at reemerging neighborhoods and putting up mixed-use development, you also have to believe your rents will surpass neighborhood rents and take that leap of faith,” Breakstone said.

Abele said the apartments at the Circ are doing great, with rents increasing, and the Publix on the ground floor has terrific sales. Block 40, with 273 apartments, is slated to be ready by January.

“We’ve always thought they would really activate downtown,” Abele said of his two projects. “They will add to downtown traffic for entertainment, shopping and dining.”

Steve Berman, CEO of local developer Firm Realty, is building a 50,000-square-foot office in downtown Hollywood without any preleasing. Most of the city’s tenants are small professional firms or startup businesses looking for 1,200 to 2,400 square feet, he said.

“We don’t attract the major law firms and large users you see in downtown Fort Lauderdale and Miami,” Berman said. “Traditionally, we get local companies and professionals already in the area who are looking for nicer office space.”

As the city attracts more residents and restaurants, he expects more companies will want to locate there to be part of the scene.

Berman will help that happen, as he agreed to sell the SunTrust office building on Hollywood Boulevard to Miami-based Estate Cos., which secured approval for 324 apartments and 30,000 square feet of retail there.

“That will put residential living directly on Hollywood Boulevard, and introduce a higher scale of restaurant and retail than exists now,” Berman said.

There’s also plenty of infill development opportunities on Dixie Highway and Federal Highway, Levy said. Housing Trust Group is building apartments there, and Brightline is interested in putting a station on the FEC Railway in the city.

“We are just scratching the surface on what the RAC area ought to be,” Levy said.

Changes on the boulevard

City officials are currently considering new street configurations for both Hollywood Boulevard and Young Circle.

The CRA’s Camejo said plans call for wider sidewalks and more shade trees on Hollywood Boulevard to enhance walkability and double the outdoor dining space.

“The challenge for any city is to differentiate themselves in the marketplace,” he said. “We have a unique pedestrian environment with Young Circle and walkable streets. That is what lures people.”

That may not be enough to overcome the inefficient building designs there, Abele said. One of the reasons there are high vacancy rates and low rents on Hollywood Boulevard is because the buildings are not configured well for modern retail, often 24 feet wide by 130 feet deep. Most retailers can’t use the back half of those buildings, so they are challenging to rent, Abele said.

Abele suggests that the city buy the rear halves of buildings and widen the alleyways to create retail-lined courtyards.

As for Young Circle, when BTI Partners completes its two towers, Hollywood Boulevard will have direct access to the park and it will have a straight view of the beach.

“That will reshape the Hollywood skyline and add density, allowing people to stay in place with the restaurants and retail,” said attorney Keith Poliakoff of Fort Lauderdale-based Government Law Group. “The biggest problem for years was there wasn’t enough residential mass to make downtown a success. Finally, there will be significant mass for food trucks and art shows and music festivals.”

Link: Real Estate Journal: Developers circle downtown Hollywood
Auther: Brian Bandell

Eviction-minded landlords may head for the courthouse with moratorium ending

Some South Florida landlords are likely to move quickly to oust tenants behind on their rents after the U.S. Supreme Court struck down a federal moratorium against evictions, lawyers said Friday.

By a 6-3 vote, justices late Thursday struck down a Biden administration eviction ban designed to shield tenants whose financial health had been severely impaired by the COVID-19 pandemic. The court said the Centers for Disease Control and Prevention exceeded its authority when it declared a new eviction ban earlier this month after a previous moratorium expired.

Now, millions of Americans, including tens of thousands of Floridians who are still behind on their rent, are no longer protected and are at risk of being evicted.

“It’s very clear that if there’s going to be another moratorium it has to be Congress that acts,” said Fort Lauderdale bankruptcy lawyer Chad Van Horn. “I think we’re going to start getting phone calls [from tenants] this weekend once this news gets out there.”

Only four new cases were filed Friday after the high court’s ruling, said Broward Circuit Court Chief Judge Jack Tuter.

Moratoriums, which were triggered by the pandemic last year, effectively halted the delivery of most eviction notices by local sheriff’s offices.

Still, the Broward Sheriff’s Office had been serving between 400 and 600 notices a month, a spokeswoman said. Most went to residential tenants whose cases were deemed by judges as “not governed by the moratorium.”

There are currently 2,460 pending eviction cases in Broward, according to Tuter, who cited data from the clerk of the court. There were 612 foreclosure cases filed this year, well below the 1,362 in 2020, and 3,689 in 2019.

In the wake of the Supreme Court ruling, some tenants could find themselves in a race with their landlords to quickly obtain public or some other rental assistance before a building owner files eviction papers at the courthouse.

Earlier this year, the Broward court established an incentive to enter mediation for renters facing evictions — and the landlords who want their past-due rent — if they agreed to settle their differences. The prize was some of the money approved by the federal government to keep renters in their homes.

Heavy pressure

The financial distress facing residential tenants was probably most sharply portrayed last month when Surgo Ventures, a nonprofit health and social policy group in Washington, concluded in a survey that 6.2 million families faced evictions nationally between June 23 and July 5, owing back rent of $23 billion or an average of $3,700.

Regionally, more than 135,000 households in South Florida were found to be late with their rent. In Broward County, 42,367 households owed an average of $5,008. In Palm Beach County, 23,201 households owed $4,658, and in Miami-Dade, 72,123 owed an average of $4,800.

Lawyers pointed out that the eviction process is designed to move quickly and that some landlords who haven’t seen a rent check in months may well move to oust longtime, non-paying tenants as quickly as possible. After a landlord gives a tenant three days’ notice, the property owner can file a complaint with a court. Once served by a sheriff’s office, the tenant has five days to respond.

“If landlords are trying to take advantage of this current moment, I think they’re going to do it and they’re going to do it fast,” said Jason Vanslette of the Kelley Kronenberg law firm. “I hope it doesn’t come to that.”

Big landlords note that they’ve been patient and are willing to continue to do so if tenants work with them. But they have creditors, too, such as lenders who expect mortgage payments to be made on time.

“The Supreme Court made the right ruling, and the entire multifamily industry is breathing a sigh of relief,” said Marcie Williams, president of RKW Residential, which manages more than 25,000 apartments in South Florida and elsewhere in the South. “The moratorium has been a long-term burden on apartment community owners, with some renters not paying any rent for an entire year.

“We have emphasized flexibility and compassion throughout the pandemic and will continue to do so to help our residents,” she said.

Let’s make a deal

Alan Kipnis, partner with the Government Law Group in Fort Lauderdale, said his landlord clients had success making payment arrangements with tenants.

“Most of the landlords have been pretty lucky throughout the pandemic,” he said. “They’ve been able to work with their tenants for the most part. They offered ideas to the tenants about giving them some money and offering payment plans.”

Kipnis suggested that despite the high court ruling, a tenant’s trip out the door might not be as speedy as some think.

He said courts are presided over by judges “who are sympathetic, and so are the landlords, by the way. There are options. ‘Okay, let’s try to keep you here, but what can you do so I can get some revenue from you?’”

Vanslette, who represents commercial landlords including those who own apartment buildings, thinks “negotiating with the tenant is the best bet,” largely because of the slow delivery of aid from Washington.

“Out of the $46 billion available, I think actually 10% has actually gone out to landlords and tenants,” he said.

Van Horn, the consumer side lawyer, said agreements can be reached between landlords and tenants who have fallen behind because they’ve lost their jobs but are “now back on their feet.”

“I’ve had landlords who have been very receptive, and I’ve had landlords who have hung up,” he said.

No case surge expected

By phone Friday, Judge Tuter suggested it’s too early to forecast a run of landlord filings on the courthouse. “We do not expect any kind of an avalanche.” he said.

Moreover, the court is prepared to handle any volume it receives.

“There are plenty of judges,” he said. “They handle them all day, every day including the satellites. We don’t expect anything extraordinary in terms of the filings”

Right now, he said, the situation is a case of “wait and see.”

Link: Eviction-minded landlords may head for the courthouse with moratorium ending
Auther: DAVID LYONS

South Florida Attorneys Weigh In on Supreme Court’s Decision on Biden’s Eviction Ban

The U.S. Supreme Court ended the Biden administration’s eviction moratorium on Thursday, allowing evictions to resume amid rising COVID-19 cases. This decision is a big deal for landlords across the country, including South Florida, who have tenants behind on their rental payments.

Alan Kipnis, an attorney with the Government Law Group in Fort Lauderdale, represents landlords whose first choice is to not evict their tenants. He says the landlords will try anything they can to work with people.

“The legal system is not the right way to do it. It never was, by the way, before COVID. They’re trying to work with the tenants as best they can. I think one of the problems is the money that was allocated from the Congress never got here,” Kipnis said.

“I’m not surprised the eviction moratorium was lifted, and it’s good news for landlords looking for more options,” Kipnis said.

Alan G. Kipnis of Government Law Group. Courtesy Photo Alan Kipnis of Government Law Group. Courtesy photo

“It’s going to be a double-edged sword. We all know how badly COVID is still going on in Florida, so the fact that the moratorium is lifted, first what’s going to happen is the landlords are now able to file landlord-tenant evictions. The problem is, the court system is still in the same spot it was 17 months ago. They’re closed for the most part and understaffed,” Kipnis said.

According to an eviction moratorium research brief by law firm Marcus & Millichap, a mass wave of forced exits is not likely, despite months of delays resulting in more eviction orders filed than in a typical year. Kipnis believes the court system will get clogged up as more people are able to file.

“While it creates a lot more problems for the tenant in terms of being subjected to eviction, I think the process will take longer, and it’s going to be painful in terms of time. It’s just going to add to the pressures we add to right now,” Kipnis said.

He advises that attorneys representing both tenants and landlords prepare for a large number of cases and problems within the court system.

“It’s going to cause delays, and attorneys are going to have to work with the courts and the clerks to try to work through this. It’s something an attorney needs to be prepared for. Give them a reality check in terms of what’s going to happen here. A tenant should know that they’re not going to be served and out the door in 15 minutes. The courts are still required to go through a procedure if the tenant objects to the eviction, and that process will take place, it’ll just take a long period of time,” Kipnis said.

According to Jason Vanslette of Kelley Kronenberg in Fort Lauderdale, the eviction process shouldn’t take too long.

“It’s a summary proceeding so they may take these eviction proceedings on an expedited basis, there might be a backlog for sure, because of the mass amounts of filings. Obviously, the court system has so many limited resources, so certainly that will take effect and probably delay some, but due to the timelines that are required due to the statute under summary proceedings, the delay shouldn’t be that much,” Vanslette said.

Now is the perfect window for residential landlords to file, just in case the eviction moratorium is extended again, Vanslette said.

Jason Vanslette, partner at Kelley Kronenberg in Fort Lauderdale Jason Vanslette, a partner at Kelley Kronenberg in Fort Lauderdale.

“The issue with that is, it’s only been 24 hours and on the executive level, the president or Congress could act and reinstate an eviction moratorium again. It is possible you can file your eviction but if another moratorium is in place between now and then, it will once again be stalled. Try to use your resources as much as possible while the window is still open,” Vanslette said.

According to the research brief, 94.9% of renters in the country made their monthly payments in July, which is less than 2% below the July 2019 measure. The statistic suggests that delinquency is not much higher than in a traditional year. The federal stimulus checks and expanded unemployment insurance were early key supports for people. For people renting, Vanslette said applying for federal assistance can help those facing eviction.

“There’s close to $46 billion for renters or landlords for that matter who can apply for assistance. To date, probably about $5 billion of that has been disbursed and there’s some red tape and bureaucratic issues, but the assistance is there at the local level, and if they have or acquire, they should try to apply with the local department of health or their local cities and county governments,” Vanslette said.

Currently, the multifamily sector is doing well. According to the record brief, rental demand has already recovered from last year, with vacancies dropping 3.8% in June. In the Class C tier where the risk of COVID-related evictions is highest, rents are climbing. Tenant turnover is expected over the next few months, but a shortage of housing will help bolster operations across a range of housing options.

“Regarding the impact of the moratorium ending on the multifamily sector, particularly when it comes to occupancies and the unprecedented rent growth we have seen, pent-up demand in primary and secondary U.S. markets should offset a substantial amount of the new vacancies. As long as would-be buyers continue to be priced out of purchasing, rental rates in these areas should remain at record levels,” said Marcie Williams, president of RKW Residential, which manages over 25,000 apartments in South Florida.

Williams said the Supreme Court made the right ruling and the entire multifamily industry is breathing a sigh of relief.

“The moratorium has been a long-term burden on apartment community owners, with some renters not paying any rent for an entire year. We agree with the National Multi-Housing Council’s [NMHC] response to the court’s ruling that encourages landlords to focus on a compassionate approach prioritizing the support of residents. We have emphasized flexibility and compassion throughout the pandemic and will continue to do so to help our residents,” Williams said.

Some states, including New York and California, have extended their own moratoriums, which will help some renters gain income stability.

Link: South Florida Attorneys Weigh In on Supreme Court’s Decision on Biden’s Eviction Ban
Auther: Melea VanOstrand