A gaping hole in the history of the boom and bust in Miami real estate is the role of foreign investors-- shielded from disclosure by partnership law. The extent of foreign participation as funders of the vast speculation/ Ponzi scheme in South Florida real estate is unknown. For certain, the Miami cash cow from Spain isn't drawing milk any more. Last week, the fourth largest bank Caja Madrid was reportedly seeking $3.6 billion in government rescue funds. In 2008, Caja Madrid paid $927 million to the Abess family of Miami, for an 83 percent stake. The Bauer rating for City National has fallen from five stars to three. The rain in Spain used to fall on Miami.
Miami land speculation is the native industry of South Florida. The sprawl model was the heart of the housing bubble and its lobbyists and political actors and supply chain (I call, the Growth Machine) were never more successful than during the building boom. But the extent to which European financial institutions, especially banks from Spain, were involved has never been fully analyzed. Local players, like former Miami Dade mayor Alex Penelas and his facilitator, Herman Echevarria, were involved in steering Spanish "investors" to South Florida real estate. Penelas was in Spain "on vacation" during the 2000 presidential recount in Miami-Dade where he had more important business to do than ensure a fair recount of the election that secured victory for George W. Bush.
News of banks crashing in Spain-- a massive reorganization is underway-- comes at the same time that Penelas registered as a lobbyist for ADA Engineering. Dan Ricker's Watchdog Report picked up the tidbit: "Alex Penelas, 49, the former mayor of Miami-Dade County is venturing onto the public scene and is now a registered lobbyist with Miami-Dade County. He signed up to represent ADA Engineering on May 26 state county lobbying documents." Penelas has been under the radar since his political career self-destructed. Yesterday, Eyeonmiami disclosed that according to the bank rating agency, Bauer Financial, US Century Bank-- organized by Ramon Rasco, Sergio Pino, and other key operators of suburban sprawl in Miami-Dade-- has fallen from three to a one star rating. Working at Miami International Airport carries a sense of returning to home base. It certainly pays better than bagging at Sedanos.
2 comments:
Well, there you go. Macro economics, served up right in our back yard. I wonder where the cracks will appear next. There are a lot of foreign investors here. That is not always a bad thing. The growth machine thing is most unfortunate, though.
I'm just amazed that Penelas was never indicted for any of the actions he took as a county commissioner and as mayor. It's like he was considered "untouchable" by the feds or the state despite all the slimy deals that benefited him and all his crooked cronies.
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