Sunday, March 04, 2012

Inspector General Chris Mazzella's Report on Landfill Money Spent (Wasted?). By Geniusofdespair

Swerdlow is not beating around the bush this time...he doesn't want to pay for the landfill cleanup this second time around. He sold his interest to Biscayne Landing the first time he got this development years ago and believe it or not North Miami is giving him a second chance. Stupid North Miami. Coincidentally, this article about the landfill was in today's paper.

Inspector General Chris Mazzella's report counts as uncovering a boondoggle in my book. I took this issue regarding the Landfill Funds to Former County Commissioner Jimmy Morales years ago, maybe 2003, that is how long I have been following the money.  

Quickly, to recap, I called Homestead City Manager and Morales about Landfill Closure funds (it is on your tax bill) going to North Miami. I told them the DEVELOPER had agreed at meetings to pay for the cleanup of the Munisport site (I went to meetings, it was part of the RFP) however North Miami was STILL trying to tap county funds for the developer. When Morales and Homestead City Manager complained to County Manager Burgess about the limited funds all going to North Miami, instead of stopping the grant money to North Miami, Burgess found other funds for the City of Miami and Homestead landfills which were in line for that money. Burgess did some convoluted dealing that you know cost us ALL more money in the end. The money to North Miami was a gift and here it is hitting us in the face. It is my opinion that Attorney for Biscayne Landing Clifford Schulman was virtually running the City of North Miami at the time.

Following is an excerpt (this link takes you to the full report on the 3 landfills) from the IG report on North Miami's former landfill Munisport (now known as Biscayne Landing):

At the time of the second amendment, North Miami had already contracted with a group of developers—the Swerdlow Group, Boca Developers, and Biscayne Landing, LLC—to develop the Munisport site. The development included commercial and residential end uses to the property that necessarily required that the landfill be closed and the groundwater remediated. While North Miami was the legal grantee of the $31 million in landfill closure funds, the developer group (its successors and assigns) was the de facto grantee of the County’s funds.

Disbursements from the escrow account are based on contractor draw requests. These requests are forwarded to PWWM’s bond engineer, who is responsible for approving such requests. The bond engineer uses a Schedule of Values (SOV) as a basis to review and approve project costs. The SOV shows work unit descriptions; work unit payment bases; work unit costs; estimated number of work units; total work unit costs; and total project cost. The SOV was agreed upon by PWWM, the bond engineer, North Miami, and the contractor’s engineer of record. Disbursements from the escrow account need an authorized signature from both the County and North Miami. Pursuant to the grant, escrow account disbursements should go to North Miami, who in turn should pay the contractor that is performing the work. However, because the contractor performing the work was not retained by the City, but instead by the developer group that held the development rights to the land, the grant funds were disbursed from the escrow account directly to the developer.

Draw request payments of approximately $10.6 million have been made, leaving a balance of $24.3 million in the grant escrow account as of June 30, 2011. This balance includes approximately $4 million of interest earned on the grant amount of $31 million.

The Munisport grant agreement does not require the project’s timely completion.

The closure and groundwater remediation work at the Munisport Landfill site began in 2005 and is still not completed. Less than one-third of the grant funding has been drawn to date, with no construction work taking place since 2008. To date, approximately $10.6 million of funds have been expended out of a total of $35.07 million. We also note that the grant agreement does not have a stated duration or period of performance. Section IV, Terms of Agreement, states:

This Agreement shall be in full force and effect from the date hereof and shall continue until the later of the final certification of completion of the landfill remediation and closure or upon depletion of the escrow account/s so that no further funds are available for disbursement therein.
The closure and remediation work on the site has run into major delays primarily due to the landfill site developer (12) filing for bankruptcy and being removed from the project. This is important because, while the grant agreement is with the City of North Miami and the City is responsible for using the funds for the stated purposes, in reality, the landfill developer became responsible for the landfill’s closure and groundwater remediation. The developer, not the City, was the party holding the contracts under which the work was to be performed. (13)

The lengthy delay in completing this project occurred because the Munisport Landfill closure was only one aspect of a larger development that was planned for the site. When the project became no longer commercially viable and the developer Biscayne Landing, LLC filed for bankruptcy, site development, including the landfill’s closure and remediation, came to a standstill. Since then, neither site development nor landfill closure have progressed. Although there have been recent efforts by North Miami to engage a new developer for the site, such efforts may or may not be successful. In the meantime, the landfill closure project remains uncompleted. This delay has left grant funds sitting idle in an escrow account and an important job unfinished. We believe landfill closure should take place independent of whether or not a new developer takes on the task of overall site development. After all, the grantee is the City of North Miami and the agreement requires the City to close/remedy the landfill. The City cannot delegate this responsibility to another party, whoever it may be.

Although the grant agreement imposes no deadlines on project completion, the failure of the City of North Miami to substantially fulfill any of the material obligations in accordance with the grant agreement may constitute a default.14 Whether substantial delays and non-performance—i.e., not closing the landfill—constitutes failing to fulfill a material obligation is a matter for PWWM and its attorneys to decide. Regardless, however, we believe that it is in the County’s best interest that this landfill closure project be completed without delay. The County borrowed over $31 million in 2005 to pay for this landfill’s closure and groundwater remediation. Six years later, less than one third of the money has been spent and the project is far from being complete.
12 One party (Swerdlow Group) to the original developer group sold its interest to the remaining parties. The developer filing for bankruptcy, Biscayne Landing, LLC, a member of the original group, is the successor developer.

13 These contracts would include the design/engineering agreements and all of the construction contracts.


Anonymous said...

All the thieves walked away with millions and millions of dollars. No one ever held them accountable. Not Swerdlow not Boca Developers, once Heralded as the largest condo developer in Florida. Where are they now?

Anonymous said...

I cannot hit read more today. After seeing Fernenez Rundle's pic in the Herald today at an LBA "installation" party, we are just so screwed; no one will be prosecuted and our tax dollars get washed away to tricks by developers/politicians and of course, Burgess, is right up there.

Fed's can you help? Now, or perhaps ten years ago and counting is the time!

Geniusofdespair said...

Suck it up: hit read more.

Hannah said...

Didn't I also read that idiot ex-mayor Joe Celestin is currently being paid some outrageous salary to oversee this cleanup?

Geniusofdespair said...

Yes you did. And now Jean Monestime's sister(?) Wife (?) is the City Attorney over there.

Stephanie Kienzle said...

Great reporting! All the things happening in North Miami right now are enough to keep a blogger working full time. The Biscayne Landings boondoggle has been hard to follow because of all the twists and turns this story has taken so far. You have done a wonderful job breaking it down for us. I'm not going to read the IG's entire 50 page report, but I'm glad you did. I can't wait to see what you uncover next!