No surprise that The Miami Herald missed, in its annual review, the biggest business story of 2012: the collapse of the insider piggy bank, US Century Bank.
Eyeonmiami, the blog, documented the hijacking of local government during the early 2000's by insiders who comprised the founders and board of US Century; Sergio Pino and Ramon Rasco. The same forces that planned the transformation of the Homstead Air Force Base into a major commercial airport through a no-bid 99 year lease in the mid 1990's materialized, in the early 2000's to proliferate zero lot line housing and platted subdivisions into Miami suburbs.
Directors like Rodney Barreto, a top Jeb! Bush consigliere, agitated for widening Krome Avenue while amassing large land holdings outside the Urban Development Boundary. It was a near perfect and completely legal scheme: manipulating zoning to arbitrage the value of farmland and open space into its conversion value as sprawl.
The media dared not acknowledge much less criticize the formula because its own revenues and profits, benefiting top executives, were tied to what even then looked like, walked like, and talked like a Ponzi scheme of gargantuan proportions.
US Century Bank provided not just the link between politically connected home builders and the local elected officials who did their bidding from the dais of the county commission, like former county commissioner and ring leader Natacha Seijas, they also provided the financing under the lazy eye of regulatory agencies.
The housing boom and subsequent crash caused the worst economic crisis since the Great Depression. On a broad scale, the Great Recession that followed -- if it can be called that -- was not a blameless exercise. The same way at the national level none have been held to account, at the local level the principal actors have gone unmentioned from the scene. The general lassitude of the South Florida economy traces directly to the shattered fortunes of consumers persuaded to invest in mortgages they could not reasonably afford, through the promotion and advocacy of homebuilders and their bankers -- like US Century -- and the politicians who made their developments possible through zoning decisions.
Eventually US Century Bank received the largest TARP federal taxpayer bailout in Florida; even this fact was lightly reported by the mainstream press. Yet, because of its rotten loan portfolio (according to Bauer Financial, a ratings agency, US Century Bank had a ratio of insider loans that dwarfed similarly sized banks in the United States) it also ranked as the most undercapitalized bank in the United States (South Florida Daily Business Journal).
If one were to overlay on a map of Miami-Dade County, those rotten mortgages from US Century Bank, it is our belief the map would provide an outline of the pattern of suburban sprawl that has been so destructive of quality of life and sound decision-making for taxpayer investments by elected officials who voters keep returning to office, mostly because voters are uninformed about the insider forces that shape our communities.
For these reasons, the collapse of US Century Bank -- yet to be shuttered by regulators or, through lawsuits, fully disclosed -- is the biggest business story of 2012 in Miami.
Eyeonmiami, the blog, documented the hijacking of local government during the early 2000's by insiders who comprised the founders and board of US Century; Sergio Pino and Ramon Rasco. The same forces that planned the transformation of the Homstead Air Force Base into a major commercial airport through a no-bid 99 year lease in the mid 1990's materialized, in the early 2000's to proliferate zero lot line housing and platted subdivisions into Miami suburbs.
Directors like Rodney Barreto, a top Jeb! Bush consigliere, agitated for widening Krome Avenue while amassing large land holdings outside the Urban Development Boundary. It was a near perfect and completely legal scheme: manipulating zoning to arbitrage the value of farmland and open space into its conversion value as sprawl.
The media dared not acknowledge much less criticize the formula because its own revenues and profits, benefiting top executives, were tied to what even then looked like, walked like, and talked like a Ponzi scheme of gargantuan proportions.
US Century Bank provided not just the link between politically connected home builders and the local elected officials who did their bidding from the dais of the county commission, like former county commissioner and ring leader Natacha Seijas, they also provided the financing under the lazy eye of regulatory agencies.
The housing boom and subsequent crash caused the worst economic crisis since the Great Depression. On a broad scale, the Great Recession that followed -- if it can be called that -- was not a blameless exercise. The same way at the national level none have been held to account, at the local level the principal actors have gone unmentioned from the scene. The general lassitude of the South Florida economy traces directly to the shattered fortunes of consumers persuaded to invest in mortgages they could not reasonably afford, through the promotion and advocacy of homebuilders and their bankers -- like US Century -- and the politicians who made their developments possible through zoning decisions.
Eventually US Century Bank received the largest TARP federal taxpayer bailout in Florida; even this fact was lightly reported by the mainstream press. Yet, because of its rotten loan portfolio (according to Bauer Financial, a ratings agency, US Century Bank had a ratio of insider loans that dwarfed similarly sized banks in the United States) it also ranked as the most undercapitalized bank in the United States (South Florida Daily Business Journal).
If one were to overlay on a map of Miami-Dade County, those rotten mortgages from US Century Bank, it is our belief the map would provide an outline of the pattern of suburban sprawl that has been so destructive of quality of life and sound decision-making for taxpayer investments by elected officials who voters keep returning to office, mostly because voters are uninformed about the insider forces that shape our communities.
For these reasons, the collapse of US Century Bank -- yet to be shuttered by regulators or, through lawsuits, fully disclosed -- is the biggest business story of 2012 in Miami.
6 comments:
It would be interesting to cross-reference the board of directors of US Century and your post of the year subject: Ana Sol Alliegro. What percentage of original board directors do you think were acquainted with Alliegro?
These criminals who owned the bank should be made to suffer and go to jail. Of course it will not happen because they will buy their way out.
Mensa, I doubt they'll have the cash left (at least in any US Bank - pun intended) to buy grocery's from Sedona's (another pun intended)!
It's just the New Years spirit kicking in, what can I say.
I want to know why Krome Gold which was re zoned back in 2008, I think, or sometime before the bust, to allow rock mining at the edge of the Everglades hasn't been re zoned. I looked up the parcel on Krome and SW 136th St. and it shows something weird like "pending zoning". The tax assessor is valuing the land at $10,000,000, but they're only paying property taxes on $1,000,000 of that land. Why aren't they paying taxes on the other $9,000,000 and why hasn't the zoning changed? It doesn't take four years to get a permit in this County and I believe they're just not submitting their paperwork to avoid paying property taxes. All the US Century people are involved with this deal, and our Mayor Gimenez approved this rock mining application on Krome too. Eye on Miami did a story about how they were going to subsidize their revenue with the fill (check out the archives, it's even more Eye opening - another pun)!
The whole thing and all these people just stink!
In any event, it's just another screwing over of real dade county tax payers because we pick up the tab the county doesn't collect, or forgets to collect (think Robaina - the bad one)!
That's what I mean: the entire purpose of local government was transformed from protecting the health, welfare and safety of citizens to doing the business of insiders.
Gimleteye - we could not agree more. I will take it a bit further and not very politically correct to say that the BCC and County Hall itself is probably the biggest cesspool we have. They are played like puppets, happily, to get what they can while they can.
This is the most logic defying collective group of people, actually worse than Congress on both sides!
From paving over our food supply to violating our clean water act, to subsidizing sport franchises with tax dollars, the list just goes on of stupidness and bad decisions - most certainly NOT for the health & welfare of it's citizens. If I go into the Everglades destruction, I'll run out of room!
I'd still give Bruno the dimmest of them all but Bell is running a very close second in this current slate of BCC members!
My wish for the New Year would be Federal Indictments for a whole bunch of political hacks and their puppeteers!
US Century Bank was the BIGGEST story of 2012 and your blog was all over it. You should never back down from this topic nor stop digging deeper till some of these elite fools goes to jail!!!
Without your blog few would know of the crimes committed at this institution and against all of the citizens of Miami-Dade County.
Thank you and Happy New Year!
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