More, on Parkland and Krome Gold ... by gimleteye

As I was trying to explain to a friend last night—in the restaurant that last year at this time would have been bustling and this year was struggling to fill a quarter of its seats—we have a local analogy to the Hank Paulson multi-trillion dollar bailout of the corrupt financial system. It is called Krome Gold Ranches and Parkland.

These developments virtually connect with each other and have interlocking ownership outside the Urban Development Boundary. Now, they are pushing their way in a few short weeks to zoning decisions at the county commission, after bouncing around at lesser show events in committee meetings and community councils.

My friend is a sophisticated real estate developer. Over the years, we’ve talked about what the economy would look like when the asset bubble in housing and commercial development finally cratered. It looks a lot like this.

We agree that the essential feature emerging from the commitment by the Bush White House to trillions of dollars of socialization of the financial industries is that insiders— investors with experience and especially those close to the Wall Street geniuses who created the mess in the first place, are now in top positions either at the US Treasury or close enough to be the first to profit from the chaos.

As I stated in an earlier post, banks are so frantic to preserve capital that at the top level they are writing off loans to whatever their customers (developers) will pay. In the case of trillions going to support financial institution balance sheets, the cherry-picking of toxic assets will create new billionaires if the markets reverse in a couple of years.

So how does this tie into Krome Gold Ranches and Parkland (click on our archive feature to read about the specific investors)? My friend long ago gave up doing business in Miami-Dade, but here is the substance of what we talked about.

For one, recognize the foolishness in a zoning change putting more sprawl in open space (excellent quality farmland) to create yet another 150 acre rock mine (Krome Gold Ranches) and a new community of more than 16,000 people within shouting distance of the Everglades, far from either transit or places of work.

Both these projects are owned by hubristic developers of suburban sprawl including lobbyists like Rodney Barreto and Sergio Pino who act like THEY run Miami Dade County and the county commissioners they help elect. (ie. the unreformable majority lead by Natacha Seijas).

Krome Gold wasn’t supposed to be a rock mine. Back when the project was conceived—only a few years ago—the housing boom was proceeding apace; sprawl developers were taking easy money and recruiting buyers off to South and Western Miami Dade to take their houses. It was called “the ownership society”. No one calls it that, anymore.

What Krome Gold and its panoply of local luminary investors was supposed to be was the battering ram for development past Krome Avenue, where US Century Bank founder Sergio Pino had set his sights to build out sprawl into Miami-Dade just like Miramar did for Ron Bergeron and GL Homes and for other speculators who share hanger space for their private jets at Tamiami or Opalacka Airports.

What Krome Gold and Parkland both turned into was the kind of anchor that no land speculator wants to be tied to in an economic hurricane, with its flood of foreclosures, bad news, and no end in sight.

The Krome Gold investors want to mine lime rock to help pay their carrying costs until the housing markets revive, and much—if not all—of that lime rock could be used across the street at Parkland, to provide fill for low lying sections of the planned “green” subdivision/traditional town/clustered development/flavor-of-the week.

In both cases, the zoning changes sought by their owners add value that will be readily appreciated by vulture funds scouring Miami and Miami-Dade to invest for cents on the dollar.

Who knows: as the current crisis drags on, and a Republican administration dives deeper into the biggest socialization of the financial sector since the Great Depression, the Republican investors in Krome Gold and Parkland may get to take their mortgages back from the banks at a lower price.

The pity here is that there is no day of reckoning; no mea culpa; no catharsis yet or acknowledgement of wrong by the investors like those of Krome Gold or Parkland for their roles in creating an unsustainable Miami Dade County. And no penalties (except perhaps for the new Planning Director if he doesn’t support these applications: we were told that lobbyists threatened his job “in 90 days” if he doesn’t fold.)

Hank Paulson, the architect of the Multi Trillion Dollar Socialization of the Financial Sector, did say the other day that “mistakes were made”. Easier to say, knowing that your hundred million dollar fortune is safely tucked away.

But the local pit bulls will appear at the county commission in a few weeks and the local county commissioners will open the meeting as though nothing had occurred in the past six months to change the “need for jobs”, or “supporting construction”; in other words, the dais talk will ricochet with the rationales of predetermined outcomes; just like it did in the last round of CDMP applications—the horrible Lowe’s application, approved by the county commission, rejected by Mayor Carlos Alvarez and the State of Florida, and headed for court; the application on distant Kendall Drive by Brown family interests whose campaign contributions show up like confetti of the same color in accounts of the unreformable majority of the county commission; the concerns of the Redland Civic Association and other community activists like the coalition to “Hold The Line” will be brushed aside by polished “environmental” attorneys supported by the cast of stock players that provide “expert testimony” the way elementary school thespians mount the stage for a Thanksgiving pageant.

It is all about money. More for them and less for you, the taxpayer.

So this is the local version of the phenomenon that is playing out on the national stage: a financial system in crisis turns to the same insiders who caused the crisis in the first place hoping for a different result. No wonder there is a crisis of confidence rippling across the American landscape.

It is too bad that the county commission elections took place months ago, because the opportunity of giving citizens the chance for the one action that is meaningful—throwing the bums from office—has passed and gone; the one measure that citizens could have rallied around, to demonstrate state-wide displeasure at the ravages of unsustainable growth called Florida Hometown Democracy (an amendment to the Florida constitution that would force the investors of Parkland and Krome Gold to persuade the electorate and not 13 Miami Dade county commissioners that their plans were worth supporting) was drowned like a baby in a bathtub by local supervisors of elections who refused to accurately and speedily process the 611,009 petitions gathered to qualify for the state-wide ballot in two weeks.)

But this, my friends, is part of the general disarray; contracts busted at whim and no one pays the price; it is every man and woman for himself while government staggers along until the pain of ordinary people grows too deep and too harsh and too meaningful. We are on the cusp of something new here, but by the time it manifests, the real estate speculators will have vanished, fled to hermetically sealed and tight security of private ranches, New England country retreats, or safe houses—but certainly not in the Redland and certainly not Parkland. Those were just investments.