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12/18/2003

News > News

Merry Christmas, Cameron

 

To fully understand the speed with which Cameron Kuhn's proposed Plaza on Orange Avenue was rushed through the city machine -- and comprehend that nothing was going to stand in the project's way -- one need only have attended the Community Redevelopment Agency Advisory Board meeting on the morning of Dec. 8.

The CRA uses city and county property taxes to fund redevelopment. The agency's board of directors consists of the mayor and the six city commissioners. The board is assisted by a volunteer advisory board, which sharpens development proposals with city staffers and makes recommendations before the directors take a vote on any given project.

On the morning of Dec. 8, the CRA advisory board was scheduled to approve the outline of an incentive package of loans and tax rebates totaling $22 million -- called a "memorandum of understanding" -- for Kuhn's $140 million mixed-use Jaymont block megadevelopment. A few hours later, the city council -- acting as the CRA's policy board -- would ratify the same memo. But the advisory panel had to sign off first.

The advisory panel had already approved two other memorandums of understanding that morning: one for the CNL building slated to go next to City Hall, and another for proposed high-rise condos at 55 W. Church Street. But when it came time to green-light Kuhn's Jaymont project, dubbed the Plaza, the advisory board hit a snag.

Forty-five minutes into the staff presentation, board member Jennifer Quigley declared that she had a conflict of interest -- which she didn't specify -- and needed to abstain. Only four of the advisory board's seven members were there that morning, meaning that when Quigley left, the board didn't have a quorum. And that put the Plaza's expedited timetable in jeopardy.

But Buddy Dyer's administration, which had been secretly negotiating with Kuhn for months, wasn't about to let that happen. Sgt. Joe Robinson, Dyer's police escort, was dispatched to the Orange County administration building to fetch County Commissioner Mary Johnson, an absent member of the CRA advisory board. About an hour later, Johnson appeared at the meeting. After some kvetching about being dragged from her office on one of the busiest days of her week, she listened to staff's presentation (given a second time), raised a few questions about the project's speed and lack of public input, and approved the memorandum of understanding.

Later in the day, after hours of back-and-forth from supporters and opponents of the demolition, the city council approved a resolution supporting a demolition permit the city had issued Kuhn's company, Downtown Land Holdings LLC, on Dec. 5. Then, technically reconvened as the CRA, the council approved the memorandum of understanding. Moments later, Kuhn's wreckers started razing. By Monday evening, parts of Orange Avenue were blocked because debris from the historic building had fallen in the road.

As Dyer later explained, the public hearing afforded those who didn't like the demolition -- chiefly members of the sidestepped Orlando Historic Preservation Board -- a chance to vent. Dyer painted the exercise a grand example of public debate, though he also admitted that the outcome was a foregone conclusion.

Kuhn's proposal, a breathtaking example of New Urbanism, is a complex of three skyscrapers with condos, office space, a multiplex theater, restaurants, retail stores, parking and maybe even a grocery store. If all goes well, it will anchor the new downtown core and pump life into the city's "Main and Main" (Orange Avenue and Church Street).

And the Jaymont block bears little historical import anyway. It was a 60-year-old department store that had been mostly vacant for two decades. Bulldozing it should have been a triumph for Dyer.

But in their rush to get the deal done quickly and quietly, city officials blatantly skirted their own processes -- bending and breaking their own rules, aborting any meaningful public input and perhaps even lying to elected officials.

"The problem is we're looking for a smoking gun, and there's a firing squad," says Commissioner Patty Sheehan, who voted against the demolition (though she voted for the memorandum of understanding). Sheehan backs the project, but not the way it was handled. "I don't think it's one thing. It's a myriad of awful things that went wrong. I've never heard so many misrepresentations made to me in a 24-hour period."

Shove it through

Dyer has two good reasons for shoving the deal through: bolstering the "Main and Main" concept conceived by his Downtown Strategic Transition Team, and landing a downtown movie theater that city leaders believe will keep professionals from fleeing to the 'burbs at 6 p.m.

The CRA's and city's contributions to the $140 million Plaza, according to the memorandum of understanding approved on Dec. 8, is fourfold. First there's the Destination Activity Catalyst Program, $350,000 paid by the city to Kuhn yearly for a decade, assuming the movie theater becomes and remains a reality. Second, the city will give Kuhn incremental tax rebates over the next 12 years, meaning that as the value of his property rises, the city will rebate him 35 percent of the increased property tax revenue for the first four years, 30 percent the next four and 25 percent the last four. Third, the city will front him $14 million to build 1,000 parking spaces, which Kuhn has to pay back as he sells condos. Fourth, within 30 days of the city and Kuhn reaching a final agreement (which should happen in coming weeks), the CRA will write Kuhn a $3.5 million advance loan.

It's the last point that bears scrutiny.

For one thing, the CRA doesn't have $3.5 million to give Kuhn. The CRA plans to borrow the funds from the city's banking fund, and loan it to Kuhn. There are no performance benchmarks for the loan, and it will be paid out long before Kuhn breaks ground. Other parts of the incentive package have provisions to protect the city; this one doesn't.

That troubled the CRA advisory board. Member Pat Christiansen asked the city's chief financial officer, G. Michael Miller, what the $3.5 million was for. "That was the request," Miller responded.

Christiansen then asked Miller to include benchmarks in the final agreement, and he and member Bob McClelland worried that if the project didn't go through for some reason, the city would be stuck holding the bag. Miller said he'd look into establishing criteria for the loan, possibly putting the money into an escrow or trust fund account until the criteria were met. That way, the city could show Kuhn the money was forthcoming without taking such a risk.

There has been some speculation, in the CRA advisory board meeting and around City Hall, that Kuhn needs the $3.5 million to shore up loans from investors. While he has strong backing for the movie theater aspect of the deal, the money may not be there for building condos. "I was hoping for more on residential, but that hasn't come into play at this time," Miller said at the meeting.

If Kuhn does need the money up front to solidify the deal -- he didn't return phone calls for this story -- that could put the city in a catch-22. Either the city fronts him the money with no strings attached and risks losing it if the project implodes, or it puts the money in escrow and risks Kuhn walking away if his investors balk, leaving a leveled Jaymont in his wake.

Greasing the wheels

Kuhn's company, Downtown Land Holdings LLC, bought the Jaymont block Nov. 12, 2003, for a reported $10.5 million from 125 South Orange, LLC, the company formerly known as the Tavistock Group. Tavistock bought the property in 2001 for $7 million, but its redevelopment plans never got off the ground.

The day Kuhn bought the property, the city's code enforcement board forgave outstanding fines against the building -- a common redevelopment practice -- declared it a hazard and signed off on the demolition. Try getting that kind of service from the city yourself.

Normally, there are prerequisites for getting a demolition permit; for instance, getting an OK from the historical preservation board and a certificate declaring the building free of rodents. But those rules didn't apply to Kuhn. The historic board's concerns were apparently trumped by safety concerns; it's unclear whether Kuhn sidestepped the rodent issue altogether. No one, including Commissioner Sheehan, seems to recall seeing any evidence that the Jaymont block was exterminated or tented between the time Kuhn bought it and the time it was demolished.

The city council resolution states that the demolition permit was issued "in accordance with all applicable rules, regulations, ordinances and procedures." There is no mention of the rodent-free guarantee. Code enforcement director Mike Rhodes did not return phone calls, though at the council meeting he touted pictures of vermin as evidence that the complex needed to be razed.

June Senay, a city permit technician supervisor, reprinted a copy of the demolition permit for the Weekly, but could not produce any of the supporting documentation -- including a rodent guarantee -- because, the permit was "issued differently. Mike Rhodes issued the permit. You'll have to check with him on any back paperwork."

What is apparent is that from the time Kuhn purchased the buildings, they were doomed. According to an agreement the city reached with Kuhn on Nov. 13, the buildings must be demolished by Jan. 27 and new construction must begin by March 13.

Say anything

There is another troubling anecdote from the behind-the-scenes shenanigans. On Dec. 5, after Dyer had left for the Bahamas with his wife but before the memorandum of understanding with Kuhn was finalized, city staffers asked city commissioners to sign a confidentiality agreement declaring they wouldn't share details of the deal until the city released the information. Only Commissioner Betty Wyman agreed.

But Sheehan says that when Miller, the city's chief financial officer, asked her to sign the agreement, he specifically told her that the rest of the commissioners had already signed, though one was out of town, another had refused and two others couldn't be reached. "He lied to me," Sheehan says. "He used coercive pressure to get me to sign a document. It's a bald-faced lie." (Miller is out of the office following minor surgery and could not be reached for this story.)

That incident, combined with the speed and secrecy with which the Dyer administration pushed the project through, left a bad taste in Sheehan's mouth. She cast the lone protest vote against the demolition.

"The problem with this is the rush through the whole system," Sheehan says. "Everything was timed like dominoes. That shouldn't have happened that way. Details get overlooked when you're in a hurry."

The big rush, Sheehan believes, was to prevent the historical preservationists from recruiting national help and filing an appeal to prevent the demolition or to require Kuhn to spend about $5 million to keep the existing facades intact, which even if unsuccessful could have held up the redevelopment for months.

Dyer's office refused repeated requests for interviews. In a press conference last week announcing that city commissioners would never again be asked to sign confidentiality agreements, however, Dyer said he didn't think preservationists had a case, especially after the city council signed off on the demolition.

That may be so, but the city would nonetheless have had to put time and money into defending any legal action. And, if the case had any legs at all, the injunction might have kept Kuhn from meeting his December 2005 goal.

In the meantime, Orlando taxpayers can only cross their fingers and hope this hastily arranged deal doesn't come back to haunt them. The memorandum of understanding is a "good faith understanding," and not a contract. According to the memo, "The parties specifically acknowledge that no meeting of the minds has occurred regarding this transaction, [and] that many significant issues will need to be resolved and negotiated in connection with this transaction, and that resolution of those significant issues may cause one or more of the parties to revise their current intentions."

In other words, the deal ain't done. But the Jaymont block, as it once stood, certainly is.

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