Homestead Fiscal Status Gives Council Pause Over Pioneer

By Victor Cruz
The future of a single-family home development in Homestead’s historic downtown is on hold while city officials weigh the city’s financial standing and consider a mixed-use option for the same land.

The developer’s contract with the city allowed completion of 72 homes in the first phase of Pioneer Village but required council approval to go ahead with a 22-home second phase, Homestead Vice Mayor Nicholas Sincore said.

But Lowell Homes, builder of the project, closed its sales office after a Homestead city committee tabled the project indefinitely May 14. The committee’s tabling of the matter kept it from reaching the city council.

Lowell had set a deadline for the city to clear the way for the second phase and became frustrated with the cost of maintaining two model homes and operating a sales office, said Senior Vice President Lani Kahn Drody. A waiting list still exists for the 22 phase two homes.

"This project was something very dear to our hearts," Ms. Kahn Drody said. "We build houses all day in areas that have already been established. But when you can come in at the foundation and are creating a wonderful community and building a tax base, that is very rewarding. We are proud of what we did there."

Vice Mayor Sincore said it was primarily potential infrastructure costs to the city at a time when finances were uncertain that led the committee to table the second phase of Pioneer Village.

The home development, city officials said, would bring $32,132 annually in tax revenues annually, while a mixed-use project would bring in $32,836 a year. But without a developer on board, that project could take at least four years before revenues become available, said Homestead Community Redevelopment Agency Director Lynda Kompelien.

The city paid more than $1 million in infrastructure expenses for phase one of the Pioneer Village project. City documents show that the second phase would cost the city $368,350, even with Lowell agreeing to contribute $182,000 in infrastructure costs.

"If we had agreed on a contract" with Lowell, Mr. Sincore said, "we would have had to come up with the infrastructure money, $25,000 for a separate roadway for three businesses" whose main entry corridor would have been cut off by the development.

Also, he said, "we would have been liable for Lowell’s potential profits if we gave them the right to proceed and then didn’t come up with the infrastructure money."

But committee members also said they wanted to consider other options for the 5 acres at the intersection of Northwest First Street and First Avenue where the 22 homes would have been built.

The remaining alternative for the site now is a mixed-use development. Proponents of this use won’t take up their cause until after the November city elections, said resident Betty Calabrese, a physical therapist, who has spoken on behalf of 20 supporters of the project.

Last week, months after the city’s finances appeared to be headed for state financial takeover, officials learned that the city had a right to use $3 million in police forfeiture funds to help balance the budget, according to Vice Mayor Sincore. The money, from property seized from suspected drug dealers, may mean the city can end up with nearly $3 million in the plus column.

But former county manager Merrett Stierheim, who is leading a task force to offer advice on the city’s financial problems, said Tuesday "Homestead is not out of the woods yet."

He said that while the city may in fact end fiscal year 2001 on Sept. 30 with "money in the bank," the results of an ongoing audit may show the city to be as much as $11 million in the red.

The budget for fiscal year 2002, due in a few weeks, would have to deal with a variety of recurring deficits, Mr. Stierheim said.

Ms. Calabrese said fellow residents who are looking for a developer to take on the mixed-use project see a different future for the historic downtown area than single-family homes.

"We want small mom-and-pop operations in two- to three-story buildings like you see in Amsterdam. Business on the bottom floor and people on top," she said.

"We have to wait until we see the financial status of the city and have to talk with the residents," Mr. Sincore said. "A mixed-use development might bring in more tax revenues."

He said Lowell President Larry Kahn "should contact the council and come back to negotiate.

"I’ll hear him out. Everyone agrees that this was a good project. I wouldn’t say it’s dead."

Construction of Lowell’s first phase of Pioneer Village began in February 1999 and is due to be finished within five months. Those 72 homes, built on about 10 acres in Homestead’s southwestern downtown neighborhood, were constructed after many structures had to be demolished in 1992 after Hurricane Andrew.

The homes began selling for as low as $75,000 when the project kicked off in 1999 and were priced up to $110,000 before selling out in April, Ms. Kahn Drody said.

The first 24 of the 72 phase-one homeowners got federally subsidized mortgages of up to $30,000, to be cancelled after five years of ownership, to allow low- to moderate-income families to buy a first home, according to city documents.

In December 2000, Homestead’s community redevelopment agency won the state’s Roy F. Kenzie Outstanding New Building Project Award for Pioneer Village.