Miami Commissioners Look To Hold Nonprofit Movers Accountable In Sugar Hill Sale
Written by Jacquelyn Weiner on June 18, 2009
By Jacquelyn Weiner
It started as a charity project and ended in a potential fraud, leaving the City of Miami nearly $1 million in debt to the federal government.
The Sugar Hill Apartments, at Northwest 14th Place and Northwest 71st Street, acquired with US Department of Housing and Urban Development grants in 1993 by a local non-profit, were intended to provide affordable housing for residents suffering from AIDS.
Yet the unauthorized sale in 2007 of the property by a second non-profit owner to a private, for-profit company has forced the AIDS sufferers to relocate and has put the city in a $935,556 hole.
"That’s the one that I cannot swallow like a pill," said Miami Commission Chairman Joe Sanchez when discussions turned to Sugar Hill last Thursday at the commission meeting.
The issue was presented in a newly urgent light last week as George Mensah, director of community development, explained to commissioners that the city must agree to a three-year repayment plan of $4 million in federal funds to receive $12 million in stimulus money. The repayment includes the almost $1 million from Sugar Hill.
While the commissioners agreed to the repayment, they also allocated $10,000 to the city attorney’s office to investigate the nonprofit — Minorities Overcoming the Virus Through Education Responsibility and Spirituality — that sold Sugar Hill without the required government authorization.
If the city attorney’s office finds possible violations, it is to refer the case to the Public Corruption Unit of the State Attorney’s Office, commissioners instructed.
"Bring them to the table," Mr. Sanchez said of the non-profit group. "That’s the first thing this administration should do."
Back in 1993, there were big plans for the future of Sugar Hill.
A total of $1.1 million in federal Housing Opportunities for Persons with AIDS funding was provided by the city to a local non-profit, the Economic Opportunity Family Health Center, to start work on the project.
The center, which is now the Jessie Trice Community Health Center, bought the Sugar Hill property in December 1993 for $228,000, according to a city document.
In total, almost $4 million was invested into the property, Commissioner Marc Sarnoff said at last week’s meeting.
A spokeswoman at the Jessie Trice Community Health Center did not reply to an interview request by press time.
In 2003, the center handed ownership of Sugar Hill over to Minorities Overcoming the Virus Through Education Responsibility and Spirituality, or M.O.V.E.R.S. Inc., a local nonprofit dedicated to helping people with AIDS.
Yet in 2007, M.O.V.E.R.S. went against these principals and sold the Sugar Hill Apartments to Golden Sterling LLC, a private, for-profit company for $1.8 million, city officials say.
After the sale, all but one of the AIDS patients was removed, according to city documents.
The sale also violated two stipulations of the US Department of Housing and Urban Development grants that funded the Sugar Hill Apartments project.
First, sale of the property was required to be OK’d by the department, which was not done.
Even the city wasn’t notified of the sale until months later, according to city documents.
Second, the property had to be inhabited by AIDS patients for 10 years after the apartments reached full capacity, which would have been February 2012, according to city documents.
Essentially, a property paid for by almost $4 million in government grants distributed since 1993 was sold to a private company for $1.8 million — so someone made a profit off the government — and now the city has to pay.
"This is not a travesty, said Commissioner Marc Sarnoff. "This may be a fraud."
Mr. Sarnoff called for the investigation to take a close look at the people on the boards of the involved non-profits.
"Look at all the players involved," Mr. Sarnoff said. "See if there’s any kind of cross-germination."
Mr. Sanchez agreed that M.O.V.E.R.S. should be held accountable.
"It’s a non-profit organization," Mr. Sanchez said. "They can’t take the money and go to the Fiji Islands or Tahiti."
Attempts to contact M.O.V.E.R.S. by press time were unsuccessful. The organization has disconnected its phone line.
To prevent similar future incidents, the city will have to ensure that there is a written covenant on the property, Mr. Mensah said.
"I will say here and admit that in 2003, whoever handled that transaction should have ensured, like we do now, that there is a covenant on the property," he said.
Mr. Mensah also mentioned that the incident has been looked into in the past by the State Attorney’s Office. He told commissioners the non-profit has been unresponsive to questions from the city and attributed the silence to a possible investigation.
Terry Chavez, public information officer for the State Attorney’s Office, was unable to provide information on any past investigations into Sugar Hill by press time.