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Front Page » Top Stories » Coastal Construction We Never Heard From City About Impact Fees

Coastal Construction We Never Heard From City About Impact Fees

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Written by on December 24, 2009

By Jacquelyn Weiner
For months, the City of Miami has said it is owed more than $317,000 in undercharged impact fees overdue since 2005.

Yet Coastal Condominiums, an active subsidiary of Coastal Construction Group that the city has said is the second biggest debtor on the list owing $86,607 from a September 2002 building permit application, says it never heard a word about it from the city.

That may be because the city sent 25 collection letters to Coastal Condominiums from Dec. 26, 2006, to Dec. 7, 2009, to an address previously listed for the company, according to records from the City of Miami’s Finance Department.

The finance records regarding Coastal, including a collection letter and a listing of the dates additional letters were sent, were provided to Miami Today on Tuesday by Cristina Fernandez in the city’s Office of Communications.

The address used for Coastal is the same as was listed on the 2002 City of Miami Building Department Permit Application relating to the fees in question.

Assistant City Attorney Sacha Reyes provided the permit application to Miami Today on Tuesday.

The undercharged impact fees were first discovered in a 2005 city audit.

Orlando Toledo, city director of building and zoning, told Miami Today in June that incorrect calculations by two employees in the Office of Zoning, who plugged an incorrect number into the formula used to collect impact fees, caused the city to collect less than it was actually owed.

He also told city commissioners about the issue at a June commission meeting, asking the commission to allow the city attorney to potentially go after those companies that he said owed the city $337,719 in impact fees.

The commission gave the city attorney’s office the go-ahead to pursue the alleged debtors. At the time, there was concern that opportunities for legal action could be waning due to a four-year statute of limitations.

In addition, Mr. Toledo told Miami Today in June that that the city’s Finance Department had been sending collection letters to pursue repayment.

Also, a Nov. 20 memo by Assistant City Attorney Reyes to City Attorney Julie Bru said the city had enlisted collection agency Penn Credit Corp. to help recover the impact fees.

Ms. Bru had Ms. Reyes provide the letter to Miami Today this month in response to queries about the unpaid fees.

The memo found that "the undercharged impact fees due by Coastal Construction, Inc." could not be collected by legal action because it would have had to have been filed by July 28, 2008.

In addition, the document stated that Coastal Construction Inc. "is now defunct."

Other city documents refer to the same debt amount as being owed by Coastal Condominiums, including in the city’s collection letters.

In a phone interview Tuesday, Ms. Reyes said that the Coastal Condominiums that filed the initial building department permit application has in fact dissolved.

According to Sunbiz.org, the Florida Department of State Division of Corporations’ Web site, Coastal Condominiums of Palm Beach was voluntarily dissolved on Jan. 18, 2008.

The company was then reinstated as active on Jan. 29, 2008, and is still listed as active.

Thus, Ms. Reyes said, the company that the city could have gone after to recover the fees it says are due is no longer in existence.

Daniel Whiteman, president of Coastal Construction Co., said the dissolution was a formality.

"The purpose of the dissolution and reinstatement was because each of the entities that were subsidiaries of Coastal Construction Group needed to have the same Federal Employer Identification Number (FEIN) to qualify as subsidiaries of the parent company," Mr. Whiteman wrote in an e-mail.

Coastal Construction Group remains an active company.

Sunbiz.org has an active fictitious name listing for Coastal Condominiums filed Sept. 8, 2009, valid through Dec. 31, 2014.

Mr. Whiteman also provided Coastal Condominium’s Miami-Dade County business tax receipt, saying payment was received by the county Aug. 4, 2009. It expires Sept. 30, 2010.

And as far as the debt the city says the contractor owes, Mr. Whiteman said the company has never been contacted regarding the overdue impact fees.

"Coastal has never been contacted by anyone at the City of Miami about any alleged non-payment of Impact Fees," Mr. Whiteman wrote in an e-mail. "If there were additional Impact Fees due by the Developer, the City would have assessed them prior to issuance of a Final Certificate of Occupancy."

Further, "Coastal Condominiums never pays for the Impact Fees on a project," he wrote, "Nor do most Contractors, these are negotiated and paid directly by the Developer." 

The address that the finance department has on record for Coastal Condominiums in regards to collecting the undercharged impact fees is 790 NW 107th Ave., suite 308, the same as on the permit application.

Coastal Construction Group’s current address is 5959 Blue Lagoon Drive, suite 200, according to the company’s Web site and listings on Sunbiz.org.

The Northwest 107th Avenue address is currently occupied by the Directorio Democrático Cubano, a non-profit organization that works toward democracy in Cuba.

The organization has been there since 2006, according to the person who answered the organization’s main phone number. That person would not be quoted on the record nor say if the organization had been receiving letters addressed to Coastal Condominiums.

Mr. Whiteman maintains that impact fees are always paid by the developer, never the contractor.

But Mr. Toledo said in an interview Tuesday that the city is simply doing what it can to retrieve these undercharged fees dating back to the 2005 audit.

"We would always go first after the contractor," Mr. Toledo said. "We’ve tried both sides" — the contractors and the developers.

Mr. Toledo said that while developers generally pay the impact fees, it depends on their agreement with their contractors.

"Usually what the contractor does is he has the authority by the developer to go out and pull the permits," Mr. Toledo said. "There are contractors out there that through the processes of the job… they will go ahead and pay the fees."

Mr. Toledo said he has not spoken recently with Coastal regarding the overdue impact fees.

And because it hasn’t heard otherwise, Coastal will continue to assume that the bill the city says it owes isn’t its responsibility, Mr. Whiteman said.

"As to the City of Miami, we have never been contacted to my knowledge about this issue, neither at the time of the building of the project or since," Mr. Whiteman wrote. "This is a Developer responsibility on any project we build."