In light of more news stories re bad Hallandale Beach CRA loans, Csaba Kulin and I thwart yet another of City Hall sycophant Andrew Markoff's desperate attempts at revisionist history of City Hall's trail of crony capitalism under Mayor Joy Cooper and her Rubber Stamp Crew. The facts could hardly be clearer.Last Friday, when I having so many problems connecting to the AT&T server, and therefore couldn't post a blog post about it, Broward Bulldog reporter William Gjebre wrote something quite interesting that the Miami Herald posted online and in print before it could appear in the Bulldog's own website.
That something consisted of yet more incontrovertible facts about the very curious and questionable loans made by the Hallandale Beach City Commission the past ten years when acting as members of the HB CRA Board.
Gjebre, who has written so many pieces over the past year about the highly questionable and perhaps even unethical or illegal doings that have happened so often at Hallandale Beach City Hall while Mayor Joy Cooper, former City Manager Mike Good and soon-to-be-departing CM Mark A. Antonio have been on the scene, with their fingerprints on seemingly everything that has cost this city's taxpayers either their money or their pride or both, wrote about a particularly egregiously ill-considered 2009 CRA loan that I wrote and talked a lot about at the time it was being considered.
A loan that nobody in the city other than the principals involved, the city manager's staff and 4 of the 5 city commissioners thought was a good idea.
Seeing as how I was one of the people there opposing the deal, and recorded much of what happened, I'd say that I'm in a pretty good position to comment on what was what.
A firm that obtained a $75,000 business development loan from Hallandale Beach without signing a repayment agreement or providing collateral has defaulted, leaving the city unable to recover nearly all of the taxpayer-supplied money.
The loan default by Digital Outernet Inc., headed by a Californian with past ties to the pornography industry and a local businessman who has since died, is the latest mix-up to surface in the operations of the city’s Community Redevelopment Agency.
News of the soured loan comes as the Broward Inspector General’s Office opened an investigation this month into the city’s management practices, including those at the CRA, which is led by the five city commissioners.
“I was against it from Day One; we are not in business to lose money,” said City Commissioner Keith London, who cast the lone vote opposing the loan three years ago. “It was never a sustainable, viable initiative.”
Digital Outernet was incorporated in November 2008. Four months later, it got the loan to buy equipment and materials. The plan it sold the city on: to set up television screens in local businesses and condominiums and sell advertising while also airing city and other information, such as job ads.
The corporate loan was made during a time when the city was making numerous loans to local businesses, some controversial:
• In 2009, the city administration approved a $50,000 loan for a weekly newspaper, The Sun Times, forgiving half the loan ($25,000), even though two top executives earned $200,000 annually two years before the loan. Mayor Joy Cooper is a featured columnist.
• The same year, the city erroneously forgave an extra $7,500 on a property improvement loan that Commissioner Anthony Sanders obtained before he was a commissioner. As a result, Sanders’ nonprofit Higher Vision Ministries did not repay $15,000 on a $46,000 loan for property improvements at 501 NW First Ave. The city then bought the property for $235,000, even though the church paid only $45,000 for it in 2001.
Digital Outernet’s chief officials were local businessman John Hardwick and Californian Steve Fecske, according to state corporate and city files.
When the loan was approved, the Sun Sentinel reported at the time, Fecske told Hallandale Beach commissioners he had been involved with a company that provided technology services to porn-connected websites, one of which featured star Jenna Jameson. He assured commissioners his pornography work was in the past.
Fecske is listed on LinkedIn, the professional networking website, where he is described as an “independent information technology and services professional.” He is currently associated with McKenzie & Co., Forensic CPAs in Los Angeles. He was president of Digital Outernet Inc. from 2007-10.
Fecske could not be reached for comment.
On the current Florida Department of State Division of Corporations website, Digital Outernet is listed as inactive.
While approved for a $125,000 loan, Digital Outernet received only $75,000. It had to meet certain city-imposed conditions to get the rest, but apparently did not do so.
However, one loan requirement was waived by the city: that the firm had to own its place of business. Digital Outernet leased.
The loan also provided for 15 percent ($11,250) forgiveness, with the balance to be repaid at 4 percent interest rate over 10 years.
City records show it wasn’t long after funds were distributed that problems at Digital Outernet became apparent.
In June 2010, the city sent a letter to Hardwick and Fecske denying their request for the additional $50,000. The letter pointed out the firm had missed its first two quarterly loan payments of $2,284 each, failed to sign a loan promissory note, and did not provide required financial reports and details on employee hires.
A month later, the city sent a similar letter.
CRA director Alvin Jackson said he met with Hardwick shortly after he became director of the CRA in January 2011, reminding him about the loan repayments and the documents and reports that needed to be filed with the city.
But state corporate records show that by then, the company had ceased to exist as a legal entity.
Available city records do not explain what happened to Digital Outernet and the city’s $75,000. A recent report by an auditing firm criticized the CRA for failing to properly track loans and property acquisitions.
Jackson said the company made only one installment payment of $2,284 in July 2010, adding that the firm appeared to go out of business with the death of Hardwick.
A member of the Hallandale Beach Chamber of Commerce, Hardwick, 41, suffered a stroke and died at Hollywood’s Memorial Regional Hospital on May 22, 2011. Prior to becoming involved with Digital Outernet, Hardwick ran a barbershop/salon at 708 Foster Rd. in the city, the same location listed for Digital Outernet.
Jackson said the Digital Outernet file was sent to the city attorney’s office for review and follow-up action. He said he was told that an investigator was sent to the Foster Road address to identify possible assets but none have been recovered, so far.
Jackson said he believed that Digital Outernet may have actually placed several television screens in local businesses, but he did not know for certain. The city file contained no information on the placement of the video screens.
The city “never got the balance” of the loan, Jackson added.
Broward Bulldog reviewed the city’s file. It makes no mention of Hardwick’s death and gives no indication that the city was trying to follow up by reaching Fecske in California.
The file also did not indicate what, if anything, the city attorney’s office did in the matter. There were no reports by the city attorney’s staff in the file.
Local real estate agent Joe Kessel is listed as an official of Digital Outernet in one document in the city’s file. He said in an interview that he was “not involved” with the company and had long ago asked that his name be removed as an associate. Kessel declined to further comment.
Mike Good was the city manager at the time of the loan. The file contains a letter he wrote endorsing the project. “The city supports the concept and advertising model offered by Digital Outernet, Inc., and seeks the support from our local business community as well,” Good wrote in his letter in December 2008.
Good, who was fired in June 2010, could not be reached for comment.Broward Bulldog is a not-for-profit online-only newspaper created to provide local reporting in the public interest. www.browardbulldog.org 954-603-1351
Nope, for them, voting for it no matter how illogical it was, because of their relationships with
what did Markoff say and do?
What did Markoff say about the loan that was so impractical and self-serving that not a single bank in the area, even ones where they were known entities, would loan them any money?
Still, at some point, it really behooves someone besides me to actually publicly point out for the record that Andrew Markoff has no tangible record of ever being someone who wants the best for this community as determined by the majority of the community making itself known in-person.
Rather, Markoff plays the role of political commissar, defending the powers-that-be and their crushing bureaucracy, and calling people out because they don't share his tax-and-spend attitude.)
My friend and fellow Hallandale Beach and Broward County civic activist Csaba Kulin later penned a response to what the Miami Herald's version of the article said and what Markoff was attempting to do:
See my March 4, 2009 blog post about this preposterous 2009 CRA loan and what it really shows about Mayor Cooper and her Rubber Stamp Crew's love of crony capitalism, despite its ultimate costs to taxpayers as money down a rat hole.
I've highlighted the item below in red