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.
Miami Herald
http://www.miamiherald.com/
Hallandale Beach unable to recover $75,000 loan
After a local businessman died, the firm he helped start fell apart and defaulted on a city loan.
By William Gjebre, The Miami Herald
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
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Later in the day, while up in Hollywood for something, I wrote the following email to a number of the usual well-informed citizens, civic activists and pols I know throughout the area, which also included the following links:
Another black eye – Hallandale loses $75,000 in taxpayer money in botched business loan
By William Gjebre, BrowardBulldog.org
APRIL 17, 2012 AT 5:59 AM
Once again, this time on the reader comments of the Miami Herald's website, Hallandale Beach's unofficial revisionist historian, Andrew Markoff, has jumped into the fray to spin his nonsense and has conveniently neglected to mention that all of the public criticisms of this particularly egregious CRA loan were given by plenty of people WEEKS BEFORE and MINUTES BEFORE it was approved 4-1 at the HB City Commission, with Comm. London the only one who questioned what was being proposed.
People in this community opposed it with facts and figures that Mayor Cooper, Bill Julian and Anthony A. Sanders thought were much less important than the fact that John Hardwick and Joe Kessel were involved.
Nope, for them, voting for it no matter how illogical it was, because of their relationships with
the principles, trumped any amount of common sense or calls to do the right thing by
taxpayers, and actually do something with the money that reduced blight and crated real jobs.
Andrew Markoff, who loves nothing more than to gesticulate and point fingers at people in this
community who were and are consistently pro-reform, pro-transparency, and pro-accountability,
like Comm. London, Michael Butler and myself, to name but three, always has an excuse ready for every ridiculous and illogical thing Cooper, Julian and Sanders -and now Lewy- say or do, but he lived in the city at the the time this awful idea was proposed.
What did Markoff say when the facts were presented?
When it was brought-up over-and-over by opponents like Csaba Kulin and Comm. London that the applicants didn't even meet the city's own simple requirements, literally, the lowest possible threshold you could find in South Broward or North Dade -that they own property in the city and offer some reasonable amount of collateral- and this fact was confirmed by the city's own staff,
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?
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?
Markoff said nothing and did nothing.
But now, after Cooper and her Rubber Stamps Julian and Sanders have seen that money go into a black hole, by not showing due diligence, he's all live-and-let live despite that fact that we -collectively- were the very ones who predicted that nothing good would come from such so many exceptions being approved by them for not just a bad idea, but a VERY bad idea.
Once again, Andrew Markoff on the wrong side of history and trying to throw stones at the very people who warned that this was a bad idea.
(His personal and absurd public criticisms of me no longer bother me quite the way they once did, considering how much I helped him a few years ago before he just turned on me like he has so many other people in this community, who have tried to give some insight into what makes this town the way it is.
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.)
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.)
I might suggest that the next time any of you come across Markoff spouting off, you might want to ask him what his pen pal, former City Manager R.J. Intindola, late of Georgia, did to earn the EXTRA $97k a year he receives from HB taxpayers for the pension plan change he pushed a year before he retired.
When he fumbles for an answer, just tell him the truth -Intindola did nothing for it.
He just pushed it to get passed by the HB City Commission and personally profited from it.
An extra $2 Million-plus over thirty years.
Even in these days, no mater where you've lived around the country, $2 Million is still real money, esp. for someone who did nothing to deserve it.
If you forgot the details:
Csaba Kulin exposes the multi-million dollar bill to be borne by Hallandale Beach taxpayers for having a disconnected City Commission that was -and is- NOT interested in paying close attention to detail or in asking tough questions. That's how and why former City Managers Intindola and Good have made out like bank robbers
And approving a $75,000 CRA loan for a preposterous idea is STILL a lot to swallow since, in retrospect, it smells more than ever like a a political pay-off to longtime crony capitalism friends Kessel and Hardwick by their friends on the commission dais: Cooper, Julian, Ross and Sanders.
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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:
It seems to me that anyone in Hallandale Beach who was an appointee of Mayor Cooper, much less, to the city's Charter Review Board, like Markoff above, is not exactly an objective source of information.
If he is going to persist in his never-ending Internet defense of HB City Hall and the mayor's unsatisfactory performance, he ought to be a lot more forthcoming about that central fact. It's telling that he never mentions it.
Contrary to what Markoff writes, there were many, many concerned HB residents at the time who spoke out against the self-evident weaknesses of this proposed CRA loan, both prior to and at the City Commission meeting three years ago.
I know because I was one of the most vocal opponents of it, but in the end, facts didn't matter to the City Comm. as much as personalities and cronyism did, and Comm. Keith London was the only member of the Comm. who did any due diligence on behalf of the taxpayers. He voted no and once gain, time has proven him right and the others wrong.
While it's true that the former City Manager and CRA Director are gone, three out of the four “YES” votes for this senseless proposal will appear on November's ballot: Mayor Cooper, former Vice-Mayor Julian and Comm. Anthony Sanders.
All three are asking HB voters to reject their own common sense and elect them to continue making one bad decision after another.
More than is true in most cities in South Florida, these three individuals never seem to learn their lesson, and are never willing to publicly admit when they're wrong.
If the residents of HB vote for the same people in November who consistently show such very poor judgment, we'll deserve the “black eye” these three have given us.
Giving people a choice in November to actually vote for someone who's got a demonstrated record of civic involvement and who's FOR more accountability and increased transparency, not continuing the appalling status quo, is one of the reasons I'm running for HB City Commission.
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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
______________________________
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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.
Hallandale Beach insiders to offer goodies/new propaganda TV channel to HB City Hall for $200k CRA loan Wed. morning
I've highlighted the item below in red
______________________________
REGULAR AGENDA (Supporting Docs)
CITY COMMISSION, CITY OF HALLANDALE BEACH
WEDNESDAY, MARCH 04, 2009 10:00 AM
1. CALL TO ORDER
2. ROLL CALL
3. PLEDGE OF ALLEGIANCE
4. PRESENTATIONS AND REPORTS
A. Presentation of Certificates to the Student Citizens of the Month
B. Presentation from Navarro Security Regarding Services Provided to the Golden Isles Safe Neighborhood District AR# 002/09
C. Discussion of Public Works Construction Projects
5. PUBLIC PARTICIPATION (to be heard at 10:15 A.M.)
6. CONSENT AGENDA
A. Approval of Minutes - Special Meeting August 1, 2008, Regular Meeting September 29, 2008, and Regular Meeting October 15, 2009(Supporting Docs)
7. PUBLIC HEARINGS (to be heard at 10:30 A.M.)
A. An Ordinance Of The City Of Hallandale Beach, Florida, Amending Chapter 32, Article V, of The City Of Hallandale Beach Code of Ordinances, The "Zoning And Land Development Code"; Amending Section 32-790, "Time Limits And Revisions"; Providing For Conflicts, Providing For Severability; Providing For An Effective Date (Second Reading)(Staff: Director, Development Services)(See Backup) CAD#010/08 (Staff Report, Supporting Docs)
The Ordinance was passed on First Reading on February 18, 2009 with a vote of 5/0.
B. An Ordinance Of The City Of Hallandale Beach, Florida, Amending Chapter 32, Article VIII, “Notice Requirements” of the City Of Hallandale Beach Code Of Ordinances, The “Zoning And Land Development Code”; Providing For Conflicts; Providing For Severability; Providing For An Effective Date (Second Reading) (Staff: Director, Development Services)(See Backup) CAD #032/07 (Staff Report,Supporting Docs)
The Ordinance was passed on First Reading on February 18, 2009 with a vote of 5/0.
8. CITY BUSINESS
A. Pursuant to Chapter 23, Section 23-105, Award of Contract, Request Authorization to Award Bid #FY2008-2009-002, Flood Mitigation Assistance (FMA) NE 2nd Street Drainage Improvement Project, to the Lowest Responsive, Responsible Bidder, Tenex Enterprises, Inc., in the Total Amount of $639,325.50. (Staff: Director, Utilities & Engineering) (see backup)CAD#017/05 (Staff Report, Supporting Docs)
B. Consideration of a funding request from Digital Outernet Inc.(DOI), through the CRA Economic Development/Business Incentive Program in the amount of $125,000, as outlined in the Staff Report. (Staff: Director, Development Services)(See Backup) CAD# 005/02 (Staff Report,Supporting Docs)
TO BE HEARD IN CONJUNCTION WITH COMMUNITY REDEVELOPMENT AGENCY ITEM # 3.A.
9. COMMISSIONER REPORTS
10. OTHER
11. PLANNING AND SCHEDULING MEETING (to be heard during lunch recess in Room 257)
http://www.hallandalebeachfl.
CITY OF HALLANDALE BEACH, FLORIDA
MEMORANDUM
DATE: February 18, 2009
TO: D. Mike Good, City Manager
FROM: Richard D. Cannone, Director of Development Services
SUBJECT: Digital Outernet Inc., Business Incentive Loan Applicant CAD# 005/02
PURPOSE:
Consideration of funding for Digital Outernet Inc. (DOI), through the CRA Economic Development/Business Incentive Loan Program (ED/BILP).
BACKGROUND:
In FY1999-2000, the City Commission/Community Redevelopment Agency (CRA) Board of Directors approved the establishment of an Economic Development Incentive Program. In establishing this program, the City Commission/CRA Board of Directors directed that each request for incentive assistance be placed on the agenda for consideration. Award of an incentive would be considered if a new business was seeking to locate within the City/CRA or if an existing business was expanding.
Under the Economic Development Business Incentive Loan Program (ED/BILP) loan terms 15% of the loan is forgiven and the remaining 85% is payable at 4% interest over 10 years. The applicant will be required to sign a promissory note and mortgage documents, to secure the remaining 85% of the loan.
DISCUSSION:
On November 24th, 2008 staff received a Business Incentive Loan Program application, Letter of Intent and Business Plan from Digital Outernet Inc., a new start up venture, registered with the State of Florida. Digital Outernet, a digital sales and advertising company, is seeking financial assistance in the amount of $200,000, through the CRA Business Incentive Program.
The company seeks to install approximately 125—32” or 42” LCD screens in approximately 40 - 60 businesses, condominiums and (8) City facilities throughout the City, which will provide advertising and/or marketing material, through what the company identifies as the “City Channel” network. The company intends to create an additional 9 -12 new jobs. Currently, the corporate structure outlines five (5) board executives, which are as follows:
1. Steve Fecske President
2. John Hardwick Executive Vice President
3. Albert Cohen Chief Technical Officer
4. Steve Tcherchain Director of Technology
5. Joe Kessel
Staff along with the City Manager have met with representatives from Digital Outernet over the course of 8 months to discuss the business plan and items related to the operations of the business. During these meetings staff discussed the following items: security (i.e. equipment and data protection), overall benefits to the City, the company’s financial stability, organizational ownership and responsibilities.
- Benefits: The benefits offered to Hallandale Beach are primarily intangible, and include:
- The City will receive free services from the City Channel’s production for signage creation.
- The City will be able to schedule special programming, such as events, fund-raisers and employment opportunities and advertise at no cost to the City.
- The City Channel offers the City an additional media outlet to distribute pertinent emergency information to residents.
- Revenues: No additional revenues will be provided to the City, other than funds received from the loan repayments.
CRA PLAN COMPLIANCE:
As part of the Updated Community Redevelopment Agency (CRA) Plan approved in 2004, the approval of funding for this venture would support the following goal, objectives and policies of the CRA Plan:
- Goal #2: The CRA shall implement projects and programs addressing targeted needs as well as area-wide concerns within the CRA.
- Objective #2: The CRA shall strive to improve the overall visual appearance of the CRA and strengthen economic development and viability.
- Objective #3: The CRA shall strive to encourage public relations and public awareness of activities within the CRA.
- Policies:
1c. The CRA Plan shall be reasonably flexible in accomdating private sector initiatives and future economic trends and opportunities
2e. The CRA, in coordination with the City of Hallandale Beach, may implement one or more subsidized or outright grant programs for the exterior and interior improvements to the commercial property, for expansion of existing business and for new business location within the CRA.
Considering the current economic downturn seen on local, state and national levels, CRAs are instrumental in stimulating and promoting economic development throughout their local area and neighboring communities. The City and the CRA approach economic development from various fronts such as:
1. Creation - New businesses develop in the community through entrepreneurial activities;
2. Attraction - New industries come into the community, either through the relocation of existing businesses or the establishment of new branch locations;
3. Retention - Companies, which are already established in the community, remain in the community and do not shut their doors or move elsewhere;
4. Expansion - Existing business establishments expand and increase their production or services offered. This leads to enlarging the physical location size, hiring new employees, and purchasing additional materials and supplies.
The DOI business model could afford local participating businesses the ability to create economic development activities, such as increased foot traffic and market exposure, which in turn could sustain our local business economy.
CONCLUSION:
Under the current Business Incentive Program requirements, applicants are required to own the real property, in which they want to expand and/or relocate. This applicant does not own the real property, in which they are looking to operate this business. The proposed location of operation is 708 Foster Road, which is owned by the Williams Family Trust, whereby DOI is leasing the building. Due to the applicant not meeting the ownership requirement, staff is requesting the City Commission/CRA Board of Directors consider waving this requirement and allow the City Manager to negotiate other means of securing funding and repayment.
Based upon staff’s analysis of the information outlined in the DOI Letter of Intent and Business Plan, staff is requesting City Commission/CRA Board of Directors consider of the request for funding subject to the following conditions:
- Digital Outernet scale back their funding request to $125,000.
- Change their network name from “City Channel” as residents and business owners may think it is a City service.
- Establish a small business bank account before funding is awarded.
- Apply and obtain the proper Business Tax License, prior to the release of funding.
- Release funds similar to the Neighborhood Improvement Program (NIP).
- Waive real property requirement and allow the City Manager to negotiate other means of securing funding and repayment.
- Business to provide the Development Services/CRA Department with an audited Annual Performance Review every year during the funding term of 10 years.
For FY08/09 the City Commission/CRA Board of Directors approved the budget of $395,694, for the CRA Economic Development/Business Incentive program.
RECOMMENDATION:
The City Commission/CRA Board of Directors to approve the request from Digital Outernet Inc., for economic development incentives in the amount of $125,000, to assist in start-up expenditures, as presented. In addition, authorize the City Manager to negotiate the funding terms and disbursement of funds in the best interest of the City, subject to the following conditions:
- Digital Outernet scale back their funding request to $125,000.
- Change their network name from “City Channel” as residents and business owners may think it is a City service.
- Establish a small business bank account before funding is awarded.
- Apply and obtain the proper Business Tax License, prior to the release of funding.
- Release funds similar to the Neighborhood Improvement Program (NIP).
- Waive real property requirement and allow the City Manager to negotiate other means of securing funding and repayment.
- Business to provide the Development Services/CRA Department with an audited Annual Performance Review every year during the funding term of 10 years.
Prepared By: ____________________________
Bobby Robinson, CRA Manager
Reviewed:
_________________________
D. Mike Good, City Manager
___ Approved
Comments:
______________________________
Contract and background info is at:
Page 9 is particularly absurd!
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