`This` is a pretty monumental day as we move forward in Parramore," proclaimed Orlando Mayor Buddy Dyer June 14. It was time. Finally. More than a year after his Parramore Task Force released its recommendations, Dyer was here, at the site of the soon-to-be-constructed Parramore Village, giving his "Pathways for Parramore" presentation, the new guide for how to fix the long-blighted neighborhood.

Dyer had a lot of ideas, some old and some new: Establish a permanent location for the Nap Ford Charter School; make Parramore a "zero tolerance" zone for drugs and prostitution and announce the fact by posting signs; support the Carver Park Housing Development, a 203-unit project being developed by the city and the Orlando Housing Authority through federal funding; have developers bid on redeveloping Parramore Village with single-family homes and town homes; build 300 more single-family, low-density, heavily subsidized houses to encourage home ownership; offer free summer camp to all Parramore kids (including free bus rides there); give free child-care subsidies; set aside a "legacy trust" for Parramore children; and develop Federal-Otey Place, a now-vacant 3.5-acre swath of land near the arena.

Then there's what Dyer called the "cornerstone project," an agreement initially reached in September 2004 between the Black Business Investment Fund of Central Florida and the city of Orlando to buy the now-vacant former site of the Carver Theater at the intersection of Church Street and Parramore Avenue. The price is $667,199, or $14.72 per square foot. A later amendment to the sale, added June 27, tacked on 9,983 square feet to the property, upping the sale price to $814,148.

The BBIF has big plans for the property. Taking a cue from Thornton Park Central, the nonprofit envisions a six-story, mixed-use development that will include condos, office space and first-floor retail. BBIF itself plans to relocate there from its current offices on East Robinson Street.

And on paper, at least, it looks like the developer has the connections needed to get the job done. Both Orlando city commissioner Daisy Lynum and Orange County commissioner Homer Hartage are on the BBIF's board of directors.

But the BBIF's record on putting together deals to revitalize Parramore is spotty at best. The BBIF and its sister nonprofit, the Black Business Capital Finance Corporation, were part of a failed effort to redevelop Federal-Otey Place – just west of Parramore Avenue, about a block from the TD Waterhouse Centre – last year. The deal fell apart due to unrealistic demands on the part of the developer, Urban Renaissance Development LLC. They wanted the city's Community Redevelopment Agency, which owned the land, to turn it over for $1 and pay $2.5 million up front (money the CRA didn't have). Had the deal gone through, taxpayers would have essentially fronted all construction costs, while the developer collected all the profits.

It was too much of a sweetheart deal for the city – negotiations never made it past the CRA's selection committee. But even as that project faltered, BBIF was actively pursuing another bargain-basement sale on property in Parramore owned by the city.

This time, BBIF president Inez Long enlisted some power players to help out, including designers and architects who had worked on Thornton Park and architects who had designed the Nap Ford school. And this time, the BBIF got what it wanted. In fact, the city – including Lynum, who Dyer says was "instrumental" in putting the deal together – went to extraordinary lengths to make sure the deal was beneficial for the BBIF. The corollary, of course, is that the deal is not so good for the taxpayers of Orlando.


BBIF was founded in 1987 as a public-private partnership enabled by the Florida Small and Minority Business Act of 1985, one of eight such nonprofits scattered across the state. BBIF's president, Inez Long, is a former SunTrust employee with an accounting degree from the University of South Florida. She joined BBIF as vice president in 1990, and became president one year later.

At the time, according to an article in Florida Trend, BBIF had just a handful of employees and $1 million in assets. Now, 14 years later, BBIF has nearly $2 million in assets.

In the last 14 years, according to Florida Trend, BBIF has made $25 million in loans to "contractors, salons, elderly-care services and other businesses." That means BBIF averages about $1.8 million a year in loans. In fiscal year 2003, according to city documents, BBIF reviewed 25 loan applications and approved 14 of them. By funding those businesses, BBIF created 497 jobs at an average salary of $29,000 and generated $13.9 million in gross revenue, according to BBIF's own financial statements.

But BBIF is also a nonprofit corporation that doesn't like to answer questions about how it generates and spends money. Despite IRS rules that specifically state all nonprofits must make their financial reports public, BBIF refused to do so when asked by this newspaper. It took a reminder of federal regulations, and the threat of a lawsuit, to get them to turn over documents that by law should be available on request to anyone who asks.

What those financial documents suggest is that in addition to being inexperienced as developers, BBIF is an extremely top-heavy nonprofit, diverting almost half of its revenue – the majority of which comes from tax monies – to salaries.

According to the records obtained by Orlando Weekly, Long is well-paid. For an estimated 45-hour workweek, she has made as little as $99,414 (in 2003) and as much as $178,685 (in 2001). The figures aren't so remarkable, until you look at the revenue side of the picture. In 2003, BBIF took in $486,282, of which $389,200 came from Orlando and Orange County governments. Long and her husband, Fitzhugh, live in a gated lakefront community in Winter Garden on more than an acre of land. Their four-bedroom house and surrounding property is valued at $479,215 on the Orange County tax rolls.

In 2003, Long's salary alone claimed 20 percent of BBIF's total revenue; her pay ate up 39 percent of BBIF's total revenue in 2001, according to tax documents. Add the $120,224 BBIF paid to other employees in 2003, and $13,559 in pension and other employee benefits, and this taxpayer-subsidized nonprofit spent 48 percent of its revenue in salaries, exclusive of other administrative costs. With those costs factored in, the BBIF looks even more inefficient: $4,151 for fund-raising, $18,169 in payroll taxes, $16,780 in accounting fees, $8,506 in legal fees, $10,031 in telephone bills, $3,682 in postage and $42,687 in rent for 2,000 square feet of office space on the top floor of a six-story building on East Robinson Street. All totaled, BBIF spent 69 percent of the money it took in on salary and administrative expenses in 2003; that's before helping a single black-owned business.

Spending that much on salaries and administrative costs is out of line with what other nonprofits spend on those costs, according to nonprofit experts. Industry standards suggest that salaries and administrative expenses should not total more than 25 percent of revenue; less is better. Some states even set 25 percent as a legal requirement. Florida is not one of them.

"It depends also on what services the organization is providing," says Emily Furlong, program manager of the Rollins Philanthropy & Nonprofit Leadership Center. "Some typically have more administration costs because of the type of business it is, and some have lower, but `the 25 percent guidelines` were right. People strive to have lower than that whenever possible.

"You don't want all of your money going to pay salary for an executive," Furlong adds.

The Better Business Bureau Wise Giving Alliance says that nonprofits shouldn't spend more than 35 percent on administrative and fund-raising costs, salaries included. According to Sheila Consaul, a United Way of America spokeswoman, most nonprofits go "way, way below `that percentage`, usually."

By definition, nonprofits strive to spend what they earn, and put any excess revenue – "profit" in the for-profit world – back into the business. But the BBIF typically runs deficits – or more specifically, decreases in net assets. The deficit in 2003 was $50,104; in 2002 their net assets decreased $48,815, and in 2001 they dropped $79,673. Which could be a reason BBIF is so reliant on city and county grants: Between the city's general fund and the city-controlled CRA, BBIF has received $692,500 from Orlando taxpayers since 2000, including $242,500 from both the city and the city-run CRA in fiscal year 2004-2005. This upcoming fiscal year, BBIF will receive $174,924 from Orange County; last year, it got $169,829.

But the BBIF isn't going broke. In fact, it had more than $1.8 million in net "assets or fund balances" on its books at the end of 2003.

(BBCFC, the sister nonprofit, is much smaller in scale, though it too runs deficits. In 2003, it was $5,224 in the red. It did, however, stay $2,353 in the black the year before. Long doesn't pay herself for running that company, which took in $38,859 in revenue in 2003.)

Despite the high overhead and the deficits, Orlando has no qualms about how BBIF runs its business.

"The BBIF project is exactly the type of project that is desired for the revitalization of the Parramore Heritage neighborhood with commercial, residential and retail rolled into one," wrote Dyer in an e-mail response to inquiries about BBIF's finances. "Again, we envision that BBIF's mixed-use development will assist the city in reaching our top priorities for the Parramore Heritage neighborhood such as increasing home-ownership and assisting in the creation of jobs for Parramore residents."

City officials even go so far as to suggest that if you aren't behind BBIF, you aren't behind revitalizing Parramore.

"Certainly there are those `who` would disregard the heritage of Parramore as we continue our commitment to reinvigorate the Parramore Heritage neighborhood," writes Orlando real-estate manager Laurie Botts-Wright in an e-mail. "The Black Business Investment Fund's historic presence in the black community created a seamless fit with the city's efforts to revitalize Parramore. The city has made a conscious effort to work with this black organization and visible community icon to assist the Parramore district by invigorating the area with economic activity to obtain the goal of having a sustainable and safe community for the residents of Parramore."


Aside from questions about how the BBIF raises and spends its money is the issue of the sale of the old Carver Theater property in Parramore, which has all the hallmarks of a backroom deal.

The deal was negotiated, in private, with BBIF board member/City Council member Daisy Lynum on both sides of the table. One internal city e-mail, dated June 24, 2004, obtained by Orlando Weekly indicates that Lynum and former chief administrative officer Richard Levey were responsible for determining the sales price. "`P`rices has `sic` not yet been determined by you and commissioner Lynum," Botts-Wright wrote to Levey.

Moreover, that sale price was negotiated without public input or a chance for other developers to bid. There is nothing in the city code that mandates a competitive bidding process for city land sales, though one could argue that, as the custodian of taxpayer funds, the city has the ethical responsibility to get the highest price possible for its land, and the best way to do that is through competitive bidding. Instead the city sold the property at cost, and actually took a loss when discounts included in the contract are factored in. This is the deal they agreed to, on prime real estate in downtown Orlando that will, very soon, become lakefront property.

Whenever the CRA is involved in a land sale, it is required by state law to put out a request for proposals or request for qualifications, known in city parlance as RFPs or RFQs. Through the RFP, the CRA asks developers to submit plans, including how much they want to pay for the land and what they want to do with it. Then a selection committee ranks the proposals based on how much money they'll generate for the CRA and what the benefit will be to the city, and sends them along to its board of directors: the City Council.

But the city itself doesn't work the same way. As a matter of policy, it doesn't put out RFPs or RFQs. According to spokeswoman Brie Turek, the city doesn't sell land that often, so the city's laws don't address the issue.

That's an important distinction because the city – not the CRA, though the two are related – bought this property in September 2002. If the CRA owned the property, it would have been required to put out an RFP before selling it. A bidding process might have driven the price much higher than $14.72 per square foot.

The city could have put the land out for bid if it had chosen to do so; in fact, it seems it was originally their intent to do just that. In May 2003, a few weeks after the city officially began negotiating with BBIF to sell the land, Levey sent Long a letter indicating that the BBIF wasn't the only group to inquire about the property.

"More than one party has expressed interest in purchasing the property from the city and I want to check with you on the progress of your plans," Levey wrote. "The entire site with its buildings and land were appraised last year and purchased for $13.55 per square foot `not including the demolition costs`. If appraised today, the corner building might have a market value exceeding this figure. Since we have been approached to sell the property through a competitive process, we need to understand whether you wish to compete for this purchase."

Only there was no bid, and it's not clear why the city changed its mind and dealt only with the BBIF. In an interview with Orlando Weekly, Long says that the property has been in BBIF's strategic plan for the last eight years, and Lynum "was a part of the strategic planning with the organization about eight years ago." Whether or not Lynum's dual role as city commissioner and BBIF board member – and the fact that she acted as an intermediary in negotiating the deal between the two entities – played a role in the city's decision not to seek other bids is unclear from city documents. (Lynum did not return repeated phone calls for this story.)

Botts-Wright could not speak to Levey's e-mail, as he's no longer with the city. The important thing, she points out, is that the city didn't have to put out an RFP, so it didn't.


The BBIF's new property is in the heart of the city's renovation plans, on the northwest corner of Church Street and Parramore Avenue. City planners want to dedicate the land west of Parramore Avenue to low-density residential development; but here mixed-use development is the key to breathing life into the blighted neighborhood.

BBIF's project is also adjacent to the under-construction Parramore Heritage Central Park, which will be a retention pond surrounded by green space. (Lynum was quoted in a recent Orlando Sentinel story saying the pond should be called "Lake Lynum." She later said she was joking.)

If it weren't for the park, there wouldn't have been a BBIF sale. The city had extra land to sell because the party it bought from wanted to sell his whole parcel, not the smaller piece the city originally wanted to buy. It's the extra land included in that deal that the city eventually sold to BBIF.

City records show that BBIF plans a mix of market-rate and affordable housing; Long says 25 percent of the condos will be "affordable," meaning a buyer must make less than 120 percent of the city's average median income. In Orlando, that's $55,100 a year for a household of four. A developer can sell units as "affordable" so long as they are priced at or below roughly $189,000. It's safe to assume that any market-rate condos overlooking a lake in the middle of a newly revived Parramore would be quite valuable.

Although the park will primarily be a retention pond, the city comes close to agreeing that the pond will add value to BBIF's land. "This storm water project is more than simply a collection facility," Botts-Wright says. "It will be a pond and park for Parramore citizens to enjoy and take pride in."


BBIF's original deal, cut in September 2004, involved just over one acre of land; BBIF only had to put down a $500 deposit. Another one-third acre was added to the deal June 27, for a total sale price of $814,148.

According to city records, the city bought the property for $1.45 million, then spent another $125,000 demolishing the buildings. Which meant, according to city records, that the city spent $14.72 per square foot – exactly what it sold the land to BBIF for.

But the city credited BBIF $86,061 for "transportation impact fees, sewer benefit fees and building permit fees (pre-existing on the site)," according to a summary included in the City Council's Sept. 13, 2004, agenda. "This will be deducted from the purchase price." That means BBIF will pay $728,357 for the land, including the added parcel.

In reality, the city sold the land for less money than it paid for it three years ago, even though land values in Parramore – along with everywhere else – have skyrocketed, in some cases tripling in just a few years.

"We've got to get rid of the misconception that dirt on the west side of I-4 is worth less than dirt on the east side," says Aida Martin, broker for Midtown Realty of Orlando. As Parramore development continues, Martin says land values will continue to rise into the foreseeable future.

But Long says the city's getting a good deal. "Actually, we're paying slightly above market. It's not cheap."

She makes that claim based on a May 6, 2005, appraisal paid for by the BBIF, which suggests the land is worth $587,000. The number is based on four comparable land sales in the area from November 2001 to March 2005 that show BBIF's price – $14.35 per square foot after the credits – to be at the high end of the range of comparable sales, which are from $11.71 per square foot to $14.83 per square foot.

The highest figure is the per-square-foot price of the entire parcel the city itself bought in 2002. (The 11-cent difference – $14.83 to $14.72 – stems from an "adjusted sale price" of $1.58 million that is slightly higher than the recorded $1.45 million.) Yet the BBIF believes its sale price, $14.35 per square foot, is fair. That suggests BBIF believes the land has actually depreciated in value, even as other property values in Parramore have shot up.

Another of the comparable sales the BBIF uses to justify its price is a piece of property sold four years ago – an eternity in a booming real-estate market. Still another "comparable" sale is industrial land near the Citrus Bowl, which is worth less because it is not zoned for high-density development.

Other recent sales in Parramore, not included in the BBIF's market analysis, tell a very different tale of land values. For instance, directly across Parramore Avenue from the BBIF property is a boarded-up house with "Keep Out" signs spray-painted on the doors. On June 15, 2004, the property – 11 S. Parramore Ave. – was sold to West Pine LLC for $125,000. The property is 2,991 square feet, which means the buyer paid $41.79 per square foot, nearly triple what BBIF paid across the street. Botts-Wright says the property with the boarded-up house property isn't comparable because it is "improved."

In 1997, before Parramore revitalization was even on the city's radar, Carolina Florida Properties paid $210,000 for 562 W. Church Street, or $29.26 per square foot. Although this property is closer to I-4 and had a 57-year-old, 3,640-square-foot building on it when it was purchased, it's noteworthy that Carolina Florida paid more than double what BBIF is paying, eight years ago.

In 2003, the city of Orlando paid $370,000 for 12,705 square feet on West South Street, then demolished the building that had been there since 1954. The city paid $29.12 per square foot.

To be fair, the city isn't only interested in getting top dollar for property it sells. "I think one goal would be to serve as a catalyst for that spot," commissioner Phil Diamond says. "Second, `it will be` a complementary use for that storm water facility."

"The city is confident and pleased with the sale price of the property to BBIF," Botts-Wright told Orlando Weekly via e-mail. "When the city acquired the property at $13.55 per square foot `exclusive of demolition costs` there were already credits on the site. Based on the property appraisal, with the current market rate and environmental and demolition costs rolled into the sale price, the city is satisfied with the $14.72 per square foot sale price."

BBIF has a year to begin construction; the city puts that clause in Parramore contracts to avoid selling property that never gets developed. In addition to buying at a good price, the nonprofit could qualify for incentives from the CRA. Executive director Frank Billingsley says there haven't been any discussions about incentives yet, but potentially there could be a tax-incremental rebate on the residential part of the development.

Asked whether or not BBIF will seek incentives, Long says, "We don't have anything on our list right now. This is our first time doing real-estate development."

If the BBIF does want more taxpayer help, Lynum has already pledged to help them get it. At the council's Sept. 13, 2004, agenda review meeting, before the council approved the land sale, Lynum pointed out that the contract had a clause allowing the city to renegotiate the sale price later, and made her feelings clear: "My position is to move the land sale now, but to look at this … and particularly in the cost, whether it's a reduction in cost based on design feasibility and how we're able to work the deal. It may even be reduced significantly, to almost a gift."

Dyer agreed. "We'll see if we can work with you in a couple of months to see if we can make the deal sweeter."


Perhaps the most troubling aspect of the BBIF deal is that the city seems to have done everything possible to make sure few people knew about it until it was done.

According to Chapter 13, Section 7 of the Orlando city code, "`w`henever the city of Orlando desires to sell, lease or otherwise alienate real property for the benefit of the city, and the value of the sale, lease or alienation exceeds $500,000, such sale, lease or alienation shall only be effective after a majority vote of all members of the City Council, at a public hearing `emphasis added`." If the value is less than $500,000, the code goes on to say, then sales "may be approved as a consent agenda item."

At the city's Sept. 13, 2004, council meeting, the city approved the then-$667,199 sale on the consent agenda, with no public hearing. That seems to be a clear violation of the city's law. Or was it?

Botts-Wright says the September 2004 vote authorized her to execute a contract with the BBIF; but the final vote approving the contract didn't happen until June 27, 2005. The city did hold a public hearing at that meeting, although no one spoke, there was no discussion among commissioners and the whole thing was done within 30 seconds. The city agenda, however, presented the June 27 council action as a routine vote on amending an existing contract, not approval of it. The item read: "Approving amendment No. 3 to vacant land contract for the sale of city property to BBIF for parcel located at the northwest corner of S. Parramore Ave. and W. Church St." The original vote, in 2004, was for "approving disposition of `the BBIF` land."

Anyone who wanted to object to the sale would have had to be following the deal very closely, and based on a reading of the agenda, they might well conclude that the deal was done, so there was no point in voicing objections to City Council over what seemed to be a minor amendment.

In reality, however, that amendment wasn't so minor. In fact, according to internal city e-mails obtained by Orlando Weekly, it was the subject of much debate inside City Hall over the last six months. A few months after the City Council approved the original contract, BBIF told the city it needed more land. Its site plan had expanded and it wanted to buy another one-quarter acre.

But that would mess with the city's schedule for the adjacent retention pond. In a Feb. 18 e-mail, project manager Steve Wiedenbeck expressed his dismay at the behind-the-scenes negotiations that had begun without his knowledge: "All of this is in jeopardy if we plan on expanding the BBIF boundary!!" he wrote.

But Long didn't give up, and eventually won some supporters inside City Hall, city architect Richard Krent for one: "I have reviewed the plans and in general I support the increased development of this pivotal street intersection in Parramore," Krent wrote. "It is the Main & Main of Parramore's core. … We did agree that the developer BBIF would need to absorb any cost."

That didn't happen. In addition to the raw land costs for the add-on, the city said BBIF would also have to pay $502,000 for a retaining wall so the city would not have to modify its retaining pond. For BBIF, the wall was a deal-breaker. It was too much money. The public works department researched ways to use tax dollars to build the wall – including, possibly, a $400,000 federal grant to improve low- and moderate-income neighborhoods. That's enough money to build 16,000 feet of sidewalk, or resurface almost six miles of residential streets. Or it could build a retaining wall that kept BBIF in the deal, an option that was seriously considered.

Ultimately the state kicked in an $860,000 grant at the behest of state Sen. Gary Siplin – who wrote a grant application that never mentioned the retaining wall – and BBIF got its wall, courtesy of Florida taxpayers.

If all goes according to plan, the BBIF development will be the anchor in Parramore's redevelopment, and will usher in an era of prosperity for a neighborhood that hasn't seen much of it in a long, long time. Whether or not that happens, and to what degree the BBIF property plays into the city's dreams of a booming – but not completely gentrified – Parramore remains to be seen.

What's certain is that Orlando residents got a land deal conceived behind closed doors, orchestrated in large part by a city official working both sides at once. There was no meaningful public input, and there was no opportunity for other developers to bid on the property or offer plans of their own. In the end, the property was sold for a loss, despite rising land values, to an inefficient, top-heavy nonprofit corporation that pays its top executive handsomely, with taxpayer money.

And that's how business is done in Parramore.

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