The hot air was thick with a sense of accomplishment at the groundbreaking of the new Z.L. Riley Park in Orlando's Parramore neighborhood June 9. Next to a pile of dirt topped with five shovels crowned with five hard hats, Mayor Buddy Dyer took to the lectern to celebrate the four-year anniversary of his Pathways for Parramore initiative, the program intended to revitalize the impoverished, largely African-American neighborhood that has to date shuffled around $35 million from city, state and federal sources in the name of economic development.
If you ask the city, Pathways has produced remarkable results: no murders in the last year; declining juvenile crime rates; a down payment assistance program that has so far shelled out $250,000 to 14 graduates of the city's Parramore Home Buyer's Club; 19 new home sales; 68 new residences scheduled for groundbreaking across from this park, and so on. Things are looking up, everybody — including commissioner Daisy Lynum — agreed, but the mayor wasn't quite ready to crow.
"Today the city is not declaring a victory in Parramore," Dyer said, cautiously. "This is a continuing effort."
Missing from the litany of proclaimed successes, though, is one of the city's more dubious redevelopment efforts, the 3.5-acre property across from the Amway Arena known as Callahan Square `see "A bill of goods," Dec. 7, 2006`. Almost three years after the city approved a sweetheart development deal for one of Lynum's allies, the lot sits idle, used only for overflow parking for arena events. There's no sign of construction, much less the slew of single-family homes and offices that were supposed to be finished by year's end.
Orlando Weekly has learned that the city never closed the land sale with the developer, PSA Constructors. That means that not only did the city forgo a possible multi-million-dollar sale during the height of the real estate boom, but it has also failed to collect the relative pittance — $253,812 — that PSA was supposed to fork over, and the city's plans for a mixed-use development are on indefinite standby. Even worse, the city is now considering paying off PSA to call it quits on a deal that was never consummated in the first place. In Orlando, this is what passes for good government.
To anyone familiar with this project's history, such abject failure is hardly surprising. That the city doesn't mind being taken advantage of is telling as well.
For decades, the city eyed this property. It spent more than $1 million acquiring the land and demolishing the properties on it. In 2003, the city asked developers to bid on the property. It got one offer, from a company called Urban Renaissance Development. URD was run by Lynum's friend Inez Long, who also ran a city-subsidized nonprofit called the Black Business Investment Fund of Central Florida. Lynum sits on the BBIF's board of directors. (In 2008, city records show that she used tax dollars to attend a BBIF meeting at the Amelia Island Plantation resort in northeast Florida.) URD offered to buy the land for $1 — not a typo — so long as the city subsidized its development to the tune of $2.5 million. After this newspaper reported on the proposal, a city selection committee rejected it.
In 2005, the city tried again. This time, it got two offers, one of which came from PSA Constructors, a company whose president, Patrick Aliu, is friends with Lynum. The BBIF was also PSA's partner in the deal. PSA's initial proposal for the project was, in a word, ridiculous. It imagined half-million-dollar homes in a neighborhood too dangerous to walk in at night. In March 2006, the city's CRA advisory board voted unanimously to reject it. At Lynum and Dyer's urging, in April 2006 the city council — for the first time ever — overrode the CRA advisory board's decision. It's good to have friends at City Hall.
In December 2006, the city council voted 5-1 to sell PSA the lot for $253,812. In March 2007, the city set a schedule requiring that infrastructure improvement permits be issued and building permits issued within a year, and calling for final completion within two years of closing. The city then gave PSA a year to think it over.
Citing an uncertain real estate market, PSA asked for an additional six-month extension, and the city obliged. Finally, the city and PSA agreed that the company would begin development in mid-2008 and finish by the end of 2009. The final project would include 16 single-family houses, 20 multi-family townhouses, five condos and 8,000 square feet of retail and office space — plus 25 percent workforce housing.
Except the city never closed the deal, and PSA never put a shovel in the ground. The city says that the only money exchanged was $4,500 in planning fees back in 2007. That said, some city officials still refer to Callahan Square as a PSA development.
"What's happened is the market's changed tremendously," says Downtown Development Board executive director Thomas Chatmon Jr. He says that PSA is within its rights to hunker down and see how successful other new Parramore projects — like Wells Landing and Carver Park — really are.
And of course, it's in PSA's interests to wait — not only because the real estate market has cratered, but also, and more importantly, because the city is investing hundreds of millions of dollars in the neighborhood in the form of a basketball arena and a planned redevelopment of the Centroplex the city calls the Creative Village. If those projects have the desired effect, PSA's land could be worth considerably more than $253,812 in a few years. (PSA did not return calls for this story.)
"The site itself is situated so well," says Chatmon, pointing to "a little thing called the events center" and the Creative Village. "In my opinion, the Creative Village could be the next medical city after the current medical city is done," he says. "It's a major project with a major buildout that will add so much."
This land deal could indeed be profitable for PSA, though not in the way the city or the company had in mind in 2006. As it turns out, Chatmon's take on the situation isn't entirely accurate, says city spokesperson Heather Allebaugh.
She says the city is negotiating with PSA to see if the Callahan Square deal can be reconfigured. The existing plan, the city now says, has "too much residential" to be viable. Ironically, the city's emphasis on low-density residential was precisely the reason it received so few bids on this project in 2003 and 2005. If they can't reach a new deal, the city may opt to keep the land and fold it into the Creative Village, should that ever come to exist.
If the city maintains its relationship with PSA, Allebaugh says, "there would have to be renegotiation of the contract as a whole." It's unclear whether that means the city would alter the sale price or simply allow PSA to build at a higher (and more profitable) density. If it falls through, Allebaugh says the city might need to "give them something" to walk away.
In other words, the city may pay PSA not to develop land that it never actually bought.
[email protected]
