Section 8 tenants treated ‘like garbage’ during troubled renovations

A publicly financed renovation project intended to improve the lives of hundreds of poor families living in Section 8 apartment towers in Allapattah has bogged down amid scrutiny and delays, leaving tenants in limbo.

Financed by county bonds and encouraged by the federal government, the sale and ensuing renovation of Civic Towers was supposed to bring dilapidated apartments up to snuff. Units — previously owned by an accused “slumlord” — were to be gutted. Everything from the floors and kitchen appliances inside apartments to the towers’ facade would be replaced.

But six months after work launched, tenants are living among exposed wires and piping, rats, and boarded-up windows that allow water to seep into hallways when it rains. Work, already crippled by a contractual dispute, ground to a halt this summer when material permit discrepancies led city officials to place a hold on the master building permit.

Tenants like Marciel Peña, who suffers from asthma and diabetes and waits in a wheelchair on the 19th floor for a moving day that never comes, are frustrated.

“I don’t think that anybody is to blame,” he said. “But somebody is at fault.”

Government officials and Redwood Housing Partners, which bought the buildings for $45 million in February, point to a fight between the general contractor and an unnamed subcontractor as the source of the problems. But a Miami Herald review of city, county and state records shows substantial delays were related to misrepresentations by a Louisiana-based general contractor that may have sought to save money on costly permitting fees and federally mandated flood plain upgrades by under-reporting the value and scope of the project.

They are being treated like garbage.

Giralda Perez Molina, tenant

Among the discrepancies:

▪ When Pete Vicari General Contractor applied for its master permit from Miami’s Building Department, the firm stated that it was performing just under $10 million in combined renovations to the buildings and paid $136,332.92 in permit fees to the city. This month, after building officials placed a hold on the permit out of concern that the stated value of the project was incorrect, Vicari said the job was actually worth $22.4 million and paid an additional $169,599.40 in fees.

Maurice Pons, Miami’s deputy building director, said he was told last month by the contractor that difference in cost “was a mistake — that the [original] number was placed there by one of their clerks.”

But the new information may also be incorrect: November credit underwriting reports included in Vicari’s successful application for up to $38 million in tax credits from the Florida Housing Finance Corp. list the initial value of its construction contracts at $32.6 million.

$169,000 additional permit fees paid this month by Pete Vicari General Contractor

▪ City officials were concerned this summer that by understating the cost of construction, Vicari and Redwood were possibly skirting federally required FEMA upgrades triggered when the scope of work to a building within a federal flood plain is worth more than half the value of the physical structure.

City officials determined this month that the FEMA upgrades aren’t necessary after receiving year-old appraisals that valued the two run-down towers, a combined 35 stories and 280,000 square feet, at $81.3 million. That’s nearly four times the stated value of construction on city permits.

Federal guidelines, however, factor developer profits into the formula. And on its application for $87.5 million in revenue bonds from the Miami-Dade Housing Finance Authority, Redwood estimated the combined value of renovations and its developer fees at $54.6 million — well over half the appraised value.

▪ The Miami Herald has learned that Florida’s Department of Business and Professional Regulation has initiated an investigation into Peter John Vicari’s state-issued general contractors license in response to an allegation that that the 35-year-old lied on his September application about his qualifications.

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The Civic Towers at 1400 NW 19th St. in Allapattah, where a gut renovation of two affordable senior towers conducted with public financial assistance, has ground to a halt. Dozens of families are living in a construction zone, waiting for some progress.

Emily Michot

Vicari did not respond to emails and messages left on his voicemail and with a secretary at the company’s Harvey, Louisiana office. No one was inside the company’s on-site, mobile trailer Friday morning at Civic Towers. A woman who identified herself as a property manager referred a reporter to owner representative Mike Walsh of U.S. Residential Group, who did not respond to a voicemail and email.

Reached by email, Ryan Fuson, Redwood’s managing director, declined an interview.

“At this time we do not believe it is appropriate for us to discuss the topics you mention below as we understand there is an ongoing dispute between the general contractor and a subcontractor,” Fuson wrote. “We very much appreciate your understanding.”

Multiple government officials told the Herald that Vicari’s woes were related to a contentious dispute with an unnamed subcontractor that, according to HUD spokeswoman Gloria Shanahan, “walked off the job.” But errors in paperwork undeniably caused delays that appear to finally be nearing an end.

Pons, Miami’s deputy building director, told the Herald this week that the department is comfortable with the new representations by Vicari, which submitted a signed and notarized affidavit. On Monday, the city — which has ceded most inspection duties to a third party company hired by Vicari — lifted a hold on the company’s master permit, allowing work to resume.

Still, the 340 families who live at Civic Tower are growing frustrated with the pace of work and slow flow of information.

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From L-R, Olga Vicente, 58, Marciel Peña, 84 and Giralda Perez Molina, 54 reside inside the construction zone at their home inside of Civic Towers (1400 NW 19th St.) in Allapattah. A gut renovation of two affordable senior towers conducted with public financial assistance, has ground to a halt. Dozens of families are living in a construction zone, waiting for some progress.

Emily Michot

“We don’t know what is going on here. We want an explanation,” Giralda Perez Molina, a temporarily relocated tenant, told the Miami Herald recently during a return visit to her apartment. “We ask them, and we don’t get anything — any information. … No one pays attention and goes and sees what’s going on there.”

Molina, 54, is among the 130 or so residents HUD says have been relocated during work. She says she was moved to Miami Springs — far from her friends, doctor, grocery store and the rental office, which she has to visit monthly to pay the portion of her bill not supported by HUD. She said she wasn’t told where her belongings were stored until this week, around two months after she was relocated.

Molina’s neighbors who remain on-site are stuck in the construction zone. Elderly residents managing health problems including asthma, diabetes, heart problems, high blood pressure and cancer said they want a comfortable place to live.

On a recent Wednesday morning, construction began at 7 a.m. with loud banging that Olga Vicente, 58, described as torture. It’s something she deals with regularly, and she hardly sleeps because of it.

“There are a lot of bad smells. There’s lots of noise. There are a lot of rats,” said Vicente, who’s lived in the building since 2013. “We don’t have any information from anybody. The managers don’t give us any information. We don’t know what is happening. We don’t know anything.”

But they’re afraid to complain for fear of being evicted. Molina, who has spoken to HUD and was featured in a Univision report back in June, received a letter this week from an attorney for the developer demanding she meet with the landlord to discuss the possible termination of her lease. The attorney said she’d threatened a property manager, which Molina denied.

It’s a frustrating situation for the tenants, who by all accounts were already living in sub-par conditions before renovations began.

Quality of life will improve significantly once the apartments are fully renovated.

Gloria Shanahan, HUD spokeswoman

The buildings’ previous owner, Global Ministries Foundation, was investigated by the federal government and called a “slumlord” on the U.S. Senate floor last year by Sen. Marco Rubio. In February, HUD, which on average contributes $880 a month to Civic Towers tenants holding vouchers, encouraged the sale of the buildings. They were purchased by Redwood Housing, which received assistance from the county in the form of revenue bonds to be repaid through rental income.

“We were made aware of the issues going on between a sub and the contractor, but that’s out of our purview,” said Cheree Gulley, executive director of the Miami-Dade Housing Finance Authority. “We’ve made our attorneys aware … they’ll keep track of it.”

Shanahan, the HUD spokeswoman, said federal housing authorities are watching the situation as well. Federal officials visited the site several times this summer, including last week, to review progress following a report in June by Univision documenting the problems with construction. On Aug. 22, representatives are scheduled to meet with Miami Mayor Tomás Regalado and several Civic Towers tenants at City Hall to discuss the project.

Redwood said before the project began that it expected to complete work by December. It’s unclear if that’s still the expectation.

But Shanahan said work is progressing enough that some of the first relocated families should be able to return as soon as this month.

“While we recognize the inconveniences that construction brings to the residents during this period,” she said, “their quality of life will improve significantly once the apartments are fully renovated.”

Univision reporter Erika Carrillo contributed to this report.