NORTHSIDE SHOPPING CENTER:
COMMUNITY ACQUISITION AND CONTROL
by
KAREN S. MARGOLIS
B.A., BRANDEIS UNIVERSITY, 1980
SUBMITTED IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE
DEGREE OF
MASTER OF CITY PLANNING
at the
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
JUNE 1984
Karen S.
( )
Margolis
permission to reproduce
The author hereby grants to M.I.T.
distribute copies of this thesis document in whole or in part.
Signature of Author
Depar'tment of Urban Studied and Planning,
Certified by
. .
I
"
May 25,
and
to
1984
F
ro fessor Frank Jones, Thesis Supervisor
11-
4\
Accepted By
Profeo'/rr h-Ga
heimer, Departmental Graduate Committee
OFTECHN:-Ogy
AUG 1 0 1984
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NORTHSIDE SHOPPING CENTER:
COMMUNITY ACQUISITION AND CONTROL
by
Karen S. Margolis
Submitted to the Department of Urban Studies and Planning on May 25, 1984
in partial fulfillment of the requirements for the Degree of Master in
City Planning.
ABSTRACT
report to Miami-Dade Neighborhood Housing
This thesis is a client
It includes an examination of the process to acquire
Services, Inc.
Northside Shopping Center, as well as a stategy for the future, upon
This thesis expands on the notion of community ownership for
ownership.
community benefit, with the objective of maximizing those benefits to the
It
community, subject to the monies generated by the venture itself.
contains an examination of the economic problems in that area of Dade
County, and advocates a plan responsive to community needs and designed
to maximize community benefits.
THESIS SUPERVISOR:
TITLE:
Frank Jones
Ford Professor,
Planning
Department
2
of
Urban
Studies
and
ACKNOWLEDGEMENTS
to the many people who have given me the
dedicated
is
This Thesis
support which has made this all possible.
I wish to thank those who have given me guidance in
First,
Supervisor,
care,
reassuring ways
and
She kept me sane and helped me to get over the
sense of humor.
wonderful
special
for her
but
typing,
excellent
for her
not only
LeBlanc;
to Jackie
"Thanks" goes
A very special
and warm ways.
I
for her quick support
my Reader,
like to thank Robin Campbell,
would also
effort.
this
in
and assistance
patience
his kindness,
for
my Thesis
Jones,
thank Frank S.
to
like
I would
together.
this document
putting
hurdles.
Next
thank
to
like
I'd
all
Northside
the
on
people
the
of
Acquisition Team who have worked with such commitment to see this project
and who
through
Larry Levine,
expressed
and freely
files
their
I
that,
than
but more
am
their
Charles
Gail,
Williams.
Don Stevenson and most of all Gail
me,
inspired
you have
opened
This thanks goes expecially to Lynette Williams,
thoughts to me.
Scurr,
have
proud
you my
to call
friend.
thanks
My
experience
you
to
here
must
a special
Cristina Nelson,
expecially
also
one,
Randal
Beatriz Ramirez
to
the
to
go
my
classmates
M.I.T.
at
people
and
friends.
Mary Knasas,
Rucker,
for sharing
the
times,
who
my
made
A warm thank
Ann Jarosiewicz
both good
and
and
bad,
for caring and for just being there.
Finally
Margolis.
all
people
I
wish to thank my mom,
Gwen Margolis and my dad,
You both have taught me to care about the quality
my own way to make a difference.
but I,
too,
will
for
do my best in
Thank you for your love and
3
life
make a difference.
and have shown me that one person can truly
You both leave me a tough act to follow,
of
Allan B.
support.
TABLE OF CONTENTS
Abstract.....................
.. 0 . . . . . .
2
Acknowledgements ............
.. 0 . . . . . .
3
5
Introduction .....................
.....................
Chapter One - The Context ......
7
Chapter Two - Community Acquisition ..................
19
Chapter Three - A Blueprint for the Future ...........
41
Conclusion ..........................................
81
Footnotes .........
..
... 0
Bibliography ......
..
Newspaper Articles
..
Interviews
..
0
93
... *
95
.. 0
... 0
97
.. a
... a
.. 0
..
...4
Appendix B
.. 0
..
Appendix C
.. 0
..
.... 0
0
...........
........................
Appendix E .........
89
92
........
Appendix A
Appendix D
86
C.....*.
.....................
4
e0.
100
.
122
127
INTRODUCTION
The objective of this thesis is
of
Miami-Dade Neighborhood
Community Development Corporation,
local
Housing
Secondly, it is a strategy for the future designed to maximize
Services.
to
benefits
First, it is a case study
of Northside Shopping Center by a
process
the acquisition
two-fold.
the
to fiscal
community subject
upon community
constraints,
ownership.
County,
Florida.
At their request,
Northside Shopping Center,
of this thesis.
of
economic benefit of the community.
maximizing community benefits,
contains
thesis
this
an
the community and advances the notion of
community ownership of this newly acquired
thesis
The
resource
for
expands on
the
direct
the notion of
subject to the monies generated by the
formulated to that end.
information for a more complete
Chapter One provides contextual
of the acquisition process.
This Chapter briefly examines
the ethnic economy of Dade County and some of
the underlying
socio-
factors which have led up to the present status of Blacks in
economic
Miami.
to date,
has been investigated and documented as a part
analysis of the economic need in
understanding
process
the acquisition
Beyond that documentation,
venture and a plan is
a CDC in Dade
Miami-Dade NHS,
a report to a client,
This thesis is
The Chapter also provides a brief introduction and history of
both Northside Shopping Center and of Miami-Dade Neighborhood Housing
Services
leading
up
to
the
Northside
Shopping
Center
Community
Acquisition Project.
Chapter Two documents
acquisition
the actual
process undertaken by
Miami-Dade NHS and the acquisition team that they were able to bring
together
for this effort.
The focus of these efforts has been community
5
Center as
the largest retail
Black Miami,
Chapter
Three
the role
and to generate a source
goes
beyond
that
Northside
present
the
acquisition
Shopping Center could
economic development of the surrounding,
community
chapter expands on those objectives and advocates
is
highly responsive to community needs,
employees at
"community
the Center.
ownership,"
the benefits
to
Northside,
but
community;
and
lack
poverty
of access
not just
to
play in
the
this
ownership,
but as
the goals of
plan to maximize
long run not only by revitalizing
the
the
addressing
due not only
and
as consumers,
this Chapter proposes a practical
also
process
an ownership role which
Having expanded and clarified
the community over
by
of funds
predominantly Black communities.
for
with the present objectives
Beginning
to more
the potential
and continued operation of Miami-Dade NHS.
the stability
addresses
center in
the present 450 or so jobs,
than double
to assure
of Northside Shopping
for the purposes of revitalization
acquisition
economic
unemployment
but
to primary market sustaining jobs.
6
problems
to
of
the
underemployment
CHAPTER ONE
THE CONTEXT
Miami-Dade County's Ethnic Economy
of
the
changed
Cubans
The community's moral conscience
Black conerns.
put aside
issues were
Miami,
in
other
in
while
issue of
social
the
from concern
shifted
of Cubans."'
to focusing on the influx
rights
about civil
of the
the Cubans overshadowed
the assimilation of
Miami,
In
1970's.
1960's and
around
"In the rest
forever.
predominant
the
were
area
the Miami
The arrival
and economy of Miami
sociology
Black rights
the South,
into
any other southern city.
Miami was much like
1960,
Cuban refugees
the
influx of
the
Before
communities
Thus,
Black
these
issues
moved forward on the social agenda.
and
tourist
workers,
but in
in
orientation
the
redefined
many ways
Miami was predominantly a
with
The Cubans not
industry.
tourist
the
of
commercial
economy,
retirement-oriented
backbone
1960,
of the Cubans in
Upon the arrival
been
far behind
left
an economic
an economy
the
trade and banking,
to Latin Americans.
where knowledge
real
Blacks have
of Spanish has become
asset in the demand for labor, and where Latin employers are
the City of Miami,
350,000
residents
percent
of
Blacks
in
tourism catering
with an increasing
to hire Black workers.2
reluctant
In
and
labor
The expanding economy in
1970's centered more and more on international
estate development
the
only displaced Black
Miami economy
Latin America.
as
Blacks
the
own 18,000
businesses.
City population own only 400
own just
businesses.
Cubans who comprise 60 percent of the nearly
The
1
percent of
the
businesses,
largest Black-owned
firm in
7
The Blacks,
businesses.
and
these
Miami is
who make up 25
In Dade County,
are mostly small
a construction firm
Blacks just opened their first Black-
employing 12 permanent employees.
the Model City area this past year.
credit union also opened in
10
only
percent
professional/managerial
According
a challenge
to operate businesses is
Black professionals
where
of
workforce
the
in
Finding
Dade County
in
employed
is
a
capacity. 3
to a survey of 1980 census data for 13 metropolitan areas
Miami has the widest gap between
nationwide by the Chicago Urban League,
jobless rates between Blacks and Anglos.
was 3.6 percentage
In 1980, unemployment in Miami
than Blacks
points lower for Anglos (4.8 percent)
Of the thirteen metropolitan areas,
percent).
Black controlled
Liberty City in January 1983 and the first
owned bank in
Miami was just
(8.4
behind
Chicago with the second highest proportion of Blacks living below the
poverty
level.
considerable
Wage
gaps between
though comparable
records a median
Blacks,
Hispanics
to other areas. 4
1980 Census Bureau data
family income for Whites at $20,261,
median family incomes was a mere $12,710.
(who are also included
in
and Whites are
while for Blacks,
Median income for Hispanics
the race counts) was $16,331
in
1980.
Dade County Median Incomes
# Families
Family Income
Male Income
Female Income
Whites
339,685
$20,261
$11,703
$5,903
Blacks
64,160
12,710
8,276
5,176
Hispanics*
156,662
16,331
9,345
4,951
TOTAL
426,520
$18,642
$10,887
$5,717
1980 U.S. Census Bureau's Detailed Population Characteristics,
Florida
5
Hispanics also included in race counts.
Source:
*
8
More than just a sense of powerlessness,
justice in
it
was the lack of economic
Florida for area Blacks that led to the outburst
Dade County,
that came to be known as the 1980 Liberty City riot.
Patrice Trapp,
this way,
Staff Assistant to Congressman William Lehman explained it
"The
civil disturbances underscored that many needs were unmet and unaddressed
in
economy.
demand
There was an increased
the Black community.
made the County more aware of the problems and that they
It
have to meet the needs of the total community.
They cannot develop one
part of the community at the expense of the other part."
in
missing partner" in
the City's economic development.
operated"
and
establishments
was
during
the
one
of
the
The U.S.
Civil
labeled Black Miami "the
report on the riot,
its
Rights Commission,
owned
for a Black
ways
few
to
three days of rioting.
The message "Black
business
protect
"Since
the riots,
fostering economic development so that Blacks can employ other Blacks has
6
emerged on the public agenda."
Ironically,
at the time of the riots, unemployment was at its lowest
point for that economic cycle at 5.6 percent.
that
low in
April-May 1980 to an unemployment rate of 8.6 percent by
Unemployment among Dade County's Blacks was undoubtedly
March 1982.7
much higher,
Unemployment expanded from
as it
has historically been.
Northside Shopping Center
Northside Shopping
center when it
Center was Dade County's first
opened on March 16,
1960.
regional
shopping
Northside was developed between
1957 and 1960 on what was once the site of a dairy farm at NW 79th Street
and 27th Avenue.
That corner became
the second busiest intersection
in
Dade County following the opening of the shopping center, with a customer
draw
from beyond
surround
it.
the young middle-income
The crowded
shopping center
9
family neighborhoods
contained
565,000
square
that
feet
leasable
of gross
housing some 50
stores
site.
on a 40 acres
had many AAA tenants and catered to a predominantly White
Originally , it
population.
space
8
Northside Shopping Center has slowly shifted from a regional center
that basically services
at its
peak between 1960 and 1972,
and it
ran well between 1972 and 1978.
to Northside's
according
1978 was a banner year,
The center was operating
community.
the
to one
present manger,
Donald
the
ethnic
Stevenson, with a sales volume of $45 million.
Nonetheless,
it
was
very
becoming
apparent
that
composition of the neighborhoods surrounding Northside was changing.
and per capita
neighborhoods were becoming increasingly Black,
At the
same
time,
Northside was experiencing
increased
competition
air-conditioned regional malls such as Westland and the Omni
as modern,
began springing up around Dade County luring Northside customers.
Mall,
history of Northside.
In 1978, Sears and Roebuck,
Adventura Mall, a super regional
a
Adventura
wealthy
and
growing
mall which was to open in
section
management would pick up
have remaining on their
lease,
square
Once
protective
2 years
the final
which will
expire in
the
the summer of
County.
The
that Sears would
June 1985.
This
per square foot annually for its
amounts to $270,000 per year or $1.28
207,000
North Dade
of
the
the anchor tenant at
Shopping Center had been enticed by the -developers of
Northside
in
also marked a turning point in
it
Though 1978 was a banner year,
1983
income of
the 1970's.
in
the area had dropped dramatically
The
feet. 9
Sears
signed
the
lease
with Adventura,
mode" and eliminated evening
hours,
than at their previous closing time of 9 p.m.
10
they went into "a
closing at 6 p.m.
rather
This action had a major
It
impact on Northside Shopping Center as evening customers dropped off.
accelerated Northside's decline as a regional shopping center causing
Northside to lose its regional base of customers.10
In
of 1980,
May
foreign investors,
bought Northside Shopping
Antilles Corporation operating out of Israel,
Center.
At the
time,
it
the center
including
land was
$3.2 million in
million,
was appraised at $10.6
land and $7.4 million for the buildings.
a Netherland-
Tashi Valley N.V.
"The total reproduction cost of
valued at...$21,199, 4 56.
Utilizing a cost
the
replacement approach to market value which included depreciation,
center was valued at...$16,500,000."ll
Tashi Valley hired Donald Stevenson to be the General Manager of the
shopping center.
Stevenson formerly managed the Lerner's Shop at the
center and headed
the Merchants Association.
retail management background.
his own agenda...for eventual
openly
to Tashi
expressed
Stevenson's
professional
dual
interests;
He also had a very strong
Stevenson took the job only because he had
community ownership
They
Valley.
to
manage
of Northside,
hired
the
him
goal (remote as it
of
aware
fully
center
shopping
manner and to use his direct contact with
which he
in
a
them to further a
may have seemed at the time) for broad-based,
for-
profit community ownership.
Since
Don
Stevenson
began managing
Northside
accurately sought a tenant mix that reflects
the shift
in
1980,
in
he
has
market from
that of a shopping center serving a regional base to a center which
provides both retail and services for a
income consumer markets.
local middle,
moderate and low-
While office space was already provided for
State Representative (now Senator) Carrie Meek and for the legal services
of Greater Miami in Northside's office building,
signed a 30 year
and in
1975,
Dade County
lease for a Central Police Station to be built on 1.687
11
the 1980's saw significant
acres of the property for $1 per year rent,
space to a mix of retail and community services at the
shifts from retail
include 7,000
Community services
center.
square
for a Dade County
feet
Public Health Center and 3,000 square feet for a U.S.
as
Post Office,
well as a Job Placement Services Corporation, a Dade County Department of
office space
Transportation Office and
for Miami-Dade Neighborhood
Housing Services.
While vacancies have remained fairly steady between 5 and 6 percent
over
recent years
at more
James
rates.
favorable
the management
leases and renegotiating expiring
has been successful at negotiating new
leases
space),
the vacant Sears
(not counting
Director
Kurps,
of Managment
1983 that "a
the Courtelis Company has observed in a letter dated May 25,
comparison of the
two tenant identification
February 1, 1983)
indicates that in
square
(June 1,
1982 and
15,000
the interim approximately
with approximately
feet was vacated
lists
8,000 square
of
feet re-leased.
The effective rental rate for the 15,000 square feet was $4.66/square
the 8,000
foot;
foot.
$6.08/square
feet was
Current
re-leased
at an effective
rate
leases under negotiation also indicate
of
that
for increasing base rent income are very good."
The Sears
be paid through April 1985 by the Adventura Mall,
at which
the prospects
lease will
square
time the lease will expire.
No
has
replacement
yet
been
found
for
the
Sears
space
which
comprises over a third of the 565,000 square feet of the shopping center.
The Sears Garden Shop area has been leased out to the Florida Business
College,
and a separate tenant is
Automotive Center.
Still,
stability would be to
also being sought for the former Sears
the best usage for the Center's viability and
lease the 2 story,
12
150,000 square
foot main
store
single anchor
to a
one
or
13
activity.
tenants
two
this
the management
strategy proposed by
for
If
tenant.
and
use
proves unfeasible,
to separate
is
Center and remains
a
the
in
issue
critical
non-retail
for
needed at Northside Shopping
an anchor tenant is
Still,
floor space
the first
floor
second
the
the alternative
of Northside
viability
Shopping Center.
The center continues
to operate
margin of profit has dwindled.
venture.
In
this
left
the black,
it
has always been a profit-making
Still
gross rents were at $1,712,000, with a
the Spring of 1983,
cash flow before
though currently its
in
Given a debt service of $696,300,
taxes of $1,197,000.
repairs).
a profit of a half a million dollars (before special
By the Spring of 1984,
gross rents have declined by some $80,000 of which
be added
To this will
$50,000 comes from the loss of a grocery store.
the loss of the $278,000 Sears lease which expires next year.
primary
is
of managment
concern
Northside Shopping Center will
to
these
get
14
]
The
leased,
spaces
lest
lose much of its margin of profitability.
Miami-Dade Neighborhood Housing Services
Miami-Dade
was
Neighborhood Housing Services
incorporated
in
April
1976 by the State of Florida, and was incorporated as a not-for-profit
corporation
exemption
status in
of private,
195
NHS
under the Internal Revenue Service Section 501(c)(3)
1977.
Miami-Dade NHS is
locally controlled,
programs
in
136
stimulating reinvestment in
cities,
part of a nationwide
operating
are selected for this program based upon such criteria
condition
of the housing stock and evidence
of owner-occupancy,
as a neighborhood.
with
their community neighborhood.
median neighborhood
the
goal
of
Neighborhoods
as the size and
of deterioration,
income
system
There are now
non-profit corporations.
each
tax
and a definable
the
level
identity
The NHS Program is one which attempts to stem further
deterioration and
in neighborhoods showing evidence of
decline
in
maintenance
the housing stock.
It
is
predominantly
lack of
a housing support
as a singular
program designed to rehabilitate targetted neighborhoods
entity.
Reinvestment
The NHS concept was developed by the Neighborhood
Corporation,
the
local
provided
as
a
revolving
fund
loan
NHS
Miami-Dade
upon
recycle revolving
Revolving
large
one-time
as an
NHS.
with a
inception
its
subsidiary of the Reinvestment Corporation,
Services of America,
The Neighborhood
support.
NHS with development and technical
Reinvestment Corporation
grant
by Congress which provides
a public corporation chartered
A
the Neighborhood Housing
"provides a secondary mortgage market mechanism to
loan fund dollars."
Loan Program in
Miami-Dade NHS operates
the West Little River
its
target area bounded by
79th Street the south, 95th Street the north, 22nd Avenue on the west and
7th Avenue on the east,
thus following the Little
River Canal on the
northeast.
The NHS Program is
based upon "working partnerships of community
institutions
residents, representatives of financial and non-financial
and local government."
Private funds are raised through fundraising
drives for the operating budget of the NHS and lenders agree
bankable
to make
loans to local residents.
The public sector local government partner's role is
improvement investments in
public services in
the neighborhood
to improve
the level of
the area and to provide funds for a Revolving Loan
Fund
to assist residents who cannot qualify
Dade
HNS's
local
to make capital
government
partner,
Community and Economic Development (OCED)
14
for bankable
Metro-Dade
loans.
County
has allotted $100,000
Miami-
Office
of
this past
year from Dade County's CDBG money for Revolving Loan Funds for housing,
in addition to capital and major road improvements.
Community residents participate in
and homes to the
their properties
the partnership by upgrading
or better,
level of code
They also
without the financial assistance and support of M-D NHS.
up
of
representatives
early years,
Though the
NHS Board
of Directors
on the NHS Board of Directors and
Housing Services was a faltering agency
execute
and
notes
the first
of money at that time,
NHS.
Following
9
from
collect
months
with a
administration was eventually brought in
meant well,
they
did not have
problems and to move forward.
They
borrowers.
homeowner
the Board considered permanently closing
Following a number of lawsuits,
M-D
in
suffering from mismanagement and internal conflicts.
agency had a great deal
to
is
sector and private sector
administration has been described as incompetent and uncaring.
neglected
their
15
Neighborhood
Miami-Dade
Public
also participate
various committees.
its
residents.
community
to improve
activities
The majority of the Miami-Dade
neighborhood.
made
Crime Watch and related
in
participate
with and
skeleton
a
staff,
to "clean house,"
the wherewithall
second
Though they
to solve
the NHS's
The organization could not continue to
make loans as they were not trusted in
the community nor by the banking
sector.
M-D NHS applied to the State of Florida for an administrative grant
from the newly created Community Development Corporation Support and
Assistance Program (CDCSAP).
The following month,
Their
contract
Miami-Dade NHS became a CDC in June 1981.
they received a grant
emphasized
housing,
but
revitalization at Northside Shopping Center,
15
for $100,000
also
spoke
from
of
the state.
commercial
the largest retail center in
Black Miami and within their newly established CDC boundary of West
River which extended westward to N.W. 37th Avenue (see Appendix
Little
money was badly
Though
A).
needed
to hire
funding at a time when they had virtually no staff.
received
administration
had
rehabilitation
specialist
already
acting
The
left.
This money was,
Miami-Dade NHS had enough political
the fall
In
a
of 1981,
Mrs.
in effect,
clout to get funded.
Wilhelmina Sands a community resident and
active citizen became the Chairman of the M-D NHS Board.
the organization began to turn around.
Sands,
was
response to the 1980
money," as the state CDCSAP program was in
Miami riots.
director
The second
from HUD who was taking care of the ongoing
rehab projects and "holding down the fort."
"guilt
they
ironically
staff,
Under Mrs.
She brought stability and
professionalism to the board and grew into her role.
In December of that
year,
she hired Gail Williams to be the Executive Director of Miami-Dade
NHS.
Shortly thereafter, Lynette Williams (no relation) was hired as the
Development Officer.
Before Gail and Lynette were hired,
grant was spent,
the state.
only $5,000 of the $100,000
and there were only 6 months left in
their contract with
They had to spend the remaining money quickly with a project
that could show a real impact, so decided to amend their contract with
the state and focus on Northside Shopping Center rather than on housing.
In
would be difficult to ge t the housing projects
the time they had, it
going,
able
the scarcity of federal
given
to
meet
the
more
Northside and trying
businesses,
specific
housing money.
objectives
Yet, they would be
of promoting
events
at
to stimulate community support, establish new
and create jobs for residents in
Little River.
16
their target area,
West
decision to promote Northside as their primary focus
Their final
came
Manager
after a meeting with Don Stevenson,
Center.
As he will do with anyone who will
Shopping
of Northside
Stevenson told Gail
listen,
about his dream of community acquisition of Northside Shopping Center and
the importance of real community control of the center as the single
the Black community.
largest employer in
Northside
If
decline.
to the area,
highly visible in
is
allowed to continue,
it
the community,
had the potential to become a blight
the surrounding neighborhood.
the deterioration of
causing
The center employed 1,200 people in
yet one could see the
the 1970's.
Yet by 1982,
employment
135 jobs were cut by the Sears store alone,
was cut in half.
Sears had always been profitable at Northside.
Shopping Center remained the
Even so,
though
Northside
largest single employer of residents in
the
Liberty City, West Little River areas.
understood
Williams
Gail
Northside Shopping Center:
the advantages
ownership of
community
multiplier
the potential
effects of keeping
support
the pride and community
within the community,
money circulating
of
that would accompany such an action, and the chance to create many new
jobs on the
The center could be the cornerstone of redevelopment
site.
Still,
of the neighborhood.
largely
unknown
in
Miami-Dade Neighborhood Housing Services was
Dade County political
circles,
had a bad reputation
Community acquisition was
due to past mismanagement and had no money.
not a feasible strategy at the time.16
Thus,
Miami-Dade
Revitalization as its
with a
In
NHS
focus toward Northside Commercial
turned its
primary economic development activity
secondary emphasis on its established
March of 1982,
Mrs. Wilhelmina Sands,
housing and
as a CDC,
loan programs.
President of M-D NHS,
sent a
letter to organizations and institutions operating in the Black community
17
asking
community-wide
for
them
and
support
of
marketplace
for a full
in
cultural
activities.
and
the focal
As
such,
accessible
and
convenient
most
consumer goods and
range of
the area;
employer
the
as
center
the
importance
the major
services;
and
civic
point for community,
support was viewed
the
recognized
letter
The
of Northside Shopping Center.
revitalization
the
in
participation
as essential
to
neighborhood revitalizaiton and improvement.
As part of these revitalization efforts,
of
in
activities
Merchants
conjunction
traffic,
stimulate
Community."
and marketing
directed
efforts
jobs for
business and create
Center's
Shopping
$100,000
to increase
community
in
consumer
residents
at
These efforts included an intensive three
Northside Shopping Center.
month campaign
Northside
the
M-D NHS spent $25,000 of its
Association (NSCMA).
state funding on promotional
with
M-D NHS undertook a number
to area residents
to "Keep You $$$
In
Your
The campaign continued from February through April 1982.
NSCMA and M-D NHS also developed a program for giveaways to West Little
River residents and M-D NHS supporters who would patronize
center.
the Northside
Merchants were asked to evaluate how many of their employees
reside in West Little River and to inform M-D NHS of open positions which
M-D NHS
would
newsletter.
disseminate
Miami-Dade
NHS
also
collaborated
Association and the Carver Family YMCA in
residents
with
the
in
their
Merchants
a major promotional campaign at
Annual International
Northside Shopping Center, "The First
Family Festival."
River
to West Little
This three day festival
in
Caribbean
August 1982 served to
encourage "community-wide use of the center" by introducing Northside
Shopping Center as a positive place to shop.17
18
CHAPTER TWO
COMMUNITY ACQUISITION
of
to
forward
an
enormous
Northside
Shopping
what appears
tackling
purchase
to own a center as
$10
community-based
reality,
M-D NHS
support,
technical
assistance,
on a
many pieces
have
to gain
had
U.S.
to
at
NHS
Board
feasibility
Stevenson had
that
that it
realized
to discuss
it
of
clout,
political
As
county
development
purchasing Northside Shopping
idea
the
spoken
to Ernie
at
was a project worth pursuing.
Directors,
of community
and they gave
of Dade
together all
called
of
acquisition
Martin about this idea and
a meeting.
When it
was
under Gail Williams,
M-D NHS,
interested,
Director
of community
was worth discussing
the County was
that
clear
to make
into place.
fall
Ernest Martin,
meeting at which Dr.
Dade County
Martin felt
This
acquisition for
In order
County Office of Community and Economic Development,
Dr.
none has
"shoestring budget."
following a
Don
community-
40+ acres.
and put together a
financing,
M-D NHS began to look seriously
Northside.
are moving
retail
the
has
unknowns,
CDC's in
They
with its
in
development
virtual
all
the process
before,
centers
and
in
Though other
as Northside,
large
economic
ownership a
community
Center
Center.
acquisition project may be the largest
million
team,
undertaking.
shopping
have purchased
based organizations
sought
commitment
of Gail Williams and Lynette Williams is
efforts
energetic
the
under
Services,
Housing
Neighborhood
Miami-Dade
the
M-D
investigate
the
She went before
their go-ahead
to
ownership.
Why Community Acquisition?
Northside
foreign
Shopping
investors,
Center is
and will
take
worth more to
community
19
the community than to
commitment
to
turn it
around.
Northside,
important to stabilize
It
the center could deteriorate rapidly.
With the Sears space vacant,
is
to stop decline at the margins then
move forward with progress. The funds needed to turn Northside around are
can today
Those funds
later.
might take
to what it
compared
small
leverage much community involvement and economic activity at Northside.
It
to recreate up to 600 new jobs which have been lost
has the potential
at the center over the last 8 years.
at
and community
time
this
With a minimum application of funds
support could
turn Northside
around and
the area.
rejuvenate
Community ownership of Northside means that much of
the community and will be used
at Northside Shopping Center will stay in
It
to create more jobs for community residents.
major leakages of money out of the community,
will
reduce one of the
thus producing a larger
the community
in
effect as money circulates
multiplier
the money spent
and stimulating
the local economy.
As put forward in
Northside is
Siler,
M-D NHS's campaign to encourage community support,
According to a study by Hammer,
the heart of the community.
the Northside Shopping Center is
George Associates,
the area.
most significant retail development in
major employer in
addition,
In
Northside is
the Black community.
currently the
it
is
the
very visible and its
rejuvenation will have significant impacts on the surrounding areas.
Community
would
ownership
accompany
more
once
Northside
ownership,
it
is
associated with it
control,
purchase
its
and education
and the extensive marketing
the
have
the
centerpiece
of
greatest
the
potential
area.
With
the residents who would gain the economic
success.
to
that
make
community
benefits
Community ownership would bring with it
so that the center would be more responsive to those who work
20
and shop there and who live nearby.
Community ownership of Northside Shopping Center can address the
the Community for stable
in
major needs
in
of the largest facility
largest employer
the rejuvenation
the community which serves not only as the
the West Little River and neighboring areas but as a
in
and community focal point of the area.
cultural
would also
business development
economic revitalization and investment in
opportunities,
social,
jobs,
investment in
to renewed private
lead
Its success
the neighborhoods
surrounding Northside.
Projects such as Northside Acquisition follow a nation-wide trend of
community-based organizations to advance strategies for self-sufficiency.
The 1980's have been a
largely
sufficient;
when funding from the. state can be counted on at
that is,
groups can no longer
services
provide
funding is
to the ability to leverage private dollars and become self
Community
all.
and instability
funding,
the State of Florida,
In
local funding.
and uncertainty in
tied
time of reduced federal
for
support
to
Community-based
constituencies.
local
their
rely on continuing
economic development will allow Miami-Dade Neighborhood Housing Services
financial
independence,
and
their funding,
increased
control
for
the opportunity
over
the
stability
sources
in
and uses
these
of
times of
shifting support.
Seeking Support and Gaining Credibility
In
to
the
late September of 1982,
business
community
Miami-Dade NHS began making presentations
and
intentions and to garner support.
others
CDC's in
the area,
Many people were skeptical.
inform
them
of
M-D
NHS's
They had also made a presentation
the Dade County CDC Coalition directors
effort of all
to
to
to make the project a joint
but got no response.
The first
21
person to see
that there was
Following
Chamber
of Commerce,
their
and
Northside
plans
for
the project were
if
support
full
lend
He agreed to
acquisition.
community
stock offered
a
to people in
stake
personal
addition,
for
plan called
The original
as
to
motivation
to raise additional
based
community
Mr.
Company,
the
in
that
Tashi
with a
good faith
in
the country,
was a good
to determine
the
He had worked with the Urban
that
project
solid
the numbers
ran through
Larry Levine saw the Center,
this
of Arthur Anderson
a principal
to Larry Levine,
of the project.
the past.
and agreed
The owners,
million.
to negotiate
accounting firm in
largest
feasibility
financial
$10
organization.
sent them
Fair
In
The purchase price
loans.
through
expressed a willingness
NV,
flow.
traffic
increase
mortgage of over $4 million and
first
money
and to give
the equity,
the community to raise
of Northside Shoping Center was placed at
Valley,
of shares through a public
the selling
M-D NHS would take back a
have
League
to find out more about
M-D NHS
called
sound.
financially
would
Fair
the Urban League and his
the backing of
them
Mr.
Greater
Black Miami-Dade
local
the
to
presentation
their
Miami.
of
the Urban League
President of
Willard Fair,
was T.
potential
could support the
financing.
Given
1982
income
and
expenses
including
the mortgage
center was operating with a positive cash flow of almost
or
$448,000
yearly.
The
existing
completely paid off by 1990.18
$4.5
The deal
new debt would not be payable until
million
payment,
$38,000
so
could be structured
such time that the first
monthly
would
mortgage
the
be
that all
mortgage was
to expire.
As Larry Levine puts it,
"This project had
22
its
genesis in
the people
downtown,
have
said,
what we want,
is
'this
sitting
what needs
tower
in
a
to
be done.
people there have come downtown and
that
is
project
The beauty of this
someone
take
pontificating
the suburbs,
in
lives
who
not
does
real
something
accomplish
To
Don Stevenson and Gail Williams.
River area -
of the West Little
can you help
In Dade County,
us."'
this was a rare occurence.
Levine
Larry
become a
He
to
agreed
work
and
the Urban League of Greater Miami.
the
condition
of M-D NHS
venture
joint
on
pro-bono
community-based non-profit.
He also
Mr. Levine saw the project
counsel.
very conservative assumptions.
project.
a feasible.
which had
project
support behind this
put his full
on
insisted
top
legal
professional
sound,
as financially
be
ownership
the
that
The project can pay back its
even under
debt -
is
it
He also understood the potential benefits that this
project could hold for Miami's Black community.
Mr.
and the Urban League of Greater Miami's involvement gave
Fair
Miami-Dade
NHS's
legitimacy.
efforts
linkages needed to move the project
able
They were
forward in
to put
together
the
sector
and
the private
with the County.
give M-D NHS credibility
Miami-Dade NHS quickly built up a network of support from political
leaders, non-profit consultants, politicians and the private sector which
allowed
the
project
together
due
to
staff
as well
the
to
progress.
enthusiasm and
The
commitment
of Gail
to garner financial
community ownership of Northside Shopping
pulled
Williams
and
support for
package
and put together a financial
team was
Still,
as the merits of the project itself.
was now ahead of them,
project
acquisition
to achieve
the real
her
test
the acquistion
their
goal of
Center.
Putting Together a Financial Package
In
the private
sector
world,
the purchase of Northside
23
Shopping
Center could be accomplished
a matter of weeks,
in
Finding
complicated and immense.
task is
the
organization without any money
but for a non-profit
the capital to affect a change of ownership
maneuvering,
bureaucratic
long hours,
perserverance,
paperwork,
and especially
team,
commitment and patience by the acquisition
taken political
has
the pro-
bono support by Larry Levine of Arthur Anderson and Company.
The original purchase plan called for a public stock offering to
and supporters of the Shopping Center to raise equity
area residents
million.
towards the purchase price of $10
Don Stevenson, manager of the
OCED in
center had advanced this plan to Dr. Ernest Martin,
By September of that year,
spring of 1982.
M-D NHS had gotten involved
and began to pursue the concept of community ownership.
seed money from
million)
and
were denied.
request.
They applied for
Department of Health and Human Services ($1
the U.S.
County's
from Dade
Development ($100,000)
Office
and
Community
of
support to back up the merits of their
little
When they approached Larry Levine
the plan for a stock offering.
increasingly clear that it
stock to the community.
Economic
Both requests
to affect that change of ownership.
They had
the late
that September,
Over the next few months,
it
it
was with
was becoming
would be a difficult and slow process to sell
Though the idea was not completely discarded,
they investigated other sources of funding.
They considered searching for a limited partnership syndication, but
upon examination of the cash flows that idea was quickly put to rest.
The
$4.5
million
mortgage
held
by
Teachers
Insurance
and Annuity
Association which was assumable at an average rate of 6 percent would
become fully amortized on May 31,
of a 30 year amortization period,
1990.
As it
was in
its
final few years
the bulk of the cash dispersement would
24
Of a yearly cash dispersement of
be going to reduce the principal.
$696,300 per year, by 1984, over $500,000 would be going to reduce the
principal debt.
Even with a depreciation of $533,333 over 15 years,
the
project was not expected to generate tax losses for tax shelter income.
19
M-D NHS also investigated the possibility of pursuing a UDAG grant
be
to
used
consultant
because
as
into
equity
the
project.
They were
advised by
that they could not use
to Dade County on UDAGS
the
the UDAG
there was not enough new construction and that HUD would not
They were advised to apply for a
accept the transfer of land as a match.
UDAG for renovations of the center once they had attained ownership.
there were new complications which made M-D NHS
By the years end,
was to move ahead quickly and make use
painfully aware of how critical it
of the support they had amassed to implement thus project.
and
Home
CDC,
announced,
Housing
out
the
blue,
that
they were
They had received word from an Aid
purchasing Northside Shopping Center.
in
of
Another area
Congressman William Lehman's office that there was money available
from the Urban Mass Transit Administration's (UMTA)
program
to
use
for economic
Northside Shopping Center,
Urban Initiatives
development near new transit
stations.
just 2 blocks from the new Northside Metrorail
Station would be eligible for consideration.
Though Home
Lehman's ofice,
and Housing was
Miami-Dade
politically
NHS cried foul.
connected
to Congresssman
Home and Housing had done no
homework on this project and knew that M-D NHS was pursuing acquisition.
didn't want
to work with Miami-Dade
Lehman's
Aid
straight
to the Congressman
NHS,
so they went
him know the score and to the Dade
to let
County Mayor and County Commissioners.
Miami-Dade NHS
gained the support of Congressman Lehman and the
County Commissioners,
especially Barbara Carey, Ruth Shack, and Clara
25
as well as the County mayor,
Oesterle,
Stephen Clark.
M-D NHS began
working with the Dade County Transportation Administration and Charles
Scurr,
Assistant
Special
to the Transportation
to put
Coordinator,
together an application for an UMTA grant through the Urban Initiatives
Program.
With Larry Levine,
UMTA money would be used in
equity.
too
It
they devised a financial package whereby the
the purchase of Northside Shopping Center
as
the community would take
was clear that the sale of stock to
long and would be better implemented as a second phase once the
center were to become more stable with an anchor
The UMTA money
tenant.
to community acquisition.
would be central
Urban Mass Transit Application
The
Dade
County
Commission
authorized
the Transportation
Administration to apply to the Urban Mass Transit Administration for
funding.
The Metropolitan Dade County Transportation Administration
submitted a request to UMTA in
June 1983 for a $3,667,499 project of
which $2,130,000 would go toward the acquisition of 8.25 acres of land
presently serving as a parking
N.W.
27th Avenue.
lot for Northside Shopping
Center
The remainder of the money would go toward the design,
construction and construction management of a bus feeder/terminal
located
on the site
and
to serve as a bus turnaround
loading and parking facility for the feeder bus service
nearby Metrorail
along
Northside Transit Station,
1984 (see Appendix B).
The request was for
with a 25 percent local match of $916,874.
to be
and passenger
to and
from the
scheduled to open in December
$2,750,625
to come from UMTA
The local match would be
divided evenly between the Florida Department of Transportation and
the
Dade County Office of Community and Economic Development at $458,437
each.
26
for
$2,130,000 requested
The
purchases
non-profit
as equity
land acquisition would
of
purchase
the
for
be used by
the
site.
The
the
to the purchase of Northside
transaction would occur simultaneously
from the present owners.
Shopping Center
The federal
funds were requested out of Section 3 of the UMTA.
These are discretionary funds which are limited to a total of $1 billion
With such limited
per year for distribution for the entire country.
allocation
funding,
is
the
very competitive and based predominantly on
transportation aspects of the project.
Several years ago,
under the Carter Administration,
tied
development
objectives
Initiatives
Program which
revitalization
more
UMTA was
Arthur Tiele,
Administrator
tied with rapid
to
responsive
to transportation
community
projects.
The Urban
for
community
funds
special
provided
and former UMTA
transportation has been phased out.
The
Northside project now has had to compete for funding with traditional
transit
projects.
Charles Scurr feels that the project should be funded because it
not only "an outstanding community revitalization project" but it
a good transportation project.
connector
traffic
is
to
the Metrorail,
Shopping
It
can also fulfill
In addition, it
the need for
riders.
the bus feeder can make the
As a community development project,
shopping center more accessible and thus viable,
the center.
as the major
the proposed north extension
excellent as the future station site for
additional parking for Metrorail
Center,
an appropriate site.
of the Metrorail along 27th Avenue.
also
a need for a bus terminal and
There is
and Northside
generator in the area, is
is
is
bringing
more people to
This would create more transit riders and more money for the
transportation system. On the down side,
27
if
Northside Shopping Center
continues to deteriorate,
this would have a negative impact on the Miami-
Authority.
Dade Transportation
addition to the
Finally, the project should be funded because "in
transit ridership and economic
to the
return
investment
in
this project
discussed earlier,
equity position and direct financial
to provide an
structured
has been
benefits
transit
the
In recognition of
transit system....
the county will assume an equity position in
the project,
20
the shopping center development."
profits or revenue at the
based on net
This equity position is
shopping center,
the county will
whereby
These
$100,000.
receive 10 percent of net revenues once they exceed
and services
proceeds will be reinvested back into the transit facilities
the community.
within
By
beyond $100,000,
the equity position on net revenues
structuring
will also
It
times.
there will be no drain on the Center during critical
thus
encourage reinvestment back into the viability of the Center itself,
keeping
net revenues
lower.
Once
the Center
is
and
viable
profitable,
can realize an equity return.
the County Transit Administration
policy,
the County Transit Administration
for all
transit related projects in
is
structuring
By
equity returns
which they "invest."
Putting the Pieces Together
The pieces to community ownership of Northside Shopping Center
coming together.
were
Miami-Dade Housing Services was designated by the
County Commission as the developer of the Northside project and was given
a $30,000
Economic
this
of
Development
project.
the
Dade County Office of Community
grant administered by the
for administrative
They had negotiated
shopping
center
purposes
to
continue
an option agreement
from Tashi
Valley,
28
N.V.
and
for
and
to pursue
the purchase
their
pro-bono
of
prepared a draft for the sale and purchase
Holland and Knight,
attorneys,
The owner placed the sale price at $10
the Northside property.
million.
$1 million would go
addition to the purchase price,
In
toward
renovations and a reserve fund.
To raise the $11 million needed,
their accountant,
structured a deal
equity would come
million in
$2
whereby
1983,
Larry Levine,
the Acquisition Team along with
in
the early months of
from the UMTA money,
million in equity would be added by the Business Assistance Center.
debt would be
of the approximately
comprised
institutions
The
million assumable
$2.5
million borrowed from
and $1 million in
subordinated debt from
mortgage from Teachers Annuity and Insurance,
local financial
$4
$1.5
Dade County for renovations.
an arm of the Greater Miami
The Business Assistance Center (BAC),
Chamber of Commerce,
to
minority
was set up by private businessmen
entrpreneurs
following
the
1980
to provide
The
riots.
BAC
loans
has
commitments of over $7 million from the private sector and financial
institutions.
helpful in
Under the
leadership of Charles Babcock, the BAC was
the early stages of the project by linking
Urban League with private-sector
M-D NHS and the
lawyers and other technical advisors.
The BAC was originally to have been an equity partner with Miami-Dade NHS
and the Urban League of Greater Miami in
equity contribution of $1.5
million.
the Northside project with an
Yet BAC reduced its contribution by
$1 million to an equity participation of $500,000.
They were becoming
uneasy with the project.
The present owners agreed to hold a purchase money obligation for
the $1 million dollars
year.
"All principal
with a simple interest
and the first
years's
rate of 10 percent per
interest and
50 percent of
each succeeding year's interest will be deferred until May 31,
29
1990.
The
sellers' balance of $1,425,000 will be paid on May 31,
with the
1990,
proceeds of refinancing loan to be amortized at 10 percent over 10 years.
starting in June of 1990,
Monthly payments,
year)."
2
1
Yearly
(though
$50,000
approximately
up
payments
interest
will be $18,051 ($216,612
indicated
not
Arthur
in
would
time
that
to
per
Anderson
be
&
Company's mortgage computation summary).
National
financial
local
Four
Bank,
institutions,
Florida National
People's
Bank,
Amerifirst Savings and Loan Association and Miami Savings
Investment Corporation have written letters of conditional commitment for
a total
of $2.5 million dollars on the condition that the other sources
of financing are in place and that a tenant be found for the vacant Sears
space.
lender,
A fifth
to participate.
By September 1983,
also expressed a willingness
N.A.
Southeast Bank,
this commitment would need to be
increased to $2,641,492 as the assumable mortgage would have decreased to
This
$3,858,508.
is
because much of
reducing the principle.
After that time,
May 31,
1990,
service goes
toward
rate of 9 percent amortized
With an interest
over a 30 year basis until
$255,048.
the debt
the yearly payment would be
the remaining balance,
amortized over 10
years at 9 percent would lead to payments totalling $477,208 annually.
Dade County has agreed to additional subordinated debt of $1 million
for renovations and reserves.
until May 31,
This debt is
to be accrued at 6 percent
1990 at which time the principal and prior accrued interest
would be amortized at 6 percent for 10 years.
monthly payments of $16,
457 or $197,
This would
484 yearly beginning in
amount
to
1990.
Given these sources of funding and the debt service on them (see
Appendix C),
including the $696,300 to be paid annually on the assumed
mortgage from Teachers Insurance and Annuity Association, debt service on
30
these finances would amount to approximately $1 million annually prior to
After that time debt service would be about $800,000.
June 1990.
Based on the Courtelis Company's analysis of income and expenses at
Shopping
Northside
Center
assumptions of a static
Appendix
(see
condition
C) with
its
conservative
taking into account an inflation
rate
expected to maintain a cash flow of
of 5 percent the Shopping Center is
just over $1 million available for debt service.
This does not take into
account the fact that leases are being renewed at considerably higher
lease expires in
nor that the Sears
rates,
in a higher rent upon its occupancy.
debt service with little
cover its
22
1985 and will certainly bring
Thus,
the center would be able to
excess profits.
the deal has changed considerably.
Since that time,
The Business
Assistance Center pulled out of the project altogether due to a conflict
conservatively.
up small businesses.
short of this mission as money is
they have even fallen
$500,000 in
in building a Black middle class by making
to black entrepreneurs starting
loans available
Yet,
lie
Their interests
them.
for
The BAC found the project to be too collectivist
in philosophies.
lent out
Tashi Valley, the present owners, agreed to hold the
addition to $1 million already committed.
The Missing Pieces
In
place.
on
the
order for the project to close,
First,
they needed a waiver
prohibition
mortgage,
of
additional
three pieces had to fall into
from Teachers
encumbrances
Insurance
written
and Annuity
into
their
and they needed Teachers to allow the release of the eight
acres for the bus terminal.
Second, they needed an anchor tenant so that
the banks would be satisfied with the viability
center and to assure it
can meet its
debt.
agree to fund this project.
31
and stability
of the
Finally , they needed UMTA to
their
of
all
The
mortgage
these
Both of
the
property.
The acquisition
at
trying
understood what they were
approved
That
and
internally
awaited
the
approval
ear
He
to the project and
the merits
were conditionally
the requests
After 6 weeks,
through.
it
and Annuity Association.
saw
to do,
most sympathetic
on
the only Black man on
Foster,
Insurance
Teachers
at
the Board of Trustees
the
for
looked
They made contact with Dr.
Teachers.
followed
team
mortgage
Teachers'
would weaken
actions
property.
first
land and to allow further encumbrances on
for the eight acres of
the
the
under
from
release
the
piece was getting
easiest
to keep hoping.
and
to bear where appropriate,
to bring politics
project,
of the
makers of the merits
to convince the key decision
people,
right
of
decisions
was to get to the
M-D NHS's strategy
and could not be assured.
others
the
with
rested
three
all
Still,
resources.
pieces with
these
pursued
team
their acquisition
NHS and
Miami-Dade
of Trustees.
Board
the
of
too was received.
an
Finding
be
not
would
so
easy.
Jeffersons
including K-Mart,
not
they were
never
they were
very
Don
the Sears
Most, like K-Mart said
and Zayre's.
Jeffersons
interested,
Manager
to fill
pursued a number of large discount retailers
Stevenson,
space,
tenant
anchor
gave a
interested but had
final
answer,
that were
stores
two
and
Zayre's said
that
too nearby.
The terms offered for the space are much below market rate
at
$2.25
According
per
square
plus
before Sears
left,
to Stevenson,
million annually.
volume of $7
untapped
foot annually
a
percentage
they had a sales volume of $12
had a sales
The Woolco store, which closed nationally,
million annually.
With both
stores gone,
consumer market for a discount retailer
Stevenson feels
above a minimum.
that
there
is
"an
32
in
unspoken
there
the Sears
decision
is
a
large
space.
among major
retail
and where
in
to leave.
present relationships
terminate
the decision to locate there is
he feels
Still,
than the decision
to
the opportunity
they have
they may leave,"
Black or depressed areas,
that they won't locate in
establishments
Though these areas,
suburban
such as Northside,
locations without the city
hassles.
They prefer the clean,
problems.
Inner city shopping centers have high shrinkage,
According to Judd Smalls,
crime.
centers
With the
not warranted.
Metro-Dade police station on the site and hired security,
down at Northside.
pilferage and
President of the Merchants Association,
an image problem which is
Northside battles
may
they do not need the
feel
fact be very profitable, many stores just
harder
crime has been
An informal survey of 11 major malls and shopping
Dade County placed Northside as number 8 out of 11 in numbers
in
an anchor could not be found.
Still,
of crimes.
M-D NHS has tried to find money to do a formal market study to let
the numbers
speak for
can be a viable retail market.
on the center.
soon,
to close
that the center is
to be sold
knowing
the expenditure was necessary.
be paid through June 1985.
that Northside
M-D NHS need that space filled
The present owner,
did not feel
let retailers know
themselves and
The company that is
The Sears lease would
paying the Sears lease
the space and appears to have written
has put minimal effort into filling
off the lease for a loss.
M-D NHS first
planned to use some of the UMTA money for a market
study, but with each delay in a decision by the UMTA administration it
became clear that they could not wait for the UMTA grant.
need the
study and an anchor tenant in
financing and closing on the deal.
place before
getting
They would
the private
Though they had been talking about
the need for a market study for six months, in December of 1983, they
went
to Dr.
Ernie
Martin from
the Office of Community and
33
Economic
Development and requested a grant for the study and a needed appraisal of
Though he suggested that his office might be able to do the
the site.
market study of
conjunction with a more general
study in
They needed a market study specific to Northside
was unacceptable.
markets and business mix, as well as to
retail
Shopping Center and its
out there and looking to be
let the community know that Northside is
to their needs and their business.
responsive
but did not move on it.
Martin agreed to give them the money,
Dr.
that
the area,
M-D NHS was growing impatient and spoke to Congressman Lehman's office
getting a marketing
they were having in
the difficulty
about
Congressman Lehman sent a letter to Dr. Martin which spoke of all
is
that he
importance of
to see this project succeed and the critical
doing
study.
This small expenditure may go a long way toward
showing County support.
finding an anchor tenant,
getting the UMTA money,
and making the project
happen.
M-D NHS has put out an RFP for a market study and has
At this time,
received
whether
two responses,
the County will fund the
from.
corporation,
Meanwhile,
M-D
NHS
will
its
to
to see if
Northside Shopping Center still
time.
national
parent
they will do the study.
awaits a new anchor tenant.
1984 closing date draws near,
not be found in
it
is
clear that an
Yet, Larry Levine has devised a
revised financial deal in an attempt to bypass this missing piece.
has been working with the owners'
representative
which would take into account the
the
not sure where the money will
applied
recently
Neighborhood Reinvestment,
As the May 31,
anchor
has
is not certain
It still
Though they say they will,
study.
feet and is
County continues to drag its
come
expected.
another
to reach a new contract
lack of an anchor
34
He
tenant and which
would redue the purchase price, which is
million (see
already at $9,750,000,
This reduction is
Appendix C).
to $1,352,000
gross rents from $1,712,000
based on the decline in
spring of 1984 (not counting the Sears rent in
for a decline
of
other vacancies has meant an inability
debt needed
the price is
Larry Levine is
With the anchor in
be a fair
the gross rents of the center for the
local
to the sellers
representative,
$7,500,000 due at closing on May 31,
cash down payment equal
1984 will
As laid out in
"the
base price of
(1)
by:
be satisfied
a
to the funds provided by Dade County from the
assumption of the existing first
(2)
million "to
million with a contingent of $2.25
preceding 12-month period equal or exceed $1,750,000."
UMTA grant;
but
not justified.
be triggered at such a time as
letter
price,
and reasonable
close to an agreement with the present owners for a
of $7.5
closing purchase
his
and
the cash flow to cover the
institutions.
financial
million would
the $9.75
without it,
to 79 percent of
to finance a $9,750,000 project and an inability to get debt
financing from the local
place,
presently
The reduced cash flow without anchor space filled
level.
the 1983
1984 which is
the
to
of 1983
from the spring
being paid and will be for another year),
to $7.5
purchase money note to the seller
mortgage on the property."
mortgage;
and,
(3)
a
for the balance secured by a second
be the same as
The terms of the note will
23
previously set forth.
According
to
this scheme,
the bank
loans would not be needed until
such time as the cash flow could certainly carry
into the deal
is
money note by all
upgrading
renovations
and
a clause which increases
the debt.
Also written
the amount of the purchase
reasonable expenditures made prior to closing,
renovation
of
the
property.
This
is
for the
to encourage
to take place now to upgrade the center and to attract
35
an
anchor tenant.
M-D NHS
now the UMTA money.
The missing piece to a closed deal is
their energy and
and its acquisition team have been putting much of
resources into getting these discretionary funds from Section 3 of the
Urban
The
UMTA Act.
sympathetic
Mass
projects since the replacement of Arthur Tiele,
transit
and the phasing out of the Urban Initiatives
Administrator,
sought
Miami-Dade NHS first
Congressman
William Lehman.
the active
former UMTA
Program.
support of Dade Congressman
represents
Lehman
as
to mass
tied
to community revitalization
or responsive
longer
no
is
Transit Administration
and
the district
the
is
Chairman of the House Sub-Committee on Transportation Appropriations, and
in
this capacity,
the Metrorail,
he has brought billions of dollars into Dade County for
People Mover and related transportation projects.
Though
Lehman was aware of the Northside acquisition project, they wanted him to
importance to the community and the benefits of the bus
be aware of its
terminal
of the area's major commercial
to the vitality
hub,
Northside
Shopping Center.
through the efforts of Gail Williams and Lynette Williams,
M-D NHS,
had gathered broad political
D.C.
Washington,
Congressman
led
in
Lehman and
by State
Senator
support and brought much of it
October
the UNTA
to
Carrie
to make
1983
Meeks
and
President of the Urban League of Greater
Barbara
Carey;
community
leader Athalie Range;
Anderson & Company; Don Stevenson,
Scurr,
included
Miami;
Dade County Transportation.
of his strong support for
points
their
administration.
with them to
The
T.
to
clear
delegation
Williard
was
Fair,
Metro Dade Commissioner
Larry Levine from Arthur
Manager of Northside;
and Charles
Congressman Lehman assured the group
the project and his commitment to working
36
towards an award.
24
Congressman Lehman has been very supportive of the project, meeting
Elizabeth Dole.
with UMTA officials and Secretary of Transportation
He
has gone through political and administrative channels to try to get this
Yet,
project approved.
even given his political
of Transportation
Department
he
has been
by the Dade County
Lobbying efforts
to move the UMTA grant.
unable
position,
channels has
through normal administrative
also proven unfruitful.
progress
All
came
to
Administrator, Ralph Stanley,
new UMTA
took over the Administration.
He put a
when
1983
grant programs subject to more review.
on all
freeze
the
late
in
a halt
who were pushing the project found
themselves
in
Those within UMTA
positions
with
little
clout.
It
has become clear to the acquisition team that in
UMTA money,
of
they would have to enlist the political support from the top
Congressman Lehman, as a Democrat has
the Republican Administration.
he can.
done all
order to get the
To get the UMTA money down to Miami will take a thrust
from within the Republican Administration.
The strategy
presently being pursued by Gail Williams,
Lynette
Williams and their team of supporters has been to make as many inroads as
to the top of the Republican Party that
they can to get their message
this is
and is
an important project for the economic development of Black Miami
a project that makes sense.
that while his energy in
community,
By
Miami to date has been directed toward the Cuban
that he should not
that he needs
turn his back on Miami's Black community,
and that he needs
to recognize them,
garnering
Republicans based
the
They want President Reagan to know
support
in Miami,
of
Black
such as
37
their support.
Republicans,
influential
lawyer Al Cardinas who is the
number
succeed,
efforts
their
Whether
Republican
the
on
Northside
does not come
through.
transportation
projects
project
gets
project,
its
funded is
or
and a
and make
agenda
a
it
tell.
time will
other
finding
UMTA.
at
priority
put
to
trying
is
team
case the money
funds from other
There are talks of shifting
this
How and if
County money.
Given the merits of the
now mere speculation.
the
for community economic development,
potential
great
acquisition
the
to devise a contingency plan in
Plans are underway
Businesses,
and Minority
top of the Republican Administration,
groups,
lobbying
of
the
those at
to
close
people
on Small
President's Commission
Chairman of the
energy already expended and support garnered,
statement of the government's
its
sad
would be a
failure
of
commitment to the wellbeing and vitality
Black Miami.
of one of
way from an idea for community control
in
Black Miami
to what may soon be
forward with
moved
the
their
particular
technical
clout.
But,
receive
and
asset
assistance has been the greatest
them.
decided
to pursue
this
Williams and Lynette Williams were
Gail
were
many people
in
busy
a big way.
telling
why they could not do it,
and that the
that
time was ripe for action.
38
sector
private
of
In
pro-bono
to the project.
"the
odds were
all
project
and no political
new
this
Northside
they felt
team
sector.
the public
They believed in
them
consistently
of a committed
They had no money, no track record,
they had dreams
explaining
and
sector
to solicit
ability
When M-D NHS first
against
support and guidance
from both the private
individuals
the major economic bases
M-D NHS has
reality.
a
long
has come a
project
The Northside Shopping Center acquisition
in
town."
project.
While
girls
was
the mood in
too
big
and
Dade County
They were prepared
to see it
through.
The Northside project is
much
to
imagination
in
great
revitalization,
for
The M-D NHS strategy has been to
needed to move forward and to seek out support to fill
They gained that support through their energy,
those missing pieces.
feasibility of
the numbers speak for the
by letting
professionalism and commitment,
financial
potential
to the site.
especially after a visit
determine what is
the
see
It does not take
very "sexy" and exciting.
the project and by showing off "their shopping
As more pieces have fallen into place, others see the work that
center."
has gone into the project and the progress that has been made.
Those who
The project is
were once skeptical are now jumping on the bandwagon.
almost infectious.
The Northside project has great potential for success because the
center is
alive and viable,
still
easily be distressed.
M-D NHS,
though five years from now,
it
could
and their joint partner the Urban League
want to own the shopping center now while it
is
still
relatively healthy
and profitable.
They want to breathe life into Northside and the Black
community before
it
Somewhat in
becomes deteriorated.
the philosophy of the NHS movement is
the stategy of
working at the edges in areas showing signs of decline which can be
stopped before it
happens,
rather than in
The present effort at community ownership
crisis
reaction as it
is
an intervention
the hard core areas of poverty.
of Northside
The deterioration at Northside,
could lead to a widespread deterioration in
physical
characteristics
neighborhoods.
of West Little
not so much a
to prevent future crisis in
urban area and to use ownership of a viable market
objectives.
is
if
an
to further community
allowed to continue,
the social,
economic and
River and other surrounding
With active community support, Northside Shopping Center
39
can become major catalyst
for the economic
community.
40
development
of Miami's Black
CHAPTER THREE
A BLUEPRINT FOR THE FUTURE
Miami
get closer
critical
to
toward
look
is
implementation
to
Shopping Center
turning Northside
for
the
energy has gone into
community
revitalization and
economic
themselves have not
defined or planned out, mostly due to an orientation
yet been clearly
and
preservation
community
plans
for
Yet the economic development strategies
development.
toward
plan
most of their
To date,
neighborhood
and
future
the
and into
acquisition process
for
it
to actual ownership of Northside Shopping Center,
maximize all goals.
around
the Urban League of Greater
partner,
As Miami-Dade NHS and their
neighborhood
self-determination,
than
rather
stability
toward
and because the more immediate goal
is
NHS
in
ownership.
Present Objectives
At
my
present,
to
relation
Center as
the Northside
it
the
is
it,
want to renovate
Transit
compaign
at
aimed
are
project
employer in
largest
the
new
These are all
Through
to acquire
and
River
attempts at
these efforts
at
Northside
to target
target area,
those jobs
to the Metrorail
link
marketing and promotional
and
increasing
consumer
and
revitalization
local newsletter.
41
increased
jobs but to
to minorities and people
these positions
traffic
attractive
making the center
mostly by working in
Merchants Association and advertising
Shopping
They also
area.
target
their
M-D NHS hopes not only to keep exising
support,
create new ones,
tenants
of M-D
objectives
the center as a
establish
attracting
at
and profitable.
West Little
of
and undertake an aggressive
System,
the center.
consumer
understanding
in
the
conjunction with the
in
the M-D NHS
community
"truly
it
community and making
the
to
stock
do
more
to
area.
A long
interest
once
shares of
high capacity by selling
healthy and operating at
the center is
more
their
portion of
a
divest of
to eventually
is
range goal
target
their
and commercial development in
residential
becomes
funds
the
of
some
use
to
like
would
they
profitable,
Center
the
when
future
the
In
support.
of
sources
from uncertain
and independence
stability
budget for future
operating
own
to their
venture as a way to contribute
sees this
M-D NHS also
as was
owned,"
the
intention.
original
Community Ownership Versus Private Ownership
that community
Those close to the Northside acquisition project feel
the
of
needs
important because
is
ownership
extracted
the
from
Community ownership would mean
active
and
recycling
in
the
providing more
community
local
The
jobs.
support of Northside
Don Stevenson,
control,
to assure
a built
in
them to
key to
this
the
local
scenario
Black
is
the
Shopping Center which would create
M-D NHS and much of
project saw the sale of stock to the
responsibility
would allow
It
thus stimulating
community
local
local
control,
and open up more jobs to the community
profits
community
need of active
the community.
to be kept in
profits
keep money
economy
they saw
turn around.
to
and local
the form of
to faraway places and
local economy
Northside which was in
at
a cycle of decline
support
to shop and work.
people
money being drained out of the community in
They saw their
profits
place for
on
returns
their
in
interest
more
the center as a
than in
investment
have
and
community
outside investors cannot understand the
at
the
Center.
the the acquisition team of this
community as the way to assure
for the center,
clientelle
42
and
local
to recycle
profits
back into
There seems to be some
have a strong incentive to shop at Northside.
internal
invested would
Community members who
the community.
the hands of
uneasiness with the "community-ownership" being in
a partnership of two non-profits serving the Black Community, as the deal
has now been restructured.
That link of direct profits
to the community
no longer holds.
ownership is
the project that once
the feeling among those involved in
There is
achieved that the hard part will be to convince the people
They feel it
of the community to shop at Northside.
will take an all-out
education process to make people understand that Northside is now a
"Black establishment'
and locally owned,
and that their support will mean
to Northside as the retail hub of the area and thus vitality
vitality
its surrounding areas.
The money will stay in
local economy.
stimulating the
the Black community,
to
thus
will also lead to jobs for people in
It
the community.
Generating
this needed community support needed,
unless the community sees real changes at Northside and
may be difficult
real
benefits coming back to the community.
stimulated,
and maintaining it,
the profits
that now
leave
Unless business can be
the county will
debt payments, not back into the local economy.
without active community support of the center,
different than it
instead
There is
go into
the risk that
Northside will
be no
was under private ownership.
Community Participation
Key to the success of Northside Shopping Center and real progress
for community
economic development
not be assured over the
Shopping
Center
is
is
community
involvement.
That can
long run without the feeling that Northside
truly responsive
to community needs.
The major
partner missing from the Northside acquisition process has been the
43
This
broad-based support of the people in the surrounding neighborhoods.
is
on those who put their
not to be construed as a negative reflection
of the newness of the CDC
energy into the project, but as a reflection
trying to replicate
Miami's Black community.
the
and
attitude
and on the general defeatist
success of CDC's elsewhere,
apathy in
in
the diffculties
Florida and
movement in
Many promises have been made and
broken.
While
it
is
the
that
true
objectives
for
managed
a well
and
maintained, attractive and profitable center in the community, responsive
is
to local consumer needs,
overlook the fact that Northside Shopping Center is
the community to shop,
work.
lead to jobs for people in
community
support of
the community to
the center already
does
the community with most employees coming from
River,
the nearby West Little
not just a place for
also a place for people in
but is
At the present time,
one must not
an impressive and laudable goal,
Broadmoor,
and Liberty City communities
according to a recent survey by M-D NHS and the Merchants Association.
Community ownership won't necessarily change
improved business and jobs,
the existing
link between
though active marketing may increase both.
Given local control and stated economic goals, responsiveness
to the
community as an employer is equally, if not more, important.
As the major single employer of the Black community of Miami,
NHS and the Urban League will
substantial
improvements
for community
residents
M-D
have a unique opportunity to facilitate
to the economic well-being and quality of
through sensitivity
to the real
life
economic needs.
Such responsiveness to the people of Miami's Black community would create
a loyalty and "sense of ownership" by community members both as shoppers
and
as employees,
and could
lead
to meaningful
44
community
economic
development.
community-based economic development are
The goals of traditional
As expressed the The National Economic Development and Law
numerous.
Center's book,
A Lawyer's Manual on Community-Based Economic Development,
"Some of the more widely shared objectives
include the following:
(1)
the development of business and economic institutions
which increase the income of community residents;
(2)
provisions of more and better employment opportunities
both inside and outside the community;
(3)
participation in the ownership and management of such
firms and institutions by the residents of communities
in which they are located;
(4)
human and technical
the development of more skilled
available in such
presently
are
resources than
communities; and,
(5)
the development of economic, social and political
which the community residents can view
institutions
be responsive to their
with pride and which will
collective wishes." 2 5
Community representation
five objectives
and control
is
believed
for community economic development,
lead to self-sustained economic growth,
central
which are
a reduction in
to
these
meant to
poverty and a more
equal distribution of wealth and income.
The draf t Contract
dated December 14,
for Sale and Purchase of Property, version #6,
1983, between Tashi Valley, a Netherlands Antilles
Corporation and the joint
venture of M-D NHS and the Urban League of
Greater Miami (now know as "Forty Acres Plus A Mule,
"The center is
Inc.") states that
the only major regional shopping center in,
largest single employer of residents of, Liberty City.
and is
Buyers'
the
sole
purpose for and intention in entering into this contract is to insure the
continued
employer,
existence
shopping
of
the
center
as a
major
and
vital
community
facility and economic factor of and for Liberty City
45
residents by means of transferring ownership,
control, operation and
6
management of the center to local interests."2
(Though Northside is
in
actually
Liberty City,
to refer to a
extended
not
the boundaries of Liberty City are commonly
larger area of Northwest Miami taking in
adjacent
connotations of
areas of Black Miami and sharing with them the negative
Liberty City.)
riotous
the
Under
Inc.,
of Forty Acres,
long
as
their Contract for Sale and
as they are true to their stated purpose in
Purchase as acting solely in
local
a non-profit
be 'community-owned'
shopping center will already
the
interest,
ownership
of the residents of Miami's
the interests
It is important that M-D NHS and the Urban League
Black community.
remain truly responsive to the people and give them a voice and the
this ownership which has been undertaken
of
benefits
on all
of the
community's behalf.
Profits to Meet Objectives
most
Though
community welfare;
in
think
CDC's
terms
in
of "trading
to
For CDC's and other non-profit organizations,
purposes.
"an
non-profits,
501(C)(3)
community
meet explicit
charitable
of its
There is not necessarily a
are not an objective for their own sake but as a medium through
profits
which
the two.
between
for
profits
so that profits become one of several target variables
27
the CDC's implicit objective function."
tradeoff
off
furtherance
of
organization is
to Reg.
organization may meet
thus
and
to
their
further
1.501(C)(3)1(e) of tax law on
the
requirements
of Section
operates a trade or business as a substantial
although it
activities,
According
goals
if
the operation of such labor or business is
the organization's
exempt purpose
or purposes
and
if
part
in
the
not organized or operated for the primary purpose of
carrying on an unrelated
trade or business..." 2 8
46
revenues from Northside Shopping Center are most desirable to
Thus,
the extent that they are not gained at the expense of community goals and
to the extent that they can be used to finance and leverage community
economic development and commercial and community revitalization for the
empowerment and wellbeing of the community.
programming,
is
as advanced by British development
benefits,
subject
a
economist Dudley Sears,
of
average
weighted
community
solvency." 2 9
to the constraint of fiscal
Using this concept,
Inc.
of
maximization
implicit
"the
The objective of development
the question facing Forty Acres Plus a Mule,
then becomes one of how to maximize
to Miami's
community benefits
Black community and the neighborhoods surrounding the shopping center
Given
itself.
to the monies generated by the venture
subject
the
important
to proceed
carefully so that actions are taken which will not sacrifice
the income
multiple
needed
priorities
of community
for future benefits
for the sake of immediate goals.
future benefits are discounted,
maximization
of benefits.
ownership of the center in
most benefits from it,
the future.
is
it
ownership,
they should be included
Put more
practically,
it
is
as
employer
understood
the
important to use
such a way that the commuity can derive the
taking into account benefits derived now and in
to the center,
but would be complementary
and continued health as long as the vitality
itself,
weighing
Using Northside Shopping Center for community benefits would
not be detrimental
vitality
in
Though
the major community
and major
to be
catalyst
the first
shopping
facility,
for community
priority for
economic
to its
of the center
major
community
development
is
the present and future gains of
the communi ty.
Bob Vdenek,
President of the National Congress for the Community
47
Economic Development has warned that the track record
While he feels that it
not good.
wholly owned by CDC's is
upwardly mobile jobs,
hiring,
in
social goals such as preference
to have
is
important
job training and
he warned that one must be careful not to put a lot
of external pressure on the business.
continued success of the venture.
that,
Beyond
plow the
the need to first
He sees
the venture before anything else
money back into
of businesses
in
order to assure the
the money available
should be used for administrative support of the CDC,
then for support
services.
According
most CDC businesses are not usually profitable
to Vdenek,
and few have money to put toward community goals.
Once the anchor space is
on the "up side,"
Center has a great potential
Yet Northside Shopping
leased, the center will be able to carry existing and new debt service
with gross
rents
of
$1.7
Given
million.
with the
rent structures
percentage sales above minimum provision and the ability of management to
sign on new
generate
the center has the potential
to
center
be
leases at higher rates,
gross
rents
upward
million
to $2.2
the
should
revitalized to 1978 sales levels.
As the deal has been structured,
anchor
in
the risk of losses without the
tenant has been greatly reduced by
debt until
the deferral
such time as the space has been leased.
of $2.25
million
The reduction in
gross rents of $270,000 annually once the Sears lease expires will be
offset by the deferred debt service.
center can not hope to realize
profits needed to assure
its
Yet, without an anchor tenant, the
full
potential,
nor bring in
the
the security of M-D NHS and to meet other goals
of community revitalization and economic development.
As the health and vitality
of Northside Shopping Center is
to achieving other community goals and is
48
important in
its
paramount
own rights as
revitalization of the center and
the commercial center of the community,
efforts
its
to assure
priority of
should be the first
continued success
Profits generated by the center should be used
community ownership.
first to capitalize, improve and maintain Northside Shopping Center.
Turning Northside Around
through economic development ventures
The road to self-sufficiency
and
the
to
ability
first
goals
organizational
objectives
and
for
and for community economic development can be achieved
revitalization
only if
meet
successful and generating income.
is
the venture itself
The
to reverse the deterioration that
goal of community acquisition is
has beset Northside Shopping Center and to make it the centerpiece of the
for the revitalization and development in
community and a catalyst
the
surrounding area.
a brief
is
Below
Shopping Center
success
of
examination
and steps
in the future.
the problems
these
to solve
proposed
to the center and to tap new markets.
depend on
the mix of products
regional
level
the
also
many positive
the potential
it
shopping center.
most feel
this time is
aspects
to achieve,
turn,
will
a hospitable
of service,
of Northside
once
again,
Shopping Center
its
status as a
These too will be examined.
Having spoken to many people
Center,
in
This
and management.
There are
that give
to maximize
and services available at the center
of community needs,
atmosphere
problems
Success will depend on the ability to draw
customers
reflective
facing Northside
familiar with Northside Shopping
that the major problem at Northside Shopping Center at
the lack of an anchor tenant to take over the Sears space.
To paraphrase,
the Urban Land Institute's
49
Shopping Center Development
the determining factor for the character and
tenant or key tenants is
center.
success of the
consumer needs,
meaning
less
Though the Sears'
the entire center.
vacancy
this
is
to meet their
lower
percentage
the space at
image on
"dead space," projecting a negative
Northside Shopping Center is
year,
and
less sales,
traffic,
empty store which comprises 40 percent of
The
rents.
many customers go elsewhere
an anchor store,
Without
the strength of the major
for a regional shopping center,
1977,
Handbook,
costly
to
the
be paid for another
lease will
tenants
other
as
at Northside
compared to the business that could be drawn given a new anchor tenant.
service
Present cash flow before debt
to drop by $270,000 a year.
expected
when
projected at $818,000
is
the Sears'
little
lease
is
not included.
mortgage of $696,300,
When combined with a debt service on the first
there is
cash flows can be
lease on the Sear space expires next year,
As the
margin for additional vacancies, major expenses,
Without an anchor tenant, acquisition of
in percentage rents and so on.
Northside
Shopping
additional
debt is
declines.
Center may be a
risky
undertaking,
even
though
to be postponed due to favorable negotiations with the
present owner.
In
order
to bring in
market
study
be
population.
an anchor
undertaken
to
The market study is
accurately
it
read
is
imperative
the
the primary sales kit
interest of prospective major tenants.
viability
tenant,
demands
that a
of
the
for gaining the
This hard data will speak for the
of the area to support the anchor tenant and for the anchor
tenant to provide the consumer goods which the market demands.
untraditional
shopping development area such as West Little River,
important that a professional with access
give added credibility
to major retailers
In an
it
is
be hired to
to the report and to gain access to the retailers
50
the
arrangements
lease
looks good on paper,
if
a respected professional
in
the market
If
tenants.
themselves as potential
and if
are suitable
the field will put support behind the feasibility of the site and market
it,
then
the
filling
for
potential
the
its
and ensuring
site
profitability will be greatly enhanced.
Also
overcoming
comfortable,
the
to
critical
negative
its
success
of
image and making
and attractive
re-landscaping and parking
Shopping
Northside
the
Center
center a safe,
clean,
the center,
Upgrading
place to go shopping.
is
lot improvements as well as giving attention
to continued maintenance and cleanliness should make Northside attractive
to a larger consumer market.
the bottom line,
center itself
is
Unlike private investors who see profits as
for a non-profit organization,
important only to
of the
profitability
Investing in
of the community can be addressed and solutions maximized.
the appearance of Northside not only makes good business
provides external
benefits as well.
to the community,
instilling
nearby.
It
the needs
the extent that through it
pride in
sense but
It may make the area more amenable
the those who frequent
it
may create a feeling of Northside as being responsive
community and a part of it.
or
to the
The message portrayed to those outside of
that,
though you may
the community by its
most visible economic entity is
have written us off,
we have faith in ourselves and are investing in
own
It
vitality.
may also
leverage
surrounding areas and serve as a catalyst
revitalization in
additional
investment
for commercial
in
our
the
and retail
the area.
An architectural
plan has already been drawn and bids are out for
the renovations to take place.
even before
live
M-D NHS is anxious for work to begin,
transfer of ownership. As structured,
51
major renovations will
be added to the purchase price upon sale and held as additional
the
owners.
present
This
just
was
the
incentive
debt by
needed
for
implementation of the renovation plans.
Beyond bringing
an anchor
in
Northside Shopping Center,
is
tenant and undertaking renovations
most important to
to
the viability of Northside
aggressive management and overcoming "the prevailing mythology that a
shopping center
in
a predominantly Black neighborhood
had
chance
little
of success."3 0
An MIT Case Study, Mondawnin
Black area of northwest Baltimore.
early success and its
with a primarily Black clientele.
the
The case followed its
downfall and subsequent loss of Sears,
experience in
change of management to one with little
successful managers,
similar to the
of a 350,000 square foot shopping center in
Northside experience,
predominantly
Mall depicts a case,
after
a
shopping centers or
Using the experience of the early
the
'prime challenge they faced was to create and maintain an
image of quality for the Mall. The prevailing general
assumption was that a shopping center adjacent to a Black
community would not carry quality merchandise and could not
In fact Mondawmin had always carried
be a success...
quality merchandise and the market for it always existed for
it in the Mall... To counteract the negative assumptions
the
about shopping centers in a Black area required
on maintaining an
management to work continually
exceptionally clean center with excellent security and good
They established links with a number of
public relations.
Black leaders and met with them on a regular
influential
basis to keep informed of what was going on in the Black
Activities and special events were planned to
community.
appeal to the different group that patronized the Mall...
An
held on a regular basis at Mondawmin.
(They) were all
enjoyable, attractive, successful and safe Mall environment
was understood to be in everyone's interest."3 1
Public image was key to success.
Many familiar with Northside
faces an image problem.
Shopping Center agree that Northside
Though physical
52
renovation will alleviate
some
of the problem,
will
management effort
a strong
While the center is
Northside an attractive place to shop.
8th of 11 major Dade County shopping centers in
is
Association would
quoted to be
numbers of crimes and it
down since the location of the Metro-Dade Police
agreed that crime is
of
end
Substation at one
to make
be required
the
the site,
Merchants
the
President of
to see the hours of the security agency dropped,
like
with more hours added to the service contract with the Metro Police.
Metro Police,
is
though more expensive,
believed
The
to be a much more
security force.
effective
Professionalism was also seen as important to the success of the
center,
benefit all
consumer needs and thus
reflect
as was a tenant mix that will
Merchants complain of individual
merchants at the center.
tenants who keep irregular hours or go home early,
neighborhood merchants and more chain stores.
Though more chain store
also leads to large leakages of
it
may be one solution to the problem,
A solution
community money to headquarters outside of the community.
more
consistent
entrepreneurial
assistance
and
with
economic
community
professional
standards
required
displays and
signage.
Remodeling
of individual
be
technical
of all
including dependable operating hours and design control,
windows,
would
development
training for small community business persons,
stricter
less
and advocate
tenants
such as on
stores
should
also be encouraged.
Other initiatives
with
the
promotion
activities.
Merchant's
important for Northside's success are involvement
Association
of Northside
Shopping
Northside needs
Black people only.
for
Center
to reverse
advertisement
and
outreach
and
image as being a center
for
collective
its
and
community
Making Northside Shopping Center amenable to not only
the local community but to those outside of the community will bring more
53
James Kurps of the Courtelis Company sees a
wealth of the community.
renovations and aggressive management.
anchor tenant,
an article entitled "Starting With a
As stated by Brooke Bassett in
the Economic Development and Law Center Report, Spring
in
the primary cause
"Poor management is
1983,
ideal
The
manager
for
have
will
the
benefit
commitment of Donald Stevenson,
the
of
experience
past
M-D NHS and the Urban
experience
present
and
the present shopping center manager who
ownership.
to remain upon community
has agreed
the venture's
venture would have
the
The
failures...
factor in
your community."
operating a similar venture in
League
of business
a crucial
selection of the right manager is
success.
given an
to turn Northside back into a regional mall,
real potential
Feasibility"
economic base and the overall
thus raising its
into the area,
dollars
The challenges that lie
ahead for Mr.
Stevenson are substantial as are the benefits that the
community can
look forward to with a rejuvenated Northside
Shopping
Center.
new
a
Given
management,
anchor
outreach
and
a
tenant,
for
renovated
community
Northside Shopping Center as a major retail
Northside
Avenue.
support
the
prognosis
the area make
the
strengths.
location especially attractive.
located at a busy intersection,
Both are major access roads.
for
shopping center looks good.
Shopping Center has many potential market
Future plans in
center is
aggressive
facility,
The
Northwest 79th Street and 27th
As much traffic goes by Northside,
the challenge will be making the center attractive enough to entice the
traffic
The
December
into Northside.
opening
1984,
is
of
the Northside
expected
to serve
Metrorail
Station
almost 2,400 patrons
54
scheduled
daily.
for
"About
almost
one half of these patrons are projected to arrive by feeder buses,
will be accomodated on the site,
but the station will eventually need a
3
capable of handling about 950 cars daily."
parking facility
The Northside transit
development
linkage to
for
accessibility
of
the center.
greatly enhance
the
station with its
easy access and high volumes of
leaving the station,
people entering and
Northside
and parking facility
the center as the hub for feeder bus traffic
riders will
2
proposed
Shopping Center's proximity to the station and its
Metrorail
312 cars
Initially,
a third by walking and the remainder by automobile.
is
which may also enhance
to the area,
new
to attract
expected
Shopping
Northside
Center.
development is
A major industrial
presently being planned for an
area just southeast of the shopping center along 79th Street between 22nd
and 27th Avenues
which is
is
in
The proposed 90 acre industrial park,
Liberty City.
expected to generate 1,500 new jobs and about 50 new businesses,
to "anchor
also expected
northwest Dade area,"
33
the revitalization of some 430 acres in
in
Seven million dollars
Federal,
the
State and
County funds have already been secured for land acquisition and basic
support services.
Community
revitalization
project is
As stated by Dr. Ernest Martin of the Dade Office of
and Economic
Development,
"This
is
the
largest,
project that the county has undertaken
expected to be ready for leasing by 1987.
It
single
so far."
The
will surely have
of Northside Shopping Center and on
an enormous impact on the vitality
the area in general, while providing much needed jobs to area residents.
Northside Shopping Center is
in
the near future.
A revitalized
in
an area expected
to grow and develop
Northside Shopping facility
expected to contribute to that revitalization and in
turn can be expected
to reap the benefits from the healthy environment around it.
55
can be
the continued
While
is
it
priority,
success of Northside
Shopping Center is
only a priority to the extent that it
a high
meets the goals of
amenable to consumers,
creating jobs
and generating an income stream for community development.
Care must be
the center,
revitalizing
taken to assure
making it
that the reinvestment
of income back into the center is
For example,
of the community.
in the sole interest
not abused, but is
lush shopping center offices and expensive furniture would not be the
most optimal use of the income.
Cost controls need to be enforced by
management.
Stability of Non-Profits to Implement
Distribution of Net Income:
Activities for Community Development
Following capitalization,
maintenance and operating expenditures for
the center the question remains as to the distribution of the net income.
According
for
to the joint venture agreement
Shopping Center,
interest in
the purchase of Northside
divided 60 percent for M-D NHS
the center is
and 40 percent for the Urban League of Greater Miami.
(This would be
beyond the 10 percent of net profits above $100,000 that the County would
the area.)
then use for transportation services in
certainly reasonable to expect some income to flow back to the
is
It
non-profits
to support
the administration of operations which serve the
Black community and to ensure the stability and continuation of the nonin
profit
interests
have
put years
of
M-D NHS and the Urban League
the shopping center.
sweat
equity
into
the
acquisition
of Northside.
Community economic development has increasingly been turned to as a
strategy
to promote self-sufficiency among community-based
nationwide.
Cutbacks and uncertainty
in
private foundation support and difficulties
organizations
public sector funding,
limited
obtaining private sector
support have made community economic development necessary for the very
56
for
successful
administrative
profits
seen as a goal
for State funding and is
a major criteria
CDC's.
of
distribution
Still,
of poor
In the State of Florida, eventual fiscal self-
and minority communities.
sufficiency is
the interests
serving
survival of many non-profit organizations
net resources
funding should be kept in
generated and
the non-profits
balance with the
the community.
for
level of net
goals of community ownership
the alternative
the benefit of people in
to
for
To the extent that traditional
sources of operating grants and other funds can be generated by the nonprofits for their traditional activities, money gained through the profit
venture should be used only as a supplement and as a safety net for
dwindling public, foundation and private support.
Distribution of Net Income:
Meeting Community Goals
Beyond revitalization of Northside Shopping Center and generating
operating
income
for the non-profit organizations,
ownership of the
Center will provide a unique opportunity to further economic development
goals as an employer and major economic factor in
upgrade the quality of
life in
the Black community.
the community and to
The challenges are
many.
Under tax exempt status, money derived from the venture must be used
for "related" activities,
to the
those activities that complement or are related
charitable purpose of the organization.
considered
purposes,
education.
'related'
when
it
the
such as alleviating
The activity,
the
helps
CBO
effects
"A business activity is
achieve
its
tax-exempt
of poverty or providing
however, cannot be operated only to provide
additional money for the CBO,
but must be integrated into the CBO's tax
exempt purpose."34
57
The money generated from Northside Shopping Center is to be used for
The tax-
the benefit of and for the community residents near the center.
of Northside not only as a
exempt purposes include the revitalization
shopping center but as an employer and an economic factor of and for
used
actively
in
Ownership is
should
be
in
the people
for
life
to further a better
the area.
Distribution of the benefits of ownership
their behalf.
managed
the venture should be
Beyond just providing jobs,
community residents.
to
conscientiously
maximize
return
the
to
the
community.
their interests
Only by acting on behalf of the community and in
will
Forty Acres Plus a Mule,
Inc. be recognized by the community as a
At that time,
legitimate representative of the community interest.
community
can
of Northside
"ownership"
to internalize
be expected
the
Shopping Center as their own, and can be expected to support the center
actively.
Giving
local community residents a real voice
in
the center
through particpation in decisions affecting them would give even more
strength to the legitimacy of the center as being community owned.
any case,
In
to improve the
responsiveness to community need and efforts
economic condition of the people to the greatest extent possible,
are at
the heart of community acquisition.
The challenges
that
lie
ahead
involve
resources to meet economic development goals.
investigation
into
the
economic
health
making
the best use of
This will first
of
the
require an
community
and
an
understanding of the problems that members of the community face in order
to evaluate their basic needs.
Such analysis is
crucial for a systematic
approach to problem solving.
Defining the Impact Area
The
first
step
to
the
anaylsis
58
is
to
define
the
geographic
neighborhoods that would most likely be impacted by the project and which
would be the natural community constituency of Northside Shopping Center.
would be proximity to the center, which is
The most obvious criteria
N.W.
located at
79th Street and 27th Avenue,
M-D NHS would certainly
include the residents of West Little River and Broadmoor,
The M-D NHC CDC Service area runs
the service area for M-D NHS as a CDC.
from N.W.
as they are in
N.W.
37th Avenue or the Hialeah boundary on the west,
Avenue on the east,
106th Street on the north,
N.W.
following the Little
79th Street on the south.
River Canal on the northwest and N.W.
7th
area corresponds roughly with, and forms the majority of,
This
the West Little
River Census Area.
The area to the south of the Shopping Center,
the Model Cities Section of Liberty City,
Census Area,
part
of
the
Northside
which forms the Gladeview
the impact area.
Shopping
Center
workforce.
conditions there are also somewhat more depressed than in
River area.
Residents
in
Gladeview
River census tracts,
like those of the West Little
residents,
large
should also be included in
the northern half of
Economic
the West Little
like West Little River,
Gladeview,
form a
should be
equally defined as part of the community to which Northside Shopping
a major employer and economic factor in
Center is
of life,
and as part of the community on whose behalf Forty Acres Plus is
purchasing
the center.
The Gladeview Census Area runs roughly from N.W.
38th Avenue/Hialeah on the west to N.W.
N.W.
the residents' quality
79th Street on the north to N.W.
7th Avenue on the east,
and from
62nd Street on the south.
The
combined West Little River and Gladeview Census Areas are approximately
within a two mile radius or half hour walk to Northside Shopping Center
(see Appendix D).
59
Area Characteristics
in
63 percent of the people in
the Target Area,
population,
for only 3.1 percent of Dade's total
Dade County.
white, many of whom are Hispanic.
almost totally
located to the west of 27th Avenue.
the White population is
this area
Blacks in
Blacks in
comprise approximately 13 percent of all
The
Most of
Most of the
the West Little River Census Area in
Hispanics are located to the west in
a neighborhood often called Broadmoor.
the population in
River and 87
West Little
While the Target Area counts
percent of the from Gladeview are Black.
remainder is
of the 51,400 people
to 1980 census data (see Appendix D),
According
Since 1980,
the Black share of
has increased as many Whites
these neighborhoods
have
moved from the area.
A profile
the Target Area reveals
in
of the residents
people of the Community are young, with a median age in
that the
the mid-20s as
opposed to the mid-30s for Dade County and with many young families.
Fifty-six
compared
percent of the family households have children under 18 as
to 45 percent for Dade.
without husbands present.
Of these 39 percent are headed by women
In Gladeview alone,
over half of all
with children have female heads of households,
percent for all
The mean
families
as compared to only 21
of Dade County.
income
households
for all
$20,402 while for the Target Area it
incomes were slightly
in
Dade County
was only $14,666.
higher at $23,472 and $15,559
For a
Target Area
respectively.
distribution
of household income,
income shows that half of all
while the median income in
better
in
1979 was
Mean family
for Dade and the
unmderstanding of
the
examination of the median household
Dade households had an income below $15,571
West Little
$8,566.
60
River Census Area was a mere
Unemployment and Underemployment
Target Area Poverty:
Upon examination
the most overwhelming
poverty.
is
1980 census data
of the
problem
the 1980 Census of Population and Housing using a poverty
index which provides a range of income
size,
number
varying by
family
householder
or unrelated person.
four was $7,412 in 1979.
age
and
of children
The income cutoffs are adjusted each year to
28.5 percent are
percent for all
quarter of all
the family
of
The poverty threshold for a family of
in
living
of Dade County.
poverty,
the
in
determined
persons for whom poverty status is
Among all
Target Area,
cutoffs or "poverty thresholds,"
the Consumer Price Index.
reflect changes in
as compared to
15
poverty affects over a
Among families,
Target Area families as compared to 11.9 percent for Dade
Poverty incidence is
at 43.1 percent.
even higher among female headed households
More than half of all
female headed households with no
husband present and with children under the age of 18 are
poverty.
of
1979 for families and unrelated individuals
Poverty status in
defined in
County.
1979 conditions,
the prevalence
is
target areas
the
in
covering
These
statistics point
to very real problems in
which have certainly worsened through the early
To understand why poverty is
the comunity,
1980's.
so prevalent in
this target community,
of the people.
one must look at the employment characteristics
percent of the Target Area persons over the age of 16 were in
civilian labor force.
County as a whole.
This was comparable
Of those in
from unemployment as compared
1980 census data.
living in
to
60.9
the 1980
the 60.5 percent for Dade
the labor force,
7.0 percent suffered
to 5.0 percent for Dade County according
Unemployment among women in
percent for the Target Area women,
the labor force was at 8.4
while for high school
61
to
dropouts it
was
Both were higher than the County rates of 5.7
as high as 53.8 percent.
Black community has increased since that time.
the
especially in
Unemployment,
percent and 43.7 percent respectively.
unemployment alone
Still
the Target
does not account for the very high incidences of poverty in
Area.
Most striking is
in
which
a householder
employed
was
households were living in
poverty.
among Gladeview families where
the Target Area
households in
the fact that of all
in
16.4
1979,
the
of
percent
especially acute
The problems is
it exceeded 20 percent.
Dade County,
In
only 7.1 percent of family households in which a householder worked in
1979
lived in
Female headed households are
poverty.
Among those households
in
poverty,
prone.
the householder worked,
the Target Area where
lived in
31.8 percent still
especially
to 19.1 percent for the
as compared
County.
to
contributing
inherent in
seems to be
far from being the easy answer to poverty,
Employment,
it.
These
point
statistics
to very basic
the jobs available to Target Area residents.
examination of statistics on labor force status in
that one problem may lie
1979,
Upon closer
becomes clear
with the fact that many jobs do not provide
year-round employment for Target Area residents.
Target Area who worked in
it
problems
Among those in the
1979, only 72 percent worked 40 or more weeks
of the year and only 54 precent worked 50 to 52 weeks of the year,
compared to 76 percent and 61 percent respectively for the County.
striking is
workforce
as
More
the fact that while 18.8 percent of County residents in
the
a full
26
suffered from unemployment at some time during 1979,
percent of the Target Area residents
some time during that year.
permanence in
in
the workforce were unemployed at
This points to a great lack of stability and
the jobs of Target Area workers.
62
Adding to that is
the
fact that it takes area residents longer to find new jobs.
The mean time
of unemployment was 16.6 weeks for Target Area workers while only 13.6
weeks for workers in the county overall.
The problems facing the target population in
the neighborhoods
around Northside Shopping Center are not just problems
of people to support
opportunity
minimum wage is
Underemployment
unemployment.
only a part of a greater underlying problem --
is
"Unemployment
of
themselves...
A full
time job at
3
a sub-poverty income for a family of four."
still
problems include the inability of people
employment for all
the
of the hours they wish to work in
to find
5
steady
order to secure
sufficient incomes to support themselves and their families above poverty
conditions and to maintain a decent standard of living.
in
the
People of color
target neighborhoods as well as throughout Dade County have been
denied
access
equal
to
good
stable
jobs
for
opportunities
with
advancement.
Dual Labor Markets
A number of labor market economists have formulated the notion of a
dual or
segmented
neoclassical
rejected
labor market in response to
Dual
labor theories of labor.
the
shortcomings
labor market theorists have
the concept of equal opportunity for jobs and advancement.
recognize
of
They
that there are many predetermined and structural barriers to
employment opportunities due to "broader social phenomena such as racism,
sexism and poor achievement based upon socio-economic
One version of the dual labor market model,
background." 3 6
put forth by Bennett
Harrison of MIT and based upon ghetto labor market data, advances that
urban jobs are
separate
divided
both behaviorally
segments "within which mobility is
63
and
technologically
into
two
common but between which it
37
takes place infrequently and only with difficulty."
stratum.
stratum and the periphery
The
market
labor
primary
the core
of time and work into two strata,
and allocation
activities
This model divides
dominates
the core
Some
stratum.
characteristics of the primary labor market include employers who have a
high degree of market power,
Their profitability allows
above-poverty wages.
to pay
and can generate enough profits
them to invest in
both
thus increasing productivity of labor which
physical
and human capital,
leads in
turn to increased profits and increased wages and benefits.
Increased wages and benefits in
"induces
workers
value
to
turn leads to higher labor efforts
and
fixed
costs
these
while
jobs,
value stable job attachment by their workers.
Those factors converge
the primary
that jobs in
the probability
high
investments encourage employers to
associated with the aforementioned
increase
the
38
stable as well as relatively high paying."
to
labor market will be
These are often referred to
as "good jobs."
The periphery
identifiable
stratum of the
economy can be divided into four
sub-sectors which contrast with the attributes of the cores.
The secondary labor market of the periphery is
characterized by employers
with labor intensive technologies and a lack of market power which
their
restricts
primary labor market,
In contrast to the
and need to pay high wages.
ability
the secondary
and almost no benefits,
labor market is
beset with low wages
leading to undesirable work conditions which
discourages stability and job attachment by the labor force.
the
in
lack of investment in
human capital
through training,
a lack of concern by employers for employee stability.
Similarly,
etc.,
results
These jobs
remain low paying and unstable and are often referred to as "bad jobs."
The
other
three
activities
of
64
the
periphery,
which are
close
substitutes for the secondary
"irregular economy" or "hustle."
All
these and the secondary
in
Individuals
labor economy "receive poverty-level
of time." 3 9
the "welfare economy." and the
the "training economy,"
theorists call
consist of what dual market
labor market,
return for an investment
income in
by unstable behavior with people
four are characterized
"Finally, city
moving between these activities of the periphery stratum.
whose ostensible function is
school and job placement institutions
"upgrade" the urban poor,
intersectoral mobility,
or,
terms of the above model,
in
to
facilitate
often perpetuate poverty by re-circulating these
40
individuals and their children among the segments of the periphery."
Jobs in the Local Economy
The Dade County economy
future.
industries alone account
Dade County jobs and are expected to increase in
"The atypical nature
of the Dade County economy
by the fact that the single largest employer is
the County government ranking second,
Eastern Airlines ranking fourth.
a manufacturing firm...
associated
the
with
trade and
toward services,
The trades and services
government employment.
for over half of all
oriented
is
Federal
is
exemplified
the School Board, with
third and
government
Among the top 30 employers,
only one is
A great deal of trade and service employment is
numerous
shopping
centers
county...significant locations include...Northside
the
throughout
at 79th Street." 4
The overwhelming emphasis on service and trade jobs in
County economy is
the
1
the Dade
discouraging for the employment prospects of the inner-
city poor and those in
the secondary
labor markets.
The service and
trade industries are characterized by a dichotomy between "good" and
"bad" jobs, and the emphasis on such jobs creates increased dualism in
the labor markets.
The service industries, for the most part lack the
65
layers of jobs that provide for upward mobility into the primary
middle
sector.
Employment in
largely restricted to
retail
and consumer service, in
low paying,
particular,
is
dead end jobs.
Estimated Dade County Employment in Non-Agricultural Establishments
by Major Industry Groups, March 1980 and 1982
Industry Group
Estimated
Employment
March 1980
Estimated
Employment
March 1982
Percentage
Change
Percent of Total
1980
1982
Total NonAgricultural
720,700
737,900
+2.4
100.0
100.0
Services &
Mining
175,600
181,400
+3.3
24.4
24.6
RETAIL TRADE
126,900
132,800
+4.6
17.6
18.0
Manufacturing
102,900
98,800
-4.0
14.3
13.4
Government
94,500
96,700
+2.3
13.1
13.1
Transportation/
Public Utilities
71,000
71,500
+0.7
9.8
9.7
Wholesale Trade
56,900
62,900
+10.5
7.9
8.5
Finance, Insurance
and Real Estate
51,100
57,800
+13.1
7.1
7.8
Construction
41,800
36,000
-13.9
5.8
4.9
Source:
1982 Biennial Report on the Comprehensive Development Master
Plan for Metropolitan Dade County Florida, 1982, using Florida
Department of Labor and Employment Security data.
Northside Shopping Center Jobs
Jobs at
centers throughout the county,
high
like those at retail
shopping
are predominantly entry level,
low paying,
Northside Shopping Center,
turnover
jobs.
According
to Don Stevenson,
Manager
of Northside,
the majority of jobs at the center pay the minimum wage of $3.35
66
per hour
with a frequent turnover of employees.
full
A typical salary for a department or area manager is
time.
week or $5 per hour.
stores
Northside
Much of the jobs are less than
$200 per
A typical chain store manager, as many of the
are chains,
might earn approximately $30,000
per year.
While the area and the storewide manager jobs tend to have a much
lower
turnover, most store managers are brought into the center from outside of
the area.
According to Stevenson,
practice.
In
addition,
many of
this is
industry
a traditional retail
the retail
chains do provide
some
benefits such as medical and life insurance.
Retail
jobs at Northside appear
and of service sector employment.
described as secondary
typical
general
jobs in
of retail
The great majority of jobs can be
labor market or "bad jobs." 4
benefits provided by some of the chain stores,
2
Except for the
they may be characterized
by the typical secondary market scenario as labor intensive jobs in
These
competitive market where low wages are the norm.
a
low, poverty
level wages for most employees leads to undesirable work conditions which
discourages
stability and job attachment by the employees.
The lack of
investment
in
through
training and
advancement
results in
stability.
Employees are then dispensible.
the employees
as human capital
a lack of concern by the employers
for employee
This scenario then leads to the frequent complaint about shopping at
Northside;
that store employees don't know how to deal with customers,
that many have no enthusiasm and make little
effort to affect customers
to come back to the store or to Northside.
While it
they don't understand
closer
to
sharing in
the
truth
the benefits
to say
that
may be said that
of encouraging people back,
they understand
it
may be
that they won't be
the benefits to be gained and that the added effort means only
67
more work and no relief
family,
For those trying to support a
from poverty.
these minimum wage jobs are jobs without dignity,
which keep
people poor and without hope for the future.
The management of
some of
understand the advantages
Smalls,
retail
the
Judd
President of the Merchants Association and Manager of the Butlers
the bottom line.
important --
is
throughout the chain.
especially at Northside,
Butler's in
successful of all
which is
the Dade region.
that employees give to customers.
On a weekday afternoon
shoe stores
in
successful
to the store and
The customers seem to respond
Attention is
than most
paid to giving
Investments in
provides for a
the benefits of their efforts
stable, upwardly mobile, proud and productive workforce.
professional
and polite
efficient
the consumer quality merchandise and quality service.
employees who share in
It appears
the store was more crowded
suburban malls.
on-
said to be the most
A visit
immediately aware of the professional,
favorably.
is
many ways it
Butler's has a programmatic
the-job training curriculum instituted
to work handsomely,
in
trains them and gives them an
He hires local people,
to move up the job ladder.
opportunity
service
Northside do
employees.
to making investments in
Shoe Store feels that professionalism
one is
at
stores
The payoff is
a
atmosphere with a caring and responsible workforce and many
happy customers who keep bringing
their business back.
Investments in
employee training and adequate pay for their labor are investments which
pay off in
sales and in
community economic development.
Community Economic Development at Northside
M-D NHS and
the Urban League of Greater Miami as joint partners
the ownership of Northside Shopping Center,
of the comunity,
will
acting solely in
have a unique opportunity
to
in
the interest
facilitate
the
the community through the creation
alleviation of employment problems in
68
and upgrading of jobs at Northside Shopping Center.
just
secondary labor market and keep people in
and in
poverty,
not
jobs are typical of the
as many retail
the creation of new jobs,
The challenge is
the periphery of the economy
but to create new jobs which are meaningful
community as employees and which provide adequate support,
to the
stability and
hope for the future.
The
most optimal
use of
the
resources
generated
by Northside
to tie the money back
Shopping Center for the benefit of the community is
into the shopping center by taking advantage of the ownership leverage,
to invest in
development
of the comunity while at the same time furthering
of Northside
of revitalization
Revitalization
capital
lead to the economic
and programs which will
activities
success will
but equally
and
increased
is
the investment
Economic development goals and revitalization
exclusive.
center,
By
Northside,
while
Inc.
at the
in
physical
will be
same
in
human
capital.
goals are not mutually
linking economic development
Forty Acres,
activity.
consumer
depend not only on investment
important
the goals
activities
to
contributing
time maximizing
the
back to the
the vitality
benefits
of
to
the
community.
-D NHS was correct in
their statement,
in
the Scope of Services of
the Northside Shopping Center Community Acquisition Project,
value of this project to the community is
employment opportunities."
most from the community,
revitalizaiton,
its
that "The
potential for increased
As a major employer of more than 400 people,
and the potential for employment to double with
Forty Acres,
Inc. has a responsibility
to community
residents as employees of Northside.
In
response
to the problems of the dichotomy between "good"
69
and
entitled,
"People,
Cities and Services," sees
market and a more favorable
workers
of
--
permanantly
remain
women,
bottom
the
the solution this way,
"In
distribution of earnings so that certain
principally
at
an article
Noyelle is
developing a better laddered labor
the challenge lies in
terms of people,
groups
Thierry J.
sector,
the service
jobs in
"bad"
among
of
and youth --
minorities
labor
the
today's
upskilling
force...could
be used to recreate a broader
Strategies
of
strata
lower
emphasizing
pool.
do not
the
labor
layer of better paid and
somewhat more challenging medium jobs."
Ownership of Northside Shopping Center will give Forty Acres,
opportunity
unique
the
facilitate
to
conventions at the center.
restructuring
Inc. a
employment
of
Given the present number of jobs at Northside
and potential for the future, Northside employment practices could have a
impact
profound
on
the
economic
well-being
of
the
people
in
the
community.
Such an investment in and commitment to the people would give Forty
Acres, Inc. legitimacy as acting on behalf of the community's interest.
It
loyalty and
would also heighten the sense of true community ownership,
support,
both as consumers and employees,
of Northside
Shopping Center.
Given the size of Northside as the largest single employer in
community,
could
itself
have
the investment in
significant
the Target
employment opportunities and "good jobs"
impacts on the economic health of the community
and the increased ability of the community as consumers to support
Northside.
a revitalized
This investment in
enhance the original investment in
lasting
and
profound
impacts
and
people might not only
Northside but might
the
revitalized community.
70
transformation
lead to more
to a healthy,
Job Training Implementation
implementation of a job
The
training program for steady employment
with adequate compensation and upwardly mobile job opportunities for
community residents will
not require
will require making use of already
their linkage,
reach this end.
and it
it
take
will
the commitment
Shopping Center and their willingness
of Northside
It
and facilitating
existing resources
parties to
take a strong commitment by all
will
Foremost,
the reinvention of the wheel.
of the merchants
to participate in
an
effort which may change present work arrangements but which has the
to turn their own operations and the operations of the Center
potential
The merchants
as a whole into a very profitable and positive ventures.
will need to be convinced that not only would these policies and programs
be a social or community good, but also that it makes good business
sense.
and
will take sensitivity on the part of Forty Acres to accomodate
It
into account existing
take
stores,
individual
to maximize
of
especially chain stores and to work them into a plan
participation within those constraints.
Forty Acres,
possibly
policies
employment and training
Inc. would need
to hire at least
shared with M-D NHS or the Urban League,
administer community economic development activities,
to the Board of Directors.
answer directly
It is
one staff
to facilitate
person,
and
and who would
important that such
making activities
of the
activities
be kept separate from the profit
center,
so there be no conflict of interest.
These activities need to be
a consistent and professional
manner by a qualified and
handled
in
dedicated individual who can interface well with the individual merchants
and
the Merchants Association and can facilitate necessary
implementation.
71
linkages for
Private
Florida,
Industry Council
The PIC of South
of South Florida.
(PIC)
with the
that can be made is
One of the most important linkages
acting jointly with the South Florida Employment and Training
Consortium Board
local
of
Board)
(SFETC
public
has
officials
been
designated to implement the Job Training Partnership Act (JTPA) in
Dade and Monroe Counties service delivery area.
established by Congress
requires
in
1982,
The JTPA legislation
primarily a training act which
is
funds spent on the
that 70 percent of all
the
local
level
be used
specifically for job training and job placement services.
provide job training, they devise
While the PIC does not directly
policy
and
implement
by designating
the JTPA
and
funding
service
providers programs which either directly train individuals from targetted
such as schools,
technical
and
groups or designate
training agents
community colleges,
community based organizations and private sector
employers.
The
range of
through
services offered
Training, Remedial
guidelines include Employability Skills
Occupational
Skills Training,
Education,
and On-The-Job Training among others,
4
developed to suit the needs of individual employers.
these job training
are economically disadvantaged,
with
Customized programs can also be
programs for both youth and adults.
Those targetted for
the JTPA
the PIC under
3
programs
include
people who
high school dropouts, AFDC recipients,
displaced homemakers and heads of households,among
others.
Special
outreach to residents of Dade County's Black communities has been pursued
by
the
PIC/SFETC
with
strong
emphasis
employment and training services.
program budget of $16,005,000
is
on
providing
high
quality
Almost two-thirds of their 1984
44
designated for Black participants.
A sample program for Northside might be implemented as follows.
72
The
Inc.
Forty Acres,
Community Economic Development Coordinator could work
with the Northside merchants to try to reach a consensus on participation
in
Forty
the job-training program and to hire local community residents.
Acres could be designated by PIC as a service program and as such could
in
do outreach
the community for employment
opportunities
at Northside.
the program could be referred to an
Those residents participating in
existing PIC/SFETC Comprehensive Employability Skills
Training Program
which features an established curriculum and performance benchmarks to
This training
ensure a workforce with good work habits and attitudes.
would be paid through JTPA funds.
completion
Beyond
participants could
of
the
Employability
then be referred back to
Training
Program,
the Northside merchant
The PIC of SF could work
employers for a job and for continued training.
with Forty Acres and with the merchants to develop a training program
tailored
to their specific employment needs.
predominantly of on-the-job
instruction for trainees,
aspects
of
retail
as
The training might consist
training coupled with weekly classroom
and present employees,
if
sales
relations,
customer
they desire,
on such
techniques,
employee/employer relations, the basics of inventory control, window
display design and other aspects
deemed appropriate
for
the orientation
and potential advancement of new employees.
Forty Acres might negotiate with individual merchants to provide
instruction for the classes.
formalized
to assure a relevant
The curriculum itself
and
competant
program.
would have to be
Alternatively,
Forty Acres and PIC/SFETC might work with a teaching institution such as
Miami-Dade Community College to provide instruction and teachers.
Acres would act as
facilitator
in
bringing
73
Forty
the decision making parties
together,
including
unless so desired and unless a comprehensive
involved in actual training,
could be established
curriculum
a qualified
be
internally.
In any case,
institution
to
provider
must
according
to the State and PIC criteria.
with
based
curriculum
The costs of this Occupational
the
of
retention
training
the
the
teach
These contracts are
through JTPA monies.
Skills Training would be paid
performance
to be
but would not need
agents,
training
the
employees
part
as
of
the
benchmark system for payment.
Regarding the On-The-Job Training, each merchant would be reimbursed
by PIC for up to half of the employee's wages during the training period,
These jobs are to be permanent,
for a period up to six months.
positions with a wage scale beginning at
according to PIC/SFETC policy. 4 5
upward mobility,
increased
It
a minimum of $3.50 per hour,
assumed there is
is
time
full
potential for
responsibility and commeasurate pay increases
over time with upskilling and increased productivity.
In
training,
addition
to
merchants
the
50
percent
of
share of employee costs.
reimbursements
The federal
government would provide the
targetted employee up to a maximum of $3,000 in
year of wages for each
the first
year.
Federal Targeted Jobs Tax Credit would be a maximum of $1,500
of employment
for
These credits would be a substantial
employer with a 50 percent tax credit on the first
second year
during
employees would be eligible
who hire targetted
tax credits for each employee.
wage
for each
targetted employee. 4 6
in
The
the
Those credits
may be carried over into the future.
In addition,
the West Little River and Model
Cities areas are both
development target areas in Dade County and as such have been designated
as enterprise
Florida Corporate Income Taxpaying
zones (see Appendix E).
businesses may claim enterprise zone (EZ)
74
tax credits of 25 percent on
wages paid to residents of these designated areas who have been hired for
new
jobs.
tax credits,
These
known as
formally
Jobs Creation Incentive Credits, may be claimed for an
Revitalization
additional year as long as the EZ employee is
under $1,500 per month or if
resident,
Economic
Florida
promoted but is
paid
still
replaced, by another EZ
the EZ employee is
and does not claim Unemployment Compensation Benefits.
State and Federal
tax credits may be claimed at the same time as long as
requirements
eligibility
Both
Any unused State EZ tax
for each are met.
credits may be carried over for a five year period.
tax
The
incentives,
job
incentives,
training
and
increased
productivity and sales potential make merchant participation
of the community and of
Shopping Center.
the
long-term vitality
Community residents need stable,
ladders for advancement and hope for the
future.
of Northside
sustaining jobs with
By responding to that
the merchants would be making a strong investment in
need
these
the best interests of the
programs not only attractive financially but in
people
in
the community
turn could be expected to support the merchants.
and the community in
These relations are vital
to a healthy shopping environment and a healthy
local economy.
Beyond the training provided upon initial
employment,
Forty Acres,
Inc. could again work with Merchants Association and the Private Industry
Council
to develop
employees,
training programs to upgrade
who have the potential
them the proper skills
jobs.
A real effort
upward mobility in
the jobs of hourly wage
for management positions,
and
to teach
of middle management or department management
should be made to encourage and facilitate
this
jobs and opportunities.
Northside Shopping Center could become a
75
training ground and model
expertise in
program for retail
Retail jobs in Dade
the Black community.
Through training
County are abundant, yet most are dead-end jobs.
programs
upward mobility
and
at
employees
Northside,
outside of the community but at a salaried managerial
opportunities
to find managerial
Merchants of chain stores could be encouraged
level.
seek
may
jobs for promising employees at other chain locations. This not only
would bring more money into the local economy from outside of it,
but it
would continuously open up the ranks so people below would have the
to move up the job ladder.
opportunity
efforts
employment
sector
orchestrated
The job training and primary
should
employees
for Northside
and documented with the participation
be well
affected
of all
parties in the planning and implementation of these efforts, so that all
expected
understand what is
be no surprises.
Success in
strong
and what constitutes
success.
and achievable.
Goals should be realistic
merchants association
and
their willingness
accomodate work structures and job training programs which
employees who are
require
responsibility,
joint owners,
to
the
education and professionalism,
and opportunities
creativity,
up
that should follow.
challenges
to
lead to upward
for employees.
mobility and increased positions of responsibility
will
require a
will
the job training and upgrading efforts
progressive
There should
of
It
increased
and the financial benefits
Finally,
it
will
require the
cooperation and commitment of M-D NHS and the Urban League as
the PIC of S. Florida,
Job training Service Providers,
the
merchants and the mall management to put together a training program that
will work in
this complex setting to advance
these goals.
Additional Community Economic Development Activities
Other programs to achieve community economic development for the
economic well being of the community while at the same time linking back
76
of Northside
to the vitality
Center,
Shopping
might include
bringing
a
onto the site to provide child care services to female
day care facility
heads of households with such responsibilities who need and want to work
to support
their families.
Forty Acres, Inc.
covers costs associated with it.
that the lease just
and
The lease arrangements could be kept low so
Association might
the Merchants
subsidies to employees
provide
for
This would enable many women to enter the workforce
daycare expenses.
would not only
who otherwise face difficult barriers to employment and
of the jobs at Northside,
add to the desirability
but would create a
sense of loyalty.
linkages
Other efforts should include
maintenance
purchase
of
Such linkages might include
within the community.
money circulating
and
renovation
materials,
contracts
major
items,
to the local economy to keep
to
local
and
contractors and
through
services
the
local
businesses, among others.
Entrepreneurship of community residents might also be encouraged
through training that focuses on teaching existing entrepreneurs and
would-be
entrepreneurs
the
needed
skills
to
take
idea
an
This might be seen as an extension of
training given
to present employees who have demonstrated
their own businesses.
the
the managerial
marketplace.
saavy and would like to start
to
their retail
Northside could
serve as an incubator to local entrepreneurs by providing relatively
cheap space and Forty Acres could provide debt or equity investments and
support/technical
critical years.
placed in
services
them get
to help
Care must be taken that
through
these entrepreneurs
direct competition with existing merchants,
potential market for their products,
and that mechanisms
77
the first
few
not be
that there is
a
and support be
in place to assure a professional operation that would complement and
reinforce
the efforts of other merchants at Northside.
These and other community efforts
a
have
enhance
also
to Northside would not only
residents,
but would
revitalized
Northside Shopping Center.
the
While maximizing
a place
the community from Northside as a place to shop,
true "heart of the community."
needs,
the feeling of
and with it
the people,
community
investment
original
an economic resource owned by the community,
of
wellbeing
economic
on the
impact
significant
tied
for
the payback
to work,
a
to
and as
Northside can become the
Through responsiveness to community
legitimate community ownership will emerge among
a loyalty to the center as shoppers, workers,
and
citizens.
Miami-Dade NHS and the Urban League of Greater Miami should not lose
sight of the purpose of community-based ownership of Northside.
that the
critical
asset be used
to
dependency and bringing dignity to the
jobs and quality of service;
Black Miami.
thus,
further
goals
the
community in
of
It
reducing
terms of quality of
leading to a better quality of life
Profits generated beyond what is
is
needed in
in
programs tied to
Northside might go back to Miami-Dade NHS and the Urban League to enhance
their
own existing
programs
for
community,
the
which
in
turn may
indirectly benefit Northside.
Sale of Stock to the Community
As Miami-Dade NHS and the Urban League may still
eventual
sale
of
stock
to
community members
ownership of Northside Shopping Center
,
for
direct
community
this too could be incorporated
into the future plans of Northside Shopping Center.
need to be well
be committed to the
Such a plan would
thought out and balanced against other goals to maximize
community gains.
78
Upon achievement of the objectives of a revitalized Northside,
and
place to assure the continuation of
the institutionalized arrangements in
actual gains made to further the policies for "good jobs" and employment
opportunities
then Miami-Dade NHS and the Urban
for community residents,
League might consider the sale of stock to a broad community base.
the non-profit joint venture, Forty Acres Plus a Mule,
its
charitable purpose, its
Inc., has achieved
status as a non-profit might be threatened if
longer used to advance
are no
profits
Once
the charitable purpose of the
organization.
become a for-profit subsidiary of
At such a time, Forty Acres would
The time would be
Miami-Dade NHS and the Urban League of Greater Miami.
appropriate
for
distribution
of
the
opportunity
profits
to
the
ownership and
of community-wide
people.
Given
already
an
relationship with the community as an entity operating in
interest,
the sale of stock could be an extension of
strong
the community
those present
relationships.
Keeping
in
mind the objectives of broad-based community ownership
the self-sustaining
and building in
through community ownership,
support of Northside Shopping Center
the distribution
of the stock should be
of Northside.
planned to further these goals and add to the vitality
Stock should
be made available not only to consumers
customer of Northside,
but also to employees,
other supporters of the center.
few shares of stock to all
merchants,
or potential
management and
A policy might be implemented to give a
employees including merchants and the shopping
center management based on the length of their employment under Forty
Acres ownership.
While the sale of stock should be marketed to all
79
constituencies of
Northside Shopping Center,
care should be taken to ensure that the stock
not be controlled by a corporate entity or individual.
occur,
Should this
Northside will once again be under private ownership for private
The rationale for broad-based community owernship is
profit.
community people will not only have a say in
Care should also be taken to
profits.
run and in
how the center is
policies affecting employment, but will also share in
so that
the distribution of
limit the sale of stock to those
outside of the community as such would represent a drain of monies away
from the
community.
True broad-based community ownership should result
support of Northside Shopping Center
from its
from customers to community supporters.
point of community activity
in
employees to its
built-in
managers,
Northside could become the focal
and community pride.
At the same time,
it
would satisfy the important objective of the redistribution of wealth and
control to those in
the community who support the center as consumers,
who are employed by the center and whose lives are profoundly affected by
this significant economic base of Miami's Black communities.
Through the sale of stock,
Miami-Dade NHS and the Urban League will
acquire money which could then be used as equity in
further
Still,
other investments
to
the goals of community revitalization and economic development.
some control of stock should be maintained to ensure the continued
stability of the non-profit organizations
Northside
Shopping Center
and to ensure the stability of
and the continued implementation
to maximize community benefit.
80
of policies
CONCLUSION
Acquisition of Northside Shopping Center by Miami-Dade NHS in
partnership with the Urban League of Greater Miami is
close to becoming a
The challenges have been numerous and many obstacles have been
reality.
overcome with the perserverance and commitment of Miami-Dade NHS and the
acquisition team.
While acquisition of Northside
has been a challenging process,
an
the revitalization
even greater challenge will be making real progress in
and economic development of the community upon community ownership by
Forty Acres, Inc.
While present objectives include the revitalization of Northside to
an attractive and
once again,
make it,
consumer needs, Northside is
equally, if
is
It
major employer.
community as its
profitable center
not more,
in
responsive
to
important to the Black
the area of employment that
community ownership of Northside may have a significant
impact on the economic well-being and quality of life
and profound
for community
residents.
Given ownership
to the real
through sensitivity
responsiveness
NHS and
in
economic needs and through a genuine
to the people of the surrounding neighborhoods,
This in
community
responsiveness,
both
as
through policies
shoppers
would M-D
representative
turn would create a loyalty and "sense
members
only
the community's interest,
the Urban League become a legitimate
community.
by
of Northside
and
and action,
on
of
the
of ownership"
employees.
Such
the behalf of
community could lead to active community support and meaningful
the
local
economic development.
While many CDC's think in
terms of trading off profits for community
81
welfare,
as a non-profit organization's
profits are not an objective for
They are only useful and desirable as a vehicle in which
their own sake.
to reach community goals and thus to further the charitable purpose of
the organization.
Borrowing
Economist, Dudley Sears,
the
concept
from British Development
the objective of development programming is
"the
implicit maximization of a weighted average of community benefits,
subject to the constraint of fiscal
solvency,"
Using
this concept,
the
question facing Forty Acres, Inc. becomes on of how to maximize community
benefits, for the Black community and neighborhoods surrounding Northside
Shopping Center,
subject
to the monies generated by the venture itself.
with such an orientation that planning for the future of Northside
It
is
is
undertaken in
this thesis.
Community ownership of Northside should be
used for the purposes of deriving the most benefits for the community
subject to the monies generated by the center, with future benefits,
though discounted,
to be included
in
the formulation.
This approach
would be beneficial to the revitalization and health of both the shopping
center and the community.
strategy should be one of ensuring the continued success
The initial
and health of
the institutions
development.
First
whouch would be suporting
and foremost,
this means recycling enough of the
income generated back into the center to ensure its
center
and
Northside is
to
encourage
investment
a public good in
community
into
and of itself.
success as a shopping
the area.
A revitalized
Additionaly, goals,
such as
the self-sufficiency and survival of the community-based owners who serve
the community and direct economic development
can be achieved only if
income.
the venture is
itself
for the community benefit,
successful and generating
Profits generated by the center should be directed first
82
to
properly capitalize,
improve and maintain Northside Shopping Center in
professional
using strict
manner,
cost controls.
support for further efforts in
vital
Northside is
the community's behalf.
Northside could generate as much as $500,000 in
a
the life
A healthy and
net profits
to
further community goals.
Beyond a revitalized Northside Shopping Center, ownership by a joint
venture of two non-profit organizations responsive
to community needs,
means that net profits do not get distributed to individuals but would be
used to futher community interests.
Still,
but it
for Miami-Dade NHS and the Urban
is
in
the community interest
League to expect some income
Northside.
is
is
not only reasonable,
support from the net revenues generated at
Not only has much "sweat equity" gone into purchasing the
center on the community's behalf,
project
it
critical,
like
but their continued support of this
investment back into
the center,
to
the
Center dedicated
to
the
continued
success of a Northside
community.
To ensure their own stability and effectiveness in delivering
Shopping
existing services and programs to the Black community,
their
ownership
facilitation
further
of
Northside
of activities
the objectives
in
in
the
community
of commercial
revitalization
development
its
support
effort,
to
and
the
the
and community
the operations of these groups
will enhance the present and future returns in
the
interest,
conjunction with Northside ownership to
economic development, an investment in
Given
the stability of
benefits to the community.
"infrastructure"
of
this
community
an income generating asset and the facilitators
success and the success of its
of
use for community benfit, net income
and efforts should be distributed to directly maximize the returns to the
community, not as profits but in
problems of the community.
terms of
lasting
solutions
to the
The challenges ahead involve making the best
83
use of resources to meet community economic development goals.
systematic
approach
to problem solving,
this requires an investigation
into the economic health of the community
an understanding
targetted
for
this effort and
of the problems community members face and their needs.
Solutions which are tied back to Northside Shopping Center,
could
facilitate
significant
progress
simultaneously adding to the attractiveness,
of Northside
should be of the first
gains for the
community.
An
investigation into
to
support
viability, and fiscal health
order in
the pursuit of economic
the community --
themselves.
of the
community
Community
Unemployment
members
face
problems
low wage,
like the majority of jobs in
minimal benefits and
of
"good jobs."
Dade County
open to people of color, are typical of the secondary labor market;
intensive,
show
that of an inability of
underemployment and lack of access to steady sustaining,
Most jobs at Northside,
and which
the community while
due not only to unemployment.
part of a larger problem in
people
for
the economic problems
very high rates of poverty,
is
For a
labor
lack of job attachment by
the
labor force and lack of concern by employers for employee stability.
With a strong commitment,
efforts should be undertaken by Forty
Acres to address these problems and to form linkages with appropriate
parties
Northside
to
facilitate
solutions
Shopping Center.
to
these
employment
problems
at
Given the employment capacity at Northside,
such policies and solutions could have a profound effect on the well
being of the community residents and on the economic development of the
community,
while
responsive to its
lasting
simultaneously making community owned
constituents.
attachment,
sense
This in
truly
turn might hold the key to long-
of ownership,
84
Northside
and
community
support
of
leading to a sustained source of income for community benefit.
Northside,
such investments in
Beyond
Northside,
the community through activities
at
additional resources might be funneled back to Miami-Dade NHS
and the Urban League of Greater Miami to futher their existing activites
in
These activites
for the benefit of the Black community.
turn would
indirectly benefit the continued health of Northside.
Upon achieving
the goals set forth
for community
and at such a time as
community ownership and control of Northside,
revenues can no longer be sufficiently
Forty Acres,
tied to the charitable purpose of
then, Miami-Dade NHS and the Urban League should pursue
in
their original intention of sale of Northside to people
for true and broad based community owernship.
support for the
continued
control
center
and
success --
its
the community,
their
efforts.
development,
Through
this
of wealth,
community resource to all
the employees,
the management and the non-profits who would continue
of
the community
This would lead to the
the redistribution
and ownership of this most vital
involved in
benefit from
approach
to
the merchants,
to see the fruits
community
economic
benefits to the community can be maximized to their highest
level facilitating long-lasting and appreciable solutions to the problems
of poverty in
the community.
85
FOOTNOTES
1
Zaldivar, R.A., "Black-Cuban Relations:
Miami's Ethnic Puzzle,"
Miami Herald, 25 March 1984, Viewpoint, p. 4E.
2
Ibid.
3
Cooper, Kenneth J., "The Impact of Race in Other U.S. Cities:
Blacks Feeling Resentful," Boston Globe, 21 December 1983, p.
4
Brownstein-Santiago, Cheryl, "Anglo-Black Economic Gap Here Near
Middle," Miami News, 27 March 1984, Section A.
5
Brownstein-Santiago, Cheryl, "Census:
Miami News, 7 January 1984, p. llA.
6
Cooper,
op.
Dade is
Miami2.
Going White Collar,"
cit., p. 2.
Metropolitan Dade County Planning Department, 1982 Biennial Report
on the Comprehensive Development Master Plan For Metropolitan Dade
County, Florida, (Miami: September 1982), Summary p. xv.
8
Baird, Lisa, "Northside:
Will Old Days Return?," Miami Herald,
March 1983, Neighbors Cover Story.
9
Interview with Donald Stevenson,
Miami, 3 January 1984.
20
Northside Shopping Center Manager,
10 Ibid.
11 Miami-Dade Neighborhood Housing Services, "A Request for Funding:
Community Acquisition of Northside Shopping Center," September 1982,
p. 4.
12 Northside
Shopping Center,
Lease Records,
1984.
13 Miami-Dade NHS, Inc. and the Urban League of Greater Miami, Inc, "A
Joint Venture Project for the Acquisition of Northside Shopping
Center," Miami, 1984, p. 102.
14
Letter to Steven Polon from Larry A. Levine,
Ft. Lauderdale, 12 April 1984.
15 Miami-Dade Neighborhood Housing Services,
"Prospectus," May 1983.
16 Interview with Gail Williams, Miami-Dade NHS,
1984.
17 Miami-Dade NHS,
18 Ibid.,
p.
"A Request for Funding,"
5.
86
Arthur Anderson & Co.,
Miami, Florida,
September 1982.
17 April
19 Metropolitan Dade County Transportation Administration, "UMTA Grant
Application Package - Northside Development Project," Miami, 30 June
1983, (Figure 4.1, Cash Flow/Taxable Income Projection).
20 Ibid., no page number.
21 Levine, Larry, Arthur Anderson & Co., Notes and Assumptions to the
Projection of Cash Flow (Preliminary), 30 June 1983.
22 Kurps, James, Courtelis Company, Northside Shopping Center 5-Year
Projection - Income/Expenses, 25 May 1983.
23 Levine,
Larry, Arthur Anderson & Co., Letter to Steven Polon,
12 April
1984.
24 Jones,
Times,
Bonita,
"Asks $2 Million for Rail Bus Feeder Terminal," Miami
6 October 1983.
25 National Economic Development and Law Center, A Lawyers Manmual on
1975), p. 8.
Communtiy Based Economic Development (Berkeley, Calif.:
26 Contract for Sale and Purchase of Property Draft, Version No. 6,
between Tashi Valley, N.V. and M-D NHS and the Urban League of Greater
14 December 1983), p. 4.
Miami (Miami:
27 Harrison, Bennett, "Ghetto Economic Development: A Survey," Journal
Economic Literature, Volume xii, Number 1, March 1974, p. 21.
of
28 Yanowitz, Alan J., and Purcell, Elizabeth A., "Using the Investment
A Means/Ends Analysis," The
Partnership as a Charitable Activity:
Journal of Taxation, April 1984, p. 214.
29 Harrison,
op.
cit.,
p.
21.
30 Bauer, Grenelle, Mondawmin Mall,
Urban Studies and Planning, MIT,
(Cambridge,
1980), p.l.
Mass.:
Department of
31 Ibid.
32 Dade County Office of Transportation Administration, Dept. of Traffic
Northside (Miami:
and Transportation, Station Area Profile 18:
Metropolitan Dade County Station Area Design and Development, January
1979).
33 "Industrial Park May Help Create 1500 Jobs," Miami Herald, 22 March
1984, p. 10.
Do You Need a
34 Smith, Stephanie, "Doing Business As A Non-Profit:
Volume xiii,
Report,
Center
Law
and
Development
Subsidiary?," Economic
Issue 2, Spring 1983.
87
35 Friedman, Robert, "Reducing Unemployment Through Enterprise
Development," Economic Development and Law Center Report, Volume xiii,
Issue 3, July/August 1983, p. 12.
36 Clark, Gordon L. and Gertler,
Meric, Local Labor Markets: Theories
and Policies in the United States During the 1970's (Cambridge, Mass.:
Harvard University, June 1981) p. 14.
37 Harrison,
op. cit.,
p. 10.
38 Ibid.
Ibid.,
p.11.
40 Ibid.
41 Metropolitan Dade County Planning Department, 1982 Biennial Report on
the Comprehensive Development Master Plan For Dade County, Florida,
(Miami, September 1982), p. 151.
42 Noyelle,
Economy,
Thierry, "People, Cities and Services," The Entrepreneurial
Vol. 1, No. 12, June 1983, p. 4.
43 Private Industry Council of South Florida/South Florida Employment and
Training Consortium, "FY 1984 Directory of Service Providers," (Miami
1984), p. 1.
44 PIC/SFETC, "Update of Employment and Training Opportunities for
Residents of Dade County's Black Communities," Miami, 1984, p. 1.
45 Interview with Jacque Pierce, Council Liaison, Private Industry
Council, Miami, 26 March 1984.
46 Private Industry Council of South Florida,
Employers.
88
Brochure to Private
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Bassett, Brooke, "Starting With A Feasibility," Economic Development and
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Borof, Irwin J., "The Private Foundation Question:
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Bratt, Rachel G. and Geiser, Kenneth, "Community Based Economic
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The Massachusetts Experience," Medford, Mass.:
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of Urban and Environmental Policy, Tufts University, Revised Draft,
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Kennedy
John
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Employment and Training and Community Economic Development: A Handbook
and Four Case Studies for Practitioners, Boston, June, 1982.
Contract for Sale and Purchase of Property, Draft, Version No. 6, between
Tashi Valley, N.V. (the Seller) and Miami-Dade Neighborhood Housing
Services, Inc. and the Urban League of Greater Miami, Inc. (jointly, the
Buyer), Miami, December 14, 1983.
Dade County Office of Transportation Administration, Department of
Traffic and Transportation, Station Area Profile 18: Northside, Miami:
Metropolitan Dade County Station Area Design and Development, January,
1979.
Faux, Geoffrey, CDC's: New Hope for the Inner City, Report of the
Twentieth Century Fund Task Force on Community Development Corporations,
New York: Twentieth Century Fund, 1971.
Friedman, Robert, "Reducing Unemployment Through Enterprise Development,"
Issue 3,
Economic Development and Law Center Report, Volume xiii,
July/August 1983.
Creating
Gardner, Linda M., Community Economic Development Strategies:
Calif.:
Berkeley,
Base,
the
Building
I:
Volume
Businesses,
Successful
1983.
Center,
Law
National Economic Development and
Possible Roles for
Hameed, Faheem A., and Sanyika, Mtangulizi K., "JTPA:
CBOs," Economic Development and Law Center Report, Volume xiii,
Issue 3,
July/August 1983.
89
A Survey," Journal of
Harrison, Bennett, "Ghetto Economic Development:
Economic Literature, Volume xii, Number 1, March, 1974.
Kelly, Rita Mae, Community Participation in Directing Economic
Center for Community Economic
Development, Cambridge, Mass.:
Development, 1976.
Kurps, James, Courtelis Company, Letter, Comments/Observations, and
Northside Shopping Center 5-Year Projection Income/Expenses, May 25,
1983.
Levine, Larry, Arthur Anderson & Co., Letter, and Notes and Assumptions
to the Projection of Cash Flow (Preliminary), June 30, 1983.
Levine,
1984.
Larry, Arthur Anderson & Co.,
Letter to Steven Polon, April 12,
Metropolitan Dade County Planning Department, Comprehensive Development
Master Plan for Metropolitan Dade County, Florida, Miami, July 1979.
Metropolitan Dade County Planning Department, 1982 Biennial Report on the
Comprehensive Development Master Plan for Metropolitan Dade County, Florida,
Miami, September, 1982.
Metropolitan Dade County Transportation Administration, "UMTA Grant
Application Package - Northside Development Project," Miami, 30 June
1983.
Miami-Dade Neighborhood Housing Services, A Community Development
Corporation, "Application For Funding Under the Community Development
Corporation Support and Assistance Program," November, 1983.
Miami-Dade Neighborhood Housing Services, Inc. and The Urban League of
Greater Miami, Inc., "A Joint Venture Project for the Acquisiton of
Northside Shopping Center," Miami, 1984.
Miami-Dade Neighborhood Housing Services,
"Prospectus," May 1983.
Miami-Dade Neighborhood Housing Services, "A Request for Funding:
Community Acquisition of Northside Shopping Center," September 1982.
Nadeau, E.G., "JTPA and Local Economic Development,"
Economy, Volume 1, Number 12, June 1983.
The Entrepreneurial
National Alliance of Business and Public Policy Center, SRI
International, The Employment/Economic Development Connection: New
Tools, New Roles, New Directions" A Guidebook, Working Draft, Menlo
SRI International, January, 1983.
Park, Calif.:
National Council for Urban Economic Development, Coordinated Urban
Economic Development, Executive Summary, Washington, D.C., 1978.
90
National Economic Development and Law Center, A Lawyer's Manual on
Author, 1975.
Community Based Economic Development, Berkeley, Calif.:
Northside Shopping Center Lease Records, 1984.
Noyelle, Thierry J., "People, Cities and Services," The Entrepreneurial
Economy, Volume 1, Number 12, June 1983.
Private Industry Council of South Florida/South Florida Employment &
Training Consortium, "FY 1984 Directory of Service Providers," Miami,
1984.
Private Industry Council of South Florida/South Florida Employment &
Training Consortium, "Update of Employment and Training Opportunities for
Residents of Dade County's Black Communities," Miami, 1984.
Do You Need a
Smith, Stephanie, "Doing Business As A Non-Profit:
Subsidiary," Economic Development and Law Center Report, Volume xiii,
Issue 2, Spring, 1983.
Urban Land Institute, Shopping Center Development Handbook,
1977.
U.S. Department of Commerce, Bureau of Census, 1980 Census of Population
and Housing, Census Tracts SMSA, PHC80-2-241, Issued July 1983.
Yanowitz, Alan J., and Purcell, Elizabeth A., "Using the Investment
A Means/Ends Analysis," The
Partnership as a Charitable Activity:
Journal of Taxation, April 1984.
91
NEWSPAPER ARTICLES
Baird, Lisa, "Northside: Will Old Days Return?",
1983, Neighbors Cover Story.
Miami Herald,
20 March
Bivins, Larry and Colon, Yves, "Industrial Park May Help Creat 1500 New
Jobs," Miami Herald, 22 March 1984, p. 10.
Brownstein-Santiago, Cheryl, "Anglo-Black Economic Gap Here Near Middle,"
Miami News, 27 March 1984, Section A.
Brownstein-Santiago, Cheryl, "Census:
Miami News, 7 January 1984, p. 11A..
Dade is
Going White Collar,"
MiamiCooper, Kenneth J., "The Impact of Race in Other U.S. Cities:
1-2.
pp.
1983,
December
21
Globe,
Boston
Blacks Feeling Resentful,"
Jones, Bonita, "Asks $2 Million For Rail Bus Feeder Terminal," Miami
Times, 6 October 1983.
Jones, Bonita, "Northside Acquisition Project Needs Anchor Tenant," Miami
Times, 4 August 1983.
"Metro Approves Grant for Shopping Center," Miami Herald, 22 September
1983, Neighbors Section.
"Metro
Seeks Loan Package for Northside," Miami Herald,
5 May 1983.
Miami's Ethnic Puzzle,"
Zaldivar, R.A., "Black-Cuban Relations:
Miami Herald, 25 March 1984, Viewpoint, Section E.
92
INTERVIEWS
Private Industry Council of South Florida, Marketing
Coppins, Murkel.
Manager, Miami, Florida. 3 April, 19 April -- phone, 1984.
Urban League of Greater Miami,
Fair, T. Williard.
Florida. 3 April 1984.
President,
National Alliance of Business, Director,
Fischer, Joseph.
3 May -- phone, 4 May 1984.
Hayes, Frances.
phone 1984.
Cambridge CEDC,
Kurps, James.
Courtelis Company,
2 May -- phone, 1984.
Levine,
Larry.
Director,
CPA,
phone, 14 March --
Center for Community Change,
Louie, Ruth.
10 April -- phone, 23 April 1984.
Mahers, Deborah.
23 April 1984.
Boston,
Mass.
30 April --
Mass.
Director of Management,
Arthur Anderson & Co.,
January, 29 February --
Cambridge,
Miami,
Miami,
Ft. Lauderdale,
Florida.
4
Florida.
phone, 1984.
Consultant,
Washington,
D.C.
Washington,
Neighborhood Reinvestment Corporation,
D.C.
Neighborhood Reinvestment Corporation, Commercial
Maini, Susan.
26 April -- phone, 1984.
Revitalization Manager, Connecticut.
Martin, Ernest. Dade County Office of Community & Economic Development,
28 March 1984.
Director, Miami, Florida.
Green Bay CDC, Executive Director, Green Bay
Mommaerts, Bruce.
Wisconsin. 30 April -- phone, 1984.
Olsen, Dick. West End Commercial Development Association, Executive
3 May -- phone, 1984.
Director, Atlanta, Georgia.
Metropolitan Area Citizens Organization,
Joe.
Perilli,
28 April -- phone, 1984.
Indianapolis, Indiana.
Pierce, Jacque.
Liaison, Miami,
Director,
Private Industry Council of South Florida, Council
26 March 1984.
Florida.
Scurr, Charles.
Dade County Transportation Administration, Special
7 January,
to
the
Transportation Coordinator, Miami, Florida.
Assistant
30 March 1984.
Northside Merchants Association,
Smalls, Judd.
2 April 1984.
Florida.
93
President,
Miami,
Stevenson, Donald. Northside Shopping Center General Manager, Miami,
3 January, 22 March -- phone, 27 March, 19 April -- phone,
Florida.
1984.
Congressman Lehman's Office,
Trapp, Patrice K.
Florida. 6 January, 2 April 1984.
Staff Assistant,
Miami,
Vdenek, Robert. National Congress for Community Economic Development,
24 April 1984.
Washington, D.C.
Miami-Dade NHS, Executive Director, Miami, Florida.
Williams, Gail.
January, 28 March, 14 April -- phone, 17 April -- phone, 20 April -phone, 1984.
Williams, Lynette. Miami-Dade NHS,
27 March, 3 April 1984.
Development Officer, Miami,
94
3
Florida.
APPENDIX A:
MAP OF WEST LITTLE RIVER
95
APPENDIX B:
BUS FEEDER TERMINAL
97
WIMP-
98
I
.POOL;,
'en
I
--
APPENDIX C:
NORTHSIDE FINANCIAL FEASIBILITY MATERIAL
100
FINANCIAL FEASIBILITY
ACQUISITION AND COST OF COSMETIC RENOVATION
*Assumable first mortgage
$ 4,000,000
UMPTA funds -frd~
Available
2,000,000
)
Bank consortium (loan)
2,500,000
Dade County renovation (loan)
1,000,000
Purchase money obligation to seller
1,000,000
500,000
Business Assistance Center (loan)
$11,000,000
Total
* Pays out in the year 1990.
The
above captioned
(loans) may be
structured
to provide a debt service pay back return to ensure the
in order
"recycling"
of resource dollars for other business loans and/or investments in
the
community.
COMMENT:
The projection of
&
Co.
included herein is
cash flow prepared
by Arthur Andersen
further substantiated by data prepared by
Courtelis Company following its in-depth analysis of:
.
Existing and recently signed lease agreements
. Present cash flow
.
Physical
It is
project will
inspection of
the center
clearly indicated by each of the
above
support debt service on its loans based
figures of revenue and expense levels.
101
that the
on present
NOTES AND ASSUMPTIONS TO THE PROJECTION OF CASH FLOW
BY
ARTHUR ANDERSEN & CO.
102
ARTHUR ANDERSEN & CO.
CERTIFIED PUBLIC ACCOUNTANTS
ONE BISCAYNE TOWER-SUITE
2100
HIAMI, FLORIDA 0131
(305) 374-3700
June 30,
Miami-Dade Neighborhood Housing
Services, Inc.
Lemon Tree Building, 2nd Floor
2160 N.W. 79th Street
33147
Miami, Florida
1983
Urban League of Greater
Miami, Inc.
1200 Biscayne Boulevard
33132
Miami, Florida
Gentlemen:
The financial projection for the fiscal period
September 1, 1963, to August 31, 2003, is based on assumptions
and estimates, the principal ones of which are set forth in the
notes to the projection.
We have satisfied ourselves as to the mathematical
accuracy of the projection and that it fairly reflects the estiThe selection of
mates and assumptions contained therein.
assumptions requires the exercise of judgment and is subject to
uncertainties relating to the effect that changes in legislation
or economic or other circumstances may have on future events.
There can be no assurance that the assumptions or the data upon
Variations of such assumpwhich they are based are accurate.
tions could significantly affect the projection. To the extent
that the assumed events do not occur, the outcome may vary
Accordingly, we express no
significantly from that projected.
opinion on the achievability of the results presented in the
projection, and no representation to the contrary may be made or
implied.
Very truly yours,
ARTHUR ANDERSEN & CO.
By
C.
By LrA.
GG
Enclosure
103
Levine
NORTHSIDE SHOPPING CENTER
NOTES AND ASSUMPTICNS TO THE
PROJECTION OF CASH FLOW
(1) GENERAL:
(a) Is is 'assumed that a corporation will be formed
to purchase the land and buildings at the Northside Shopping
Center on September 1, 1983. Each year of the projection is
a fiscal year beginning September ist and ending August 31st.
(b) The cost of the center is assumed to be $10,000,000,
with the buildings and other depreciable improvements representing 80% (or $8,000,000) and the land 20% (or $2,000,000)
of that amount.
(2) ACQUISITION OF PROPERTY:
The source of funds for the purchase of the shopping
center (including a $1,000,000 reserve for renovation and possible
working capital requirements) is as follows:
Equity:
Community Development Corps.
Business Assistance Center
Debt:
Existing mortgages
Additional borrowingsFinancial institutions
Subordinated debt - Dade
County
Seller to hold
$2,000,000
500,000
$ 2,500,000
$3,858,508
2,641,492
1,000,000
1,000,000
8,500,000
$11,000,000
Total
(3) FINANCING:
(a) Existing Mortgages-
The property is subject to assumable mortgages for the
first six years and nine months in favor of Teachers' Annuity
The existing debt is at an average rate of approxiAssociation.
The
mately 65 and will be fully amortized at May 31, 1990.
monthly payments are $58,025, or $696,300 per year.
(b) Financial InstitutionsThe private borrowing with financial institutions of
$2,641,492 at 9% is to be amortized on a 30-year basis until
104
The monthly
May 31, 1990 (the payoff of the existing mortgages).
payment will be $21,254 ($255,048 per year) through May 1990.
After May 1990, the remaining principal balance will be amortized
at '9% over 10 years. The monthly payments after May of 1990
will be $31,434 ($377,208 per year).
(c) Subordinated Debt -
Dade County-
Interest on the additional subordinated debt with Dade
County of $1,000,000 is to be accrued at the rate of 6Z until
May 31, 1990. Then, after May 1990, the principal and prior
The
accrued interest will be amortized at 6% over 10 years.
monthly payment starting in June of 1990 will be $16,457
($197,484 per year).
(d) Seller To HoldAn additional $1,000,000 purchase money obligation
will be held by the seller with simple interest at 10% per annum.
All principal, the first year's interest and 50% of each succeeding year's interest will be deferred until May 31, 1990. The
seller's balance of $1,425,000 will be paid on May 31, 1990,
with the proceeds of a refinancing loan to be amortized at 10%
over 10 years. Monthly payments, starting in June of 1990, will
be $18,051 ($216,612 per year).
Because of provisions in the existing mortgages that
no additional debt may be secured by the property, the private
borrowings will be either unsecured or secured by the stock of
the corporation formed to acquire the assets of the Northside
Shopping Center.
(4) OPERATING INCOME AND EXPENSES:
Rental income and expenses were projected with the
assistance of James Kurps, Director of Management with the
Courtelis Company. Mr. Kurps reviewed the available data to
arrive at assumptions of gross income and expenses in a static
condition. The overall inflation rate is assumed at 5% per
(See the attached Report by Courtelis Company.)
year.
(5) INCOME TAXES:
The assumption has been made that funding of the
investment directly or indirectly by §501(c)(3) organizations
will not result in "unrelated business taxable income"; therefore,
no provision for state or federal income taxes has been made.
105
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REPORT BY COURTELIS COMPANY
108
g
.L
gT
MIAMI,
01 BRICKELL AVENUE
$ CG)Mv11ANy
4C*QTGU5<:*M
ANYTELEPHONE:
(305)
, FLORIDA 33131
379- 8A67
May 25, 1983
Mr. Charles I. Babcock, Jr.
Chairman
The Babcock Company
1500 Monza Avenue
Coral Cables, Florida 33146
Re:
Northside Shopping Center
Income and Expense Projection
Dear Mr. Babcock:
At your request I reviewed the following documents in order to project
period
of
property
for
the
for
this
income
and
expenses
September 1, 1983 through August 31, 1988:
*Tenant Identification List dated June 1, 1982
*Tenant Identification List dated February 1, 1983
*lndividual Lease Abstracts
*Tashi Valley N.V. Financial Statements for Years Ending
December 31, 1981 and 1982
*Selected Tenant Sales Summaries for 1980, 81 and 82
*Schedule of Percentage Rent Payments 1980, 81 and 82
*Cash Flow/Taxable Income Projection, Analysis of Taxable
Income and Loss 1983 - 2002 (Schedule I)
From the attached projection sheet you will note that I am projecting a
higher initial income than that shown on the previous cash flow reports.
However, the annual rate of increase over the projected period is less
than previously projected. There are several factors involved in this
variance.
1)
The initial cash flow/taxable income projection
was based on income figures and existing leases
available at the time of that report. Since that
time there have been several tenant cbanges and
rental increases which affect the base rent
income. The income from the food store was not
fully included in the initial report.
109
Mr. Charles I. Babcock, Jr.
May 25, 1983
-Page 2
2)
This projection is based on very conservative
assumptions for CPI rental increases, re-leasing
and tenant sales increases. Thus, the rate of
increase from year to year is less than previously
projected.
Favorable renewal and new leasing
would
have
a - significant
impact
on
these
projections. Tenant sales generating overage rental
payments is a significant factor and my projections
could be quite understated.
On the expense side there are some current expenses which are attributable
to the particular current ownership situation which would not be a factor if
this property is owned and operated locally, i.e.,
Communications
Consulting Fees
$10, 844
15,161
The communications cost is extremely high due to telex and long distance
phone conversations. This expense should be around $3,600/year. The
consulting fees should not be an expense for a new owner.
In addition, the 1982 Schedule of Expenses included .a bad debts entry of
$19, 146.
I have made an adjustment on the income side labeled
"Collection Loss" to cover this entry. The schedule listed insurance under
fixed charges; I have included this expense under operating expenses.
These adjustments would make 1982 operating expenses to be approximately
$411,000. The cash flow/taxable income projection showed $450,000 for these
expenses for the first year. I suggest that we continue to use this higher
figure since it would provide additional funds for extra maintenance
personnel, higher costs for repairs and maintenance and a little extra for
Merchants Association contribution (security guards costs are paid from this
fund). These expenses are assumed to increase five percent each year.
This projection does not include any provisions for debt service since there
are a miriad of methods to structure the financing. Mr. Levine and you can
determine what amounts you want to plug in for this expense. I have also
left out corporate income tax.
In addition to the projection, I have attached a couple of pages of my
personal comments and observations. After you have had a chance to review
this information we can get together to discuss this report.
Sincerely,
James Kurps
Director of Management
JK :kw
Enclosures
110
COMMENTS /OBSERVATIONS
for the Courtelis Company I
As Director of Management
routinely prepare annual budgets, proformas and projections
similar to the projection I have just completed for Northside.
Generally, my forecasts are for well established properties that
have a history of continuous, increased income growth. I have
the benefit of first-hand operating experience with a reasonable
knowledge of past costs, current market rent structures,
income trends, tenant sales and the related factors that can
influence a property's cash flow.
This projection utilized the available data along with very
conservative assumptions to arrive at the gross income figures.
reflects anticipated costs to
The expense side accurately
maintain this property at a higher standard. I am confident that
these projections are reasonably accurate, but they may be
misinterpreted if they are not understood to represent a static
condition. All of the assumptions were based on the premise
that this Center would just continue at the same level that it is
operating on at this time. The only adjustments were minimal
cost of living increases tying sales volume, expenses and rental
increases, where applicable, to anticipated increases in the CPI
there are some additional factors to be
However,
Index.
considered in analyzing this data.
A comparison of the two tenant identification lists indicates that
in the interim approximately 15,000 square feet was vacated
with approximately 8,000 square feet re-leased (not necessarily
the same space). The effective rental rate for the 15, 000 square
feet was $4.66/square foot; the 8,000 square feet was re-leased
at an effective rate of $6.08/square foot. It is evident that
Management is able to obtain new leases and renewal leases at
much more favorable rates. Current leases under negotiation
also indicate that the prospects for increasing base rent income
are very good.
There are a number of leases which provide for a fixed rental
rate for their entire term. Several of these tenants are
currently either paying percentage rent or can be expected to
be paying percentage rent in the near future because of the
increase in gross sales due to inflation. If additional sales can
be generated at this Center, there will be a significant increase
in percentage rent income. It is not unrealistic in my opinion to
anticipate that at least some of the current sales volume from
Sears will be transferred to some of the other existing tenants
once Sears vacates. This would also increase percentage rent
income.
111
Additionally, the Metro Rail System will have a positive - impact
on gross sales for this property.
If this projection is to be extended past August 31, 1988, some
sort of an adjustment should be made to the income side to
incorporate the effects of renewal leasing at higher rates,
increases percentage rent income and re-leasing the Sears main
store and the related 'space (auto center, patio area and
storage) .
112
NORTHSIDE SHOPPING CENTER
5-Year Projection - Income/Expenses
NOTES /ASSUMPTIONS
Base Rent
Arrived at by calculating each tenant's annual rent per the terms of the Lease.
Renewal leases and annual CPI increases were assumed to be 105% of previous
years rate. Income from Holly Shops not included per discussion with Mr. Stevenson
,since this tenant is expected to vacate his space. Income for leases under negotiation
is McDonald's, Trax Auto, and odd lots not included.
Collection Loss
Assumed to be 2%of base rent.
Sears
Straight lined at $278, 902/year based on average of tenant's payments.
Percentage Rent
Based on actual individual tenant's 1982 sales increased 5%each year. This would
represent a static condition where sales only keeps pace with inflation.
CAM
Based on current leases and rates, CPI increases assumed to be 5%.
Ooerating Expenses
-
As explained in the cover letter, based on 1982 actual expenses with appropriate
adjustments including the anticipated higher expense of maintaining this property
in acceptable condition.
Real Estate Taxes
Taken from the cash flow/taxable income projection. No adjustment made for
existing tax stops in tenant leases. Does not include any proration for 1983 taxes
payable by Seller.
Special Repairs
First year includes costs for painting, seal coat and restriping parking lot; parking
lot lighting repairs; landscape improvements; general small repairs to bring the
property back to acceptable condition; and funds for getting vacant spaces into
rentable condition.
Second, third and fourth years show $50,000/year for an on-going program of
upgrading the property. This may include items such as additional landscaping,
tenant improvements, site lighting improvements, etc.
The fifth year expense assumes the need for repainting and resealing and striping
the parking lot.
113
5-Year Projection - Income/Expenses
Page 2
Reserves
Anticipated costs for major roof repair, parking lot repairs, architectural
improvements.
114
911183-0/31/04
9/1184-B/ 31185
91/@S8-8131186
911186-8131187
9/1/87-
8131/88
INCOME
Base Rent
Less 2
Collection Loss
$1,324,214
$1,347,0176
484
26, 950
26,
$1,368,572
27, 3711
$1,399, 369
$I,419, 843
27, 987
28, 397
1,297,730
0,320,526
1,341,200
1,371,302
1,391, 446
Sears
278,902
278,902
278,902
27,902
278,902
Percentage Rent
135,502
152,185
171,997
198, 341
225,983
Adjusted Base Rent
551
70, 578
$1,78I,685
$1,822,191
$450, 000
$1472,500
Real Estate Taxes
104,000
Special Repairs
178,500
CAM
INCOME
69,
71,656
72, 780
73, 976
$1, 921,413
$1970, 307
$1496,125
$520, 931
$546, 97
108,161
112,487
116,906
121,665
50,000
50,000
50,000
120,000
150,000
150,000
150,000
15b,000
150,000
$972,834
$780,661
$808,612
$1837,917
$938,643
,
$1 041 530
, ,
1 esi n9o
1e0i
$1,863,71
56
ENPENSES
Operating Expenses
Percentage Rent Adjustment
Reserves
EXPENSES
CASH AVAILABLE FOR
DEBT SERVICE
90, 334
$800 851
, ,
$1 055 I1
sa
ARTHUR ANDERSEN
& CO
2929 EAsT CoMMERCIAL BOULEVAUD
FORT LAU!D1RDALE,
3338
FLORIDA
(305) 561-9227
April
12,
1984
Mr. Steven Polon
Twelve Fifty East Building
1250 East Hallandale Beach Boulevard
Hallandale, Florida
33009
Dear Steve:
This letter will summarize the conversations Dick Satterfield
and
I have had with you during the past
two weeks regarding the
purchase of the Northside Shopping Center.
The original
contract called for a purchase prince of
$10,000,000 subject to possible reduction to $9,750,000 based upon
certain appraisals which might be required.
As you
know, that offer
was based upon gross rents in the range of $1,700,000 to $1,800,000,
which represented
and
the operations of
spring of 1983.
Gross rents
flow sufficient to service the
of $9,750,000 to $10,000,000 as
recap of
the Center in the fall of
1982
in that range would generate cash
debt associated with a purchase price
stated in the present contract.
A
the situation a year ago and at present is as follows:
Spring
1983
Spring
1984
Gross rents
Operating expenses
Real estate taxes
$1,712,000
(411,000)
(104,000)
$1,352,000
(420,000)
(114,000)
Cash flow before
debt service
$1,197,000
$
Gross rents have declined by $360,000
1983 level.
The $360,000 decline
is
818,000
to 79% of
the Spring
composed principally of
116
the
AnTHUR ANDERSEN & (:O.
CETIFIZED PUBLiC ACCOt1aTvANTs
Mr. Steven Polon
vacancies
in the Sears
($50,000).
April 12,
-2-
space
Similarly, the
has declined by $379,000
As a result of
($278,000)
However, we all
price.
a result of
grocery
of the
store
Spring 1983 level.
the decline in gross rents
$9,750,000 would
it
has become
the gross
a
space were to be
indeed be
a
fair and
financing sources.
clear
that
will be available until an anchor tenant and other
located which will increase
flow,
the present
the vacant
Vie have explored numerous
these attempts,
and cash
justified at
recognize that if
leased at any reasonable rate,
reasonable
the
cash flow available before debt service
to 68%
purchase price of $9,750,000 cannot be
time.
and
1984
no
financing
tentants are
rents to the level projected
in Spring of 1983.
In view of
the
-he difficulties noted above,
purchase price for the Center at closing wili
an additional
contingent payment of $2,250,000.
we agreed that
be
;7,500,000 with
The obligation
at such
time as the
gross rents of
month period equal or exceed
the Center
$1,750,000.
for
in such other
subordinated
to the purchaser's equity in
the property based upon a $7,500,000 purchase price.
The
the right to locate suitable retail tenants
vacant space and the purchasers will agree
is
to rehabilitate
seller
for the
to absorb any usual
customary brokerage commissions which may result.
community project
form
The contingent payment will be
as may be acceptable to the seller.
will retain
12-
the preceding
The $2,250,000 contingent
payment will be secured by a letter of credit or
non-interest bearing and
to
triggered
pay the contingent element of the purchase price will be
The
focus of
and
the
this vitally important economic
117
ARTHUR ANDERSEN & CO.
CERTIFIED PUTLIC
-3-
Mr. Steven Polon
hub and to restore
last
ACCOUWTANTS
jobs
the 700 to 800
several years.
April
which have
The governmental,
who have been so supportive of
civic and
12,
1984
been lost over
the
business leaders
this project constitute an impressive
network of contacts and influence which will assist the purchasers
in the effort
to secure tenants
for Northside.
In
event that the combined efforts are unsuccesful
gross rents
to the trigger point
seller's purchase money mortgage),
expire.
Based on
only be necessary
$1.50
per square foot to
the present time, it would
space at an average rate of about
reach the trigger point.
seller will have the right
to prohibit the
price less
during the
than $9,750,000
increasing the
due date of the
the contingent obligation will
the vacancy rate at
to rent the
in
by May, 1990 (the
the unlikely
In addition, the
sale of the property at a
contingency period.
The base price of $7,500,000 due at closing on May 31,
1984 will be
satisfied by:
provided
by Dade
existing
first mortgage;
seller for the
The
as
County from the
and,
ULTA grant;
purchase money
assumption
of the
the
note to the seller will be the same
in the existing purchase contract (no principal amor-
tization, interest accruing at 10%
in the first year and
1990 coterminous with
a projected
per year with no interest payable
5% per year payable
balloon payment of all principal
Based upon
(2;
(3) a purchase money note to
balance secured by a second mortgage on the property.
terms of the
set forth
(1) a cash downpayment equal to the funds
and deferred
the payoff of the
May 31,
annually thereafter with a
1984
118
in May
existing first mortgage).
closing,
purchase price will be as follows:
interest due
the components
of the
&
ARTHUR ANDERSEN
CERT!TPED
PUBUaC
(O.
ACCOUWTANTS
-4-
Mr. Steven Polon
April 12,
Cash-UMTA grant
Assumption of 1st
mortgage
Purchase money note
$2,150,00':
3,502,000
1,848,000
$7,500,000
Total
The principal amount of
further increased by
maintenance) which
1984
the purchase money note will
reasonable expenditures
(other than
be
routine
the seller may make prior to closing for land-
scaping, parking lot
lighting, paving, etc.,
and
for interior
renovation of vacant space.
If you have any questions or comments on
as indicated
in
Also enclosed
is
a copy of
the letter from Teachers
Insurance and Annuity Association, which confirmc
to release
the eight acres
financing on
the terms of sale
this letter, please do not hesitate to contact me.
on 27th Avenue and
the remainder of
their willingness
to permit
subordinated
the property.
Very truly yours,
ARTHUR ANDERSEN & CO.
By
Larry A.
bkt
Copies to:
Mr. Richard W. Satterfield
Mr. T. Willard Fair
Ms. Gail Williams
(Continued Next Page)
119
Levine
ARTIiUR ANDERSEN
&
Co.
CERTIFIED PUBLIC ACCOrNTAWTS
Mr. Steven Polon
Copies to:
April
-5-
Congressman William Lehman
Mayor Stephen P. Clark
Commissioner Barbara Carey
Commissioner Ruth Shack
Senator Carrie P. Meek
Dr. Ernie Martin
Mr. Charles Scurr
Mr. Raul Masvidal
Mr. Kenneth M. Neely
Mr. Sonny Wright
Mr. Don Stevenson
John H. Patterson, Esq.
John Smith, Esq.
Mr. Joshua High
Mr. James Kurps
120
12,
1984
-
-
Teachers Insurance and Annuity Association
College Retirement Equities Fund
730 Third Avenue/New York, NY 10017 (212)490-9000
March 27,
1984
Mr. Larry Levine
Arthur Andersen & Co.
2929 East Commercial Boulevard
Fort Lauderdale, FL 33308
RE:
TIAA Mtge. #M-900
Northside Shopping Center
Miami, Florida
Dear Larry:
Please be advised that Teachers is willing to waive the prohibition
of additional encumbrances and to release the eight acres as requested
in your letter of November 29, 1983. I will forward a letter which
outlines the terms and conditions under which Teachers is willing
to waive the prohibition of additional encumbrances, as we get
closer to closing and know the exact amounts of the additional
loans.
Please do not hesitate to contact me if I may be of assistance.
Sincerely,
avid Redmond
Senior Mortgage Analyst
kw
cc:
Mr.
Mr.
Mr.
Ms.
T. Willard Fair
Charles D. Scurr
Donald Stevenson
Gail Williams
121
APPENDIX D:
CENSUS AND TARGET AREAS
122
CENSuS
AND
AREAS
RA
ILRDOAD
U----------
. . . . .-
.
..
.e .. . .. ... .. .. . .
.....
ee e
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.
.
.
.
.
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.
e
. . . . . . . .
.
-.
.
. . .
.. .
.
.
e e.
- -
.
N
e
. . o .
.
.
.
.. .
. .
.
.
.
reeoeeeee;
H
eo er
.
.. . . . . . . . . . . . . . . .
... ... ... .... ..
e
.
.
Nw
.
7A..
.
.
.
.
.
.
.
I1i
.
.
.
e
.
.............
e
W-EST
.
.
eeee
..
.
. .
.
.
.
. . . e . . o . . ..
eeo
e[
. . .
. r. .
.
>ee
.
.
.......
.. .....
................
. .
...........
.
r
o.
. . . . . . . . . . . . . . . . .
. . . . . . . . e . . . . . . . . .
......
e..
.
V.
. . , e . . . ee . e e .
ee ee 10ee
ee
L1TTLE'
e ee . e o e
e eoe 4ee
G
ee
e o e DIe IF,.
...
e
Z.
(
RivER
e
ee e
......
N
NORT HSIDE
TARGET AREA
cAtE f-i 4
a
CENSUS
M~IAMI5 AVE
-
5OUNDARIES-----
M-0 NHS SERVICE AREA
BOUN DARI ES
123
1980 CENSUS DATA
Dade SMSA
West Little
River*
Gladeview**
West Little
River and
Gladeview
General Characteristics:
1,625,781
34.7
32,492
27.3
18,919
24.9
51,411
@26
Family Households
422,762
7,658
4,248
11,906
Family HH w/kids
less than 18 yrs
188,643
4,368
2,278
6,646
39,613
1,337
1,283
2,620
Total Persons
Median Age
Female heads w/
kids less than 18
Race & Ethnicity:
12%
87%
1%
3%
31%
63%
6%
22%
78%
17%
5%
36%
White
Black
Other
Hispanic
24%
72%
4%
15%
Education:
1,048,561
People Age 25+
West Little
10.02.
**
Gladeview -
Source:
1980 Census
10.04,
of Population and
Bureau of Census,
1983.
Housing,
124
9.02,
10.01,
15.02.
Census Tracts SMSA,
Analysis by Karen Margolis
69%
47%
18%
7%
67%
43%
17%
8%
River - Census Tracts 4.07. 4.08. 9.01,
Census Tracts 9.03,
26,793
9,439
71%
50%
19%
7%
77%
64%
34%
17%
Some High School
High School Grads
Some College
College Grads
*
17,354
U.S.
Dept.
PHC80-2-241,
of Commerce,
Issued July
1980 CENSUS DATA,
Dade SMSA
p.
2
West Little
River*
Gladeview**
West Little
River and
Gladeview
Income, 1979:
Median Income Households
$15,571
$12,890
$ 8,566
@$11,000
$20,402
$16 ,002
$12,258
$14,666
$18,642
$13,926
$10,079
@$12,000
$23,472
$16,520
$13,787
$15,559
Mean Income -
Households
Median Income Families
Mean Income -
Families
Income in 1979 Below
Poverty Level:
Persons
15.0%
23.8%
36.5%
28.5%
Unrelated
individuals
27.4%
33.2%
46.3%
39.0%
Families
11.9%
21. 5%
32.0%
25.2%
Householder
worked in 1979
7.1%
14.5%
20.8%
With related
children less
than 18 yrs.
16.1%
25.9%
40.4%
31.0%
28.3%
37.5%
49.3%
43.1%
19.1%
29.1%
35.5%
31.8%
38.2%
45.0%
57.8%
51.4%
Female HH, no
husband present
Householder
worked in '79
With related
children less
than 18 yrs.
River -
Census Tracts 4.07. 4.08. 9.01, 9.02,
*
West Little
10.02.
**
Gladeview - Census Tracts 9.03, 10.04, 15.02.
Source:
10.01,
1980 Census of Population and Housing, U.S. Dept. of Commerce,
Bureau of Census, Census Tracts SMSA, PHC80-2-241, Issued July
1983.
Analysis by Karen Margolis
125
1980 CENSUS DATA,
p.
3
Dade SMSA
West Little
River*
1,292,407
23,013
Gladeview**
West Little
River and
Gladeview
Labor Force Status:
Persons Age 16+
Civilian labor force
16+
Unemployed
Unemployed among
women
Unemployed among
H.S. dropouts,
age 16-19
Not in labor force
among H.S. dropouts, age 16-19
13,095
36,108
781,308
5.0%
14,873
6.3%
7,117
8.4%
21,990
7.0%
5.7%
7.1%
10.8%
8.4%
20.3%
31.7%
29.3%
30.9%
43.7%
49.1%
61.5%
53.8%
15,365
7,967
Labor Force Status
in 1979:
Persons Age 16+ in
labor force
Percent of all
persons 16+
831,794
Worked in 1979
40 or more weeks
50-52 weeks
With Unemployment
in 1979
Mean Weeks of
Unemployment
River -
64.4%
67%
61%
64.6%
815,655
76%
61%
14,847
74%
56%
7,462
68%
49%
22,309
72%
54%
19%
24%
31%
26%
13.6%
15.1%
18.9%
16.6%
*
West Little
10.02.
**
Gladeview - Census Tracts 9.03, 10.04, 15.02.
Source:
23,332
Census Tracts 4.07. 4.08. 9.01,
9.02,
10.01,
1980 Census of Population and Housing, U.S. Dept. of Commerce,
Bureau of Census, Census Tracts SMSA, PHC80-2-241, Issued July
1983.
Analysis by Karen Margolis
126
APPENDIX E:
EMPLOYMENT TAX CREDITS
127
ZONE)TAXCREDITS
EZ (ENTERPRISE
Employer Fact Sheet
What are EZ Tax Credits?
Florida
They are state tax creoits for newly created joas (Section 220.181 Florida Statutes, as amended in 1992).
Corporate incomeraxpaying businesses may receive a 25 percent tax credit on wages paid to residents of enterprise
zone areas hired on new jobs. Since July 1982. any unused EZ credits earned may be carried-over for a five year
period.
What is in EZ Eliible Anolicant?
An eligible employer may only claim EZ tax
An EZ eligible applicant ts a resident of an approved enterprise zone.
credits on wages paid to EZ residents for months in which the employee resides in an EZ area.
For EZ tax credit ourooses, what is a new job?
The following definitions regarding "new jobs" are based on technical advisements issued by the Florida
advisements are subject to change upon issuance of OR rules.
of Revenue (00R).
The
Department
A now job is defined two ways:
1.
Quantitativelv - when an employer reports more employees on their current year's unemployment compensation
quarterly tax report than the average they reported in the previous four quarters.
2.
Qualitatively - when an employer diversifies and hires employees to perform services not provided in the
previous tax year, he/she has, For EZ credit purposes, established new jobs, even if the total number employed
is
than last year.
less
Additional EZ Tax Credit Job Reouirements
A corporate taxpaying employer may claim an additionalyear's Florida EZ credit only when:
1.
The EZ enployee is promoted but still paid less than $1,501
2.
The EZ employee is replaced.
NOTE:
a month,
or
(by another EZ resident) and does not claim Unemployment Compensation benefits.
Eligible employers whose firm is not located
month period.
portion of the initial
12
in an EZ are,
mayonly
claim replacement credit for t'e unused
How to Claim EZ Credits?
To claim Florida Economic Revitalization Jobs Creation Incentive credits (EZ credits), the law requires an employer
to attach to a Department of Revenue Corporate Income tax Form (F-1157)both the resolution(s) passed by the
for tax credit
letter which designates this area an enterprise
appropriate local government and the
purposes. Submit this information with your Florida Corporate income Tax return.
zone
OCA
How do I locate EZ eLicible moolicants?
in
hiring job seekers eligible for EZ tax credits, please contact your nearest local office of
If you are interested
the Florida State Employment Service.
Are tyere anv restrictions or limitations?
Yes, a few reasonable restrictions.
L.
The program is efFective For businesses earning more than $5,000 in a given tax year in Florida.
$5,000 of
earned is exempt From Florida corporate income tax.
2.
The EZ credit
federal tax liability because as the credit reduces Florida taxes,
amount that can,be deducted from federal taxable income.
income
increases
it
The first
will reduce the
Hav I claim both the Federal Targeted Jobs Tax Credits (TJTC) and the Florida EZ Tax Credits at the same time?
TJTC
Yes. Some EZ eligibles will also meet Federal
eligibility criteria.
These combined savings over a two year
period could result n as mucn as a 113,500 (54,500 raJC/s9,000EZ) EZ zone emoloyer tax credit on each eligible
individual hired on a new job.
128
i
BOSS0
&
n ft
v v
3
IUS*
__________________________
I, t
dl
TARGET AREAS
INWADE CMUNTY
h
1. NORTH COUNTY
2. OPA-LOCKA
3.
.LITTLE
RIVC
4. HIALEAH
129
7.
8.
9.
10.
11.
12.
13.
DISONITTa RIVER
ALLAPATTAH
WYNWOOD
CULMER
CENTRAL DOWNTOWN
LITTLE HAVANA
COCONUT GROVE
SOUTH BEACH
14.
SOUTH MIAMI
15.
PERRINE
16.
17.
18.
'
GOULD
NARAN.IA
HOMESTEAD-FLA. CITY
TIFE IS mDEY-DllARS SAVED
ADVERTISING COSTS
$229.60
wIilAMIHERALD,JCOLLMl
MiAMI
INCI, 2 SUNDAYS
TIME,3con'I INCH MINIMUM, 1 THURSDAY
DIARIO LAS APERICAS,1.
TOTAL
CoLLI
21. CC
22.00
INCH,1 SUNDAY
PERSONNEL COSTS
STAFF TIMI1E:
REVIEw&SCREEN APPLICATIONS/RESLHES
($35/STAFF HR.) (1/2 HR./APPLICATION) (20 APPLICATIONS)
150.00
37.50
INTERVI ES
($15/STAFF HR.)(1/2 HR./INTERVIl)(5 INTERVIBqS)
IE.5
TOTAL
TAX CREDITS
TATE (FO NE EMPLOYEE):
($4/HR. WAGE)(40 HRs./WK.)(52 wKs.)(25% CREDIT)
FEDEPAL(FIRST YEAR FOR ONE EMPLOYEE):
($8256*) (50%cREDIT)=$4128 (HoiEvER, MXIM
Is $3,O00/EPLOYEE)
2,064.00
3,000.00
5,4.
*ANNUAL WAGE AT $4/HR.
$5524.10
GRAND TOTAL SAVE)
130