The Miami Herald

Posted on Mon, Dec. 12, 2005 THE MIAMI HERALD

MIAMI-DADE COMMISSION

Chairman cuts unusual deal

Miami-Dade Commission Chairman Joe Martinez bought land from one of the county'slargest home developers in a deal that offered the commissioner favorable terms.

BY NOAKI SCHWARTZ AND MATTHEW HAGGMAN

Miami-Dade Commission Chairman Joe Martinez bought a residential lot in his district this year from one of the county's biggest private home developers in a deal that some real estate analysts called unusual:

Martinez put $1,000 down on the land, or just over 1 percent of its $85,000 cost, signed no contract and got to pay the remainder more than 18 months later -- when built-out lots in the subdivision were closing with land priced at about $16 a square foot, compared with the roughly $8 per square foot that Martinez paid for his lot.

And though the county's ethics agency initially signed off on the deal last year, its executive director told The Herald that it may take another look.

The developer, Caribe Homes, has sold only one other vacant lot to an individual customer in its 18 years in business, said Carlos ''Charlie'' Martinez, the company's head, who is no relation to Joe Martinez.

Charlie Martinez, a former president and current director of the Latin Builders Association, which has backed Joe Martinez in his election campaigns, said he initially was ''very skittish'' about how the public might view the deal. Nonetheless, he said it was ''way above-board'' and that the terms didn't differ much from normal.

''During the 18 years we've been in business the one thing that has never, ever been up for negotiation is the standard of ethics and integrity of this business,'' he said.

Still, real estate experts told The Herald that the deal's terms seemed favorable to Joe Martinez. One called them "the kind of terms you would do for a relative or friend.''

Joe Martinez declined three requests for an interview and would not respond to written questions for this story. His spokesman, Gilbert Cabrera, referred inquiries to the Miami-Dade Commission on Ethics & Public Trust, which found nothing wrong with the transaction last year after Joe Martinez requested a review.

However, in response to the Herald's questions, Robert Meyers, who heads the ethics commission, said its review was done "very superficially.''

''We're not in the real estate field,'' he said. "We looked at whether the price was fair.''

In her weeklong review, ethics investigator Sylvia Batista compared the price the commissioner paid for his lot to the prices paid to Caribe by another developer, Lennar Homes, which bought more than 200 lots of varying sizes -- most smaller than Joe Martinez's lot.

'' . . . We may conclude that Commissioner Martinez paid market value or above for the lot that he purchased from Caribe at Tamiami LLC,'' Batista wrote. "As a result, this matter is closed.''

After the Herald asked him about it, Meyers referred the case to the ethics commission's independent advocate, who could reopen it. As of Friday, there had been no decision.

At issue is a handful of votes Joe Martinez made during the months he was under contract to Caribe Homes -- votes that helped create special taxing districts for Caribe developments, including the one for which he was buying property.

Such districts allow developers to pass the costs of infrastructure improvements along to home buyers. Such costs can reach into the millions.

''During that 18-month window maybe he should not have been voting on anything on Caribe,'' Meyers told the Herald.

DEAL CUT

The transaction had its beginnings in early 2003, Charlie Martinez said, when Joe Martinez called him at his office and asked about buying an empty lot in a new subdivision Caribe was developing called EFM Estates.

'He ended up calling me one day and asked me, "Would you be interested in selling me a lot?' '' Charlie Martinez recalled.

By May 2003, the developer had drawn up a contract -- one that set a price of $85,000 with $1,000 down -- and a closing date of February 2004. However, the sale didn't close until January 2005.

In an interview, Charlie Martinez acknowledged it was unusual for his company to sell a vacant lot to an individual, but said the $1,000 down payment was "not unique.''

Caribe allowed about 20 home buyers in another development to put $1,000 down for condominiums priced between $95,000 and $120,000 in 2004, company documents show.

And he said the 18-month term of the deal came about because the contract required that the developer deliver the land ''fully improved'' with utility lines and road access. That infrastructure wasn't installed or approved by the county until November 2004, Charlie Martinez said.

The contract dated May 2003 -- a copy of which was sent to the county ethics commission when Joe Martinez asked for its review in October 2004 -- was never signed.

Charlie Martinez said it's not unusual for his company to proceed, anyway.

''We're not real good at the details,'' he said.

REDUCED PRICE

The commissioner agreed to the $85,000 price, which Charlie Martinez said was based on how much a developed lot would have sold for.

The Herald calculated that Joe Martinez received a $4,000 to $6,000 break on the land, and in an interview Charlie Martinez did not dispute those figures. However, he said that at the time, in 2003, it was still a good deal for his company -- especially since he did not have to take on the trouble of building a house there.

'Of course, any person today, in hindsight, would say `Oh my God, you gave away the farm,' '' Charlie Martinez said. "But at that time that was a very good deal for me as a seller but not necessarily a good deal for him as a buyer, but that was for him to decide.''

An e-mail that was part of the ethics commission's investigation said that Charlie Martinez had not sold a vacant lot to any other individual in that development.

''Charlie Martinez, President of Caribe Homes, said he would provide us with comparables,'' Batista wrote. "The only problem is that he has not sold any lots to homeowners directly but has sold several lots to Lennar Homes.''

In initial interviews with The Herald, Charlie Martinez said this was the first time he had ever sold a lot to an individual.

Later, after checking with his staff, he said that on one other occasion Caribe sold an empty lot to a buyer who purchased a home and wanted to keep an adjacent property undeveloped.

''Is it unusual? Of course,'' he said.

The development includes 431 lots, about half of which Caribe sold to home builder Lennar. Charlie Martinez said that Joe Martinez hand-picked the lot he wanted from a site plan -- at 10,500 square feet, it was one of only a handful of larger properties; dozens are about half its size.

The commissioner's lot sits in a block that otherwise went to Lennar -- something developers call a ''carve out.'' Such carve outs are also unusual -- though Charlie Martinez said this one happened because of a mix-up; Caribe thought it had the right to sell the lot, while Lennar thought it was among the lots it had bought, he said. Caribe wound up transferring the remaining lots to Lennar with the exception of Joe Martinez's lot, he said.

Charlie Martinez and Anthony Seijas, Lennar's regional vice president for Miami-Dade and Broward counties, agreed that Lennar had no other involvement in the development or in Joe Martinez's land purchase.

FRIENDLY TERMS

Jack Winston, a real estate analyst with Goodkin Consulting, said the terms the commissioner got "are the kind of terms you would do for a relative or friend.''

''If Caribe had a cousin or brother or a very good friend, with respect to the terms and conditions of the sale, that is a place they could massage the deal,'' he said.

Another expert questioned the validity of the unsigned contract.

''It's unbelieveably casual and it technically doesn't reach the dignity of a contract because it's not signed by both sides,'' said real estate attorney Reuben Schneider.

Charlie Martinez said he and Joe Martinez do not socialize. He said he met the commissioner during his first campaign for office, and has donated a total of $500 to his campaigns.

The commissioner, a former police lieutenant who declared bankruptcy in 1997, was first elected in 2000 and became chairman last year.

Since closing on the lot in January, Joe Martinez has moved forward with plans to build a 5,300-square-foot home there.

Plans include a pool, a built-in wine cooler and a master bedroom that stretches across the second floor with coffered ceilings, a private sitting room and decorative columns leading into a 17-foot-long ''hers'' closet.

Charlie Martinez said his company is not involved in the construction.

''I had no idea what he was going to do there,'' Charlie Martinez said.