Hollywood mulls homeless shelter buy to spur redevelopment

City would pay $4.8 million for 10 properties if commissioners approve transaction

Oct.October 15, 2014 09:45 AM

Hollywood commissioners will consider Wednesday whether to pay $4.8 million to buy a tax-exempt homeless shelter on North Federal Highway that City Manager Cathy Swanson-Rivenbark said is a major drag on the city’s redevelopment plans.

Swanson-Rivenbark acknowledged the city purchase of the shelter would be an unusual way to spur economic development. But she told The Real Deal the acquisition of the shelter at 1203 North Federal Highway, “which we can fix up and flip, or put out for redevelopment,” would allow the city to reinvigorate the stagnant corridor north of downtown Hollywood.

If approved, the city would pay $1.2 million for the 16,481-square-foot shelter, plus $1.3 million for nine nearby rental properties that owners Sean Cononie and nonprofit COSAC Homeless Assistance Center operate as separate shelters. The city’s $2.5 million payment for the rental properties would exceed their $2.2 million appraised value. The city would pay an additional $2.3 million to help Cononie relocate and re-establish his shelter operation outside Hollywood.

“We don’t pay property tax,” Cononie told TRD. “The city is going to make their money back long term.”

The city previously tried to remove the shelter by claiming in a lawsuit that the property’s operation violated its zoning code. A Broward Circuit Court judge ruled against the city in 2005.

Cononie said about 300 homeless people pay rent to reside at the shelter and smaller rental properties. Some tenants pay their way by standing on street corners and selling copies of a newspaper called the “Homeless Voice,” which Cononie and his colleagues publish.

The main shelter previously operated as a hotel, according to Cononie.

“It was a sex hotel,” he said. “It was a legitimate swinger’s hotel called the Haulover Inn. [It] had 22 rooms in different designs and themes … the jungle scene, the Oriental theme, and so forth.”

From Jan. 1 through Aug. 1 of this year, the city recorded 234 police calls and 411 fire-rescue calls from the 1203 North Federal Highway shelter.

“We do get a lot of ambulance calls,” Cononie said. “If we didn’t house them, these calls would end up on the street. There would be overdoses in the parking lots, overdoses on the bridges.”

A “post-closing agreement” is attached to the proposed purchase-and-sale agreement between the city and the Cononie-led group. Among other terms, Cononie’s homeless operations must stay outside of Hollywood for 30 years. Violations would trigger financial penalties.

The main location of the COSAC Homeless Assistance Center might end up just outside Hollywood. Cononie said the shelter operator acquired land at I-595 and State Road 441 in unincorporated Broward County for what he calls a potential “small city” of homeless shelters.

Cononie noted Lazy Lakes is a Broward County village of a less than 20 affluent homeowners.

“They have their own mayor, their own constable, their own city commission, their own zoning board,” he said. “If you have a city for the rich, you should be able to have a city for the poor.”

Commissioner Kevin Biederman told TRD he looks forward to getting public input on the proposed deal during Wednesday’s meeting. A supermajority of five of the seven commissioners must vote in favor of the transaction for it to occur.

“I’m not necessarily in favor of buying property,” Biederman said. “We’re not in the real estate business. But if we can buy property so [the city] can sell it and get it redeveloped, then I guess that’s what we have to do.”

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