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The Real Deal Miami

Probe of affordable housing spreads to multiple developers

Subpoena covers projects by firms including Carlisle Development, Cornerstone Group, Pinnacle Housing and Related Group
June 24, 2017 12:10PM

Villa Capri at 14500 SW 280th Street (Source ApartmentFinder.com)

Miami-Dade County has until Thursday to respond to a subpoena for records of all affordable housing projects that got funding from a county bond program.

The subpoena lists multiple developers of county-funded housing projects for low-income people, including Biscayne Housing Group, Carlisle Development Group, Carrfour Supportive Housing, the Cornerstone Group, Pinnacle Housing Group and Related Urban Development Group.

A spokesman for Miami-Dade told the Miami Herald the county is responding a grand jury subpoena from the U.S. Attorney’s office.

County spokesman Michael Hernández told the Herald that Miami-Dade officials believe the distribution of funds from a $137 million county bond issue to finance affordable housing was “appropriate.”

The Miami Herald reported that prosecutors are trying to determine whether affordable housing developers falsified construction costs

In the last two years, executives of Carlisle Development Group and Biscayne Housing Group have admitted to stealing millions of dollars from a program that provides federal tax credits to finance construction of apartments for low-income people. This year, a construction company affiliated with Pinnacle Housing Group paid $5.2 million to settle charges that the company stole federal tax credits for four affordable housing projects

Federal prosecutors now are trying to determine whether developers inflated construction costs to steal money from the Miami-Dade’s bond-funded affordable housing program.

According to the subpoena, Related Group got county bond money for two projects in Miami to build affordable housing for low-income people: $5.5 million for Edificio Pineiro at 1176 Southwest 20 Avenue and $3.16 million for Porto Allegre at 126 Southwest 8 Street.

Hollywood-based Cornerstone Group got $2 million of county bond money for its Villa Capri development at 14500 Southwest 280 Street in the Homestead area and another $10.6 million for its development of the Waterford Apartments at 195 Street and West Dixie Highway in the Aventura area.

Carrfour got almost $5 million of county bond money for its development of Verde Gardens, a 145-unit rental property at Homestead Air Force Base.

Adolfo Henriques, vice chairman of Related Group, the corporate parent of Related Urban Development Group, told the Miami Herald that the company has cooperated with federal prosecutors and all fees paid to Related Urban Development Group in connection with affordable housing projects in Miami-Dade were “completely appropriate.”

A spokesman for Cornerstone told the Herald it hasn’t been contacted by federal prosecutors, and a spokesman for Carrfour had no comment. [Miami Herald] Mike Seemuth