6/12/2006

In Riviera, eminent domain bolsters developer's offers to buy: source, 5/28/06

By William Cooper Jr

When William and Inez Stroby bought the one-story duplex at 117 E. 22nd Street [in Riviera beach FL], America was celebrating its bicentennial and the New Jersey couple rejoiced in landing their retirement home.

A year later, William Stroby died in a boating accident near the Jersey Shore.

For 30 years, Inez Stroby has held onto her memories and the place where she and her husband made one of their first investments. She moved to Riviera Beach full time in 1990 and planned to spend the rest of her life within walking distance of the Intracoastal Waterway.

That changed this month, when Stroby and 22 other property owners received letters on behalf of the city's master developer, Viking Inlet Harbor Properties. Viking has offered to buy their property to make way for Riviera Beach's $2.4 billion waterfront redevelopment, International Harbor Village.

Stroby and the property owners must respond to Viking's offer or face having their land taken through eminent domain. Two weeks ago, the city council, which also sits as the Community Redevelopment Agency board, signed a contract agreeing to use eminent domain on the developer's behalf.

At 83, Stroby said she's too old to start life over and doesn't have the energy to negotiate with developers. She's turned the letter and the talks over to her son, Wallace, who lives in New Jersey.

Stroby is among 23 owners of 39 parcels that stand in the way of the project. The land is a mix of owner-occupied homes, rentals, businesses and vacant lots.

Over the next 16 years, Viking plans to transform the 400 acres of mostly blight into a dazzling waterfront filled with condos, shops, restaurants, a marina, an aquarium, a maritime charter school and new homes. Riviera Beach is looking to the redevelopment to create jobs and boost the city's image as well as its coffers.

After years of promises, International Harbor Village is the closest the redevelopment agency has come to fulfilling its redevelopment mission. The question being raised now is whether the redevelopment is worth trampling on the rights of residents.

Although the city council has promised to use eminent domain only as a last resort, such letters as the one to Stroby and her follow property owners will test that commitment.

Riviera Beach has also taken a beating nationally when the city was presented as the eminent domain [abuse] poster child. Since the U.S. Supreme Court ruled last June that cities could take private land and transfer it to developers for economic renewal, Riviera Beach has fought accusations that it planned to take about 5,100 homes for its waterfront redevelopment.

A wave of resentment and fear generated by property-rights groups led Florida's legislature to pass a bill, which Gov. Jeb Bush recently signed into law, stripping cities of the ability to take land for economic development.

But in a counter-move, the city and Viking rushed to sign a contract before Bush signed the bill. Mayor Michael Brown believes the city is protected under the U.S. Constitution to enter into a contract with Viking and not have the actions of the state legislature interfere with the agreement.

It's under this premise that the redevelopment agency and Viking began the process that could lead straight to court. The letters, like the one sent to Stroby, hint that the offer is an attempt to avoid eminent domain, but the governor and some property-rights groups have promised to challenge the city's right to take the land.

So far, since making the offers, Viking has bought several properties, including Serojanie Singh's at 133 E. 22nd Court for $632,800. Singh, who lives in New York, couldn't be reached for comment.

Viking's biggest coup came last week when the developer purchased 16 properties from former rival Nader Salour, president of Abacoa Development Co. and a principal in Cypress Realty.

Cypress Realty was runner-up in the race to become Riviera Beach's master developer. For months, Cypress Realty was rumored to be waiting in the wings to take Viking's place if the developer were to bail out of the project because it couldn't come to terms with the city.

In the deal, Viking bought the seven properties between 14th and 15th streets that were subject to eminent domain. The developer also got nine other properties located throughout the community redevelopment area.

Salour bought the properties a year ago from John Staluppi, once one of the largest land owners in the redevelopment area. Staluppi sold the land for an undisclosed amount, and that better positioned Cypress Realty to become the city's master developer.

Meanwhile, Viking has withdrawn three offers because the owners were either unwilling to sell or their counteroffers exceeded the amount the developer would pay. Those properties cover an entire block between 21st and 22nd Streets, and that makes it easy for Viking to build around them, said Bob Healey, Viking's chairman.

"People think we're going to pay three or five times the value of their land," Healey said. "We can't do it because the economics don't sustain it."

Healey, however, was forced to pay more for land this year because Wayne Huizenga Jr. quietly came to town. The son of billionaire and Miami Dolphins owner, Wayne Huizenga, bought property in January and paid more than triple its value for tax purposes.

One such seller was Martha Babson, a vocal critic of the city's use of eminent domain for redevelopment. Babson, who appeared on a national news show condemning the project, sold her home at 156 E. 21st St. for $732,000, more than three times its $202,454 appraised value.

Deals like that prompted a short-lived bidding war between Viking and Huizenga, said Healey, who initially was unaware that Huizenga had stepped on Viking's turf. The two developers apparently resolved their differences and a Huizenga spokesman said the company is moving forward with plans to build a mega yacht servicing center in Riviera Beach.

Virginia Merchant, owner of Sea Shell City, 2100 Broadway, said she was originally offered $2 million for her property. Sea Shell City, an eclectic gift shop, has been in Riviera Beach for 50 years, she said.

The deal was pulled off the table and Merchant heard nothing from the developers until she received the letter on behalf of Viking.

Viking's offer, she said, was considerably lower: $800,800.

"If I'm offered good money, I'll take it," said Merchant, who said she won't sell at that price.

Meanwhile, just a few blocks away, Stroby is content tooling around town in her gray Plymouth Horizon, which she bought new in 1987. At her age, she just wants to live near her touchstones: St. Francis of Assisi Catholic Church on 20th Street, the Walgreens's on the corner of Blue Heron Boulevard and the Dollar General Store just up the street on Broadway.

"I thought I was going to be here forever," said Stroby, a retired registered nurse and great-grandmother. "If I have to move, I just want to be somewhere close by here."


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