City and Slumlords Collude in Riviera Beach, Tenants Dying

We, the Palm Beach County Tenants Union, are a grassroots, tenant-led organization that fights for safe and affordable housing. We are writing this to clear up a matter regarding a low-income housing complex called Stonybrook Apartments in Riviera Beach where the tenants have suffered under the grip of slumlords for years. The latest slumlord to run Stonybrook, Millennia Housing, claims they’ve raised $17 million for a renovation of the complex, and many in state and city politics buy it. They are lying, plain and simple, and this article will explain in detail why. Hopefully this will help many to understand the intricacies of slumlord housing and how cities & government programs abet them in scamming taxpayer cash at the expense of the lives of the poorest families, not just at Stonybrook but everywhere.

Let’s set aside the fact that the families and children who live in Stonybrook are dying daily and need immediate relief and relocation today, not months from or a year or two from now. Let’s set aside the fact that Millennia has (mis)managed the property and hundreds of other low-income housing complexes for years, allowing conditions to sink to even deeper levels of despair and inhabitable. Let’s set aside that, in spite of this reality, elected officials from Senator Marco Rubio to Rep Al Lawson Jr. to Riviera Beach city councilmember Julie Botel believe that Millennia is the savior of Stonybrook and similar projects. Let’s set aside the fact that Rubio got campaign donations from the CEO Frank Sinito before Rubio played a direct role in installing his company in at least six different HUD housing projects in Florida. And let’s set aside the fact that properties Millennia has owned for many years are still run in slumlord conditions from Kansas City to Galveston to Miami.

For a moment, let’s address the specifics of Millennia Housing and its so-called rehab here. Let’s talk about how we know 1) they have NO INTENTION to bring Stonybrook up to even basic code building standards 2) why they are planning to scam tax credit money if they ever even get a chance to 3) and how the city of Riviera Beach is a willing accomplice in all of this. We are going to break it down simply why there is no renovation coming and why the only answer is for the city to condemn the whole property today, shut it down, and relocate the tenants immediately — in its place rebuilding new public housing under the control and supervision of those tenants who want to return.

It’s tough for folks who aren’t familiar with low-income housing development to understand the sort of dynamics involved with tax credit, HUD and other agency financing. There’s little regulation of where the money goes and it operates on a trust basis for developers who often funnel money to their own construction companies, while doing patchwork at best. This is what we know Millennia plans to do. It’s part and parcel of the whole game of public-private partnerships. Elected officials and government agencies of all levels are involved, and tenants pay the price with their lives.

The best place to start is with levels of building construction. Before any construction begins, developers must file for a permit. There are three levels of permits. There’s level one, which is basic patchwork and minimal repairs, which certainly do not cost $17 million. Level one permitting is what is required for Millennia’s superficial site plan for Stonybrook, which the city of Riviera approved. This is essentially putting a band aid on a head shot wound. And then there’s level three permitting, which would gut, install fire walls, and bring Stonybrook up to basic code standards for fire safety and more. In early 2019, when Millennia received title to Stonybrook, they filed for level one permits on their so-called renovation. The building official Goldwire Ladi refused to issue them. She would only issue permits for level three construction — renovations that would bring Stonybrook up to basic code standards. Millennia refused to file for them! Period.

Notwithstanding this outright refusal to do what they promised — a complete renovation — they then they lobbied city officials, claiming that Ladi was holding up the renovation. This has been Millennia’s MO from Day 1. They claim that if they just get one more gift, or one more obstacle removed out of their way, they will give you what they’re promising. But it doesn’t add up. Ask yourself: Why would they be willing to invest $17 million into a property without it having basic fire safety (level 3 permitting)? Simple answer: because they’re not. But for refusing to toe the line to developer interests at the expense of Stonybrook residents, Ladi March was fired this year and the city pressed charges against her — charges that were later dropped. In her place the city of Riviera brought in a private company that issued Millennia the level one permits they wanted, which would allow them to pocket the lion’s share of the $17 million they plan to raise.

But have they actually raised this money? No. Now, to finance their fake rehab, Millennia needs two things: tax credits AND lenders to finance them. Low-income housing tax credit (LIHTC) is a government program that gives tax breaks to affordable housing financers. Developers receive government tax credits, then sell them to banks or investor syndicates that raise the money to finance construction costs for repairs. What Millennia has is $17 million in tax credits — NOT from lenders. In short, it does not have $17 million in financing on hand, and likely never will. Why? The conditions at Stonybrook are public and well known. Lenders know about them as do agencies. Simply type “Stonybrook Riviera Beach” in google or google news to see yourself. There are also what the real estate industry calls “encumbrances” — issues with a property that prevent transfer of ownership or raising loans. In the case of Stonybrook, this is the “unsafe housing abatement order” — which condemns the whole property — that the building official placed on the property last year. This is why Millennia’s financing on Stonybrook has fallen through twice already. The rumor is it recently that fell through again for the third time, which we are working to confirm. The city of Riviera is aware of this. They’ve held several meetings with the county to do PR control and to relocate the tenants from Stonybrook before this blows up in their face. They have tied their fates to the ship called Millennia, and are sinking with it.

The other issue is ownership, something that’s complicated Stonybrook for years. The lack of clear ownership has obscured who is actually culpable and allowed for constant buck passing between multiple entities. Now Millennia has “title” to the property, but doesn’t fully own it outright. The former owner, Global Ministries Foundation, is still a partner on the property through the operating entity, GMF-Stonybrook LLC. That’s right, GMF has not gone away. The old slumlord is still in, the new slumlord is partnered with them, nothing has changed. The same scam game, the same players, all hiding behind different entities. To distance themselves from the toxic Stonybrook name, Millennia has made another LLC, Azure Estates, to operate Stonybrook in partnership with the GMF one, which they are partnered in too. This is, again, to help raise money from lenders, but it’s no longer working. What they never counted on was that the tenants are done playing along.

The big thing that’s hurting Millennia is the action of Stonybrook tenants themselves. Their entire portfolio of 200 low-income properties is in crisis as lenders close their books, but the biggest bleeding is now at Stonybrook, where the tenants are universally withholding rent and HUD is no longer paying subsidies for most units. The rent strike now spans the entire property, putting an end to this slumlord game. Millennia is now holding a brick, and they are working to toss it before it sinks them, and the city is helping them do so. Rumor is, the real reason Millennia is lobbying the city to remove the “unsafe housing order” is so they can wholesale the property and dump it. Remember, not only can’t they raise financing, but this “encumbrance” prevents the sale and transfer of title. Once removed, it will stop the bleeding and excise the porcupine they’ve swallowed.

What will be the final outcome of all of this? We predict Stonybrook will go belly up. Maybe not tomorrow, but sooner than later. The city will have no choice but to take the property under receivership and demolish it. The tenants will be relocated and put into temporary housing, with emergency tenant-based vouchers. The city council of Riviera will be discredited for its partnership with Millennia and lose their seats. They are trying to prolong this reality. In the meantime, more tenants suffer in that suffocating toxic prison hellhole. Why prolong this? Make the inevitable happen now. But what about the issue of affordable housing supply? We need more of it, without question, and we will demand that new housing should be built back up in place of Stonybrook. To that end, we are working the tenants who choose to return will be ready to take the property themselves, overseeing the build up of the former Stonybrook under their control and supervision. In the meantime, you also have the ongoing class action suit filed by the Stonybrook tenants against GMF, Millennia, and the city, where residents will get real compensation for all of the wrecked lives, sick children, and irreversible damage they have suffered. We are winning. Time is winding down for our enemies. Stay tuned. The fireworks are only just sparking.