BALANCE SHEET BLOG – HOLLYWOOD, FL


Hollywood Playhouse
October 14, 2012, 4:28 PM
Filed under: Development, Historic Preservation, Neighborhoods, Residents

“…a growing body of research suggests that the arts can be a valuable engine of civic renewal….The arts can nurture social capital by strengthening friendships, helping communities to understand and celebrate their heritage, and providing a safe way to discuss and solve difficult social problems.”  Saguaro Seminar on Civic Engagement in America. John F. Kennedy School of Government, Harvard University

The Hollywood Playhouse, a successful community theater for 50 years, fell victim to poor planning and developer greed a decade ago. The property is in foreclosure with bank and  City engaged in litigation over its future.  The City Attorney is recommending a settlement that would allow the bank to sell the property to a private party, with the stipulation that the City be allowed to use it for public purposes at least four times a year.  This would be a sad end to our community theater. At 5 PM on Wed., Oct. 17, the City Commission is scheduled to vote on this proposal.

A Better Alternative

Hollywood Resident Rene Barrett is a strong advocate for saving the Hollywood Playhouse.  She says “It takes a village!” to save our community theater.  To launch such a project would take more than talk, more than deploring mistakes from the past.  We residents would have to donate our time, our skills, and our money to make it happen.

Can we do it?  Read Rene’s article posted below.  It is followed by a few thoughts of ours to help you answer this question.

Hollywood Playhouse – by Rene Barrett

The Hollywood Playhouse is very special.  We can’t lose it.   I think it  has the potential to prove to be the best resource this city could ever have.

HP was self-sustaining and successful for 50 years.  In its heyday we had busloads of people coming from condos in the tri-county to this easily accessible facility.  The history of success is immense.  It included recognition by the Kennedy Administration in the early 1960’s.

We need people who are willing to roll up their sleeves.  What makes community theatre successful are the associations that can be made with the community by providing opportunity for a diversity of uses, such as for universities, community education programs, children’s theatre, community arts programs; creating a teaching venue for dance, music, voice, stage craft, etc., etc. Look at the successful Inside Out Theatre in Weston. The Ft. Lauderdale Children’s Theatre has been in business for 60 years.

There are so many ways to utilize this renovated building that has office space, kitchens, a large rehearsal hall, dressing rooms and several large rooms for multiple purposes.  As a 501C 3, just as one example, we can apply for grants from United Way to give music and dance lessons to Hollywood children. Hollywood Playhouse could provide a venue for touring plays as well as mounting its own productions.  Parks & Recreation and the Art & Cultural Center could utilize this facility.  An established production company might like this for their home.

A question has been raised that the demographics have changed in Hollywood, and indeed they have.  They have improved.  Hollywood now boasts a diverse cultural population that would provide a mission for this theatre to create a venue where various groups can have their artistic cultural events.

There are many ways that you can help. The first is to sign the petition at: http://www.gopetition.com/petitions/save-the-hollywood-playhouse.html

Come to the next City Commission meeting on Wednesday, October 17th at 5:00 pm. If you are willing, please step forward and speak from your heart. If you belong to a neighborhood organization or to an art or theater organization, think about what value this little Theatre facility could have for your organization and let the Hollywood City Commission know.

If the City Commission agrees to demonstrate the leadership needed to secure the Hollywood Playhouse, we will need to begin to raise funds to restore the facility. Donate; help to run the fundraising drive; write a grant; help us to organize. We will need to paint, refurbish and restore the theater. Theaters need carpenters, electricians, etc. Would you volunteer to make this happen? What are you good at? We need very active community support. 

If we don’t try, this mini-Shubert Theatre will be lost forever. We can only do.

Editors’ Thoughts

Will Hollywood residents pull together to take the lead in creating a public-private partnership to purchase the property from the bank? We can do this if we choose.

Will we raise significant dollars? (If 3,000 Hollywood residents would contribute $10.00 per month for a year, we would have $360,000 to put to the cause.)

Are you willing to donate your time, skills and $10.00 a month to reclaim Hollywood’s community theater?

Bottom Line:  If we want to save the Hollywood Playhouse, it’s up to us to do the job.  It’s not governments that save community theaters. It’s communities!

 

 



Margaritaville Financing
September 1, 2012, 4:08 PM
Filed under: Beach, Budget, CRA Districts

Margaritaville – New Plan

Hollywood residents in need of tax and fee reductions and City employees in need of salary increases …Time to Pay Attention!

As we all know by now, the Margaritaville project has been unable to secure funding from foreign investors as the original plan required.  So now we have a new proposal in which the CRA is to give the developer $23 million for construction financing.  When I learned of this plan, I initially opposed it as one more boondoggle — a massive developer subsidy like Radius, Hollywood Station, WSG, Great Southern, and Block 55, to name a few.

But when I actually read the legal documents now available on the City website, I discovered a huge difference between this “handout” and all the other ones. The new Margaritaville proposal provides millions of developer dollars for the City’s cash-strapped General Fund.  This new revenue stream will significantly bolster the City’s ability to improve employee compensation and reduce taxes and fees without compromising services.

How Will This Work?

The CRA will receive the tax increment on this project (estimated to be more than $1 million a year) but the developer’s compensation for the $23 million CRA construction funding will take the form of doubling its rent payments from the original $500,000 to $1 million the first year, and substantially more in subsequent years.  These rent payments will go directly into the General Fund.

How Can This Be?

A financially strong equity partner, Starwood Capital, will join the developer partnership. Starwood is a solid, well qualified entity both in experience (owning 2100 quality hotels around the world) and in financial strength.  It not  only significantly increases developer equity in the project but can also attract conventional financing that has been unavailable to the original Margaritaville-Lojeta partnership.

Bottom Line

The proposed new Margaritaville financing plan, while appearing at first glance as just another handout, in fact serves as a vehicle to significantly strengthen the City’s General Fund.  For those of us who feel it is unhealthy for a city to have virtually all its disposable income in a single district while the rest of the city deteriorates from reduced services, this financing plan announces a new day.  The CRA will get the entire tax increment on the Johnson  Street property (over $1 million per year), but the Hollywood General Fund will receive substantial rent payments for the 99-year life of the ground lease (over $1 million the first year and growing exponentially in future years).

How To Learn More

To learn more about the plan and many other details not covered here, attend the  public meeting  on Tues., Sept. 4, 6 PM at  City Hall, where city staff will present the new financing proposal for Margaritaville.  This will be an important opportunity for all of us to learn the details and ask questions of  City and CRA staff.  The City Commission and CRA Board will both vote on the new plan the following day. You can find the legal documents on the City’s website.

Editor’s Note:  This article is the opinion of only one of the Balance Sheet editors (Sara Case).  The other editor, Laurie Schecter, is out-of-town and not available to weigh in at this time.



Pension Reform
July 2, 2012, 12:52 PM
Filed under: Budget, City Commission, City Staff, Taxes

Editors’ Note:  Long-time Hollywood resident Larry Legg has sent us the following letter.  We believe that it warrants serious attention by the City Commission and City staff.  Residents, too, need to understand these issues. We are grateful to Larry for sharing his expertise on a difficult subject that affects us all.

Dear Balance Sheet,

I have been a CPA and business advisor for about 27 years now, 20 years of which were spent auditing government and not-for-profit entities.  I am also a life-long student of economics and politics, although you will never catch me running for office.  I’m not Republican or Democrat, nor a Tea Partier, but attempt to look at the world around us in an independent and objective manner, in light of the underlying economics.  Your blog has helped me better understand the difficulties that our city faces today.  There is one issue, however, that should not be swept under the carpet, and that is pension reform.  I know this is cliché, but the giant Gorilla is still in the room and, although only 800 pounds now, he’s still going to mess some things up!

After having observed a lengthy blogger debate on pension reform, and having studied much of the relevant evidential materials – including but not limited to comments on both sides of the issue, citywide financial audits, pension audits, actuarial reports, 2012 budget analysis, national municipal bankruptcies cases, etc. – I am convinced that, no matter who has to pay the tab, our city is still at a moderate to high level of risk of bankruptcy and/or austerity measures.  Pensioners have a legitimate argument, particularly with respect to “Legacy Costs and Liabilities.”  It is difficult to believe that any employer could breach such a promise, and I’m sure the courts are beginning to decide this very issue all over the country.  The debate appears to be in the hands of the judiciary at this point, so let’s all keep our eyes on the cases that are being filed in this alarming nationwide trend.  Many of your bloggers appear to be bogged down in the details due to their own special interests (which I fully understand), so they fail or refuse to see the big picture “from 30 thousand feet” so to speak.

The Facts:

The following are some highlights of my research on Hollywood’s citywide finances:

Assets as of last fiscal audit, September 30, 2011 $ 727 million
Liabilities Recorded on Books  (553) million
Liabilities Not Recorded on Books (Unfunded Pension costs)  (350) million
Liabilities Not Recorded on Books (Unfunded Healthcare costs)  (433) million
Citywide Net Deficit in Fund Balance – Adjusted Net Assets  (609) million
  • Unfunded pension liability is net of $66 million in downward adjustments related to the referendum, and as per the most recent actuarial reports and city staff.  This is a real debt that does not get recorded on the City’s books.  In addition to this debt, the City has an actuarial “unfunded” liability to legacy employees for their lifetime healthcare benefits of $433 million as per the most recent certified audit.

 

Your bloggers have properly enumerated the many wasteful projects Commissioners have spent our hard-earned tax dollars on for the past three decades.  This spending, I concur, must stop.  No more developer handouts, no more capital expenditures on non-essential infrastructure, etc…the list goes on and on.  For obvious reasons, city employees’ heads are in the sand regarding an expense item that currently makes up about 21 percent of Hollywood’s operating budget – i.e., pension expense.  There will be no winners in this process, unfortunately, so it’s easy to see why people naturally shy away from the subject.  The pain will be even worse if the City is forced to seek protection under the U.S. Bankruptcy Code.  The hard, cold economic facts and circumstances will drive the outcome:

  •  $609 million deficit in Net Assets;
  • Pension Expense that constitutes 21 percent of total revenues;
  • Unfunded pension liability of $350 million (approximately 50% funded) – severely underfunded according to most experts;
  • Unfunded Post Employment Healthcare Benefits of $433 million;
  • Pension expense as a percent of gross salaries is between 36% and 81%, depending upon which department, which is far above national averages;
  • Overly optimistic actuarial assumptions about returns – currently 7 percent.  That should be reduced to the “new normal”, which many economist and analysts (and astute private sector investors) agree is about 5 – 6 percent;
  • Weak stock market performances;
  • Weak investment returns on pension assets, compared to the broad market, unmanaged averages;
  • Declining Property Values; and
  • Aging Infrastructure

Our City’s current finances are not too different from several recent Chapter 9 municipal bankruptcy filings.

Opinion:

My advice to Commissioners and Future Commissioners:

  1. Honor Legacy costs.  I think that even in bankruptcy court the judges will lean toward such a requirement.  Keep an eye on these cases.
  1. Do not make promises you cannot keep.  The stock and bond markets are unpredictable. And you, your accountants, your actuaries, economists, and investment advisors can never accurately calculate how much money to set aside for some variable defined benefit, ad-infinitum into the future.  And, no organization in the world – whether for-profit, not-for-profit, or governmental – can afford 21 percent of its revenues in pension expense – period.
  1. Employ a contributory, 401(k) type plan like most organizations in this day and age – i.e., a defined contribution plan.
  1. Urge retired employees to push for further pension reform.  They need to understand that it is in their best interest to help devise a solution to this problem before their livelihoods are in jeopardy.
  1. Quit spending money on almost everything except for critical infrastructure and routine operations for a few years.  We need to get back on our financial feet.  That would include a complete moratorium on new hires for an indefinite period of time.
  1. Review the entire way of doing business, perhaps by way of an “Operational Audit”, and make changes.  Change is good, so long as it’s economical.
  1. Forget about your own pocket books and about getting re-elected when making decisions that affect 143,000 citizens and taxpayers – it’s your duty to do so.
  1. Stop caving to special interests.  They don’t run the city, “We The People” do, supposedly through YOU, our elected officials.
  1. Don’t raise the millage rate; it’s already one of the highest in the county.  Property owners have already paid an inordinate amount of money for taxes, and I don’t think they can bear further increases.

As always, I invite comments and questions.

Sincerely,

Larry Legg, CPA



Call For Resignation
May 30, 2012, 3:05 PM
Filed under: City Commission, City Staff

We began the Balance Sheet eight years ago with the goal of providing factual information about City issues and seeking solutions to problems.  We have tried throughout to be fair and accurate. So today, it is after much discussion, deliberation, and sadness that we call for the City Manager to step down immediately. Despite his many good qualities, he has demonstrated a stunning lack of maturity and readiness for the job during his short tenure with our City

His arrest for driving drunk shows poor judgment.  His Twitter post shows immaturity and a lack of seriousness.  By not informing the Commission the full circumstances of the night of his arrest, his behavior raises concerns of both judgment and truthfulness.

The Manager is the top appointed official in our City.  For him to exhibit such impaired judgment is an unacceptable blow to the City’s well-being.  He is, after all, responsible for supervising the entire City staff other than the City Attorney’s office. Recent media coverage about his behavior is not just a private matter.  The City itself has been tainted by the scandal.

As a City, we appear to be lurching from one catastrophe to another: financial urgency, pension referendum, sewer break, and now the Manager’s arrest for drunk driving at 3:30 AM after leaving a strip club. The City has responded with great strength to recent major challenges, and it must do so again now.

Judgment

Driving while legally drunk demonstrates an extreme lack of good judgment. Driving under the influence presents inherent danger to both the driver and the public at large. Hollywood does not deserve and cannot afford a Manager so lacking in judgment.

Some say the Manager was drinking and driving on his own time, not on City time.  For this reason they imply that such behavior should be given a pass. We disagree.  The International City Managers Association (ICMA) Code of Ethics specifies “exemplary conduct in both personal and professional matters.”  No one could dispute that the Manager’s conduct “in personal matters” has been far from exemplary.  Indeed, reports of his behavior have been splashed across the media, showing the City of Hollywood in a highly unfavorable light.

Some say the Manager should be given a second chance. Again, we  disagree.  Hollywood is a troubled City financially and demographically.  Our City requires the staff’s full, professional attention. The Manager’s ability to lead has been tarnished. His behavior has been a huge distraction. For the City to limp along while the Manager tries to gain maturity and judgment would be unfair to City staff, residents, and businesses alike.

Internet Behavior

The Manager’s Twitter account reveals a surprising lack of maturity and judgment.  He describes himself as the “Uncivil Civil Servant – You’ve been warned! Florida.” Whatever this is supposed to mean, it does not reveal a person who is taking his new job seriously.

Conclusion

This Manager should step down.  If he does not, the City Commission should fire him for cause.

Recommended Action

We encourage our readers who feel strongly about this issue to write to the Commission immediately.  Let them know your opinion before  9 AM Friday, June 1, when a Special Commission Meeting on this subject has been scheduled.

City Commission E-Mail Addresses

pbober@hollywoodfl.org

passeff@hollywoodfl.org

bfurr@hollywoodfl.org

hosheehan@hollywoodfl.org

rblattner@hollywoodfl.org

frusso@hollywoodfl.org

lsherwood@hollywoodfl.org



Margaritaville?
May 29, 2012, 11:32 AM
Filed under: Beach, CRA Districts

The Margaritaville project slated for Hollywood Beach is unable to start construction because the developer has not yet been able to raise enough money. The City has notified the developer that it’s in default.  The developer is seeking more money and city staff are reviewing the project’s numbers to determine what if anything can feasibly be done.

Every member of the public we’ve spoken with is flatly opposed to investing more public funds in this project.  It’s one thing to allow the developer more time to come up with the money it needs, if there is a reasonable prospect that additional time would produce results. But it’s quite another for the City or CRA to put public funds, again, in a development that can’t attract sufficient private investment.  We’ve seen that way too many times. No more, we all say.

If the developer can raise the needed money within the next six months to a year, and we can continue to use the garage and the public park meanwhile, then we say consider doing that.  If not, then it’s time to start over.

One of our readers, Craig McAdams, has a suggestion for the property that we print in full below.  As you can see, he is interested to hear what others think.

“I hope to see an Aquatic Fitness Center on the site currently planned for Margaritaville.  If the hotel and bars are not going to proceed, I want to propose something healthy and attractive for residents as well as visitors.

Several pools with water aerobics, learn to swim, competition and diving.  Surrounded by a health club and juice bars and a healthy alternative to the alcohol scene.  Most of the local hotels don’t have the space to provide a pool and this is why Joseph Young originally put a pool on this site. Yet it was demolished years ago.
 We need a place to swim when the ocean is contaminated and closed.  As well as when it’s too rough or sea lice and man o war.  A pool is the best facility the city could provide on the public land, not a hotel with restaurants and bars.

I would welcome your opinion as well as the opinion of others to see if my idea is popular among the residents and guests that read your blog.”

The Balance Sheet has long advocated for public use on this publicly owned beachfront property.  We’ve also recommended health and fitness uses along the broadwalk. We think Mr. McAdams is onto something.  What do you think?



West Hollywood Corridor Pilot
May 22, 2012, 5:42 PM
Filed under: Corridors, Neighborhoods

New Role for Civic Associations

The Johnson Street business corridor between 56th Avenue and 441 is about to meet the Hollywood Council of Civic Associations’ Neighborhood Pride team.  A resident-driven pilot project to help rejuvenate the corridor is in the works. If successful, this project can be replicated in other Hollywood neighborhoods.

Johnson Street Business Corridor

Decades of neglect have taken their toll on this three-block stretch that runs through the newly organized Hollywood Gardens residential neighborhood. Many useful services and stores populate the corridor. Some well-maintained properties are located here, such as Mimi’s, Gino’s, Hispanic Unity and a few others. But in general the corridor looks like a run-down hodgepodge of properties badly in need of refurbishment, with vehicles parked every-which-way.  Many vacancies exist that could provide space for companies forced to relocate as 441 is widened. But its current appearance may not provide much attraction for businesses moving from 441.

The Neighborhood Pride team is organizing community and city support, in the form of in-kind services, from local schools and community groups as well as city staff, to help the businesses improve the curb appeal of  their properties.  In addition, somewhat similar to Superior Small Lodgings on Hollywood Beach,  the group is creating a Neighborhood Pride Award to be conferred in 2013 on businesses that clean up and beautify their properties. The award will focus only on exterior appearance:  business facade, signage, cleanliness, landscaping.

Over the summer, residents from the Neighborhood Pride team will be walking door-to-door on the corridor to meet business owners and tenants, learn more about their particular needs, and seek ideas from them about corridor enhancements.

Representatives from the following civic associations are steering this pilot project: Highland Gardens Civic Association, Hollywood Gardens Neighborhood Association, Hollywood Hills Civic Association, Hollywood Lakes Civic Association, and Lawn Acres Civic Association. If you have ideas or would like to participate in this pilot project, contact the Neighborhood Pride team at the following address:  board@hccacentral.org



New Power Plant
April 8, 2012, 9:26 AM
Filed under: Infrastructure

Did you know that the Port Everglades Power Plant is located almost entirely in Hollywood, and that it’s soon to be demolished?

At a recent community meeting at Hollywood City Hall, FPL representatives described the company’s plan to replace the archaic oil-burning Port Everglades plant with a modern, much cleaner facility fueled by natural gas.  FPL publicity notes that (1) the new structure fits within the existing plant’s footprint, (2) it will have three shorter stacks instead of the four smoking monsters we have today (140′ as opposed to 350′), (3) no new pipeline installation will be required, and (4)  the project will create 650 construction jobs.

FPL says the new plant will cut carbon dioxide emissions in half and reduce air emissions by more than 90 percent.  It is expected to generate power using 35 percent less fuel and will supply enough power for about 260,000 FPL customers.  The new plant is scheduled to open in 2016.  FPL is seeking project approval now from the State of Florida Siting Board. You can read more about the new plant on this FPL website.

Port Everglades Power PlantThis is definitely good news for Hollywood.

The source of the natural gas to operate the Port Everglades plant tells the story.  Just five or six years ago, energy companies were seeking permission to ship foreign liquified natural gas (LNG) to off-shore locations (e.g., the Bahamas) where a proposed plant would convert the LNG back to gas.  An ocean-bottom pipeline was to be constructed from the regasification plant to the vicinity of John U. Lloyd State Park, followed by horizontal directional drilling to get the pipeline under the Intracoastal and then new pipeline construction all the way to the Florida Gas Transmission Line located near the Florida Turnpike. This was a huge, potentially destructive project that drew strong opposition based on public safety and environmental concerns.

Now the whole picture has changed.  Domestic natural gas production based on Hydraulic Fracturing of Shale — the process known as fracking — will supply natural gas to our FPL plant for its 30-year expected life.  Major landscape disruption and potential damage to the water supply occur from this process but Southeast Florida is not a fracking site.  Our plant will be fueled by natural gas extracted in states north of Florida.

While we applaud replacement of the old FPL polluter plant, at the same time we’re troubled with our gain at the expense of so many other US citizens further north who are now struggling to secure protections from the depredations of fracking. For all of us, transitioning to a lifestyle less dependent on fossil fuels is more important than ever.