Developer low-balls Riviera Beach property owners,
 threatens seizure by city

By Stephen Deere
South Florida Sun-Sentinel
Posted May 18 2006

RIVIERA BEACH -- Mike Mahoney admits he has his price, but $231,000 doesn't even come close.

Mahoney, who owns a custom T-shirt shop on Broadway, is one of about 30 Riviera Beach property owners who received written offers from attorneys representing Viking Inlet Harbor Properties LLC, the private company heading up Riviera Beach's massive $2.4 redevelopment project.

Considering that others have been offered more than $700,000 for small, two-bedroom homes, Mahoney thinks the notice is a little, well, insulting. 

"I'm not going to jump on it," he said.

The property where Dee's T-shirts sits is worth $165,000, according to the offer Mahoney received.

The notices also contain a not-subtle hint that if they don't sell, the city's Community Redevelopment Agency could initiate eminent domain proceedings against them, despite a new state law that says governments can't take someone's property for private development.

In recent months, the project -- considered the epicenter of a national debate over property rights -- has taken some strange turns, including the city's attempt to rush it forward to ensure they have a firm legal basis for challenging the new eminent domain law.

And while the redevelopment plan has made some ordinary folks rich, it may send others to court to save their homes or businesses, or at least to get a better deal.

Less than five months ago, real estate developer Wayne Huizenga Jr. began buying up prime property along Riviera Beach's waterfront within the CRA boundary. Huizenga, son of billionaire Miami Dolphins owner H. Wayne Huizenga, has plans to open a megayacht-building business, and in some cases he paid homeowners more than three times the market value for their property.

That was then.  Now the offers are lower. Much lower.

Initially, Huizenga failed to consult Viking, which has bought more than 100 properties, said Robert Healy, the New Jersey-based company's CEO.

"He did a very unwise thing by running in there and making those kind of offers," Healy said. "I got him on the phone and said `What are you doing?' ... Then I get a call about a week ago."

Huizenga, Healy said, wanted help. Realizing he couldn't afford to keep shelling out large amounts of cash, Huizenga asked Healy to help him acquire more property using the threat of eminent domain from the city's CRA.

Alex Muxo, a senior vice president with Huizenga Holdings Inc. who usually handles media inquiries, could not be reached for comment.

"I got to tell you the truth. We aren't making any $700,000 offers on $125,000 houses," Healy said. Although attorneys for Viking are making the offers, Huizenga still would pay them, Healy said.

Business owners such as Mahoney, 49, are balking, especially in light of what others received.

So is Virginia Merchant, owner of a Sea Shell City, a souvenir shop. Just a few months ago, Viking offered her roughly $2 million for the acre where her store sits, she said. The deal fell through, and just Tuesday she received another offer: $800,800.

"They say they [originally] overpriced," she said. "But I know some people got their money, and they are really happy."

Besides the substantially lower offers, Viking has another problem. The CRA's threat of eminent domain may no longer be a legitimate threat.

The city's redevelopment boundary encompasses 858 acres and plans call for new hotels, condominiums, marinas and shops, and rerouting U.S. 1 to make room for a new harbor, but the Florida Legislature recently passed a bill prohibiting governments from seizing property for private development.

City leaders signed an agreement with Viking last week to ensure their contract was in place before Gov. Jeb Bush signed the bill into law, which he did May 11. Mayor Michael Brown argues that because they have invested millions in the plan under the old statutes, they should still be allowed to follow previous eminent domain law.

"We are not trying to short-circuit [the governor]," said council member Elizabeth Wade. "He is trying to short circuit us. ... You might say we fast-tracked it, but this contract has been in the works for eight months. I don't think we fast-tracked it."

Russell Schweiss, a governor's spokesman, said Bush and state legislators likely would not decide if Riviera Beach is protected under the old law.

"That would probably be something decided in court," he said.

But the governor has strong feelings about Riviera's attempts to circumvent the new law. 
"He feels the actions of the city are reprehensible," Schweiss said.

Wade said that if the CRA attempted to use eminent domain it would be on a case-by-case basis, and she didn't fault anyone for trying to get as much money as possible from Viking or Huizenga.

"Some people were close to negotiations if the hammer from the state hadn't come down," she said. "I applaud these people. They should get as much as they can."