Article Courtesy of The Palm
By Eliot Kleinberg
Published November 24, 2012
In 2007, Erica Poag says, she paid $239,990 for a home in the Preserve neighborhood.
Three years later, the board of the city's Community Redevelopment Agency allowed the builder, the Cornerstone Group, to keep its tax break after it said it planned to convert the rest of the development from townhomes into mostly low-income rentals. Poag and other neighbors who'd already bought said Cornerstone never told them its new plans.
Now, Poag has missed three mortgage payments. She says her only option is a short sale for $87,000.
On Tuesday, she and the owners of two other Preserve homes asked the CRA to forgive, or negotiate down, $50,000, $50,000, and $45,000, respectively, in down-payment assistance grants so they can sell.
The CRA had given a total of $945,000 to 19 buyers in the Preserve, on the west side of Federal Highway south of Gateway Boulevard.
Eleven of the 19 now are in various stages of foreclosure.
Poag acknowledge the collapsed housing market played a large role in her dilemma. But, she said, not nearly as much as the board's 2010 nod to Cornerstone.
"I did not choose to be surrounded by unsavory characters," she told the CRA board.
The board -- comprised of commissioners and two outside appointees -- voted 4-2 to tentatively approve the action, pending the final paperwork.
"We all have egg on our face right now. But we have to face it," Mayor Woodrow Hay said.
"It's a bitter pill to swallow, but we have to be realistic. This money's never coming back to the CRA any more than the bank's money's ever coming back to the bank," CRA board member James "Buck" Buchanan said. "I feel it's in the best interest of the taxpayers to get whatever we can out of it."
Vice Mayor McCray voted "no" in all three cases, saying he wasn't comfortable voting even tentatively without seeing all the documents.
And, he said, "this is like a whole lot of money that has went down the drain. I feel for people, but I'm just saying this was all done in good faith."
At the time of the CRA's 2010 vote, of the 180 planned units, only 66 had been built. Under the 2010 deal, 100 of the 180 units would be rentals and 150 of the 180 would be classified as "affordable."
At the time, Cornerstone had told the CRA board that homeowners already were having trouble paying association fees because so few units had been built and that, with rentals, Cornerstone would pay for and maintain the master property.
Current CRA Executive Director Vivian Brooks -- noting that, as interim director in 2010, she'd recommended against the tax break for Cornerstone -- told the board Tuesday, "it has a destabilizing effect. It's too many low-income rentals in one area. What's it going to do to the people that did buy in the area? Exactly this."
Assistant Palm Beach County State Attorney Lauren Godden's home has a short sale offer of $80,000. In a breaking voice, she told the board Tuesday, "I've been approached by defendants at the pool," defendants she later saw in the courtroom.
Jennifer Lopez -- the one who got $45,000 -- told the CRA board, with her 1-year-old daughter in her arms, that she's found drugs on the ground and had dealers race their cars through the neighborhood or come to her door day and night looking for their customers.
Lopez, a mother of three small children, has an $85,000 short-sale offer. But she said she already has moved out.