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Bailing Out the Land Speculators

As Democrats approach a filibuster proof US Senate, every race will be a heated battle. In 2010 one of the key contests will be in Florida where a governor perceived to be moderate, Charlie Crist, is locked in a primary against the former House Speaker in the Florida legislature, Marco Rubio.

When Crist became governor scarcely three years ago he brought an amiable disposition and style that quickly distinguished him from his predecessor, Jeb Bush. To the irritation of Bush acolytes, Crist opened the door to his office and embraced dialogue with the other side, including environmentalists who had endured eight long years of policies matching predetermined outcomes. Where Bush pushed the thread of Florida’s changing demographics with grim determination, Crist breezily followed it.

When Jeb left office in January 2007 to join the private sector—including work for Lehman Brothers as a consultant—he anointed the telegenic Rubio as his standard bearer. Both are from Miami. The political base of both is securely tapped into campaign contributions from development industries.

The primary battle between Rubio and Crist will test versions of the Republican vision among the party’s faithful before rolling out a more palatable version to a statewide electorate that surprisingly delivered Florida to President Barack Obama in 2008.

This week Gov. Crist, who built a solid environmental record for his Senate run, signed a highly controversial bill opposed by citizens and editorial boards throughout the state and supported by the various constituents of easier rules and regulations governing development, including the Florida Chamber of Commerce, Associated Industries, and the state’s real estate industry.

Interestingly, Florida’s counties and municipalities also opposed the bill, the ridiculously titled, “Community Renewal Act”. The law represents anything but “renewal”. It is more aptly named “A Bailout Bill for Land Speculators”.

The bill does two things principally: it eliminates the need for “traffic concurrency” in urban areas. That state planning requirement is meant to address taxpayer and voter frustration with mind numbing traffic congestion. Florida not only has some of the worst urban traffic in the nation, it is also a poster child for suburban sprawl and its massive, unallocated costs. Today, those costs prominently include ghost towns formed from the remnants of the housing bubble. The real killer is a provision in the bill redefining urban areas exempt from state review as those “with an average of at least 1,000 people per square mile or in counties with populations of at least 1 million.”

Florida is not only swamped with foreclosures—one of the highest rates in the nation– it is also an incredible example of the endurance of the boom mentality in construction and development. Since 2007 more than 600,000 permits have been issued for new home construction. In areas like Homestead, Florida nine out of ten real estate sales today involve properties in some stage of foreclosure, and yet statewide, the number of permitted but unbuilt homes is greater than all the housing starts anticipated for the entire US for 2009.

1000 Friends of Florida president Charles Pattison criticized the new law without delving into the underlying contradictions of a state so dependent for revenue on real estate transactions, “The areas being exempted are not the ones that are urban and dense,” Pattison told the St. Pete Times. “This is clearly meant to benefit development interests.”

The sole statement in the Governor’s press release is downright wistful, “”It’s probably one of those bills where no one’s going to be overly happy on either side of the argument. So hopefully, it’s right down the middle and will be able to stimulate our economy and not do harm to our beautiful state.” It is not right down the middle by a long shot, unless you are in love with median strips and swales in highways that the state and federal government count as “functional wetlands”.

“Our economy needs the shot in the arm that this legislation will provide,” said John Sebree, the Florida Association of Realtors vice president for public policy. Associated Industries of Florida president and CEO Barney Bishop said the state’s prosperity hinges on its ability to grow and the new law will provide a spark by “easing the regulatory burdens that have been stifling economic growth.”

But that is not what has stifled growth in Florida. Florida is literally buried under overbuilding and oversupply whose effects, in aggregate throughout the states, are now costing US taxpayers trillions of dollars. Florida Chamber of Commerce president and CEO Mark Wilson praised the legislation while criticizing “special interests and others” for making “a last-minute push to politicize” the issue.”

Crist had intended to publicly sign the bill last week but an avalanche of calls, emails, and faxes pushed the issue off his daily schedule. Citizens who have been fighting bad growth in Florida for decades—well before the current economic crisis disclosed its rotted core—had reason to hope for a veto. Apparently, Crist came to the conclusion that most of them would not be voting in a Republican primary. Yesterday, he signed the bill into law far from cameras.

There were approximately 254, 491 reasons that Gov. Crist did so. That is the amount of money recorded as campaign contributions in Marco Rubio’s quarterly campaign finance report for his exploratory committee to run for US Senate, filed on April 9, 2009.

Here are a few of the highlights from Miami contributors. Caesar Alvarez, CEO of Greenberg, Traurig the Miami-based law firm whose origins are tied to Miami land use law for zoning and permitting sprawl in farmland and wetlands, $2400, Alan Becker, Becker and Poliakoff, a Miami-based law firm with an extensive zoning and land use permitting practice with close ties to Rubio, $2300, Ronald Book, ubiquitous lobbyist, $2400, Silvio Cardoso, former president of the Latin Builders Association and sprawl builder, $2400, Santiago Echemendia, Tew and Cardenas, the law firm mostly closely associated with Jeb Bush, $1000, Herman Echevarria, a political consultant close to former Miami Dade mayor Alex Penelas and the Latin Builders Association, $2400, Ann Herberger, Bush family fundraiser, $1400, Miami-Dade lobbyist Jorge Luis Lopez, $1000, Miami-Dade political consultants Marin and Son, total of $7200, Mestre family interests in Redland garbage and land development, total $12,200, Milton family interests, Miami’s major contributors from the development industry, total $4800, Miami sprawl developer Stanley Tate and family, $4800. These numbers, while not large in themselves, are tell tale indicators of what obstacles Gov. Crist will face in raising millions for his primary battle.

Also of note, (along the lines of no good deed goes unpunished) Crist’s highly publicized and successful effort to put more than 70,000 acres of US Sugar lands into public ownership for Everglades restoration antagonized Fanjul family interests based in Palm Beach, sugar barons who are powerfully connected to Miami by employing legions of downtown lawyers over decades to cement their interests on top of wetlands. Contributions to Rubio from the Fanjul interests total $11,200: (Cantens, $1000, Dominicis, $2400, Oscar Hernandez, $1000, Albert Recio, $1000, Armando Tabernilla, $1000, Jose ‘Pepe’ Fanjul Sr., $2400, Jose Fanjul Jr., $2400)

In a significant departure from Bush policies, Crist’s Everglades initiative provides a modicum of hope that eventually, with large and costly technological inputs, that the Everglades can be restored by a more natural flow. What Bush—and the Fanuls—preferred was a highly controlled and even more costly, mechanized system of managing water infrastructure. This model was a form of strait-jacket that served Republican politics very well. Why? Because a highly mechanized system provides easy access for spigots for campaign contributions from interests that need guaranteed water supply: from Big Sugar to cities that were formerly exploding. Both Sugar and Development in Florida, it turns out, only survive based on immense taxpayer subsidies.

The same special interests that used the housing bubble to hold power in Florida succeeded with the signing of yesterday’s bill in securing a free pass to do it all over again, if and when demand revives for suburban sprawl. To be sure, they are struggling through the worst climate for development since the Great Depression. But they banked a lot of wealth during the housing market asset bubble—from cement and rock mining, to highway construction and engineering infrastructure, to building sprawling suburbs.

Most Americans are clueless how Republican developers who run states like Florida are itching to use economic stimulus in whatever form it arrives and whoever gives it to them to rebuild their net worth. Charlie Crist said to them yesterday, “yes we can”. Recently, Jeb Bush Jr. endorsed Marco Rubio for US Senate.

ALAN FARAGO lives in south Florida. He can be reached at: afarago@bellsouth.net

 

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Alan Farago is president of Friends of the Everglades and can be reached at afarago@bellsouth.net

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