Jorge Perez’ ONE OCEAN South Pointe project

The Awful Truth under City of Miami Beach Cornerstones
March 11, 2014 By David Arthur Walters MIAMI MIRROR Everyone but Martin Heidegger understood what ‘Being’ meant although they could not define it. He was bound and determined to get to the bottom of it, and found a negating factor within each human being, a certain nothing anxious for the being it cannot have. So there is a bum in need of a handout at the bottom of human being. I am even more of a fool than Heidegger, inasmuch as I felt a need to know the meaning of a concept which is by no means as universal and empty as general being; the concept of Phased Permitting, a construction permitting process introduced to the Commission of the City of
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Miami Beach on July 31, 2013, by City Manager Jimmy Morales, four months after he was appointed to office. “Phased permits sometimes called an early start permit allow certain types of construction to begin once a Phased Permit is approved by the Building Official ,” Morales stated in his Memorandum to the Commission. “It is important to note that only commercial new construction, commercial interior alterations, and residential new construction will be eligible for the program…. The phased permit process offers developers and builders the advantages of immediately beginning construction as long as they are willing to assume all of the risks associated with that early start Customers have long asked for such a program because delays in obtaining permits and the resulting ability to begin construction have serious financial implications for their projects. The City’s new Building Director/Official, Mariano Fernandez, successfully implemented a similar program in the City of Miami that has drawn considerable praise from the development community and enabled construction in that City to commence quickly and efficiently over the last several years.” Morales attached a one-page “Phased Permit Approval” information sheet to his Memorandum. No quality assurance audits or reviews of the Miami experience were included, nor were any letters from developers praising phased permitting in the City of Miami. I reread the Memorandum, imagining that I was a licensed fool or city commissioner. I could not restrain myself from laughing out loud. “Early start permit, my eye! This has got to be a joke! Ha, ha! So now work can start early, that is, without a real permit, with a no-permit permit. Why? Why does Miami Beach suddenly need phased permitting? To please major contributing developers like Jorge Perez and Russell Galbut, of course, by letting them hire their own inspectors to expedite construction. No conflict of interest there, hee-haw. Let the city wash its hands of liability for waiving protection of the public, and please be sure the insurance company names the city as additional insured just in case that Florida Supreme Court ruling on sovereign immunity for negligence does not hold up. Wait a minute. What’s the excuse? Oh, right, your building department is incompetent . Indeed! I may be a damn fool in need of an ass’s ears, for this whole thing is a gag as far as I am concerned. You cannot fool me because I am a fool.” It is with that hilarious definition of “phased permit” in mind that I contacted Morales for the sake of journalistic balance: “I ventured to Permitting and asked about it,” I emailed him, “but several people there had not heard of it, and one contractor said it only applied to demolition. I also went to Permit Doctor next door and the gentleman there said he not heard of it. This week I asked a superintendent
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at a major construction site if he had heard of such a permit, and he said, of course he had: it was only for demolition. Planning Department staff said phased permitting did not permit actual construction; rather, it was a preliminary paperwork process, Since Mr. Perez was already pulling preparatory permits on this job, like for a fence back in 2012, why is he not using the usual permitting process? The master permit says nothing about "phase." How can he proceed with construction when the permit is just applied for and not approved? And where is the fee balance due of $183,711.37?”

Phased Permit at 321 Ocean Drive – permit fee balance $129,230.00 – unlicensed private inspector in foreground

With a regular master permit for an entire job, the full permit fee must be paid before there is a permit, and there must be permit before work begins. Theoretically, that is. A fire inspector by the name of David Weston said he butted into Building Department business to discover that millions in monies had not been collected, pressed the issue and was fired. Apparently one attraction of a phased permit, as handled in Miami Beach, is that one may pay a small fee of up to $2,000 for the phased permit, plus a percentage of the fee on the master permit, which has not been approved, and then go full speed ahead with construction. As for the “certain types of construction,” demolition is not included by definition, naturally, but an entire building from foundation to roof may be constructed according to Section 105.31 of the Florida Building Code, which allows governing entities to adopt phased permitting:
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“105.31 After submittal of the appropriate construction documents, the building official is authorized to issue a permit for the construction of foundations or any other part of a building or structure before the construction documents for the whole building or structure have been submitted. The holder of such permit for the foundation or other parts of a building or structure shall proceed at the holder's own risk with the building operation and without assurance that a permit for the entire structure will be granted. Corrections may be required to meet the requirements of the technical codes.”

Arthur Begged the Question

Morales did not respond to my question, leaving me fazed as to the true nature of phased permitting. I was obviously the only one seriously interested in it who did not fully understand the sufficient reason or cause its being. I suspected that development devils were at the bottom of it. Of course the city’s Building Manager and staff had to know. And the commissioners he addressed in his Memorandum must have been fully cognizant. I supposed that a fool like me would never rise to their level of wisdom about phased permitting in the City of Miami Beach even if I wrote a book about it. I entered the terms in “The Fishbowl,” i.e. the city’s search engine, and came up with the 2013 Policies and Procedures Manual written by city Building Official Mariano Fernandez, and submitted by Morales to the Mayor and City Commission on August 9. 2013. 1 I noticed that the explanatory Memorandum submitted to the Commission by Morales did not mention that the Fire Marshall has to sign off when necessary for work to proceed, as per an Opinion of the State Fire Marshall, so I pointed that out to Morales. Although the section on Phased Permitting in the Manual did not mention Fire approval, an Indemnity and Hold Harmless Agreement addendum included this language: “The Indemnity and Hold Harmless
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Agreement signed by the owner states that, ‘Owner agrees that the Phased Permit does not imply review of or compliance with the Florida Fire Prevention Code and that any work requiring a Fire Permit is not included in this Phased Permit and therefore cannot commence without said permit. Any required Fire Permit cannot be issued without an approved design document as prescribed in Florida Statutes.” Permitting expert David Weston expressed environmental concerns with phased permits, stating that projects should be permitted by the Department of Environmental Resources Management (DERM). Nowhere in his Memorandum did Morales mention DERM. Neither did the Manual mention DERM in the section on phased permits. However, the Permit Application form addendum included a DERM box on the checklist for submitting plans. Since the Permit Application appertains to ordinary permits that would only be approved some time after the phased permit, the question must be raised as to whether construction might unwittingly begin on phased permits without the necessary DERM permits. If that were the case, the absence of regulation could adversely affect the environment. Wherefore I emailed Luis Espinoza, Communications Program Manager for Miami-Dade Regulatory and Economic Resources Department Environmental Resources Management. I attached a list of 17 phased permits that had been approved in the six months since the program began in August 2013, and asked if they had been DERM permitted. I also included the pertinent section of the Manual and asked if it were adequate. “Please note that a DERM review and approval is required for all municipal and unincorporated building permits issued by the corresponding building official,” stated Espinoza. “This includes phased permits. DERM reviews these plans for compliance with requirements of Chapter 24, Miami-Dade County’s environmental protection ordinance. The purpose for the review is to assure that proposed projects will comply with the county’s environmental protection code, including certification that the wastewater collection, transmission and treatment systems, (from the point of connection to the wastewater treatment plant) have adequate transmission and treatment capacity in accordance with the Federal Consent Decree (CASE No. 1:12-CV24400-FAM) prior to them beginning construction. Unlike other development reviews, which can be performed post construction initiation, DERM reviews must be completed, and DERM approval granted, prior to initiating construction. For example, certification of adequate transmission and treatment capacity must be obtained prior to initiating construction. “The DERM fees are simply plan review fees collected to pay for the effort involved with performing the review. The actual fees vary depending on the scope of work for the project, but can be found on our website at The plans reviewed by DERM will have a DERM stamp with an approval sign-off.
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“Note that Miami-Dade Water & Sewer Department (WASD) and Florida Department of Health (DOH) review and approval may also be required depending on the specifics of the project. WASD reviews all new development projects and collects connection charges in accordance with Ordinance 89-95. DOH reviews projects proposing septic tank systems and issues construction permits for water mains. “We have reviewed all the phased permits listed in the table you provided, and added 5 columns to show the DERM status, DERM approval date, DERM process number, WASD approval and DERM notes. Of the 23 phase permits listed 17 were approved by DERM. Both the projects at 1 Collins Avenue and 321 Ocean Drive received DERM approval. The City of Miami Beach procedures should be revised to specify that DERM approval is required prior to the phase permit being issued. DERM will be contacting the City of Miami Beach to assure that the required DERM approval is listed as part of the Phased Permit process, and that the DERM approval is consistently obtained prior to City approval of all Phased Permits. The National Pollutant and Discharge Elimination System (NPDES) is a permit issued by the Florida Department of Environmental Protection (FDEP) for constructions sites involving 1 acre or more. You can obtain additional information at The NPDES permit is not a DERM approval.”

One of the projects DERM disapproved of in February, proceeding full pace to date: Menin and Galbut’s $10,700,000 renovation of the Kaskades at 300 17 th Street.
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I forwarded the information to Morales with this n ote: “As you may see from the below, you may need to check your procedures manual to see if it specifies DERM approval for phased permits - I believe I did see it on a checklist but do not recall if the list was for all permits including phase permits, You may also recall my previous (unanswered) communication including an attached opinion of the Florida State Fire Marshall (Alex Sink at the time) that Fire must sign off.” His reply: “Not so sure why you are so obsessed with phased permitting. It has worked well in Miami and it is beginning to work well here. The Building Official is aware of what DERM and Fire require. Thanks for your concern.” So the Building Official would be fully aware of any projects proceeding unlawfully with his permission without DERM approval. As usual, Morales provided no support for his statement about the City of Miami, nor did he say what “working well” meant. For example, for whom was it working well? A fool might ask if it were working well for developers, and for officials who were pleased to shirk as many responsibilities for the public welfare as they could under cover of this rather occult denomination, “Phased Permitting.” And what in the world did they mean by “phase”? One might think that a huge project would have several phases, each phase to be permitted separately instead of going ahead whole hog with a single phase permit. Although I was still fazed by the subject, and felt duty bound to drill down to the true foundation of this kind of permit, I was glad to hear it was working well in the City of Miami Beach since my extended anecdotal experience with its Building Department and inspectors during surveillance of an unpermitted project completed by a well known unlicensed general contractor who has done millions of dollars of work permitted and unpermitted inside high rises in both Miami and Miami Beach led me to suspect that Miami’s Building Department under Mariano Fernandez prior to his coming to the Beach was atrocious in comparison to that of the Beach under its then director Stephen Scott, who was demoted to assistant under Fernandez shortly after Morales arrived to save the Beach from the scandal there. Witnesses to what was going on in the project several collaborators were observing in downtown Miami were left aghast. And that project was hardly novel. On December 19, 2012, the Office of the Inspector General of Miami-Dade County reported to the Mayor of Miami-Dade County on the “Failure to Obtain Building Permits for Work Located in the City of Miami - Ref. IG12-26.” Tellingly, the unpermitted work was accomplished by the government itself; that is, under the wandering eyes of two divisions of the Internal Services Department (ISD): the Design and Construction Services Division and the Facilities and Utilities Management Division. The OIG’s Findings & Conclusions are damning, and reminded me of what was going on in the private sector as well:
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“The OIG investigation substantiated the allegation that ISD was required to obtain building permits, but failed to do so for both projects reviewed. The City of Miami Building Department officials advised the OIG that building permits were required for both projects, and confirmed that the permits had not been obtained. The failure by ISD to obtain building permits for these projects means that the projects were not inspected by qualified electrical, plumbing, and/or mechanical inspectors. The purpose of an inspection is to ensure that work is done safely and meets the requirements of the building code. Incorrect installations could result in life safety issues, potentially causing a hazardous situation for employees and the public, and could also lead to more costly repairs in the future. Currently, both projects are completed; however, neither has undergone an inspection as required. The OIG finds this matter troubling, as the aforementioned investigative findings are similar to findings substantiated in another investigation conducted by the OIG (IG12-04). That investigation revealed that ISD failed to obtain a building permit until 16 months after the start of a substantial roofing project, and then significantly minimized the scope of the work and the cost of the project on the permit application. The OIG is concerned that a pattern of building code violations appears to be emerging and should, therefore, be addressed.” It then dawned on me what a fool I had been. The definition and reason for phased permitting had in fact been clearly expressed by Morales to the Commission. I had even made a joke of it, which demonstrates that there is truth in humor. Phased permitting permits an owner to build a building without a permit for the building because building departments are incompetent. The city manager, building department officials, and city commissioners did not laugh at phased permitting because they knew all along that they are incompetent when it comes to doing anything efficiently, so why let their customers, the owners and developers who support them, unduly suffer? After all, they had tacitly approved of early starts without a permit all along. As the gentleman at Permit Doctor next door told me, although there was no such thing as an “early start permit,” one could always proceed with a job with the risk of having to pay double permit fees if caught. Given what is called the mañana code enforcement culture, a violator might be accidentally caught on a random inspection, or caught if someone with an axe to grind makes an anonymous complaint. Double permit fees are usually waived for those who make the right contributions to the culture. Play nice and your case will never get to the local code magistrate, the “Special Master,” or, if it does, he will go easy with the fines if your attorney cooperates with the city

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attorneys. After all, as liberal prosecutors who enjoy exercising broad discretion like to say, laws are not meant to punish offenders but to encourage voluntary compliance. Yes, there have been bribes at the lowest level, not to mention the quid pro quos among the power elite. So now the city will get the $2,000 up front, reducing the bribes once deposited into toilet paper dispensers at city hall, and the power elite will get their end as usual. To his credit, Morales has rightly called phased permits, “early start permits.” Again, the tradition has been to start jobs without any permit at all, or to obtain a really cheap demolition permit and then proceed with millions of dollars of unpermitted construction, or to get a flooring permit inspected out and then do a great deal of unpermitted renovation. Morales says new construction will include commercial interior alterations; will that be extended to buildouts of construction-ready condominium buildings? When caught – and one might not be caught if inside a condominium building that had already obtained an occupancy permit – work could be stopped until permits were obtained, and double permit fees could be imposed yet were seldom imposed unless the public made a fuss, which was unlikely given the opaque system and the public’s general ignorance about permitting procedures. As for the quid pro quos high and low, who is going to tell? Building managers and others are “taken care of” via “money trucks” reple nished as needed with bank-wrapped bundles of $100 bills, and it was therefore no easy matter for inspectors to get inside if they wanted to. These premature “permits” are called “No Permit Permits” because, “Everybody Does It, Everybody Knows It, and Nobody Cares.” Owners/contractors/developers swear that it is necessary to “get ahead of the job” i.e. get ahead of the permitting process because of incompetent building departments. But getting ahead of the job could include defrauding the city of permit fees and its ability to protect the health and safety of the public. Getting ahead of job with the new phased permit system requires the owners and developers to hire private inspectors, an abnegation of official duty, and a relationship with an inherent conflict of interest. Quality assurance audits have found private inspections to be inferior to public inspections. I wrote a published series entitled ‘Getting Ahead of the Job Con,’ tracing the misconduct of one general contractor who was unlicensed, renting licenses where he had to have them but handling all the money and running the jobs. Building department officials knew about it and did nothing except to wish him well on one occasion. As mentioned previously, some of the most egregious misconduct occurred in downtown City of Miami when our current Miami Beach Building Department Director was then director of the Miami Building Department. Since
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he with our new city helped introduced Phased or Early Start Permitting after the bad press, I am especially wary of the novel (for Miami Beach) process. Now Morales has denominated my concern an obsession, as if I were compelled to anxiously fixate my attention on phased permitting. “Not sure why you are so obsessed with phased permitting,” he said. I have noticed a tendency of officials licensed to practice law practicing psychiatry without a license, diagnosing any outsider who begs askance of their behavior as “delusional,” “obsessed,” “moronic,” and the like. Soviet psychiatrists diagnosed anyone who did not believe they were governed by the best government as afflicted with “sluggish schizophrenia.” Dissidents who cited Lenin, Marx, and Engels against the dogma of current communist authorities were diagnosed as suffering from a mental disorder called “philosophical intoxication.” That is, they were wise fools without a license. I shall admit to being a bit of a moron, in the etymological sense of being foolish, yet not as a “natural fool,” but rather as someone of average mental ability who simply does not know what is going on in town, how things are run by the ruling clique. The fool of merit was the ablest man at Court. I am a man of many themes who likes to pursue my themes to the end that I may learn as much truth as I can about a subject. That requires skepticism and even cynicism. So officials pursuing careers in which they may not be very happy have remarked that I am “passionate” about my subjects. Now I can add “obsessed.” I asked permit doctor David Weston, the only local construction permitting expert who responds to my questions about permitting, what he thought of Morales response to my suggestions on DERM, and he called me a “watchdog.” “Anytime you run an organization the size of a city,” said Weston, “you should welcome the factual and accurate reporting of watchdogs. I am sorry to hear that city does not welcome your constructive input especially on vital environmental issues. I should trust they are not ignoring your concerns but rather working behind the scenes to correct any deficiencies.” So phased permitting is just another theme among others that I have been developing of late. Lacking an elaboration from the city manager and building official on the theme, I am left to develop it with whatever information I have. A conspiracy theory, that big real estate developers, influential lawyers, and politicians have created phased permitting to faze the public might be developed based on the following information:

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The Charter of the City of Miami Beach has a weak-mayor, strong-city-manager system of government, presumably providing for a businesslike, apolitical administration of the city’s business. Morales, a politician and lawyer with no professional civic management experience, was shooed into the top management job by the so-called reformist faction on the commission that had forced the resignation of longstanding professional city manager Jorge Gonzalez in the wake or several arrests of city code enforcement officers. Gonzales, and then Kathy Brooks, his budget director, who filled in as interim city manager pending Morales appointment, promoted a waiver of double permit fees, purportedly as an amnesty for violators who confessed their violations in advance of being caught. The city attorney wisely advised that such an amnesty would violate state law; therefore, a fruitless effort was made to get the state board to give government entities discretion to waive double permit fees. The candidates selected by an independent recruiting firm for the city manager job were set aside in favor of Morales. Two weeks after his formal appointment on April Fool’s Day, Morales hired City of Miami Building Department Director Mariano Fernandez as lead Building Official for the City of Miami Beach. Three months later, phased permitting was introduced to the city, and immediately taken advantage of by major developers. Philip Levine, a local cruise line media entrepreneur and real estate developer, was recruited to run for reformist mayor that November. He invested over a million dollars of his own money and secured the endorsement of Bill Clinton to win the mayor’s job. The mayor alone has little executive power. However, according to local political fixer J.P. Morgan, whose allegations have not yet been corroborated and may be spurious, Levine expended more millions to support candidates for commissioner, and thus brought two new commissioners with him. The main and successful thrust of the so-called reform was to dispense with Jorge Gonzalez’ grand plan for a new convention center and adjoining hotel as conceived by a famous developer and internationally renowned designers, in favor of a downsized development favoring other developers and architects. Go figure. XYX

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NOTES (1) Miami Beach Policies and Procedures, Building Department, Operations Division, Revised July 2013. Phased Permit Approval. POLICY: The Building Official is authorized by the Florida Building Code to provide Phased Permit approval for construction projects. PROCEDURE: After an applicant has submitted plans, calculations, survey, and a permit application to the permit counter, obtained a process number and paid the upfront processing fees for a regular building permit they may submit a request for Phased Permit approval to the Building Official. The following items will be required: • Two sets of plans of the architectural and structural portion of the building • A letter from Miami Dade WASA of intention to issue the water and sewer allocation letter. • Phased Permit Hold Harmless form • Notice to Building Official for Private Provider inspection services. Before submitting to the Building Official for Phased Permit approval, the applicant must first obtain approval from the Planning Department and the Flood Plain Compliance section of the Building Department. Phase Permit plans will not be reviewed by other trades. After the approval of the Building Official, the applicant will need to return to the permit counter to obtain and pay for the Phased Permit. Please be advised that the cost of the Phased Permit is non-refundable and will not be credited to the final building permit. The applicant may need additional trade Phased permits (electrical, mechanical, plumbing, etc..... ). These permits must be related (linked) to the phase permit. This will ensure that the trade permits can be transferred to the building permit once obtained. A National Pollutant and Discharge Elimination System (NPDES) permit may be required. Storm water, erosion and sediment control during construction, demolition, or related activities that impact one-half (1 /2) acre or more, shall be in accordance with the city's Municipal Separate Storm Sewer System (MS4) permit. Separate permits from City of Miami Beach Public Works Department may be required for work on the public rights of way that involve paving, sidewalks, excavation, drainage, maintenance of traffic/street closure, tree removal/relocation/planting or dewatering, etc, as needed. For applicable permits, please contact Public Works Department at (305} 673-7080. The Phased Permit cost is $2000 for Commercial New Construction, $1500 for Commercial Interior Alteration only, $1 000 for Residential New Construction and is valid for six {6) months only. You must obtain your master permit within six months from the date of issuance. REFERENCE • Florida Building Code 20 12 PREPARED BY: Building Department Building Director Revised. 07-24-2013

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