Dive Brief:

• The Miami-Dade County public housing office is investigating Atlantic Pacific Communities in connection with a $3.3 million project grant that officials have said Atlantic didn’t really need, the Miami Herald reported. The agency said Atlantic claimed to need the money to complete funding on a $66 million housing project but failed to disclose almost $4.5 million in a loan and cash on hand.   
• Critics of the investigation have said it is a political move due to Atlantic’s association with Carlisle Development Group, which has been plagued by scandal after allegations of a tax-credit scheme. According to the Herald, Carlisle transferred employees and four projects to Atlantic during the investigation, but none of those employees was implicated in the fraud investigation.
• Atlantic is in the running for a $287 million contract for the rebuild of Miami’s historic Liberty Square, but, although Atlantic scored the highest in the process, the award is being delayed while one selection committee member’s score is under review. An attorney for Related Urban Development Group, Atlantic’s biggest competitor for the project, argued in a letter to the housing department that the grant applications should be of concern due to Atlantic’s ties to Carlisle.

Dive Insight:

In August of this year, prosecutors charged seven Florida construction executives, two at Carlisle, with misappropriating $36 million in U.S. tax credits meant for affordable housing projects in the Miami area. Matthew Greer and Lloyd Boggio of Carlisle allegedly pumped up construction costs, accepted millions in kickbacks from contractors and even set up shell companies to receive the payments.

The Herald reported that several county commissioners want the county to investigate past projects by companies with ties to Carlisle. However, Carlisle has some fans because of the many affordable housing projects it had built in Miami-Dade.

"If there's something that’s found [to be wrong] I’ll be the first person to say 'Let’s do this over again.' But a lot of this is just rumors," Commissioner Audrey Edmonson said. "I do know there's a lot of political maneuvering in reference to Liberty Square."

Michael Liu, the county’s housing director, told the Herald he’s trying to ensure county funds are spent appropriately and that an unnamed third party is helping the county review Atlantic’s grant. City officials also said it’s not unusual to renege on this kind of loan commitment if a developer’s finances show city funding is no longer needed.

"Bottom line," Liu told the Herald, "we just want to make sure the county's affordable housing resources are used in a way that we can maximize the number of units that are built and that are used fairly, and that there are no abuses to the program."

Atlantic spokesperson Jessica Wade Pfeffer said in a statement that they would welcome a review of the grant application, although she said they had not yet been contacted by the county. Pfeffer attributed any irregularities to "fluid financing" and construction costs from an increase in the number of units in the project. "Ultimately, whether we build 100 units or meet our goal of 134 units of affordable housing, all sources of financing and costs will be fully transparent to all parties," Pfeffer said.

The investigation coincides with recent heightened scrutiny of illegal activity in the construction industry, with authorities increasingly cracking down on corruption.