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David Arthur Walters

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Getting Ahead of the Job Con at the ICON South Beach

7/3/2012 6:00:00 AM

by David Arthur Walters


The City may have lost $50 million in permit fees over the last decade

 

 

Photo: Sharron Lewis Miami Style staging by Elizabeth Calomiris for ICON Unit 1801

3 July 2012

 
By David Arthur Walters
THE MIAMI MIRROR
Miami Beach
 
Suite 1801 at the ICON at 450 Alton Road in South Beach offers a perfect example of how a general contractor get and complete a project without a license or a permit and make plenty of money for himself besides a small fortune for a speculator on a single condominium remodeling project. An exemplary photograph of one of the completed rooms in Suite 1801 appears today on the main webpage of Sharron Lewis Design Central. (see above).
 
The unit had been foreclosed on and thoroughly trashed when lead residential designer Elizabeth Calomiris, who had been engaged by the late Sharron Lewis to carry on her Miami Style for the company, designed the outstanding renovation. Jihad Doujeiji, Sharron Lewis’ bereaved husband, owner and sole manager of the furniture manufacturing, interior design, and construction operations, arrived with his crew and worked Ms. Calomiris’ wonders under the heading of one of his family’s cover firms, Audy Group LLC, whose publicly listed members are the three brothers, namely Jihad, Imad, and Zeyad.
 
Audy Group LLC billed the owner’s real estate agent—Bragi Sigurdsson, then broker and part owner of Sigurdsson Schechter Luxury Real Estate, now with prestigious Sotheby’s—nearly $80,000 for the construction. Sharron Lewis Design Central billed about $87,000 for the furnishings, for a grand total of $167,000.
 
Mr. Sigurdsson’s principal, Gerald Jonas, trustee for the federally qualified profit sharing plan of Jonas Builders, Inc., a Wisconsin construction and real estate company, had purchased the wrecked condominium from First Bank Puerto Rico on December 15, 2010, for $1,800,000, and sold it on June 13, 2011, for $3,400,000, leaving a gross profit of $1,600,000. Deducting $167,000 for renovations, and estimated commissions of $ 170,000, would leave the profit-sharing plan a net of $1,263,000 less Mr. Jonas’ expenses for administration. An additional finder’s fee in merchandise may have been paid by the contractor directly to Mr. Sigurdsson, the owner’s fiduciary, as is customary in these deals, hopefully with the knowledge of the owner and the IRS. Such is the magic of good marketing, interior design, and remodeling.
 
What’s not to like? We do not begrudge anyone their profits. A fact that you may not like if you are public-spirited is that neither Gerald Jonas, nor Audy Group LLC dba “Audy Construction,” nor any of its member including Jihad Doujeiji had a general contracting license. Mr. Doujeiji’s wife, Sharron Lewis of Sharron Lewis Design, had one when the contract was signed in January 2011, which was prior to her tragic death from cancer in March 2011 after a protracted painful illness. Mr. Doujeiji failed to notify the Contractor’s License Board of her death and continued to present himself as qualified to contract under her license number.
 
But at this juncture we shall not stand on formalities given the fact of Mr. Doujeiji’s emotional distress and confusion during the ICON remodeling. Instead, we shall assume that his critically ill wife was supervising his construction activities. The point here is that, according to Beatriz Dooley of the City of Miami Beach, the construction work on ICON 1801 was not permitted, despite the fact that the owner/developer in charge, Gerald Jonas, is a seasoned Wisconsin contractor who should have known better.
 
But how would the contractor and furniture company get into the building? Where there is a will, there is a way to “take care of” building management, perhaps out of the Money Truck—more on that elsewhere. Or one may slip into the building presenting false, invalid, or irrelevant certificates of insurance to building managers, who fail to scrutinize them and call the insurance companies for verification of the type of coverage, if any. Of course Miami Beach Building Department inspectors who are around from time to time must also be managed or taken care of effectively.
 
We seriously doubt whether Jihad Doujeiji and Gerald Jonas were the only persons who avoided permit fees at the ICON, a 40-story condominium complex with about 240 residences, which are at least 90% occupied; that is, if the current promotional rhetoric for the nation’s Ground Zero for the real estate condo collapse (Miami area) is accurate. The City of Miami Beach provided Miami Mirror with a history of building permits for the building. There are a mere handful of minor violations noticed on that spreadsheet for the residences themselves. The units were provided “builder-ready,” meaning the spaces had walls but were otherwise bare except for bathroom and kitchen fixtures, and in some cases shiny flooring resembling linoleum, all of the quality that upscale buyers would rather get rid of in the renovation process. Now the most frequent addition or replacement is the flooring, for which a permit is rather easy to get, especially if you pay a permit fixer to get priority when time is of the essence.
 
As we have seen in ‘Getting Ahead of The Job Con at the Continuum’, Mr. Doujeiji, acting as an unlicensed general contractor, had his permit fixer line up a flooring specialty contractor for Continuum Unit 2602 as 50 South Pointe Drive, and then the Doujeiji crew laid down the floor that was permitted to the license contractor, but went on to build out the rest of the unit without a permit. Apparently this is one of those “everybody does it” violations, the “getting ahead of the job” violation for which one might get a “traffic ticket” if caught—the fact that there is an advertised double-permit fee for the unpermitted portion of the work is only a slight disincentive when millions of dollars in construction contracts are in the works.
 
At the ICON, we count around 150 flooring permits, and roughly 50 permits for the renovations that most wealthy people and savvy real estate flippers would desire. We leave it to competent statisticians to estimate the extent of non-permitted renovations among the units that pulled flooring permits. We estimate that the City of Miami Beach lost up to $1,000,000 in potential permit fees on that tower alone, some of which could be secured if the building were professionally audited. Extrapolate that among the total new condominium units in Miami Beach and the total loss may approach $50,000,000. That sounds like grand larceny; however, to the best of our knowledge, no arrests have been made for defrauding the municipality of its dues and perhaps safety to boot.
 
What is the other side of the story? Does anyone care? Is not the government fair game, an enemy to be starved to death if possible? If we would not begrudge anyone their profits, so what if the rich are getting richer at the government’s expense?
 
The owner and his lawyer are not answering questions either, not in writing. Sharron Lewis Design staff refers all questions about permits, construction, licenses and the like to the manager, Jihad Doujeiji. Still, gossip is circulating all over town, some claims have been made and complaints filed, for apparently he has made some people awfully sore. Mr. Doujeiji has not responded to requests for a written or video explanation of his contracting exploits; the scuttlebutt is that he is claiming that a nosy reporter is trying to keep him from making money, and he cannot understand why anyone would hate him that much.
 
But Jihad in particular is not hated: evil is hated; to extirpate evil is our jihad. The best of all possible worlds is desired for all, or at least the greatest happiness of the greatest number. The truth must be told to bring that about, for he who ignores evil is good for nothing. We have had enough “prosecutorial discretion” in the name of liberty, for discretion has established another tyranny of the arrogant who think they own the law. What is wanted is righteous administration, that all have unity in just laws, that they be treated fairly and rewarded according to their merits. Fees and penalties should be collected. Wrongdoers should be reformed or punished.
 
The Miami Mirror asked Building Department officials to look into the ICON situation on June 20, and to advise what will be done about it; for example, “follow the published procedure, get the unpermitted work permitted or redone, collect double permit fees on some or all of the around $80,000 in construction.”  An audit of the entire Icon building was recommended to quality control manager Linda Blanco.
 
We noted that our ICON example appertains to the same unlicensed contractor, permit fixer, and owner as at 1800 Sunset Harbour TS3, where work had been ordered stopped because the enormous amount of construction completed did not match the work permitted, the demolition of an imaginary bathroom/kitchen! That location will be address in ‘Getting Ahead of The Job Con at Sunset Harbour.
 
Miami Beach officials are mute on the Icon as of this writing. Perhaps an investigation is pending, or perhaps nothing at all is being done in hopes that nosy reporters will go away.
 
# #
 
 
 
 
 
 
 
 

 

 

 

 

 

 



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