The Miami Herald from Miami, Florida • 109

24-A THE MIAMI HERALD Mon Feb 7 1972 Green Firm Tools Big Profits 4 a conflict with land records which show Richard Green owned the land on which his houses were built I if' 7 '7 sh Jr Although Green got FHA approval to build his houses in either sections or of South Miami Heights he actually built in Section with no revision in the FHA allocation AT i i jrv GREEN BOUGHT his house lots from Martin Woolin who with his father David is a major land developer in South Dade Priestes said that sale of lots to him was one of his of as an FHA build- er and it was Woolin who asked him to take out the permits for houses and to sell them through the Priestes sales office Woolin asks me to do something I do Priestes said Woolin could not be reached for comment Pelski who said he vaguely remembered meeting Green once failed to follow published FHA policy regulations which call for a formal evaluation of the builders applying for subsidy construction John Priestes Right With Associate Louis licit builder's contracts soared under subsidised housing a 4J174A IV2 i s-C u-s department of housing and urban development rrnrpAL HOUSING ADMINISTPiTinw FHA Fora 3122 Sv 371 122 Request for Preliminary Reservation ef Contract Authority for Conditional Commitments to be Converted to Section 235fi) 0 (S or more home mortgage units only) A to Buildings of John Priestes Homes Inc I To: Director Area or Insuring Office CORAL GABLES FLA Submit original builder and associates became fourth busiest in Dade 3 Application is hereby made for a preliminary reservation of contract authority in connection with the proposed insurance of home mortgage financing the construction or substantial rehabilitation of 5 or more dwellings in the subdivision or area identified below such funds to be used to make assistance payments for lower income families who qualify under section 235(b) of the National Housing Act ACCORDING TO FHA policy Pel-ski was under instructions to carefully evaluate the builder and other criteria before granting subsidy allocations There was a backlog of 10000 requests from long established Dade builders anxious to take advantage of the lucrative program on Aug 12 1971 when Pelski obligated the FHA to subsidize 40 houses According to the contract Pelski signed the government is obligated to pay up to $34240 a year to subsidize low income families buying houses UNDER THE so-called 235 subsidy program the government pays the difference so low income families can move into new houses with $200 downpayment and low monthly mortgage payments The subsidy program enables the builder to sell his houses as soon as built with a minimum of price haggling with low income families grateful for an inexpensive new home The Charter Mortgage company the same company that handles most of house sales under the FHA 235 program also is financing the sales of Richard houses CHARTER MORTGAGE agent David Little said he had signed the name Richard Green to the formal re- 4 Name of Subdivision andor Area Where Construction is Proposed: MIAMI HEIGHTS VARIOUS ADDITIONS (DEFGH) Proposed Construction Rehab 5 1 i tat ion OAopl ication Application Estimated Number of Sales With Section 235 Assistance Estimated Sel 1 ing Price 2100000 LO 2100000 ko Total- 80 0A 0A 2 From: (Name and Address of Sponsor or Other Party at Interest): CHARTER MORTGAGE COMPANY 720 NW 27th AVE MIAMI FLA and 3 copies Proposal Is located in: (Cheek appropriate box) blighted area "core city" neighborhood Within city limits other than "core city" Other Is addition check appropriate box below: 0 Anrea of minority concentration A model city neighborhood An urban renewal area Not Filed on File Commitment Issued Under Construction Units Completed Not Sold Estimated Number of Sales Under Other Sections Without 235 Assistance Total Number of Cases 10 JSL 10 50 20 100 7 Date Aug 11 1971 Reservation No: Locations JDatJ fS! 97t of Authorized Official Reservation of Contract Authority To: Sponsor or Other Party at Interest: -icy This is to certify that I have reserved contract authority in the amomMf'of c3 in connection with the above request Please furnish our lender the attached cop'y of this Career Starte Sigu Points quest for FHA authorization to build subsidized houses Little said he remember why he signed name I think Green was not available and he asked me to sign his name So I Pelski said he was not concerned about who signed the official document think I would get excited about it put it that he said Pelski said a member of his staff had written in the names of builders on the line that calls for the signature on a number of records he had released to The Herald KNOW why he (the staff member) does that sure for better record Pelski said In a tape recorded interview with The Herald Pelski was asked what he knew about the Richard Green Building Company we have is that his mortgage company is Charter Mortgage He has an address of 19711 SW 117 Country Club and has an apartment in Martin Cabana complex Priestes credited his success to Martin Woolin the stylish millionaire of South Miami Heights and to a less extent to Joe Wawrzyniak a homebuilder who has never made the top 20 "I owe them everything he said Wawrzyniak introduced Priestes to the building industry in 1969 erecting cottages in South Miami Heights job was vaguely identified by an associate as The associate the man legally responsible for the quality of the construction asked his name be withheld He expressed displeasure over the experience AT THE TIME Priestes 34 his brother Tom 37 and their widowed mother Mrs John (Marie) Priestes operated a small hearing aid shop on Douglas Road in Coral Gables building and selling hearing aids in a rented one-story building Priestes had learned the business as a Tri State Hearing Service employe in Pittsburgh then opened a Miami franchise advertising Aids Wholesale and Retail Custom Earmolds and Batteries Free Home He later claimed invention of an all-in-the-ear nickle-cadmium hearing aid The address Pelski gave is the home of an employe who works for John Priestes Homes Inc The employe told The Herald Richard Green is her husband's house guest at their home when he travels to Miami from his home in Pittsburgh PELSKI WAS ASKED if he ever met builder Richard Green he answered you ever discussed his project with he was asked don't recall discussing the project I remember vaguely meeting him when he came in the office Pelski said top aide Louis Baine interrupted: point you have got to keep in mind is that when we allocate funds 235 funds to any builder this is to supplement his building program that he has already started in the YOU saying that Richard Green started before he came in here (the FHA office) or that he was an established The Herald asked ear and incorporated Magnatone Hearing Aids to manufacture the device His income rose steadily Circuit Court records from an assault and battery suit later dismissed show: $8000 in 1967 $14000 in 1968 $20000 in 1969 and $29000 in 1970 He credited his modest success in part to the insistence on cash in advance In 1970 Priestes joined Wawrzyniak and a third builder Carol Sheppard the Miami Dade in a corporation Land Development Corp while remain ing based in South Miami Heights SHEPPARD HAD previously been a North Dade roofing contractor Dade County licenses show The file also reflected past financial difficulties and contained a letter from the Better Business Bureau: quantity and the nature of these complaints has raised a question as to the competency of this Sheppard signed the building permits as the builder-contractor During the year Priestes struck a bargain with landowner Woolin that was to prove immensely profitable to both in 1971 after Priestes had apparently divorced himself from Sheppard and Wawrzyniak At the time the prevailing price for fora so that when requests are made to convert conditional commitments to firm commitments under section 235(1) reference may be made to the reservation oumber shown in panel ft above Unless extended at your request this reservation will expire: (a) 4 months after the date of issue if the developer has not obtained subdivision approval (or conditional commitment if a subdivision is not involved) (b) 6 months after the date of issue unless conditional eoamitments on eligible properties in the subdivision (firm commitments if there is no have been issued in a sufficient number to use ell outstanding reservations if the ere ell ultimately converted to firm commitments under section 235 or the mort gages represented by the firm commitments ere ell insured If at any time after expiration of the 6 month period the number of outstanding conditional commitments in subdivision (firm commitments when there is no subdivision) is less th an the number of outstanding reservations the excess reservations automatically expire (c) 9 months after the date of issue if the conditional has not yet been converted to firm commitment under section 235 (d) on cornnltment if the mortgage has not been insured under Office FHA Document With Signature Awards Richard name appears hut he sign it A late surge of house sales in the final month of 1970 brought builder John Priestes and his associates into the top 20' for the first time in his fledgling career and suddenly hiS competitors began hearing the Priestes name They pronounced it or or occasionally with the proper two syllables accent on the first Last year the Priestes syndicate built and sold an average of one new house a day began planning for even more rapid growth this year and vaulted from 19th place to fourth AND NOW THE Italian rolls comfortably off the tongues of builders who would have heard of Priestes only if they wore hearing aids which he sold or golfed at La Gorce Country Club where he caddied ten years ago Priestes concedes that his competitors show him no great affection but dismisses this as resentment of the new boy on the subdivision block and disagrees when they say he knows more about hearing aids than houses John (Joe Bird) Priestes must know something or someone his competitors do not Last year the University of Miami engineering dropout semipro outfielder and former caddy bought a $75000 pad skirting the Biltmore you know that for a (Green had told The Herald he never built a house before getting his FHA approval) Baine answered did you know not really sure of Pelski answered EARLIER PELSKI said he never required subsidy builders to fill out the evaluation forms required by FHA policy published on March 19 1971 Pelski said he had sent questionnaires to all builders doing business with the FHA office shortly after approving the Green subsidy allocation the Richard Green Building Company was not on our mailing list so we ask him to fill out a Baine said Pelski was asked if he felt he is bound by the policy manuals would say in most instances we are There are times at the local level we have to deviate or change from the written policy is certain discretion given to the Pelski said Aids in: a building lot in South Miami Heights was $3000 Priestes agreed to pay $3500 But he was not required to pay until after the house was sold when he was released fro mthe mortgage on the lot WOOLIN BENEFITED from the higher price from rent for space in his shopping center and from the new-found customers for his utility company A land purchase agreement between Woolin and real estate broker Robert Marx produced in a Circuit Court suit also said the land purchaser must every effort consistent with the laws of the state of Florida to induce the various home purchasers to purchase their home insurance from the Caribbean Insurance a Woo-lin-associated firm By the end of 1970 Priestes anticipating allocations of FHA contracts for subsidized housing had erected 64 houses He and other builders who had been encouraged by the FHA soon covered that the contracts were not forthcoming have people calling and coming to me every day complaining and asking why they get into their Priestes complained last February homes and I have 64 of them are completed with landscaping sewers and water and yet 1 let these people move in because the government is not allocating funds for the Priestes flew to Washington to lobby for section allocations he said He could not recall to whom he spoke Nevertheless the lobbying effort must have been successful DURING THE YEAR a Herald anal-ysis indicates Priestes and his associates received more than 600 contract allocations far more than any other builder The net profit from each contract has been estimated conservatively at $2000 to $3000 Priestes may have earned more Authoritative sources said his construction costs were a rock $12 to $1250 a square foot The way to make sizable profits Priestes explained is to have a large concentration of 235 houses in one area so that subcontractors can move rapidly up and down the rows of houses in assembly-line fashion In the beginning at least his labor costs were low He obtained workmen by driving a pickup truck to street-corner groups of black laborers and calling out the skills he needed he said Today he has his own subcontracting crews and heavy equipment he said Now that his corporate empire has been inflated by FHA subsidy contracts he has begun land development in South Dade and Lake Wales making himself in effect the Woolin for other builders and is concentrating on $40-000-class homes ding empire to fourth place last year Many of the FHA contracts Priestes received last year will not appear as actual sales until this year because of construction time SPURRED BY A LIBERAL allocation of FHA subsidy contracts builders John Priestes and his associates vauled from 19th place among Dade County homebuilders in 1970 the birth year for his bud Building Permit Shows Priestes as Owncrof Land contractor Camp heard Green really.