Unlicensed general contractor Jihad Doujeiji dba Sharron Lewis Design Central had gotten ahead of every luxury condominium job we had investigated thus far on South Beach. He got away with not pulling a permit at all at Icon 1801. At Continuum 2602, he had a licensed contractor pull a flooring permit, then his crew went in, laid down the floor and did a thorough non-permitted renovation of the apartment. Most amazing of all, his trusty permit fixer, “Trusty Rusty,” got him a license number to piggyback on at Sunset Harbour TS3, and then had a permit pulled to demolish an imaginary kitchen and bathroom in a completely empty space, where Mr. Doujeiji’s crews did nearly a half-million dollars of work before we convinced the Building Department to conduct an investigation and issue a stop work order. Mr. Doujeiji, when exposed, claimed that he was only doing what everybody does, getting ahead of the job, therefore we dubbed our investigative series the ‘Getting Ahead of The Job Con.’ Go in small and come out big, catch me if you can, the penalty is just a traffic ticket.
How did he get away with it? The owners like the work he does, but is he a genius? Our investigation of the processes at the scandal-rocked Building Department of the City of Miami Beach revealed that there exists a virtual honor system for permitting luxury condominium build-outs and renovations. Apparently enforcement during the building boom was far beyond the ability and competence of city officials. Untold millions in dollars in permit fees were probably being evaded with an unknown increase in safety hazards. But never mind, for the public feels no pain for what it does not yet know. City officials were mute to many of our questions and suggestions, although they appear to be exercising what they call due process behind the scenes.
We took our investigation of the exemplary South Beach contractor to the City of Miami, where we discovered from public records that Mr. Doujeiji and his brothers own several apartment buildings that provide them with a considerable currency flow despite numerous evictions due to the nature of tenancy in the respective locations. The crown jewel is their lovely four-story apartment and office building at 1601 NE 2nd Avenue, sitting on the advantageous corner of an otherwise vacant block of real estate near fine hotels, and poised for high rise residential and commercial development as the northeastern edge of the downtown area advances along the gentrification path to and thru the art district. The Miami-Dade County Appraiser put the taxable value of the property, purchased in 2002 from Miami Milano Corporation for $1.7 million, at nearly $2.5 million in 2011. ZJ Audy Investments LLC, holding the property for brothers Jihad, Imad, and Zeyad, has mortgaged it to the BPD Bank of New York, the stated value of the mortgage being $3.4 million as of 4 November 2011. We estimated its market value to be around $5 million given grand development schemes for the neighborhood including a potential high rise development around the building.
However, Henry R. Block, Vice President of Jack Thomas Inc., a realtor who was involved in the potential $20 million sale of the 2.4 acre property around the Doujeiji building, suggested our assessment was too enthusiastic. “The property,” he said, “has a very small footprint, is overpriced and is encumbered with a historical designation. There could be a list made of outparcels to big developments in Miami that held out in anticipation of price appreciation that wound up built around. We’ll see.”
A developer and real estate broker who left the Miami area during the boom, and who asked not to be named due to ongoing controversies, said that “small footprint” means that “you have a 40,000 sq. ft. building on about 11,000 sq. ft. of land. As for the notion that the property’s position would have no bearing on value—don’t bet on it! This is why Carnap is not in the real estate speculation business.”
A search of the public records revealed that Mr. Doujeiji had filed an owner’s Notice of Commencement for construction at 1601 NE 2nd Avenue, listing his late wife, Sharron Lewis, as contractor. Her general contractor license was no longer valid after her death in March 2011. Mr. Doujeiji continued to use her license although no notice of death was given to the Florida Board of Contractors as required by law so that he might legally complete the work permitted under her license. According to the county’s website, all permits issued for the renovation of the historic building are expired, the latest expiration dates being in October 2011. Occupants of the apartment building, which houses Mr. Doujeiji’s Sharron Lewis Design Central showroom, said there had been continuous renovations ongoing in the building even after March 2011, usually at night and on weekends. Tenants complained about the noise, and at least one longtime tenant to the north of the internal courtyard had moved out due to the din. The apartments, we learned, were being completely made over, including installation of new windows at an estimated cost of about $25,000 each unit. Furthermore, Sharron Lewis’ showroom on the first floor had been radically expanded after her death, to include the adjacent rental space. That necessitated the demolition of walls, and a kitchen area used by the company’s employees.
Jihad Doujeiji, in part inspired by his appreciation of appreciating real estate values and rising cash flow, and wanting to build a suitable memorial to his beloved wife, has obviously done a great job renovating the building inside and out.
What Mr. Doujeiji does not appreciate are the licensing and permitting regulations, not to mention other governmental impediments to getting ahead in the United States, restrictions many capitalists abhor but abide by. We can understand his distaste for government interference given his origin in Lebanon, and the relative freedom he must have enjoyed in Greece, where he made a small fortune as a master plasterer. Yet we have more formal ways of doing things in America, of which Miami is a part even though it has peculiarities alien to the norm, and proudly competes for the title of Most Corrupt City in America. Nonetheless, we are preoccupied with the proper way of filling out legal forms, especially if they are sworn to, and otherwise abiding by the rules, although the same thing might be accomplished without them at far less expense until the physical and moral structures collapse.
It is clear all ready from our examination of the volume of business Mr. Doujeiji is doing, his contacts with high end clients and their brokers, the quality of his construction, the talent of his furniture manufacturers and design staff, that he would have a more prosperous thriving business if he treated his employees well, hired a savvy controller/general manager, and complied with the “stupid” rules to do things the right way instead of the stupid way. For that some disciplining would be required.
We contacted Carlos Ollet, a contractor licensing investigator with the Enforcement Section, Miami-Dade County Department of Regulatory and Economic Resources, and Reinaldo Benitez, head compliance inspector for the City of Miami, for information about allegations of ongoing unlicensed and non-permitted construction at the site. We were informed that there was some history of complaints and suspected violations.
Mr. Benitez assured us that one day he would catch up with the perpetrator of the violations alleged. On June 22 he was informed that a large dumpster was going to be pulled up, late on Friday afternoon or early Saturday morning, to dispose of construction debris from the renovation of a floor of apartments in the north section of the building, and that the debris was currently stacked behind the door on the south side of the building. Evidently a great deal of construction activity was planned for the weekend, he was told, and therefore he could make a coup. Mr. Benitez said he dropped by that Friday afternoon before he went home for the weekend, and saw nothing but two buckets—they were placed to reserve space for the dumpster that arrived after his departure. He said he could not schedule a team to inspect the premises until the following workweek.
Mr. Doujeiji’s crews do the major work in the building on evenings and weekends because there is no enforcement during those hours. Extreme caution must be exercised during the daytime on weekdays, with work such as painting kept inside and other work kept very quiet. According to observers, who do not want to be identified for obvious reasons unless they are questioned by sworn law enforcement officers or commanded to speak by judicial authorities, Jihad’s brother Zeyad usually stands guard or is nearby whenever construction is in progress. This is not the typical behavior of folks who are licensed and have permits.
The tipsters were correct: major construction took place that Saturday while the regulators were off duty. A dozen workmen were observed “crawling all over the place” inside and out, throwing studs and drywall out of the second and third floor windows onto the ground in the northeast area of the building, where the view of the debris and a stack of new drywall was partly occluded by a tree. Another stack of drywall was clearly visible inside the front gate of the building. The debris in the back was then picked up, carried “ant-like” and dumped into the huge dumpster brought in for the purpose. Laborers were also carrying out garbage bags full or debris, including broken up drywall, out of the double doors on the 16th Street side of the building. Workmen were using chisels to smooth out stucco around newly installed windows. A great deal of noise was being made by nailing inside of the apartments.
An effort was made in the late that afternoon to contact a City of Miami compliance officer or building inspector, only to discover that none were on duty for the weekend. The police department was persuaded to send an officer out to ascertain if the crime of unlicensed contracting was possibly being committed. Hopefully a report could be made with enough information about the construction activity to enable the absent inspectors to get a warrant to inspect the inside of the apartments for unpermitted construction during the inspectors’ working hours.
Police Officer Lopez reported from the scene at 6:47 PM. He said that the crew was just leaving the site when he arrived. He said he saw large garbage bags piled up in the 20’ foot dumpster, but he did not want to climb up on the “eight foot high bin” to see what was in the bags and dumpster. He said he did not go inside the building. Since he did not see anyone actually working, he said he had no cause to write a police report, thus dashing hopes for enough official information to warrant access to the apartments.
We were further informed that drywall was installed by a dozen men on Sunday, and that the bin had been picked up and pulled away by Monday morning. Mr. Benitez and his team of inspectors showed up on Tuesday, June 26, and walked around the building. A fire inspector came into the office, allegedly laughed out loud, said there was nothing for him to look at, and walked out. A fire alarm company had been around for a day or two the previous week, perhaps adjusting the alarms due to the reconfigurations of the apartments. The fire inspector was identified from photographs as a famous fireman who had previously visited the building during construction and was allegedly amused by debris blocking an exit door in the back of the showroom, which leads to the apartment area. Although that door was always open during office hours until Mr. Doujeiji became aware of the investigations, none of the inspectors allegedly attempted to open it. During the course of the team’s inspection, Mr. Doujeiji was observed circling the building. He would soon announce to everyone within earshot that he recognized the inspectors because they were his friends, but he worried that they had gotten through the back door of the showroom. He said that some of the new windows were not permitted, but that everything else was perfectly legal.
Mr. Benitez asked if we had any photographs of the activity. No, photos could not be taken because Zeyad was guarding the site and telescopic cameras were not available. He said his team had walked around the building, that all the doors were tried and were locked, and no new construction was evident except “a little in the showroom, which is being taken care of.” He said that plans would have to be compared to whatever existed, which was a difficult process. Although we had previously informed him how windows newly installed on the north side of the building were blacked out with white canvass to conceal construction inside the apartments, he said “the windows are permitted,” and, “there are no new windows.”
On Wednesday June 27 Mr. Benitez asked again if we had any photographic evidence of violations, saying, “Hey, if you come up with any hard evidence, please do not hesitate to send it (images speak thousands of words.)” We suggested he check the video surveillance tapes of a nearby building. He would have taken plenty of photos himself if only had been present on the weekend after being alerted to the impending activity.
A member of Sharron Lewis’ staff, who is no longer with the company, was allegedly ordered to take measurements and make drawings of the completed construction in the showroom according to some kind of official list. Mr. Doujeiji allegedly said that he had to deliver them to the city by the next day. He apparently has a habit of telling everyone within earshot of his business: he allegedly complained that his “friends at the city” asked him what he had done to make a reporter “mad enough to call again and again and day every day.” When we called Mr. Benitez on June 29, he grew hostile and again said no violations were found besides the little ones in the showroom. However, when we asked him again for a copy of his team’s report, he said, after having previously referring us to an information clerk, that there was no report because no violations at all had been found. The clerk did not respond to our public record request and follow up.
Neither Mr. Benitez nor the fire inspector responded to the opportunity we afforded to rebut our assessment that the team inspection was staged or rigged so that no violations would be found. We invited Mr. Doujeiji to come clean, to report faithless inspectors, and to follow the laws. Our experience with a subsequent inspection by Miami Dade County’s licensing inspectors gave us cause to balance our negative evaluation of the city inspectors with the possibility that they had simply been outsmarted. Or perhaps Sharron Lewis’ spirit is guarding the site. The fire inspector may have forgotten to scowl so as not to appear friendly towards violators, and Mr. Benitez may have been irritated by someone other than his boss looking over his shoulder and pestering him.
As fate would have it, the county’s contractor licensing investigators decided to inspect the site for unlicensed activity on July 27. A painter showed up in the courtyard of the building earlier that morning. He said that thirty new windows stacked in the hall in back had been removed from an apartment upstairs so that it could be painted. At 2:35pm, an observer said he saw three inspectors arrive, but there was no construction going on at the time because Zeyad must have been alerted “somehow” to the inspection, maybe by the marked county car when it pulled up. Three inspectors, two men and one woman, were seen by tenants going around the building earlier, and were noticed in front of the building addressing a blonde woman who works in the showroom, handing her a business card. Inspector Carlos Ollet soon informed us that the inspectors had walked the halls on all floors of the building and had found no evidence of alleged violations. We had someone check to see if the windows were still stacked up in the back—they had been removed.
We speculated that the painters had showed up early in the morning, finished painting by noon, returned the windows to the apartment where they were stored, and went on to another job. It was too far of a stretch to imagine that the brothers constitute a criminal organization that has managed to pervert not only the City of Miami Beach but both Miami-Dade County and the City of Miami. It is easier to believe the brothers are crafty dodgers who have had great luck outsmarting officials.
Mr. Ollet’s supervisor, Jose Lezcano, reiterated that no construction activity had been seen. An earlier conversation with him led us to opine that the brothers were by no means the only crafty dodgers around given the fact that it is human nature to take what you can get away with in a viciously competitive society. After all, government interference in the economy is an evil thing, is it not? Violations are probably running rife all over town because enforcement forces are understaffed. Each agency including the state has only a handful of enforcement officers, mostly unsworn. The county licensing inspection unit, for example, has only six men to cover the whole county.
We told Mr. Lezcano that it would be an easy matter to sting Mr. Doujeiji for unlicensed contracting by having undercover agents pose as an owner and realtor, inviting him to a vacant penthouse condominium to bid on a contract, or to just approach him in his office, where he broadcasts that he is a contractor. The State Department of Business and Profession Regulation bragged how it stung some poor slob upstate after he answered an ad, how he was sat down in handcuffs to cry and wonder how he was going to feed his wife in kids. Yet an unlicensed contractor can do business with some of the wealthiest home owners in the world with impunity.
Mr. Lezcano said funds had been cut, that there were no funds now for what I called proactive enforcement involving the participation of the police, explaining that normal enforcement involved complaints from owners who had actually been harmed by contractors.
Affluent owners seem satisfied with this contractor’s performance thus far. The public will be none too pleased, however, to know that he and a legion of like-minded contractors have cheated their government out of millions of dollars of permit fees. The tragedy is that he has good cause to believe he is only doing what every contractor does.