The Coral Gables Times

Goodbye to the TPC's

6 THE GORAL GABLES TIMES Thursday, October 12, 1961 Goodbye to the TPC's

We Did What Couldn't Be Done: Pay Our Bills

By MAURICE LABELLE Times Reporter One day soon a torch will be put to a pile of yellowed and legal looking papers symbolizing the part pay-off of a debt that once meant a $1,658 burden on every man, woman and child living in Coral Gables. That was back in 1937 after a combination of fancy dealings by the founders, the Hurricane of 1926 and real estate collapse combined to put the City in financial chaos. It was a time when the City was floundering around insolvent and dodging its creditors. All bonds were in default and City employes were paid irregularly. DENIED WAY OUT The courts had denied a way out through bankruptcy. Furthermore, any sort of settlement with the bondholders appeared impossible and the situation seemed hopeless. But today, 24 years later, most of the debt has been paid off — 16 years ahead of time. It is one of the greatest come-back stories of all time. How did it all come about? Had the beautiful p'ans of George Merrick and the Coral Gables Corporation for a show-piece community materialized in the mid-1920s, the whole thing never would have happened. COMPETITION KEEN But the expenditure of millions in private and public money for publicity and promotion could not overcome the competition from other Florida communities for the easy money. The nameless but notorious hurricane of 1926, coupled with the national depression, put off Merrick's dream for two decades. When the Corporation, whose officers sat on the first City Commission, found themselves in an economic funnel with the bottom dropping out fast, they dumped their land holdings on the City and, in an unusual legal maneuver, shifted the responsibility for building streets and sidewalks for 30,000 lots from the Corporation to the City. BOUGHT PROPERTY Property included the Coliseum, Granada Golf Course, Venetian Pool and the Transportation System. The few residents who lived in the Gables then, many of whom worked for the Corporation or whose fortunes were tied in, approved the moves in referendum. Had the economy of the area improved, the move might have been heralded, but things were to get worse before they got better. The debt mounted steadily as the City was unable to collect enough taxes to pay off the bonds. City Attorney Ted Semple, now the image of the Gables' guardian and protector, had a different role then. He represented some of the creditors and he sought with every legal weapon to force the City to pay its debts. A bit of humor was added to the chaotic situation as Semple and Finance Director George Shaw maneuvered to outwit one another. SECRETARY PAID Shaw, contending that the City was always broke whenever faced with legal action from the bondholders, hid money and paid off City employes secretly whenever a taxpayer would come in to pay his bill. Eighty per cent of the creditors formed a "Bondholders Protective Committee" a n d threatened to put the City out of business. The debt continued to mount. By 1936, it had reached $11,200,000 — $8.3 million of which was principal and the balance accrued interest. Many attempts were made to arrive at an agreement with the bondholders, between 1930 and 1936, but none could be reached. STREET LIGHTS OUT One of every four street lights was lighted, the remainder were darkened reminders of the City's economic status. Even then the City was extended credit by the power company. Meanwhile, The Coral Gables Corp., which changed its name to Coral Gables Inc., refused to pay its taxes and won in court. Just when everything looked so dark, a group of City leaders led by Mayor Roscoe Brunstetter brought peace between the warring factions. On the City Commission at that time were Commissioners Martin Avery, Milton B. Garris, Paul D. McGarry and Hollis Rhinehart. E. M. Williams was city manager and Shaw finance director. EXPERT BROUGHT IN A financial expert, Carl L. V. Excelsen, was brought in to work out the settlement. Excelsen made a colorful figure in his large baggy pants drapped around his six and a half foot, 300-pound-plus frame as he worked with Shaw and others on the details of the unfolding plan. What they worked out was somewhat of an inovation in the field of municipal finance. All but six per cent of the bondholders accepted the terms. The rest were paid off separately. Briefly it entailed the issuance of refunding bonds for half the debt and a liquidating certificate issue called tax participation certificates for the balance plus interest — $6.5 million. NO INTEREST PAID The TPCs, as they became known so familiarly in the years to follow, bore no interest. They were to be paid to the holders on a pro-rata basis from debt service levy not used for retirement of the bonds. It is these certificates that were paid off ahead of the 1977 schedule and will be burned. "The crash of the Florida boom of the 1920s left the City of Coral Gables in a prison of debt and, in the early 1930s, under what appeared to be a death sentence to seemingly-life sentence in a jail wh[?] bars were the covenants of that bond issue," said Finance Director Kenneth Allyn recently in summing up the incident. The conditions, imposed by the TPC agreement however, proved not to be so formidable, especially when the city began to boom again once again in the Post War period. And a new way had been found to get out of debt w[?] honor.

And a Mayor Who Wouldn't Lister to 'No'

By MAURICE LABELLE Times Reporter Many persons worked long and hard to take Coral Gables out of the financial mess it found itself in after the bubble broke back in the '20s. But if one man had to be cited for bringing order out of the economic chaos that followed the real estate collapse and after effects of the hurricane, Roscoe Brunstetter would be a leading candidate. Others tried before him, but it was the easy-going Brunstetter, an attorney and then mayor, who finally got all the warring factions together to sign the agreement that brought new fiscal order to Coral Gables. Brunstetter, tall, lean and still athletic-looking despite his 70-years, tells of those hectic times when things looked so black for so many. "I put an end to the feuding among the City Commission about the debt settlement," Brunstetter said matter-of-factly. He leaned back, cupping his head in his hands as he reflected about the past: There was the constant quarrel between commissioners and between commissioners and bondholders which had prevented a settlement of the unpaid debt problem. Unlike many of his fellow Gableites, Brunstetter never favored leaving the creditors out in the cold by taking the road to bankruptcy. This had been favored by Mayor Vincent Wyman and Congressman J. Mark Wilson had fought hard to get it accomplished. But the courts blocked the way for the Gables to get out from under. The bitter campaign of 1935 that put Brunstetter in office as mayor also cost him the friendship of Wyman. It was Wyman, over a golf game, who had talked Brunstetter into politics. "I contradicted everything he said during a debate," Brunstetter recalled, "and he never forgave me for it." And one of his opponents in the eight-way race for mayor — M. B. Garris—quit talking to him and continued his silence even while serving on the same commission with Brunstetter. .But the feuding was civilized compared to what it had been. The first thing Brunstetter did upon becoming mayor was to contact the bondholders. "I told them I had been elected mayor and wanted to negotiate a settlement," Brunstetter said. "They wired back they had nothing to negotiate," Brunstetter added. Brunstetter then fired back another telegram that he would get a settlement with the Bond Committee without their participation. They finally agreed to negotiate. Brunstetter was not alone. It took many hands to mold the final settlement. But it was Brunstetter, as may[?] who brought the factions to gether. This independence of thought was to serve him well when he was to reject the thought that the debt question couldn't be settled. Brunstetter became a lawyer in 1918 when the University of Pittsburgh handed him a degree. He first hund his shingle in the smoky city. Then Miami beckoned for Brunstetter and his wife Mary Gertrude. That was 1925. Before they homed on Coral Gables, the Brunstetters occupied a small apartment in the Miramar section of Miami near the site of the new Miami Herald building. The boom was in full bloom when Brunstetter to[?] and passed the bar exam in Florida. He was the first to do so. He established a practice and later got into politics at the suggestion and urging of Wyman. His first term as commissioner came in 1933. While others struggled during the Depression, the Brunstetters were more fortunate. "We were better off then than at any other time," he recalled. "Income tax was unknown and servants came cheap and were plentiful." During this period Brunstetter campaigned actively for Franklin D. Roosevelt and was chairman of the National Democratic Committee for Coral Gables. He warred on one-armed bandits and quit local polit[?] in 1937 after serving four years on the City Commission. Since then he has been active in real estate, estates and general law. Ten years ago he teamed up with Charles H. Netter. More recently William A. Kolodgy joined the firm to make it, Brunstetter, Nette[?] and Kolodgy. Brunstetters' civic activities and memberships are too numerous to be listed here. He's far from retired and still maintains a keen interest in local politics. But the current variety is tame compared to the hectic period when Coral Gables seemed to be going down the drain before Brunstetter helped apply the stopper.

ROSCOE BRUNSTETTER

THESE WERE THE days of yore before bikini bathing suits for girls and when boys were about as well covered as their sisters. The oldtime scene is at Venetian Pool, whose origin is described in "Something to Talk About."

Something TO TALK ABOUT

There it lay, an ugly rock pit. Today, it's Venetian Pool, a symbol of man's imagination and determination to find an answer to what seemed a problem with no solution. George Merrick, Phineas Paist and Denman Fink had planned every detail of Coral Gables with loving care in the 1920's. Yet here in the center lay a twisted, ugly rock pit. Rather than toss up their hands in dispair, they said "Let's work with what we have." Boulders were scooped out of the rock pit to make room for a pool . . . a large boulder became a diving tower . . . tropical plants gave an illusion of a South Seas lagoon. William Jennings Bryan, who ran for the presidency three times and lost, spoke daily at Venetian Pool for $50,000 a year trying to persuade his listeners to buy lots in Coral Gables. It was also at Venetian Pool the Chamber of Commerce was organized July 22, 1925. George Merrick was honorary president and F. Wingfield Webster temporary president. Later, Frederick J. O'Leary was elected to that top office.