The cranes and construction crews say it’s boom time on North Beach, a place where crack and vandalism was common less than a decade ago. Today the stretch of Collins between 63rd and 87th streets is choked with traffic.

“North Beach is now a beautiful place to live,” says Daniel Veitia, who resigned two months ago as volunteer president of North Beach Development Corporation, a nonprofit community group devoted to improving the economy, beauty and culture on the north end of Miami Beach.

New condos and resorts are still going up, crime is down and flowers are blooming in front of the Normandy Fountain on 71st Street, Veitia says — and he feels that NBDC is responsible for North Beach’s revitalization. But now NBDC is so strapped for cash that it can no longer organize the 34th annual Miami Beach Festival of the Arts.

“If you look at the North Beach crime stats from six years ago, you can see that shootings and drug use and arrests were rampant, graffiti was rampant. That organization [NBDC] was a big part in revitalizing North Beach and bringing good development to the area, jobs,” Veitia says.

But NBDC, widely credited for practically everything good happening in North Beach, has nearly been gutted because its supporters have been losing money in the declining real estate market and don’t have anything left to give, Veitia says.

Veitia says the “major financial difficulties and a large amount of debt” were such huge obstacles to new accomplishments that he left NBDC six months after beginning his term as president. “The organization spent most of its time trying to overcome that debt. But it’s been around a long time and it has done amazing things.”

“Times are tough, economically,” agrees Mark Weithorn, one of 25 volunteers on the NBDC board, which he says has instilled civic pride.

Running the Miami Beach Festival of the Arts, which attracts crowds of 50,000 during February, is chief among NBDC’s stated achievements (the group has run the Miami Beach Festival of the Arts since 2004), as well as persuading the city of Miami Beach to restore the Byron Carlyle Theater.

But now NBDC doesn’t even have enough staff to run the festival. Two months ago the nonprofit laid off its executive director, Randall Robinson. The only employee remaining is the administrative director, who is planning to leave in November. Weithorn doesn’t know when or if the group will be able to hire new staff. In addition, after Veitia resigned, the next president, Dr. Barry Ragone, resigned two months later.

City Manager Jorge Gonzalez writes that the NBDC “is in a transition period” in his Aug. 22 letter to the commission, announcing that the city of Miami Beach would be taking over the festival.

Making the situation more urgent, Gonzalez writes, is that Ragone quit the presidency in anger on Aug. 22, citing an inability to “enact real change” within the organization.

“In light of Dr. Ragone’s resignation coupled with the current state of NBDC, the Administration has determined that it is in the City’s own best interest to assume all production responsibilities for the 2008 Festival, particularly considering that critical items in the Festival production timeline must be addressed immediately,” Gonzalez writes.

Though Ragone served as president for only two months, he did not leave quietly. On Aug. 22 he wrote an e-mail to Gonzalez, accusing NBDC’s operators of fiscal responsibility and asking that the city audit the organization.

“There has not been an internal or external audit of the books since 2005. Required yearly IRS 990 returns have not been filed under previous administrations. These returns are overdue for the fiscal years of 2005 and 2006,” Ragone charges.

“Additionally, concerning the 990 forms, questions of self dealings between the organization’s officers, board members and substantial contributors have not been revealed as required by the IRS. A serious and thorough review of signed contracts by past executive directors [needs] to be examined for their validity and fiscal responsibility,” Ragone wrote.

Then Ragone claims “the possibility of illegal lobbying activities threatens the 501c3 status of this organization. These actions, [which] were carried out by past administrations, are highly questionable and possibly illegal.”

“I don’t know what he is talking about,” Weithorn replies, saying the charges are completely unfounded. “That took me by surprise. I said ‘What?’” He adds that “Ragone was not experienced in running a nonprofit organization and was overwhelmed.… We had issues with him as the president.”

Still, Weithorn says with Ragone’s resignation, coupled with NBDC’s lack of funding, he assumed that NBDC would be forced to shut down.

“The whole real estate market the way it is right now, cash is very tight. A lot of people who donated to NBDC were in the real estate business, so you know the whole economy is really tight right now, and we’re tightening our belts,” Weithorn says.

In years past, the nonprofit had a budget of $110,000, receiving $20,000 from the city, $50,000 from the Festival of the Arts and raising the rest from donations given at honoree dinners. But contributions have dried up, and without the arts festival to bring in funds, the nonprofit’s future financing is in doubt.

However, the most recent adversity seemed to rally the troops, Weithorn says. When word got out about Ragone’s resignation, the board got mad.

“All of a sudden I got phone calls from board members who were angry and decided that no matter what happens, they are committed to continue to defend North Beach. It really shocked me,” he claims.

Weithorn says until they can attract more donations, board members are taking over the functions that the staff performed. And despite the financial setbacks, he says, “We are fine.”

He says fallout from the real estate downturn has proven that the board is “very passionate about tackling a lot of issues — gang issues, the traffic, keeping sand on the beaches. If we don’t do it no one will.”

Meanwhile, the city’s cultural affairs manager, Gary Farmer, swears Miami Beach and the Fine Arts Board will put on the Festival of the Arts come hell or high water, at least next year. In fact, the city has hired former NBDC events coordinator Brian Huether to run the festival, as he has since 2004, according to Gonzalez’s memo. Farmer will meet with his staff on Aug. 30 to start planning the event, which takes place at Ocean Terrace, between 73 and 75th streets and is scheduled for Feb. 9 to 10, the second weekend of the month, as always.