http://www.knowledgeplex.org/news/178194.html
Interesting.
I agree. The question is where did the money go, or maybe more to the point, who did the money go to?
http://www.carolinajournal.com/exclusives/display_exclusive.html?id=1695
Housing Policies Fail in Durham, Charlotte
Federal audit reveals problems in the Durham Housing Authority, while in Charlotte a density bonus may end
By Michael Lowrey
July 29, 2004
CHARLOTTE — The fallout continues from the U.S. Department of Housing and Urban Development’s audit into the activities of the Durham Housing Authority. In the latest reversal for the DHA, the agency has admitted that its attempts to convert the former Fayetteville Street public housing project into a privately owned affordable apartment complex have failed. Many of the problems the HUD audit discovered at DHA involved the Fayetteville Street project.
“The deal is not going to close,” Robert “Bo” Glenn Jr., housing authority board member, said to the Durham Herald-Sun. “Given the present environment, I don’t see a private investor coming in — not with the cloud hanging over it.”
In a complex series of transactions, the housing authority in December 2002 sold the public housing complex for $1 to Fayette Place LLC. Fayette Place, in turn, was owned by two nonprofit subsidiaries of the housing authority. The transfer was made to obtain federal tax credits for developing low-income housing. The bulk of the $12.5 million needed to remodel the non-air conditioned, boxy brick-and-concrete public housing units into modern Victorian-style duplexes would have come from mortgage revenue bonds and private investors.
The principle force behind Fayette Place was James Tabron, then DHA’s executive director. In April 2003, Tabron was forced to resign from the public housing agency for charging $12,500 in personal purchases, including a $1,750 gold ring for his daughter, to the agency’s credit cards. Discovery of Tabron’s unauthorized credit card purchases also prompted the HUD audit.
It has since come out that Tabron was also engaged in self-dealing. Tabron ran a consulting business on the side with Troy Chapman, director of the Chester County, Pa., housing authority. Chapman was to be paid a $450,000 “developer’s fee” upon completion of the Fayette Place project.
The HUD audit uncovered more than $5 million in questionable spending by DHA. It also recommends that the federal agency take over control of DHA, freeze spending on a $35 million federal housing grant Durham received, and discipline certain officials.
Even before the release of the audit, the Fayette Place project was in trouble. The sluggish economy had put downward pressure on rents generally, making it difficult for the authority to attractive private investors to the project.
The housing authority has spent more than $1 million on the project. To what degree it is liable for an additional $1.3 million in pending and disputed charges remains to be determined.
To make matters worse, DHA moved families out of Fayetteville Street in anticipation of remodeling the property, aggravating a public housing shortage in the city. The Herald-Sun reports that only 43 of the 200 units are occupied. Twenty of those families didn’t pay their rent in May. Even with only limited maintenance being done, the complex lost $20,000 during the first five months of the year.
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