ST. PETERSBURG, Fla. (WFLA) — One week before it was supposed to be sold back to taxpayers, St. Petersburg City Council member Steve Kornell is calling for an audit of the Jordan Park housing project. His motion to discuss that proposal in an upcoming council committee session was approved unanimously at Thursday’s City Council meeting.
“I think there’s still a lot of questions,” Kornell said Thursday. “I’ve provided about eight pages of questions and I’ve been advised by legal that we do have the right to ask for an audit.”
Kornell’s call for an audit comes just before the St. Petersburg Housing Authority planned to buy back the 237 apartments in the Jordan Park housing project from private developers who have owned and operated the units for 15 years.
Essentially, taxpayers were about to pay for that multi-million dollar development twice, but that deal is now delayed indefinitely. “Which is the right thing to do,” Kornell said. “All that high-pressure tactic that they tried to get us to go along with clearly didn’t work and they backed off.”
The buyback deal quietly negotiated over a period of months by the Housing Authority CEO Tony Love and his staff was supposed to give $400,000 in cash to the developer and forgive $18 million in federal and city grants and loans owed by developers.
The Housing Authority — meaning taxpayers — would be on the hook for as much as $7 million to restore deteriorating apartments at Jordan Park. “That’s a great deal for taxpayers,” Love told 8 On Your Side in an interview two weeks ago.
Basically, the St. Petersburg Housing Authority wanted to purchase a handyman special that You Paid For already in a much ballyhooed private-public partnership agreement signed in 2001.
That deal didn’t seem like much of a bargain to activist Terri Lipsey Scott who is a vocal critic of the Housing Authority and the developers that own Jordan Park. “I am totally perplexed as to why we’re having to purchase something that’s already owned not only by the state and federal government-by the taxpayers of the local entity,” Scott said.
Scott says she was “delighted” to hear Thursday the Jordan Park deal was on hold due to the city audit and that developers had retreated on their demand for a $400,000 cash payment, in addition to walking away from millions of dollars in government loans used to re-build Jordan Park.
Love insists the private developers, the Richman Group of Florida, Inc. and Landex of Jacksonville, Inc., who took ownership of the buildings, but not the land, 15 years ago, have been losing millions on the property, according to their annual financial reports filed with the Authority. Those developers have not returned calls to 8 On Your Side inquiring about the sale.
We took a closer look at those annual financial reports and discovered the developers’ losses are based on annual loan payments that the developers haven’t paid and are not obligated to pay until 2030 or 2051, along with the annualized depreciation of the buildings.
In other words, if you take out losses listed for accounting purposes, along with the management and consulting fees, the developers have been making money, not losing it on Jordan Park. This is an opportune time for developers to sell the project back to the Authority because their tax credits — which amount to millions — are expiring this year and the project is sorely in need of costly repairs that would surely cut into the developers’ bottom line.
But for now at least, the sale is on hold until the city decides whether to move forward with an audit that would deciphers Jordan Park’s finances and determine whether the sale to the Housing Authority is a good bargain or a boondoggle for taxpayers. Sylvia Norris is a longtime resident of Jordan Park who has complained loudly about deteriorating conditions under private ownership and management. Norris says rats and other vermin crawl through her ceiling at night, her water heater vent was clogged with a nest for mice and her appliances are obsolete.
What doe she expect an audit would reveal? “The truth,” Norris said.