ST. PETERSBURG, Fla. (WFLA) – The St. Petersburg Housing Authority (SPHA) has put the controversial purchase of the Jordan Park Housing Project on hold until further notice, but it’s not for lack of trying.
For more than a year the SPHA has been paying a team of private attorneys from the firm of Squire Patton Boggs LLC between $400 and $600 an hour in taxpayer funds to hasten the deal to completion.
One city council member who has been highly suspicious of the Jordan Park deal is critical of the Housing Authority’s decision to authorize as much as $60,000 in legal fees for that real estate transaction. “I don’t believe a single employee for the City of St. Petersburg that’s employed by us makes that amount of money per hour,” Council Member Steve Kornell said. “I know they don’t. I don’t think that might be a good use of public funds and that board (SPHA) ought to ask that question.”
Even before 8 On Your Side presented Kornell with documents showing how much private lawyers hired by the Authority are profiting from that public deal, Kornell had questions of his own about the terms of the transaction.
Since September he has been calling for a Jordan Park audit of the private partners who took ownership of that public housing project 15 years ago. Those owners took control in a development deal involving millions of dollars in government funding, brokered by HUD. “What I’d like to do is make sure we got what we paid for,” Kornell said.
When 8 On Your Side began our You Paid For It investigation in August, the Housing Authority was all set to pay Jordan Park’s private owners, the Richman Group and Landex Inc., $400,000 in cash. The Authority was also going to forgive $18 million in government loans and grants those developers used to rebuild Jordan Park on Housing Authority land in 2001.
Under the original HUD deal, the private owners would not have to pay back anything as long as they maintained ownership of Jordan Park and maintained the property to HUD standards for 50 years. But last year the owners let it be known they wanted to unload Jordan Park to a new buyer – 35 years early. The Housing Authority has the right of first refusal.
The private investors contributed about $11 million of their own money in 2001 but recouped that original cash investment through federal tax credits which expire this year. They hired a property manager and kept 100 percent of all rent collected since 2001, along with all HUD subsidies for low-income renters at the 237-unit housing project. Even still, the private partners claimed to be losing money year after year.
When You Paid For It questioned why taxpayers should have to pay $400,000 to the private owners – after taxpayers essentially funded the project in the first place – Richman suddenly backed off on its demand. “After a lot of the media reports we’ve seen, we’ve had further discussion with Richman,” Housing Authority Attorney Alexandra MacLennan told a City Council Housing Committee Sept. 22. “They are willing to take zero purchase price, reduce the purchase price to zero.”
A week later MacLennan —w ho the Authority pays $400 per hour of taxpayer money to work on the sale — told 8 On Your Side she had no idea why Richman decided to drop its demand for a $400,000 cash payment.
“Do you think I know everything?” MacLennan asked. “I think you ought ask Richmond that.”
News Channel 8 has asked Richman a lot of questions about Jordan Park, but company officials never reply to our inquiries. Neither does Landex.
Kornell and other city council members met with MacLennan and Authority CEO Tony Love in that contentious two-hour meeting on Sept. 22. They expressed longstanding distrust for how the Housing Authority handles its business. That was the same day Kornell called for an audit of Jordan Park at the regular City Council meeting. “The trust was broken a long time ago,” Council Member Lisa Wheeler-Bowman said that day.
8 On Your Side obtains emails
8 On Your Side has now obtained a series of previously confidential emails that attorneys with Squire Patton Boggs — acting on behalf of the Authority — sent to lawyers working for the private owners. The emails show the lawyers are eager to unload Jordan Park before their tax credits expire.
In the emails, it’s clear that Authority lawyers were rushing to close the deal in a hurry. “Time is of the essence,” Authority lawyer Jeffrey Butt writes on Aug. 16.
In other emails, Butt references You Paid For it news reports and a newspaper story detailing how former Governor and current Congressional Candidate Charlie Crist had visited Jordan Park to meet with residents who are angry about deplorable living conditions at the rundown project. The residents complained that, among other things, appliances were obsolete and broken, rats were running wild, and mold was a widespread problem.
A Sept. 16 email Butt sent reads, “More and more people are coming out of the woodwork to complain.” He notes that members of the City Council (Kornell) were “calling for an audit of Jordan Park” and expressed a sense of urgency to get the deal done. “Time is of the essence,” Butt writes in this email to his counterparts who are working on behalf of the private owners.
“Why is there so much concern? Why is there such a rush?” Kornell told 8 On Your Side. “There’s questions about this project and those questions need to be answered.”
Kornell wants to know, for example, whether the private owners installed underground sewer pipes the city required as part of its $3.1 million investment in Jordan Park’s rebuild back in 2001. “I’d like our city staff at a very minimum to snake a sewer cam through the sewer pile to make sure they’re new and functioning well,” Kornell said.
Whether or not sewer lines prove to be troublesome, there are plenty of other problems to establish Jordan Park as a taxpayer-funded handyman special. On Sept. 22, Love told council members he expects to pour $10-12 million dollars into repairs and maintenance after the Authority acquires the rundown property. Private partners were supposed to be maintaining the building in good order during the past 15 years.
“It kind of bothers me that the public is going to pay for what was supposed to be done in the first place by that developer,” Kornell said at the Sept. 22 meeting.
“I don’t believe that was an accurate statement,” MacLennan responded.
Love insists he still doesn’t have a complete picture on what needs to be done to bring Jordan Park up to par, but he says the Authority will have to borrow the money to finance those repairs, possibly by offering more tax credits to a new set of private investors.
Meanwhile, the closing date of the sale is on indefinite hold while the city stakes out its role in the transaction and Authority lawyers keep racking up fees at the rate of $400-$600 per billable hour on the taxpayer dime.