Dougherty District Attorney Greg Edwards walks into the grand jury meeting room Wednesday. The grand jury decided against handing down criminal indictments in a probe of the city’s Cutliff Grove housing deal.
ALBANY — A Dougherty County grand jury has reviewed the report on the failed Cutliff Grove housing project that was compiled by the District Attorney’s office and found no basis for criminal charges, but did find conflicts of interest and incompetence on the parts of both the city and the church’s family resource center.
The report notes there were several instances of conflict of interest both with city and the church, and that a lack of competence of city and church officials led to the city having to reimburse HUD about $374,000 when the low-cost housing project failed.
Cutliff Grove Family Resource Center, a non-profit organization formed to help create low- to moderate-income housing on behalf of Cutliff Grove Baptist Church, began efforts in 2005 to build a housing project off West Broad Avenue called Grovetown.
The project would ultimately falter because of economic factors and what investigators would later say was a chronic lack of experience in developing low- to moderate-income housing.
“They (Cutliff Grove’s Family Resource Center) also lacked experience and expertise in document control, proper budget creation and control, proper record keeping with employees and staff, no experience in indicators of fraud and abuse, and have no knowledge of conflict of interest indicators or ways of correcting them,” the report stated.
In faltering, CGFRC managed to spend more than $374,000 of federal HUD dollars that were later reimbursed to the federal agency by the city of Albany.
The report addresses the city’s involvement by saying that its finance department failed to recognize proper document control, failed to recognize indicators of fraud and abuse and failed to question the payments without approval in writing.
“My investigators and I thoroughly reviewed all of the documents and reviewed those involved and everything we have is being made available to the public,” District Attorney Greg Edwards said. “This is a public incident. It was involving public money, so I have no reservations in making sure the public understands how this happened. In effect, why we do have a finding (from the grand jury) that there was no crime, there are things that may be considered in terms of civil litigation, but that’s something the City Commission will have to review at some later time.
“As we note in the investigation, there are a few instances that smack of ethical issues, but these issues did not rise to a level of there being a criminal basis for a charge. It was a failure on the part of city officials and a failure on the part of Cutliff Grove personnel to be able to do what they were trying to do. ... It was business. It was a bad business deal.”
City Manager James Taylor hadn’t had an opportunity to read the report before The Albany Herald provided a copy for him to review. After reading the synopsis of the report found in the opening pages of the 92-page document, Taylor said he believes there is room for improvement, but also said that many new layers of scrutiny in both the DCED (Department of Community and Economic Department) and the city’s finance department have been implemented since the Grovetown project.
“I haven’t read the report yet, but I’m sure there is useful information in it; information that we can use to better our operations,” Taylor said. “Obviously some things could’ve been done better. I feel we have to do a better job selecting who we give these projects to and do a better job in assisting them in doing it ... it’s unfortunate that we have to learn the hard way, but I look forward to having an opportunity to review it.”
The report shows that investigator John Johnson interviewed or obtained records from at least 17 different people, entities or agencies, including Cutliff Grove Missionary Baptist Church Pastor McKinley Drake, Albany Department of Community and Economic Development Director Latoya Cutts, City Attorney Nathan Davis, City Finance Director Kris Newton, Architect John I. Rivers and others.
The report shows that Drake provided various church and CGFRC Board documents, but was the only person interviewed who invoked his 5th Amendment right when interviewed by investigators.
The report notes that Drake was never implicated in any wrongdoing. He served on both the board of directors for the church and its non-profit. The report points to a letter from former city DCED Director Richard Wooten that says Drake’s role on both boards allowed for the possibility of “undue influence” between the church and its development arm.
Juanita Nixon, director of the CGFRC, provided both documents and a statement to investigators and provided information about the Grovetown project and specifics on how reimbursements were paid.
“The city of Albany approved all of their requests for reimbursements and there were few questions asked,” the report states.
One of the “conflicts-of-interest” noted in the report involved the city’s project manager, Johnny Hamilton.
In the report, Hamilton, who worked for the city’s DCED and was involved in dealings with CGFRC, stated that he was hired as a consultant by Cutliff Grove roughly 18 months after he was no longer employed by the city and that he didn’t believe that to be a conflict of interest.
Rivers told investigators that he was involved in at least four different aspects of the Grovetown project.
Initially, he said, he charged $9,000-$10,000 in consultation fees as a part of a company called Development Consult Services to assist CGFRC in preparing materials to present to the city of Albany to become a Charity Housing Development Organization.
He said he then provided architectural services through his firm, John I. Rivers and Associates, in which he charged a fee equivalent to 5 percent of the total cost of the project.
Next, he took responsibilities of construction management under the mantle of JIRA Properties Inc., where he again charged a fee equivalent to 5 percent of the total project cost.
Finally, he was also hired to incorporate the design and development of the project into the city of Albany’s master plan by CGFRC at the start of the project in 2005.
At the end of the report, the investigator said he believed that Rivers should not have been allowed to perform four different functions for the group.
“Mr. Rivers probably never should’ve been allowed to perform four functions during this project. He was the architect, construction manager, master planner for development area and development consultant for Cutliff Grove, which allowed him to have too much influence into the amount of funds being budgeted, requested and spent on the project,” Johnson wrote.
Rivers told investigators that about 35 percent of the way into the project, the scope of the project changed from 32 townhouses to 16 rental apartments and the $40,000 that was initially spent on the development of the townhouses had to be spent again on the apartment design.
When it came time to bid the project out, Rivers told investigators, the group got three construction bids, the lowest of which was between $1.7 million to $1.8 million, meaning that the group would have to find an additional $1 million in private funding.
They first sought the Federal Home Loan Bank, which turned them down because “the persons involved were not experienced enough to handle this project,” Rivers told investigators.