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Albany commission votes to repay HUD $500,000 for failed dunes development

By making the payment, city staffers say HUD will put $500,000 back into the CDBG revolving loan fund for use on other projects.

The University Gardens site is just off Oglethorpe Boulevard.

The University Gardens site is just off Oglethorpe Boulevard.

ALBANY — University Gardens was supposed to be a promising development in the sand dunes that would've provided affordable housing to low- to moderate-income residents and seniors. Now, it's costing the taxpayers of Albany a half-million dollars in the largest failed housing boondoggle yet.

As first reported Tuesday ont Albanyherald.com, the City Commission, with little discussion, voted 6-0 (with a vacant seat still open for Ward II) to authorize repayment of the funds from the city's general fund to the U.S. Department of Housing and Urban Development.

By repaying the money, city staffers told commissioners that HUD would then turn around and place $500,000 into a revolving loan fund, which is part of the Community Development Block Grant Program meant to help spur community improvements.

The only question came from Ward IV Commissioner Roger Marietta, who asked Community and Economic Development Director Latoya Cutts if the money HUD puts back into the CDBG program could be used to demolish blight "like the Heritage House?"

She answered yes.

"It's essentially a wash," Albany Mayor Willie Adams said. "It's a shame that we have gotten to this point, and we need to make sure we carefully watch these kinds of programs in the future so it doesn't happen again, but we'll be getting the money back in a different form in which we can use on demolishing the Heritage House."

University Gardens was to be the second phase of a development that never fully got off the ground in the sand dunes off of Oglethorpe Boulevard.

The developer of the project, which had a tenuous connection to Rod Mullice, who was part of a campaign consulting firm hired by Adams on his first attempt at public office, got an allocation of up to $500,000 to purchase the land for the development, but died before repaying the money to the city.

Capitol City Bank has since started foreclosure proceedings on the property.

In October, city officials received a letter from HUD stating that they had until this coming Monday to either find an eligible project to develop in place of University Gardens or repay the funds.

Tuesday, Cutts told commissioners that finding an alternative before the deadline was "unlikely."

The repayment is the most yet that city officials have had to repay to HUD due to a failed project.

The district attorney's office continues its probe into the circumstances that led to the failed Grovetown project. That project was a low- to moderate-income housing project that received federal HOME funds through the city. Ultimately, the city had to repay $375,000 dollars to HUD because of that project, but asked the DA's office to do an independent investigation of the matter.

Comments

KaosinAlbany 3 years, 1 month ago

This whole situation is isn't right. You mean to tell me they couldn't come up with anything? I am p.o.ed that the taxpayers have to once again suffer because of the city's stupid mistake in granting HUD money to scrupulous people. There needs to be better checks and balances when it comes to granting HUD money in the city. City leaders - you have failed us once again and this should have been on the minds of voters last Tuesday, but I'm sure few voters remembered. We need to start holding the city commission accountable. Deduct their pay and make them pay it back since it was their fault to begin with.

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supersquawker 3 years, 1 month ago

I think you mean "unscrupulous" people. We got plenty.

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KaosinAlbany 3 years, 1 month ago

Yes, I meant to say unscrupulous instead of scrupulous. Sorry for the typo.

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supersquawker 3 years, 1 month ago

OK but PLEEASE DON'T EVER APPROVE ANY FURTHER DISBURSEMENTS TO SO-CALLED "PASTORS" OR "CHURCHES" FOR STUFF LIKE THIS. KEEP CHURCH AND STATE SEPARATED.

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whattheheck 3 years, 1 month ago

Well, this is what happens when citizens don't get involved. Did anyone show up at the meeting today? Why the rush to resolution on this one? The city DCED has a "great big pot" of money from sources other than the local taxpayers. This CDBG money did not have to be "repaid"--it could have merely been absorbed from the "pot". But then that would deprive the "poor" of more monies the city frittered away, right? If the deed has been done, is Capitol City Bank, who is likely holding $300,000 or so in "bad paper" from the ATL crooks on this one, the big winner? They are holding the title on some of the land although their loans to the scammers were smaller. Lord knows, we don't want a bank to take a licking when the taxpayers can take in in their place. And how in the world could the vote be 6-0? Prima facie evidence of weakness in the head, so it seems.

People finally demanded an investigation on the Cutliff Grove's Grovetown debacle. However, this is the one that really needed invvestigation. We were told recently that there is more flexibility with CDBG funds, which is true, so why make a "payback" at all? Who is asking for a payback? No one, it is a matter of the city not wanting to look bad to HUD--again. And if the money is "paid back", HUD will not ask why it was thrown away and our official designation as an "entitlement city" will be intact.

Wake up folks, DCED is a time bomb just ticking away but then it seems no one really cares. Why don't you ask the city how many units of subsidized housing of all types are already in Albany? Think big, think really big. Albany is the Field of Dreams for those wanting cheap to no rent--and you pay the price for an influx of non-contributors. Those in subsidized housing eat cake while you, my friends, eat horse droppings!

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ObjectiveEyes 3 years, 1 month ago

wth: very well put. But, if I read this correctly, the most troubling part is this: the Albany taxpayers write a check for $500k to HUD from the General Fund. In return, Albany taxpayers get a $500k "revolving loan fund." A LOAN fund! The proceeds from the "revolving loan fund" go to demolish the Heritage House (not saying this is not a worthwhile thing to do). But, it's decribed as a "loan." If that is true, the taxpayers get to pay another $500k (loans have to be paid back, right?) $500k (payment now to HUD) + $500k (repay loan) = $1.0 million. With all due respect, Mr. Dr. Mayor, that is not "essentially a wash." At least not in the real world. Of course, we don't get to play with other people's money like it was some sort of board game.

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supersquawker 3 years, 1 month ago

Re: Weaver "If the glove doesn't fit, you must acquit!"

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supersquawker 3 years, 1 month ago

Reading these updates...am getting depresseder and depresseder. Our City Commission doing their worst.

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KaosinAlbany 3 years, 1 month ago

You are right, Supersquawker. Is it coincidence that they do their dirtiest work right after the election? I think NOT. The city should sue Willie Adams' campaign manager on this one since it was his bright idea.

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waltspecht 3 years, 1 month ago

A Judge that was himself a defendant in a case whose resolution smells like three week old ded fish will once again sit in judgement. Something here just isn't right.

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wilson 3 years, 1 month ago

DCED has got to go. Two projects lose nearly $900K taxpayer dollars and there is NO consequence for any of the parties involved except the taxpayers. Heads should roll but instead the folks at DCED are probably on overtime writing checks to cover their mistakes.

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supersquawker 3 years, 1 month ago

I like to make up new words. You can't have enough words to express yourself. I mean real words, not abbrevs.

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Outtahere 3 years, 1 month ago

I like making up words too! I know what you mean about not having enough to express yourself!!

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ittybittyme 3 years, 1 month ago

Interesting how these meetings are held when the taxpayers are at work(the middle of the work day)...duh....why not have some meetings in the evenings.

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PumpkinEater 3 years, 1 month ago

"It's essentially a wash," Albany Mayor Willie Adams said..."

and....

"HUD would then turn around and put $500,000 back into a revolving loan fund which is part of the Community Development Block Grant Program." (see news article)

A wash? You gotta be kidding! So does it make sense to you that it is a wash that the city pays $500,000 in taxpayer funds to HUD from the general fund (your money!) and HUD makes a loan for projects that has to be repaid by somebody is a "wash?" Sure seems like the city is paying money absolutely and then HUD is keeping the project loan funds flowing. It is really the city's money going back in and out again! Any way you look at it the taxpayers are out $500,000 .... at least!

And why was there no discussion by the City Commission? Of course, they talked about it somewhere, somehow .... what about the Sunshine Laws? What is the cover-up? Who will get embarrassed?

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chinaberry25 3 years, 1 month ago

Why do they dish the money out all at once? Just give them a draw like banks do when you have finished the building? Make them come up with the initial operating money or no go. If they cannot come up with the initial money, then they are not going to ever finish it because they are under capitalized. Look at the legal section of builders who have scammed banks out of money. There are four or five who seem to be in the paper every week. They have not lost $5 million, it is in an offshore bank the same as this money is. Some of these houses have sold and yet they still owe the original or most of the loans dished out to these builders. Some are old money Albany's offspring and we are condemning these thugs who steal $900 and let the bluebloods off scott free for millions.

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whattheheck 3 years, 1 month ago

Like it or not, the city is in the housing business big time. Through the Albany Housing Authority, it owns over 1,000 units--look at the pictures at the Authority site. In addition, through DCED, the city has upwards of 250 units in various stages of renovation/rental/vacant. (And don't forget there are over 2,500 additional subsidized non-city units),

When the city itself renovates, or in some cases actually builds, housing with HUD money and in turn sells them to citizens, the financing is through a local bank with a contract clause that the city will be given an option to buy it back in the event of a default. Of course defaults happen and the city buys back, renovates again with money from the HUD pool, sells again, and starts the sell/renovate/foreclose cycle again. In some cases, $100,000 homes are sold to persons already living in subsidized housing because of supposed low income.

Does anyone actually know what DCED does in our name? Operation of the dept is supposedly paid for with funds taken off the top of funds flowing through it. If the July 2009 proposal to turn the Heritage House into low rent housing had gone through, the DCED would have gotten $800,000 of the $16 million requested for the project. The rest would have been wasted by the developer. But in this case God smiled on us and the project was not funded.

Nevertheless, the point is that big money, jobs, and the ability to reward friends ride on the continual thirst for funds through DCED. And when we provide plenty of high quality subsidized housing, we are not creating homes and opportunity for a group of taxpayers. Rather, we create and enlarge an ever-growing pool of wards of the state--we grow our own "poverty".

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Justice4Moma 3 years, 1 month ago

Albany commission votes to repay HUD .So they should repay it.Not the tax payers.It was there vote,not ours.We tax payers do not have pockets for you all to pick anymore.You made your minds up on this,so you all should come up with the money.after all you are the ones who oked it in the first place.Alos Weaver should have NO say so in this at all.And Willie you have a good bit of money and you only open your mouth or show up when it will help you and the good ole boy system.So dig deep in all of your pockets.

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waltspecht 3 years, 1 month ago

The ones profiting from both cases were the land owners and the consultants. Certainly not the Citizens. When is anyone going to figure out how this scam works, and stop it's future use by these profiteers.

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Outtahere 3 years, 1 month ago

I use to work at DCED and know a lot about the housing programs there - I worked in the housing division. To say that I saw a lot of things that were not quite right is an understatement. As some of the others have mentioned, DCED does not run off of city dollars; they depend on grant money from HUD and other federal programs. All employees know that their position is not guaranteed from year to year because if the grant money is not approved then there is no money to pay them.

Just like throughout the city, DCED has the wrong people in the top positions. It starts with Mrs. Cutts but there are several other of her "yes" women at fault too. About two years ago there was no money is a few of there home repair programs and we were turning people away for "lack of funds", but Mrs. Cutts had MANY repairs done to the DCED building. For example, tile flooring, brand new cabinets in the break room, new carpet and furiture, ect.. I could really go on and on about how DCED does operate as it should but I wont!!! Everyone just know that this will not be the last time that they mess up!!!!!

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Outtahere 3 years, 1 month ago

Sorry about the typo, I was in a rush. I meant: About two years ago there was no money in a few of the repair programs.... Also: I could really go on an on about how DCED does NOT operate as it should.

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GeorgiaAl 3 years, 1 month ago

"It's essentially a wash," Albany Mayor Willie Adams said. "It's a shame that we have gotten to this point, ................ so it doesn't happen again, but we'll be getting the money back in a different form in which we can use on demolishing the Heritage House."

"Slick Willie" is already gearing up to get more money which is SO-O-O typical of politicians. They can always find another way to get and spendwaste more of our money. Very few will get my vote next election if they have an (i) by their name....Such a waste of our hard earned money!!!!!

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wilson 3 years, 1 month ago

And we're still waiting on the DA to reveal the results of his investigation into Cutliff Grove. How long can it take?

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KaosinAlbany 3 years, 1 month ago

The DA had some problems getting all the docs from certain banks so he had to threaten them and the DA just finally received the docs. Read the Albany Journal from time to time and you might just find the answers to your questions.

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whattheheck 3 years, 1 month ago

Don't expect much from the DA if we ever get more than a cursory answer. I suspect there was a lot in play with Grovetown that we won't learn about. But one certainty is a lack of competence and protection of the taxpayer on the part of DCED.

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truthsayer 3 years, 1 month ago

Welcome to EBONY. Land of the free, home of bogus loans.

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DrMax 3 years, 1 month ago

Here in the land of abomination and desolation, has anyone taken notice of the glaring similarities between Albany, GA., USA ... and Monrovia, LIberia? Consider this carefully, and make a list of those areas in which we are actually different other than the merely geographical. The list would be short and depressing.

Wonder what the "least common denominator" is?

Just sayin'

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rchatmon 3 years, 1 month ago

I think that all of you are confused with what you are reading in this article. This is actually a good thing. First, the money being repaid to HUD is HUD's money, not that of Albany taxpayers. This money came from HUD allocated for the specific project in the dunes. Second, due to unfortunate and unforseen circumstances, the developer of this project passed away. This is not Albany's fault, this is not the City Commissions fault, nor is it the fault of anyone else. However, the result of this occurrence led to what is now deemed a failure and HUD simply wants its money back. Third, the good of this action is that the same 500K can now be reallocated in a more useful fashion by getting rid of the blight we all know as the Heritage House. In this respect it truly is a "wash" and people should be very thankful that all of the city commissioners could see the benefit of such an action as dictated by their votes.

Given the true understanding of this article, I ask that those of you who consider this to be an act of incompetence or underhandedness to please re-read it and see if your opinions change.

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wilson 3 years, 1 month ago

You better do the re-read.

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billybob 3 years, 1 month ago

And where do you think HUD gets its money? You said "First, the money being repaid to HUD is HUD's money, not that of Albany taxpayers." You seem to fail to understand that any money HUD has comes from taxpayers.

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whattheheck 3 years, 1 month ago

Sorry rchatmon. Won't buy that for one second. If you look at the whole thing in the context of "tax money", frankly it is all the same to me, and $500,000 goes out twice (once from "HUD pool" and once from "general fund") and it comes back once as $500,000 "HUD pool" dollars, there has been $500,000 that was absconded with because the city did a "dumb deal". I don't give a rat's patootie whose $500,000 it is called--IT IS STILL MY TAX MONEY!

Another little wrinkle no one mentions is that the $500k was to be either a (free) temp construction loan, later converted to a 15 yr construction loan at 2% interest, or perhaps the developer thought he could keep the first loan and would get another $500k loan from the city--making it a $1 million debacle. At any rate, he planned to get most of the project money from Fed/State sources in the form of tax credits et al. And, he planned to get a developer's fee of $1.5 million--nice, eh? The end result was to be a real bargain at $102 sq ft or $105,000 per unit for subsidized housing--sweet, eh?

While it is true the prime developer died, it should be noted he was also mixed up in the Enclave project which got a $292,000 "grant/loan" from the state and $1,468,000 from GA Affordable Housing Corp, a consortium of banks set up to make such loans and who will write off their loss against taxpayers in some form. In fact, the deceased was mixed up in all three parcels of land involved in the two projects. And don't forget our friends at Capitol City Bank who ate some loss on University but now have foreclosed on the same piece of land we ate the $500,000 on--can we all share?

In short, University and Enclave were two poorly conceived projects which would have taken the taxpayers at all levels "to the cleaners". So, although the article leads one to believe the $500,000 now being laid out is a "good deal", it was not and is not when all pieces of the puzzle are put together in one place--which no one has ever done.

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KaosinAlbany 3 years, 1 month ago

You are so very correct it is scary.

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tocar 3 years, 1 month ago

It won't be long now before the city of Albany is in bankruptcy. Taxpayers are tired of the mess downtown. All they know to do is build or construct something else for entertainment of the people who do not want to work. We are constantly reminded of the negatives that our city government does not do, but it doesn't get any better. They throw taxpayers monies into a bottomless pit. Many of the thugs and street walkers do not have anything to do so why doesn't the city hire them to work on one of the many projects that they somehow fail to complete.

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PumpkinEater 3 years, 1 month ago

The death of the developer did not bring this project down. It is a very poorly conceived development in a very off location. The marketers and the city pols referred to it as "downtown" trying to give it a little sizzle, but thinking it is downtown is absurd. It is out by the car dealerships in the middle of nowhere. Who would want to buy a house there? Bottom line was that no one bought, it was marketed and marketed and no one with money would invest or go on the hook for a mortgage there. There are too many better places to buy a house. For reference, the Ashley apartments project downtown by the civic center has performed well.

BTW, Tim Coley, a local developer, did make a low-ball offer for the remains once the deal tumbled, but was turned down. It is very likely Capital City Bank will NOT recover its loan on the property in this market. That Coley offer should be looking pretty good by now.

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