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.