ALBANY, Ga. — A project originally billed to provide low-to-moderate income housing in the East Albany sand dunes has proved to be vexing for city officials, who now must explain to the federal government how they plan to use the space where they have found nothing but dirt and dejection.
University Gardens was supposed to be a separate phase of a $20 million project that was to be built off of Frank Postell Drive.
Instead, the property that was purchased still sits largely undeveloped and a $500,000 loan from the city’s Community and Economic Development Department’s revolving loan fund has yet to be repaid, which has prompted the U.S. Department of Housing and Urban Development to ask the city of Albany for action plan on the property.
Contrary to the belief of many Albany residents, the property that was developed into a row of eight town houses on Postell Lane known as the Enclave was not the project in which the city awarded the $500,000 loan.
The Enclave is a private project developed by Dwidon Albany, LLC; and while it was not spared its own bit of controversy when the general contractor for the project filed a lien for $312,025 in unpaid but completed work on the project, there is no indication that the project ever received public funds.
The city did, however, award the $500,000 of HUD funding to Liberty Partners Albany Land LLC, for land acquisition to spur development of $11.5 million worth of low-income housing that was to be a second phase of the townhouse project.
That loan, according to documents obtained from the city of Albany under a request under the Georgia Open Records Act, was made in June 2006. In 2008, the principals of Liberty asked the city commission for a two-year extension on the deadline on which they had to begin paying the money back, which was granted.
But as the deadline to pay, June 2010, came and went, nothing was repaid and, one of the principals of the company died unexpectedly.
Currently, Capitol City Bank has foreclosed on the property, and bank officials say they are owned $175,022 on the property.
And despite letters threatening lawsuits from the city, city attorney Nathan Davis and City Manager James Taylor say there has been little headway made in finding out exactly how the funding was spent.
Given that Capitol City Bank paid $122,400 — the rest is interest and penalties — and the city gave $500,000 to Liberty for land acquisition, its reasonable to assume that Liberty borrowed at least $622,400 to begin work on the project.
So how was the money spent?
A closing statement sent to the city and obtained by The Herald shows that Liberty was to pay $392,737.23 for 7.5 acres of land for the site.
If the developer used the funding from the city to do what they were supposed to, which was to purchase the land, Liberty still had more than $107,000 in unspent tax dollars left over from the purchase of the land that, to this day, remains unaccounted for.
Taylor said that the city had been working with the family of the deceased principal to see what assets existed or how the remaining funds were spent. Since the company was a limited liability partnership, there isn’t much the city can do to go after personal assets.
Instead, the city is working to find a purpose for the land so that they’ll have something to show to HUD.
According to Joseph Phillips, a spokesperson for HUD in Atlanta, the Feds sent the city a letter in September asking for an action plan for the property by November 21.
In his email to The Herald, Phillips inferred that action could be taken by HUD.
“The action plan is due back to HUD by November 21, 2011. After the action plan is reviewed a determination will be rendered,” Phillips wrote.
LaToya Cutts, director for the city’s DCED, said she believes it’s unlikely that HUD would ask for repayment or withhold $500,000 from a future allotment because the funding came from Community Development Block Grant or CDBG funding, which has far more latitude in how the money can be spent, than other federal housing programs.
If the city can find a purpose that meets the core mission for the money, such as low-to-moderate income housing or blight reduction or community development, HUD would likely be satisfied, she said.