Sunday, October 25, 2009
Roanoke's inaction on housing agreement causes rift
A man who sold 70 apartments to the housing authority says it and the city haven't kept their promise.
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When the Roanoke Redevelopment and Housing Authority bought 17 rundown apartment houses on Day Avenue in 2005 to convert them back to single-family homes, the deal rested upon a promise.
The RRHA and Roanoke agreed to build 50 scattered low-income rental units over the next seven years to replace some of the 70 apartments that would be lost on Day Avenue Southwest.
Four years later, the city and RRHA can't come up with a single completed rental unit that will satisfy Dana Walker, the man who sold the Day Avenue houses and to whom that promise was made.
With three years left, the city and housing authority have no building plan, no plan for managing the apartments, no lots picked out, and no source of money identified to get it all done.
Walker has waning faith that the commitment will be met. He will take the city and RRHA to court if necessary, he said.
"If I hadn't raised this issue in the fifth year, we'd be right in this position at the beginning of the seventh year," said Walker, managing partner of Christian Housing Fellowship LLC, which owned the Day Avenue houses.
But City Manager Darlene Burcham doesn't think that's necessarily the case. "It's premature to say if you haven't gotten something done, you won't get it done," she said.
"It could be done ... if money is identified," said housing authority Executive Director Glenda Edwards. "Our challenge is the resources."
The authority is about to begin work on six houses in the Hurt Park area that should be done in 45 days and meet the terms of the agreement with Walker: no more than two units per block, at least 1,000 feet from public housing developments, with rents based on Section 8 income guidelines.
Those units will cost about $130,000 each to build, Edwards said. The RRHA also has submitted a plan to the federal government to build an additional six rental units in the same neighborhood.
Edwards is quick to point out that the RRHA has not been shirking its mission to provide affordable housing. It has built 89 apartments over the past two years -- just not in locations that meet the agreement.
The agreement says the city and RRHA must "construct or cause to be constructed" the rental units, so they could direct funds to a private entity to build them.
Edwards and Burcham also would like Walker to accept five lease/purchase units as part of the 50. While the renters will eventually buy them, each one bought will be replaced with another rent-to-own unit, and they help the poor more by creating home ownership, they say.
But Walker says those units don't serve the "poorest of the poor," which is "what we all agreed to do."
"Sorry, no compromise," he said. If the city and RRHA had made a good faith effort before now, he might be willing to bend, he said. Now, it's too late.
Walker has tried to prod the city and RRHA into action with letters and inquiries in the past.
Earlier this year, Edwards said, she contacted Burcham's office to set up a meeting with Walker and someone from the city. She said she was told they had until 2012, and it wasn't an urgent matter.
She feels at a disadvantage, because she wasn't around when the agreement was forged. She's the second executive director at the housing authority since the retirement of John Baker, who signed the agreement for the authority. The entire housing authority board and executive staff involved in the deal in 2005 have since turned over.
Baker and Walker initially negotiated the land deal. Burcham said she got involved as a "middle-person" to settle terms over the rental units.
The agreement to build the rental units was signed on May 16, 2005, by Burcham and Walker -- but not Baker, though it was the RRHA that would be responsible for building the apartments.
Walker, who said he did not consult with an attorney over the agreement, found that odd, "but I thought, how could you have more security than to have the city manager's signature?" he said. "The agreement is far more simple and trusting than it should have been."
"I didn't agree to anything John Baker didn't agree to," Burcham said.
The land deal was closed on Sept. 1, 2005, but the purchase agreement makes no mention of the rental units.
Burcham asked for the terms to be included in the agreement that transferred $370,000 from the city to the RRHA to buy the houses, correspondence from the time shows, but that never happened. Neither Burcham nor City Attorney Bill Hackworth said they can remember why.
On Sept. 16, 2005, at Burcham's request, city and RRHA documents show, Baker added his signature to the agreement to build the apartments with the note, "Seen and agreed."
The request prompted the RRHA's attorney, John Grove, to ask Baker in an e-mail, "Do you suppose that Mr. Hackworth or Ms. Burcham suspects we would not do as we have indicated?"
Hackworth said last week that without Baker's signature the RRHA would not have been bound by the agreement.
Despite the unorthodox addition of Baker's signature and phrasing in the agreement that seems to treat the "city/RRHA" as one entity when they are separate political subdivisions, Hackworth believes the agreement is binding.
RRHA attorney Nick Conte said he hasn't reached a conclusion on that point yet.
But how were these apartments to be built? Freedom of Information Act requests to the city and RRHA produced no documents indicating a plan or a funding source. Edwards said she could find nothing, either.
Then-RRHA Deputy Executive Director Earl Reynolds said he never discussed any plans with Baker and recalls no discussions at RRHA board meetings.
Jim Allen, an RRHA board member at the time, said he recalls no discussion of a plan.
Then-RRHA board chairman Ben Fink deferred to Baker, who could not be reached for comment.
RRHA board meeting minutes show no discussion of a plan, and no action approving the agency's commitment to the agreement, though it's clear the board was aware of it from early on.
Meeting minutes show that Burcham told city council at the time that the units would be built as part of RRHA's ongoing building efforts, not as a special project. Burcham recalls the same thing today.
"As soon as we transferred that money, we never heard any more, because we weren't needed," she said. She said she "erroneously assumed John was doing something to look at these other commitments."
Baker retired in May 2006. Not long after that, the RRHA became the subject of a U.S. Department of Housing and Urban Development audit that led to the RRHA being declared a "troubled" agency.
Edwards became interim executive director in March 2007 and was appointed permanently a year later. Most of her tenure has been devoted to responding to the audit and removing the "troubled" label.
Burcham, in an Oct. 9 memo advising the city council that this news story was forthcoming, said the RRHA has been working through "numerous activities" to meet the commitment.
Edwards, however, acknowledged that "in the time that I've been with RRHA we have not been actively engaged with the city to meet the terms of this agreement."
But the RRHA stands ready and willing, she said.
She's hoping for a fresh start with Monday's board meeting, and she said she hopes Walker is willing to be flexible.
Burcham said Walker's current approach "is not helping us meet the goal."
Walker said he doesn't want to see the city and RRHA fail, but the agreement makes no provision for what would happen if they do.
Walker has his own idea.
While he was paid $344,000 for the houses on Day Avenue, they had an assessed value of $1.15 million. So, Walker said, he gave RRHA a gift of $806,000 in equity.
If the city and RRHA fall short, he'll calculate what percentage of the 50 units that remains to be built, and demand that same percentage of that $806,000 in equity -- plus interest -- be paid to a nonprofit agency of his approval to complete the units.
"Or they can stop right where they are right now and do the same and not have to worry about it," he said.
Edwards said he believes if everyone can sit down and talk, the goal can be met.
"I hope it doesn't deteriorate into a debate over how to get it done; that loses sight of the fact that it's a worthwhile thing to do," she said.





