East Augusta Community Development Corp. gets to keep a dozen lots it purchased using federal money, but the city is on the hook for repaying about $344,000 used to buy them, the Augusta Commission reluctantly agreed Tuesday.
The commission voted 6-2 to repay the U.S. Department of Housing and Urban Development the money from the city’s general fund, with Mayor Pro Tem Joe Bowles and Commissioner Joe Jackson voting against. Commissioners Jerry Brigham and Corey Johnson were absent.
Super District 9 Commissioner J.R. Hatney, who frequently abstains on commission votes, cast a vote in favor, despite his close ties to the community housing development organization.
“I’m in the clear. I know what I’m doing; I’ve been doing this for 20 years,” Hatney said after the meeting. “There’s no conflict of interest because I’m not associated with that organization.”
Hatney, the senior pastor of Good Hope Missionary Baptist Church, incorporated East Augusta Community Development in 1999, before joining the commission.
While the group continued to receive federal HOME money through Augusta Housing and Community Development throughout the 2000s, it lost its nonprofit status in 2011 by default for failing to file tax returns since 2003.
In 2011, East Augusta Community Development amended its articles of incorporation to name Johnny Hampton, the administrative pastor at Good Hope, as president.
The community housing development organization, which received $299,128 in HOME money to develop low- and moderate-income housing, failed to complete the development within five-years, prompting HUD to require the federal money be repaid, Augusta Housing and Community Development Assistant Director Hawthorne Welcher told the commission.
Asked to elaborate on the impediments that prevented East Augusta from completing the work, Welcher said the lots purchased had drainage problems and lacked water and sewer service. All are in the riverfront neighborhood of Marion Homes.
“When people buy property, and expect water and sewer to come it’s called land speculation,” Bowles said.
Welcher said the situation created a “constructive tension” prompting Housing and Community Development to implement checks on the community housing development organization activities.
“This is a mistake that definitely will not happen again,” he said.
It occurred previously in 2008, when Augusta had to repay $288,786 in housing money because of missing documentation, and in 2009, when the city had to repay $95,000 after two houses were sold to buyers whose incomes were too high.
Commissioner Grady Smith asked which engineer OK’d the purchase of land that lacked infrastructure. City Administrator Fred Russell said Housing and Community Development authorized the expenditures.
“It’s cheaper to put it on paper first and go down the checklist,” Smith said. “It seems like the taxpayers take it on the chin every time we have a shortfall.”
Both groups were sent formal requests for repayment March 31; neither has responded, Welcher said.
The requests weren’t included in the two-page response to an open-records request by The Augusta Chronicle for documents associated with the refund.
Commissioner Alvin Mason moved to repay the money so long as Housing and Community Development check on the community housing development organization activities.