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Augusta housing groups have checkered financial history

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The recent controversy involving East Au­gusta Community Development Corp., a housing group founded by Augusta Commis­sion member J.R. Hatney, is the latest chapter in a relatively checkered history of Community Housing Development Organizations in Augusta.

Summerfield East subdivision was a major project for Laney Walker Development Corp. A 1997 audit took issue with the low prices of the land and the homes.  ZACH BOYDEN-HOLMES/STAFF
ZACH BOYDEN-HOLMES/STAFF
Summerfield East subdivision was a major project for Laney Walker Development Corp. A 1997 audit took issue with the low prices of the land and the homes.

Like East Augusta, whose inactivity in using federal funds is forcing the city to refund nearly $300,000, Augusta’s first CHDO – Laney Walker Development Corp. – was also ensnared by U.S. Department of Housing and Urban Development regulations.

A 1997 audit found, among other things, that some of the homes in the Summerfield East subdivision – the subject of Laney Walker Development’s first grant – were sold to homeowners at less than market value, while the city sold lots to the group at less than market prices.

The group, closely associated with the black business group CSRA Business League, was founded in 1989 to spur redevelopment in the historically black neighborhood just south of downtown Augusta.

The latest refund demand also cited 30901 Development Corp. for improperly paying $52,105 for a fence around Faithview Estates using federal dollars. That group was incorporated in 1999 by Pastor Sam Davis of Beulah Grove Baptist.

East Augusta CDC was founded by J.R. Hatney, now a member of the commission; former interim Mayor Willie Mays; and others in the mid-1990s. In 1998, it received $50,000, its first federal infusion of CHDO operating funds, to begin redevelopment off Sand Bar Ferry Road and Magnolia Avenue in east Augusta.

The nonprofit hasn’t built as much housing as some of the earlier CHDOs, though it has received $900,901 in federal housing funds since 1998.

The group’s tour de force came in 2001 with a $4 million renovation of the East Boundary apartment complex Lincoln Square, later renamed East Augusta Com­mons. That project almost didn’t happen after the city’s Housing and Commu­nity Development director, Keven Mack, determined a contract award was moving faster than the city could monitor it.

The same year, Hatney, the pastor of Good Hope Missionary Baptist Church and a Richmond County school board member, accused Mack of playing favorites with 30901 Development Corp. Mack was a member of Davis’ church.

The 30901 group has received $1.2 million in federal housing money since 2001, including $850,000 spent on development of Faithview Estates, which comprises a dozen new homes along Holley Street and Augusta Avenue in the Bethlehem community.

Mack, now a commercial real estate agent, said he’d been thorough in vetting CHDO project applications and acknowledged that each of the city’s housing directors since 1996 had a different operating style.

THE LATEST imbroglio involving East Augusta stems from its receipt of $292,128 for “revitalization,” acquisition and demolition of Marion Homes off Sand Bar Ferry beginning in 2005, according to city documents, with no homes to show for it seven years later. The organization also hasn’t filed a tax return – required of all nonprofits, regardless of funding – since 2003 and lost its nonprofit status by default in 2010.

Chester Wheeler, the current community development director, said the houses hadn’t come along because of a lack of adequate infrastructure. Hatney said Wheeler was to blame.

An inability to get housing built according to federal guidelines isn’t the only problem to plague Augusta CHDOs, whose parent corporations often offer other forms of assistance to the poor and homeless.

“One of the hardest things is for the CHDO is to build a house and actually sell it to a low- to moderate-income family,” Mack said.

SHEILA BOAZMAN, the director of one relatively new CHDO, Promise Land Com­munity Development, said such groups must find qualified buyers with sufficient credit to afford a mortgage.

“That’s the bottom line, credit scores and actually being able to sell the home and get a loan from a lending institution,” she said.

Promise Land, which specializes in home rehab and resale, has received $1.22 million in federal funds from the city of Augusta since 1999.

According to a list Boazman provided, Promise Land has obtained 110 houses and condominiums, rehabbed them and put them back on the market. Most of the homes were in Augusta or Hephzibah, but several were in Columbia County or metro Atlanta.

For instance, property records show Promise Land obtained a Dover Street house from HUD for $35,000 in 2006 and sold it to a home­owner for $65,000 in 2010.

THE CITY NOW requires CHDOs to borrow HUD funds instead of receiving them as grants. That, said Boazman, could lead to their demise. The overhead associated with running a CHDO – office space, computers, telephones, maintenance
and insurance on empty houses, all while maintaining nonprofit status – is huge, she said.

City Administrator Fred Russell defended the change. Some CHDOs “survived the loans,” he said. “They’re building houses and putting people in them.”

Community Housing Development Organizations

Community Housing Development Organizations are nonprofit groups that use federal funds to develop and sell affordable housing. Some of the groups listed also perform other services.

WHAT: Laney Walker Development Corp.
FOUNDED: 1989
CHAIRMAN: DeFore Holmes
BOARD: Mildred Irish, Thelma Mack, Lynda Thomas, Edith Peebles
NET ASSETS (2010): $848,563
MAJOR PROJECT: Summerfield East subdivision

WHAT: Antioch Ministries
FOUNDED: 1992
DIRECTOR: Scylance Scott
BOARD: Cynthia McKinley, Augustus Miller, K.B. Martin
NET ASSETS (2010): $1,231,331
MAJOR PROJECT: Houses on Florence, Blount streets

WHAT: East Augusta Community Development Corp.
FOUNDED: 1999
DIRECTOR: Charlene Watkins
BOARD: Linda Ball, George Grant, Johnny Hampton
NET ASSETS (2003): $23,937  on latest tax return (lost its nonprofit status in 2010)
MAJOR PROJECT: Renovations at Lincoln Square, now East Augusta Commons

WHAT: 30901 Development Corp.
FOUNDED: 1999
DIRECTOR: Beverly Wright
CHAIRMAN: Sam Davis
BOARD: John Parham, Daisy Brown, Ayanna Burns, James Williams, Norman Frank, Bernard Bowman
NET ASSETS (2010): $720,202
MAJOR PROJECT: Faithview Estates subdivision

WHAT: Sand Hills Urban Development
FOUNDED: 2005
DIRECTOR: Tim Wilson
BOARD: Alice Stills, Norris Rouse, Barbara Hammond
NET ASSETS (2006): $211,944 on latest tax return
MAJOR PROJECT: Mount Auburn duplexes

WHAT: Promise Land Community Development
FOUNDED: 2000
DIRECTOR: Sheila Boazman
BOARD: Patricia Gilchrist, Terrance Gray, Denine Thomas, Chris Bell, Vincent Fort
NET ASSETS (2010): $636,042
MAJOR PROJECT: Home renovations in south Augusta

WHAT: South Augusta Redevelopment
FOUNDED: 2004
BOARD: Bob Finnegan, Charles Shaw, Bob Garrett
NET ASSETS: Has not filed a tax return
MAJOR PROJECT: 2525 Miles St.
-- Compiled by Susan McCord, Staff Writer

Correction

Because of a reporter's error, the relationship between CSRA Business League and Laney-Walker Development Corp. was omitted from an April 29 article in The Augusta Chronicle. CSRA Business League performed staff services for Laney-Walker Development Corp., a community housing development organization, or CHDO, in the late 1990s, but the League, an organization primarily engaged in small business development, is not a CHDO and is no longer associated with Laney-Walker Development Corp.

The Chronicle regrets the error.

Comments (6)

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raul
3387
Points
raul 04/28/12 - 08:23 pm
5
0

Sounds like the CHDOs have

Sounds like the CHDOs have taken a lot of money, and done relatively little in return. Where did the money go?

When did the city start requiring CHDOs to borrow HUD funds instead of receiving them as grants?

wondersnevercease
9155
Points
wondersnevercease 04/28/12 - 10:59 pm
1
0

Stinks...(don't it?)

Unpublished

Stinks...(don't it?)

crackertroy
540
Points
crackertroy 04/29/12 - 10:12 am
4
0

This is backwards, the black

Unpublished

This is backwards, the black community will go ape nuts over Trayvon Martin (one very tragic incident) but not a peep when black leaders take money, in this case possibly in the millions, from the lowest sector of the black community and line their pockets with it. While these "projects" only foster nests for drugs and thugs. How many Trayvon Martins have been killed in these projects since their existence? And how many George Zimmermans have walked free without a peep?

double_standard
166
Points
double_standard 04/29/12 - 01:04 pm
0
1

Crackertroy the chronicle

Crackertroy the chronicle wants you to go ape nuts over this. Why no mention of the Land Bank Authority. This is another tit for tat story much like the weekly commentary of the city ink column.

Willow Bailey
20255
Points
Willow Bailey 04/29/12 - 11:37 pm
1
0

What a crooked dishonest

What a crooked dishonest mess. Sounds like they got free money, converted it to their pockets and never paid taxes on their Ill gotten gains. Oh, but now they can make it all better by "borrowing" the money. Hello Justice Dept???

wildman
954
Points
wildman 04/30/12 - 04:22 am
1
0

Smoke normally equals fire,

Smoke normally equals fire, in this case I see an inferno burning a lot of money that no one is accountable for. That's all.

prov227
2337
Points
prov227 04/30/12 - 06:49 pm
0
0

Actually, the question isn't

Actually, the question isn't whether a non-profit owes taxes, but, rather, why didn't the organization file returns. The BOD is responsible for this oversight, not a delegated staff person.

Willow Bailey
20255
Points
Willow Bailey 04/30/12 - 10:23 pm
0
0

There should be an audit of

There should be an audit of these funds and some responsibility to provide the intended purpose or return the funds.

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