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.”