The Alabama Housing Finance Authority is considering its options after it received a letter last week from Anniston’s city manager saying some of the letters included in the developer’s project application were “in error.”
“This is a unique situation and we’re evaluating it,” said Alison Ingle, communication manager for the finance authority, which distributes HOME funding throughout the state. “We’ve never really had this situation.”
The finance authority approved the project, a complex of 46 apartments for senior citizens on the site of the old Noble Street School, in June and committed $602,031 in tax credits and $742,990 in state HOME funds for the developer. That money has not been sent to the developer, Ingle said.
At its Jan. 12 meeting, the City Council approved a purchase option for the old school for The Vantage Group. That company had proposed renovating the building for affordable housing, something that would have required a zoning change.
In its application to the finance authority in March, the Vantage Group included letters from Mayor Gene Robinson and former Community Development Department director Clarence Williams saying that Williams had the authority to commit HOME Consortium money to the project, plus a letter from Williamscommitting $300,000 for the project. Last week’s letter from City Manager Don Hoyt to AHFA states that Robinson’s and Williams’ letters were incorrect.
A third letter in the Vantage application, dated Feb. 2, 2010, and written by City Planner Toby Bennington, stated that the city-owned Noble Street School was already zoned R-2 for multi-family residential property, something he says was an error.
Bennington sent his own letter last week to the finance authority, saying the February letter was incorrect and that he had notified Vantage of the error about a week after the first batch of letters, well before the March 11 application deadline.
Bradley Carroll, project manager for the Vantage Group, said in a written response that the company is looking forward to working with the city on the project. The declined further comment.
The Vantage Group is owned by Lowell Barron II, the son of seven-term state Sen. Lowell Barron of Fyffe.
Tony Baxter, who was working with a developer competing with the Vantage Group for the federal funding from AHFA, was denied a commitment letter from the city and, without the letter, couldn’t apply. The commitment didn’t have to be in HOME funding, but it did require the city to match 25 percent of the HOME money. That match could have come from the value of donated land, cash from another source or waived taxes and fees.
Baxter has approached the city with copies of the letters and threatened potential legal action. The city could have given both developers commitment letters, but, by giving only one developer the letter, the city was playing favorites, Baxter said.
“I’m trying to get the AHFA to pull the funding on this deal,” Baxter said. “Next year, we would both be able to come back and put applications in again, and we’d be on an even playing field.”
If the finance authority allows the Vantage project to go forward, Baxter said, his affordable housing project wouldn’t be eligible next year. The AHFA uses a point system to allocate the HOME money. A county gains a certain number of points for different qualifications, and, when a development is built, the county loses points, Baxter said.
“Once they build something in the county, they take points off for (the county) the next year,” he said. “They do the point system so they can spread the money out throughout the state.”
Baxter plans to contact the federal Department of Housing and Urban Development, which awards HOME funds and the Community Development Block Grant that Anniston receives. The CDBG program is already under investigation by HUD, and Baxter would like to ask if they will investigate the HOME Consortium as well.
Hoyt and Bennington both said last week they had only just found out about the letters in the last couple of weeks. However, the city had been in communication with the Vantage Group about the project and knew that it had won the federal funding.
Bennington’s recent letter to the finance authority states that city officials thought the building was to be refurbished, not demolished. His letter also says he was told by the developer when it won the funding – the funding was announced June 8 – that the building would be demolished, not refurbished.
That was a surprise, he said in the letter to the AHFA.
“The city (…) evaluated the building to determine its eligibility for the National Historic Registry,” Bennington’s letter states. “This was done to structure tax credits for a developer.”
The Anniston Historic Preservation Commission sent a letter to Bennington dated July 21, the same day it learned of the proposed demolition, denouncing the destruction, said David Christian, chair of the historic commission.