Affordable housing deal fails
By AARON SHAROCKMAN
Published January 18, 2007
ST. PETERSBURG - The St. Petersburg Housing Authority botched a deal that could have provided homes for some of the 300 residents being forced out of the city's largest public housing project.
An agreement to purchase a 90-unit apartment complex disintegrated last week after the housing authority failed to follow routine federal guidelines, a spokeswoman with U.S. Department of Housing and Urban Development said Wednesday.
The housing authority, which had a contract to buy the one- and two-bedroom Woodland Oaks apartment complex, did not notify HUD of the pending $5.5-million purchase, nor did it detail how it would pay for the complex, HUD spokeswoman Gloria Shanahan said.
HUD officials, when they heard of the pending sale, said they would expedite their review. But they never received a formal proposal from the city housing authority, Shanahan said.
"The housing authority has development and acquisition experience, so should have been fully aware of the process," Shanahan said in an e-mail.
Instead, the housing authority asked to delay the closing on the property, the real estate broker who is marketing the complex said.
The deal evaporated when the sellers said they would not extend the contract beyond Feb. 5. The two sides had been negotiating for nearly six months.
"We were at the finish line," said John Burpee, president of NAI Tampa Bay, which is marketing the apartments on 49th Street N near 42nd Avenue. "We were basically ready to go."
Burpee now expects that the property, which is back on the market, will fetch closer to $6-million from a private developer within days.
The housing authority, meanwhile, is left to face growing questions about how it plans to provide housing for the low-income residents being forced to leave the Graham-Rogall housing project, which is under contract to be sold for close to $12-million, and how it will spend the money from the sale.
Housing authority executive director Darrell Irions is scheduled to appear before the City Council this afternoon, where criticism has been mounting. Irions met individually with some council members this week.
Irions and other housing authority executives say they can no longer effectively manage large complexes like the Graham-Rogall, and instead will reinvest in smaller affordable and mixed-income housing projects.
They said deals were in the works.
But only the purchase of Woodland Oaks has been discussed publicly, according to a review of housing authority board meeting minutes since May.
Now that plan is dead.
Richard Salem, the general counsel for the housing authority, said the agency is exploring several potential new deals. The housing authority, however, would not discuss the sites.
Salem said the sale of Woodland Oaks was complicated by zoning issues as well as how the sale would be funded. Initially, the housing authority planned to assume the current mortgage on the Woodland Oaks property.
After HUD said that was not possible, the housing agency attempted to cobble together other funds, including part of the proceeds of the sale of another public housing project, James Park.
Salem described HUD's description of events as semantics. He said no formal request was submitted because the deal had already fallen apart. And the housing authority contacted HUD as soon as it knew it needed HUD's approval, he said.
"This is not like going to McDonald's and buying a hamburger," said Salem, adding that the housing authority needed to pull out before Feb. 5 or risk losing a $60,000 deposit. "As a public housing authority, we can't act hastily."
But its failure to act could leave the housing authority with a more expensive problem.
Woodland Oaks, which is just outside the city limits in unincorporated Pinellas County, cannot be converted into condominiums because of zoning rules, Burpee said. That makes the property less valuable to developers, and a better fit for someone like the housing authority, Burpee said.
If the housing authority now tries to secure a building that can be converted to condos, it would be left to pay a higher price per unit and would have to compete against private developers. For instance, Woodland Oaks, or a similar complex, could sell for as much as $7.65-million if it could become condos, he said.
Woodland Oaks "is the perfect property for the housing authority," Burpee said. "But it's going to be somebody else's."
Three private developers are touring the property this week, Burpee said.
Graham-Rogall residents were told in December that the 486-unit complex near Tropicana Field was being sold to a condominium developer, and that all residents would have to leave.
The buyers, a pair of Tampa lawyers, have agreed not to close on the property until all of the residents are relocated. They also have said they will put $1-million up front to aid in the residents' relocation.
There are more than 1,500 other people waiting for subsidized housing in the city.
Aaron Sharockman can be reached at firstname.lastname@example.org or 727 892-2273.
[Last modified January 18, 2007, 01:18:38]
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