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  • City loan backs project for Lyons


    ©St. Petersburg Times, published July 15, 1997

    ST. PETERSBURG -- It would be among the biggest projects the Rev. Henry J. Lyons had undertaken in St. Petersburg: turning a dilapidated former restaurant site into a 120-unit elderly housing development, complete with convenience store, beauty salon and day-care center.

    But until Mayor David Fischer stepped in last fall to prod staffers to approve a $300,000 city loan for the project at 2401 34th Street S, the non-profit development corporation led by Lyons was struggling to get off the ground.

    City staffers reviewing the proposal called it "highly likely for failure," but they approved it, city records show, at Fischer's recommendation.

    "I don't force anything on anyone, but if I see a project where there's a benefit beyond purely financial, I say, "Let's see if there's a way to make it work,' " Fischer said.

    Lyons' Bethel Village project offers many social benefits, Fischer said, and risks are often necessary to promote economic development in minority neighborhoods.

    The city's loan enabled Bethel Adult Care Inc., of which Lyons is president, in December to buy 2.36 acres just east of Lyons' church, Bethel Metropolitan Baptist. If the project fails, the city could foreclose upon the property, which housed the Sand Dollar Restaurant.

    The loan is the latest and largest financial connection between the city and Lyons, whose finances have come under scrutiny after several revelations last week. Lyons' wife, Deborah, was arrested July 6 and charged with arson and burglary. She is accused of setting fires in a $700,000 waterfront home in Tierra Verde that she said she discovered was owned by Lyons and another woman.

    Lyons, who heads the 8.5-million member National Baptist Convention USA, has been involved in non-profit and for-profit ventures, but the last time the city funded a corporation involving him, the effort turned out poorly.

    In 1993, the city issued three housing rehabilitation loans, totalling nearly $135,000 to a non-profit corporation called Cooperative Housing for Urban and Rural Community Homes, or CHURCH Inc. The corporation used the money to buy deteriorated homes, rehabilitate them and sell them to low- or moderate-income residents participating in one of the city's home ownership programs.

    But in two of the three cases -- 4665 17th Avenue S and 4700 16th Avenue S -- the renovated homes sat vacant for years. In October, CHURCH directors deeded the properties to the city to avoid foreclosure. One of the witnesses listed on those legal documents, is Bree Jones, a name used by Bernice V. Edwards, the woman who co-owns Lyons' Tierra Verde house.

    City officials are trying to sell the two CHURCH Inc. properties.

    If the asking prices are met for both, the city would receive $74,000 on properties for which they lent more than $84,000 in 1993.

    The money involved in the CHURCH Inc. and Bethel Adult Care loans are federal housing dollars aimed largely at projects that will benefit low- and moderate-income residents.

    City officials stress that such ventures can be risky, and indeed federal guidelines presume that some untested private non-profits will fail. Part of the reason cities issue such loans is because they are often too risky for conventional banks.

    But federal dollars are scarce, and demand for those dollars is high. Every year, city leaders reject millions of dollars worth of requests from non-profit groups.

    Fischer, who had Lyons' endorsement during his recent reelection campaign, said he expects the city will take many more risks in coming months as it tries to spur economic development in the inner city. Bethel Village stands to be a great addition to the community, he said.

    Housing coordinator Tom de Yampert said that when he another another staffer recommended against the Bethel Village loan, they were looking solely at the financial projections, not at other benefits from the proposal.

    "The Bethel transaction had a whole lot of social impact -- 35 jobs, two-thirds of which were full-time, and two-thirds of those associated with health care," de Yampert said.

    Besides, he added, the elements of the financial structure that concerned the city at the time have been revised.

    The effect of Lyons' current problems on Bethel Village is unclear. Early summaries of the project indicate that Lyons' prominence in the community was expected to be part of the draw for elderly and frail residents.

    Neither Lyons nor his attorney could be reached for comment Monday. One of the directors of Bethel Adult Care, Ashby Hobson of Tierra Verde, declined to comment on the project's status.

    As recently as last week, though, Hobson told the Pinellas Housing Finance Authority he was awaiting word on a loan through the U.S. Department of Housing and Urban Development. The developers had planned to start construction on the first $5-million, 84-bed phase in March, but the time frame now is unclear. If construction is not under way by Dec. 31, the city could foreclose on the 2.36 acres for which it lent $300,000.

    That parcel is part of a 5-acre tract that has been for sale for years and is appraised on county tax rolls at $398,000.

    It had been owned by former state Sen. Mary Grizzle, who holds the $200,000 mortgage on the part of the property that fronts on 34th Street S. Grizzle said Monday that Bethel Adult Care is up to date on its interest payments.

    City officials issued their $300,000 loan without obtaining an appraisal on the property, de Yampert said, because they felt comfortable with two other appraisals. One, from HUD, put its value at $302,000, while a professional appraisal for Bethel Adult Care put its value at $190,000.
    -- Staff writer Mike Wilson contributed to this report.

    ©Copyright 2006 St. Petersburg Times. All rights reserved.