The Great Land Grab

A nonprofit "charity" is pursuing millions in taxpayers' money to redevelop the Fourth Ward. The question for Houston Renaissance is, charity for whom?

Like the Fourth Ward, the Midtown district between the Pierce Elevated and U.S. Highway 59 is one of several key, interlocking components in Lanier's urban renewal strategy. The potential for Midtown, which borders the Fourth Ward to the northwest, has been greatly enhanced by property tax breaks that could total as much as $350 million over the next 30 years. Those subsidies were assembled by the Council-appointed board of the Midtown Redevelopment Authority, which is chaired by another close Lanier associate, Doug Williams.

Williams is on the city payroll at $112,000 a year, plus a generous benefits package. As the mayor's special assistant for inner city revitalization, he was hired to advance a series of urban redevelopment projects that include Midtown and the Fourth Ward.

Satisfied by Houston Renaissance's promise to build low-income housing, the IRS finally granted the organization its nonprofit tax exemption in November 1995, by which time the group's board had begun to flex and contract in significant ways. Burge, who was listed as a board member in Renaissance's early promotional literature, stepped back at the request of Lanier, who didn't like the idea of one of his closest friends on the receiving end of public money. He now has an "informal role" as an advisor, according to other board members.

The group also brought three African-Americans onto its board: insurance agent Bill Calhoun, a Republican who is vice chairman of the board of Unity Bank, the only black-owned bank in the state; attorney Jim Lemond, a former lobbyist for the law firm of Akin, Gump, Strauss, Hauer & Feld; and Third Ward developer Gerald Womack, who was active in Sheila Jackson Lee's 1994 congressional campaign and is now working on the City Council campaign of the Reverend James Dixon.

Two other original board members became paid consultants to the organization: Consultant Denis Calabrese stepped down to handle public relations and fundraising, while Barry Snowden, a member of Renaissance's first executive committee, became its legal counsel.

But the most prominent -- and troubling -- transformation was in Laguarta's role. In a brief document drawn up in 1995 and entitled simply "4th Ward Building Plan," Laguarta -- Houston Renaissance's founder and, at the time, president of its board of directors -- proposed that he and the group form a "joint venture" in which he would become the "operating partner."

In late 1995, Laguarta took over the day-to-day strategy of securing the Fourth Ward land in exchange for a $6,000-a-month fee, plus $3,000 for administrative expenses. He stands to make hundreds of thousands of dollars more in real estate commissions when his Fourth Ward contracts come to fruition.

Laguarta could probably use the money. In fact, his job with Houston Renaissance has been one of his more lucrative undertakings of late. Last July, the homebuilder filed for Chapter 11 bankruptcy protection, listing assets of $1.7 million against liabilities of more than $3 million, including about $30,000 owed to the IRS.

The bankruptcy petition shows that in the last three years Laguarta's annual income -- he owns National Homes Corporation and Laguarta & Company and is involved in a number of real estate partnerships -- has declined to about $40,000. Board president Frank Kelly explains that paying Laguarta was "essential" to Renaissance's ability to carry out its Fourth Ward plan.

"Julio brings to the table both the expertise in real estate development and the knowledge of the city and area," Kelly says. "We needed him to work full time on this thing, and the clear agreement was that he couldn't do that and be a member of the board. So he left the board, and we hired him."

It's probably best that the Lanier administration recently ordered Laguarta to step down from the Planning Commission after it was revealed that he had been violating the commission's by-laws by living in Bellaire. Elected officials and appointees are prohibited from benefiting from city-backed programs, and Renaissance has asked to be reimbursed by the city for more than $300,000 in administrative expenses, including more than $270,000 paid to the three former board members. Had he remained a planning commissioner, Laguarta's fee arrangement may have constituted a conflict of interest under city law.

As it is, Houston Renaissance has enough to worry about from an image standpoint. Even its board members, none of whom have done an iota of business in the Fourth Ward, acknowledge that the involvement of this particular mix of people could lead to some unflattering conclusions.

"Everybody assumes someone's got land or is going to get a contract," says Crosswell. "That's everybody's natural inclination.

"I have zero interests. I don't sell insurance, I don't own land anywhere near the vicinity and I'm not an engineer. There is absolutely zero for me to get out of this, and I don't believe anyone on the board has any financial interest anywhere near the place."

The Renaissance board members are simply "civic minded," Crosswell concludes. "That's the difference. We got a lot of other things we could be doing."

Property tax records support Crosswell's claim, repeated by other board members, that none of them have direct ownership interests in the Fourth Ward. That said, the civic minds alluded to by Holcombe Crosswell are apparently only willing to open so far.

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