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?

But in a December 18 letter to Renaissance attorney Barry Snowden, assistant city attorney Jean White pointed out that such an arrangement for the Fourth Ward does not meet federal regulations, since the affordable housing units are restricted to low-income persons for only five years. Therefore, White wrote, "there is a real likelihood that the agreement will terminate prior to actual completion of 350 homes and the sales thereof to 350 qualified homebuyers."

Snowden, whose expertise as a real estate attorney has been largely for the benefit of private developers of master-planned communities, disagrees with that interpretation.

"If you look at the regulations, you can see that HUD doesn't look at housing development as a bigger scheme," Snowden says. "It's a government program to the builder, rather than a government program to developer, then to builder. The regs are intended to include both, but they haven't been applied that way."

City attorneys and housing officials refused to comment on the contract negotiations, other than to say they are "ongoing." But how Houston Renaissance agrees to spend the grant is of no small concern, given that the group is also looking to secure some generous terms should it default and fail to build the requisite number of affordable homes.

In her letter to Snowden, White took issue with Renaissance's insistence that it not be required to repay the grant if low-income housing requirements are not met. She reminded Snowden that HUD would demand that the city repay the $3.4 million subsidy if the project produces anything less than 350 affordable homes for the Fourth Ward.

Even if some city officials are wary of Houston Renaissance's ultimate intentions, Michael Stevens isn't. Since he was tapped by Lanier in early 1995 to be the mayor's "special assistant for housing and inner-city revitalization," Stevens's responsibility has been to screen each urban redevelopment project brought before the administration.

Some credit him for the resolution of the Allen Parkway saga, which ended after 15 years last spring when HUD finally approved the project's demolition. Others believe Stevens possesses a power that borders on sinister: When the city's housing authority recently missed the deadline for an application to build 400 units of subsidized apartments in the Fourth Ward, Stevens was blamed in some circles for orchestrating the snafu.

Though improbable, it's not such a stretch. Stevens's bottom line is, well, the bottom line, and Houston Renaissance board members say the city capped affordable housing in the Fourth Ward at 350 because that's all the market could handle. Yet even Stevens, an apartment developer with millions in real estate holdings, professes to understand the political implications of what Renaissance is trying to accomplish.

"They have no alternative but to provide those 350 affordable houses," says Stevens. "That contract is a legal obligation for them to deliver something, and if the contract is breached, those board members have a liability. This is a well-aware group of people who, I think, would fairly cringe at the prospect of being in noncompliance."

Stevens has already demonstrated that he can step in and close a deal, if that's what Lanier decides is necessary. His behind-the-scenes involvement in the Rice Hotel negotiations turned the tide and delivered the coveted project for the Lanier administration. It's probably only a matter of time before the mayor grows impatient with the pace of the Renaissance project and asks Stevens to settle the issue.

To do that, however, Stevens will have to somehow appease Jew Don Boney, or risk what could become a public confrontation. The freshman representative from District D, which includes portions of the Fourth Ward and Freedmen's Town, has kept tabs on the Renaissance project on behalf of the Fourth Ward Ministers Alliance.

Boney and the dozen or so ministers who make up the alliance have been attempting to secure a guarantee that they will have some influence on the redevelopment. Initially, the group asked Renaissance to enter into a joint venture and "share ... as full and equal partners" in the Fourth Ward project. That suggestion was quickly rejected by Renaissance, whose board members say the ministers still haven't identified what they might contribute.

At Boney's urging, however, city officials put in its EDI application last fall that Renaissance would work specifically with members of the ministers' alliance, as well as other community groups such as the Freedmen's Town Association. But when the city tried to include the same requirement in its contract with Renaissance, the nonprofit balked. Instead, Renaissance says it will put forth its "best efforts" to include "qualified community development corporations ... with the ability" to build or sell the low-income units.

Renaissance board president Frank Kelly says negotiations with the Fourth Ward's community groups, including the ministers, are not dead by any stretch. But the discussions are "sort of comatose right now, just hanging in the air with a zillion other things," he adds.

Stevens, however, says the nonprofit is concerned that any "partners" taken on by Renaissance will damage the delicate "economics" of the project. "They will have the opportunity to participate, even in the construction, as long it doesn't end up costing the buyer any more money," says Stevens. "That's the test, because the person who ends up paying for inefficiencies in the system is the homebuyer."

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