In May, the city quietly allowed Mastermark's two-year contract to expire, and the project collapsed. Fewer than half the 109 homes planned had been built. Moreover, the city had already spent more than $5.5 million, nearly twice the amount of the revolving loan.
Hartgrove says housing officials are still trying to determine what went wrong. Calls to Mastermark's founder, Bob Hutchins, who closed his company after more than 25 years in the home-building business, were not returned.
Whatever happened, city housing officials have kept quiet about the failure of the project. As for councilmembers, the only way they would even know about the Mastermark failure was if they picked up the June 4 Houston Chronicle. In the fine print of the classified-ad legal notices, the city announced that Mastermark's plans and specifications, as well as any leftover building materials, would be sold at public auction.
In some ways, the city's contract with Houston Renaissance mirrors the Mastermark deal: For example, after almost two years, few councilmembers realize how rapidly the original plan to build a mixed-income neighborhood in the Fourth Ward could crumble.
Renaissance received the go-ahead to develop a master plan for the Fourth Ward in October 1996. The terms of the city's contract were simple: In exchange for a $3.4 million grant, the nonprofit is obligated to develop a minimum of 250 housing units for low- and moderate-income people. With city money, augmented by a $5 million loan from the quasi-public Houston Housing Finance Corporation, Renaissance has bought about 40 percent of the property in an area bordered by West Gray, Taft, West Dallas and Heiner.
According to Houston Renaissance's master plan, an "underlying concept" of the Fourth Ward project is "the retention of viable historic structures ... with particular emphasis on those that remain in the Freedmen's Town Historic District boundaries."
But, in the last month, Renaissance has torn down at least 18 buildings in the old neighborhood. That includes ten houses that Randy Pace, the city's historic preservation officer, recommended be saved following a survey of Fourth Ward properties with possible historic significance. Pace's written report noted that his survey was performed at the request of Robert Boyd, executive director of Houston Renaissance.
However, Boyd, who moved to Houston from Orlando a year ago to accept the $180,000-a-year job of managing Renaissance's daily operations, denies that he asked Pace to conduct a survey. Rather, he says, "that decision was made at a meeting I did not attend."
Boyd lays blame for demolition of Fourth Ward structures at the doorstep of local preservationists, who, he says, have failed to step up and help the nonprofit in its mission to preserve the historic integrity of the area.
"We couldn't find anybody to bid on those houses," Boyd insists, "and we can't afford to restore them ourselves."
Architect and preservationist Lynn Edmundson disputes Boyd's claims, saying he rejected a proposal she made in May to relocate the houses elsewhere in the Fourth Ward, if Renaissance would donate them.
Renaissance still hopes to solve its financial problems by securing a $7.2 million bank loan. The loan would allow Renaissance to pay back the $5 million it owes the Houston Housing Finance Corporation, which has cut off further funding of Houston Renaissance. The nonprofit would then own 1.2 million square feet of Fourth Ward land outright, but still wouldn't have enough money to complete the project.
What happens then is up to Lee Brown, who has been asked by Houston Renaissance to sign a "subordination agreement" that would give lenders a first lien on Renaissance's land. That means the banks, not the city, would have the right to foreclose on Fourth Ward property bought with public money. The banks could then sell the land to builders, who would be under no obligation to produce the 250 units of affordable housing promised by Houston Renaissance.
So far, Brown has declined to sign the agreement.
Meanwhile, city housing officials are powerless to dictate the direction of the project, despite evidence that the organization tried to renege on the terms of a $3.4 million agreement approved by City Council in October 1996. A month later, assistant city attorney Jean White complained in writing to assistant housing director Jim Tipps that the nonprofit was trying to "undermine" the city's ability to enforce the contract.
"I ask that you please take these matters into consideration in evaluating the business deal," White wrote, "and, in particular, the additional concessions which [Houston Renaissance] seeks. Otherwise, the city may one day find itself in the unenviable position of having to explain why it provided $3,400,000 to a private entity, why little or no affordable housing was ever constructed, and why the city couldn't do anything about it."
Indeed, the city housing department can't keep tabs on Houston Renaissance, but maybe Lee Brown can. Unlike the investigations into the parks and public works departments, which were initiated by others, Brown could order his own review of the Fourth Ward project, just his transition team suggested in March.
The alternative could be that, while he had nothing to do with how the mess began, Lee Brown may become known as the mayor who watched as a historic Houston neighborhood disappeared.
E-mail Brian Wallstin at brian_wallstin@houstonpress.com.
