Doug's Deals

Real estate consultant Williams continues to serve two masters

Nearly a year ago, when we last checked on Doug Williams, the real estate consultant had just quit a job with Post Properties, citing the "appearance of a conflict" with his duties as chairman of the publicly funded Midtown Redevelopment Agency.

While his resignation might have seemed motivated by principle, Williams opted to maintain a similar consulting arrangement with Camden Property Trust. Like Atlanta-based Post Properties, Camden had signed a multimillion-dollar contract to receive property tax revenues from the redevelopment agency to build apartments in Midtown (see "Public and Private Doug," February 25, 1999).

Williams has since left the board of the Midtown Redevelopment Agency. However, last month the consultant entered into two agreements that raise more questions about his dual role as a steward of public funds and a hired gun for private companies that have access to those funds.

On December 1 Williams signed a new one-year contract with the quasi-public Houston Housing Finance Corporation, which is attempting to sell more than one million square feet of land in the Fourth Ward for a publicly funded redevelopment project. Two days later Williams finalized a consulting agreement with Perry Homes, a major landowner in the Fourth Ward and a potential bidder on property HHFC has earmarked for sale to private home builders.

The two agreements pose, at the very least, another "appearance of a conflict" for Williams. The consultant has been on the HHFC payroll since 1996. Last May he was named "point man" on the troublesome Fourth Ward project after HHFC assumed control from the failed nonprofit Houston Renaissance Inc.

To date HHFC has invested more than $8 million in the Fourth Ward, which the agency hopes to recoup by selling off some 630,000 square feet of land to private builders. Williams's relationship with Perry Homes could conceivably work to the home builder's advantage in future negotiations with HHFC, which, so far, has had little luck attracting the interest of private builders. HHFC is asking $16 a foot for its Fourth Ward land.

Moreover, other home builders with an interest in bidding on the property might be distressed to know that an agent of the seller is also employed by a competitor.

Williams did not return repeated phone calls to his office and pager. When contacted at a private business number, Williams hung up on a Press reporter.

Jeff Smith, HHFC's executive director, says Williams's contract with Perry Homes is not a concern because the agency is focused on selling land for 255 units of affordable housing, which is required under the terms of a $3.4 million city grant. Smith says HHFC is negotiating with several builders to construct affordable housing but that Perry Homes is not among them.

However, Smith acknowledges that Williams is probably "working Š for a variety of builders" besides Perry Homes. "That wouldn't surprise me," Smith admits. "I don't know all of the consulting relationships he's got, because he works for so many different people. But I don't believe he is working as a consultant for any of the builders we're dealing with for affordable housing."

If Smith's lack of knowledge about Williams's other consulting arrangements is surprising, he's downright enlightened compared to J. Dickson Rogers, president of HHFC's board of directors. At first Rogers wouldn't even acknowledge that Williams had a contract with Perry Homes, despite the fact that HHFC's records indicate the issue was discussed at the December board meeting.

"I'd heard he had a deal with Perry," Rogers said at one point in a recent interview, "but I really don't know."

Minutes later, however, Rogers insisted that Williams's consulting arrangement with Perry Homes had been thoroughly vetted by the HHFC board. "We looked at that pretty carefully," Rogers said. "We talked about it quite a bit, and Perry is not building inside the area where we own land."

That much is, in fact, true. For now, Perry Homes owns land just outside the boundaries of the Fourth Ward redevelopment project, which is bordered on the east by Heiner, on the west by Taft, on the north by West Dallas and on the south by West Gray.

But that distinction is meaningless in light of the Fourth Ward Tax-Increment Reinvestment Zone, which includes the property owned by both HHFC and Perry Homes. The so-called Fourth Ward TIRZ would capture future property tax revenues generated by redevelopment of the area and use them to reimburse builders for certain infrastructure costs. HHFC and Perry Homes would be in direct competition for those revenues.

Indeed, Williams's original agreement with Perry Homes called for the consultant to represent the builder at TIRZ board meetings. In a December 1, 1999, memo to Williams, HHFC's general counsel, Mickey Norman, pointed out that "a potential conflict with HHFC would exist if you represented the interests of Perry Homes Š in opposition to or in competition with HHFC positions in the Fourth Ward."

Likewise, Norman suggested that Williams's contractual obligation to "facilitate meetings with elected officials and governmental staffs" on behalf of Perry Homes might be a problem, since that's also one of his primary functions on behalf of HHFC. In response to Norman's concerns, Williams and Perry Homes agreed to add a line to the end of his two-page contract stating that certain services "as they pertain to the Fourth Ward TIRZ will be excluded from the range of services provided."

How the HHFC board of directors will ensure Williams doesn't violate that provision is unclear. The consultant has always been something of a lone wolf. While his HHFC contract has commanded fees as high as $120,000 a year, Williams has never been required to file written reports outlining his accomplishments, nor, until recently, has he been obligated to reveal his other sources of income.

How much Williams is being paid by Perry Homes is a mystery, though one must presume it's a fairly substantial amount. For one thing, his fee from HHFC has been cut drastically. This year Williams's contract with HHFC will pay him $16,500, well below the $100,000 he earned in 1999.

Whatever he's paid, Williams is on the HHFC payroll to serve the public's interest in making the Fourth Ward project a success. That means furthering HHFC's effort to build affordable housing in the Fourth Ward, as well as to help the agency recover $8 million in taxpayer funds.

Whether or not Williams can do that while serving the interests of a bottom-line-oriented company such as Perry Homes is a question worth asking.

E-mail Brian Wallstin at brian.wallstin@houstonpress.com.

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