Thursday, August 12, 2010

City Planning Department Plays Shell Game with Stimulus Money

As August 15th nears, the City must have its bids in order to get about $3.5 million in federal “stimulus funds” for its real estate investment program.

It was a lot of work to get this project completed. City Development wanted to divide up the $3.5 million into as many projects as it could. Each project required finding a developer to work the project with a budget as to how the money will be spent on that project. If the City chooses to not use a developer, the City may become the “general contractor,” but in this case the City must have all subcontractor contracts in place by the August 15th deadline.

In one of the contracts, the razing of the former Spanish Center and building two new houses on the lot, the deadline approached without either of the requirements of the Federal Neighborhood Stabilization Project being fulfilled. So the Racine Loan Board of Review, the overseer of this program, acting on the recommendation of the Director of City Development, Brian O’Connel, pulled a rabbit out of a hat: Racine Housing & Neighborhood Partnership.

RHNP has no paid staff, has not paid taxes in more than four years, and has largely been inactive for more than two years. The point being RHNP is but a shell organization, a conduit for the City to by-pass NSP requirements to receive funding for this project.

According to Deputy City Attorney Scott Letteney, RHNP is not a qualified contactor to do such a project. It has no staff. So the City (my guess: Brian O’Connel in City Development) will find the subcontractors. But in that case the City must have those contractors by August 15th.

And we have come full circle in the scam.

According to Alderman Eric Marcus, HUD has reviewed this matter and given him the opinion that this maneuver is not in compliance with HUD regulations.

The federal government is huge and has a penchant for bungling. The City may never get caught. But is this the way we want our City Government to do business?

1 comment:

  1. City Development has made many more infractions in the NSP project. Not following lead regulations, not using low bidders as required, ect. ect.. I guess they just make up thier own rules.

    ReplyDelete