Housing Authority ends agreement with city

 

LAKEWOOD – Lakewood Housing Authority will vacate its City Hall offices April 15 and will resume business as Metro West Housing Solutions April 20, completing its separation from the city.

“The management agreement with the City of Lakewood has been terminated,” LHA executive director Tami Fischer told City Council earlier this week.

Fischer said the renamed agency plans to cut back on the federal funds it uses to operate. But she did not say how, or if, those funds would be replaced.

The agency takes with it the $31.5 million in assets, including a single-family homes and multi-family housing complexes it owns and operates throughout the city.

“So far, we have contributed $50 million in construction in the city of Lakewood and our projections are that we will have put in close to $90 million by 2012,” Fischer said.

The agency’s latest operating budget is $19 million.

City Councilman Ed Peterson, who has worked closely with the agency, said seeing LHA leave makes him feel “like the proud parent of an over-achieving child.”

Until the agreement ended, Fischer also served as director of Lakewood’s Family Services Department.

The city’s Community Resources Department and its director, Kathy Hodgson, will inherit those social services duties and family Services remaining staff.

Metro West Housing will have its own employees and benefits programs and will operate under state authority, but its Board of Directors will be appointed by Lakewood’s mayor, Fischer said.

City Manager Mike Rock was Fisher’s boss until the separation.

“This didn’t happen by magic or accident,” Rock said. “Fourteen to 15 years ago, it was a much different organization, it was very traditional and very cautious.” Rock said. “It owned buildings and it warehoused people.”

During his comments on the change, Mayor Bob Murphy seemed surprised to learn the agency dropped a plan to develop a 6-acre parcel in Ward 2, partnering with a St. Louis developer with plans for an adjacent property.

“I’m just asking because there was a presentation made to the neighbors about this ‘wonderful partnership’ and now I’m hearing that it doesn’t exist anymore,” Murphy said, obviously irritated.

The out-of-state developer wanted the housing agency to buy the adjacent property, said Bill Lunsford, the LHA’s housing development manager.

“And they didn’t even own the property,” Fischer added as chuckles rippled through the sparse audience.

It was unclear whether the chuckles stemmed from LHA’s purchase of its new headquarters a 36,124 square-foot office building at 575 Union Boulevard.

The agency bought the building for $3.1 million last summer and plans an extensive makeover, including an estimated $900,000 to repair the building’s roof.

But the LHA’s deal for the building became a hot topic after it was reported by Rocky Mountain News.

The seller of that property didn’t own it, either, and the arrangement even raised the eyebrows of LHA’s appraiser.

After a lengthy negotiation, the Housing Authority bought the property from Formations LLC. But the deal was completed just moments after Formations closed its own deal on the property, purchasing it from Stuart Gilbert Realty.

The quick flip netted Formations a $310,000 profit on a $2.8 million investment in minutes.

The agency’s appraiser, Valuescape, also noted concern over the three-party deal.

“The subject (property) is being flipped on the same day as the closing date for the sale. … There is some speculation that the transfer from Stuart Gilbert to Formations LLC may not be an arm’s-length transfer,” Valuescape’s report states.

The appraiser, which pegs the value of the building at $3.2 million, was not able to determine how much Formations LLC paid Gilbert in that transaction, or how much Gilbert paid for the building in 1997.

Jefferson County property records show Formations paid $2.8 million for the property and Gilbert paid $2.47 million for the building 11 years earlier.

The quick-flip transaction is just the latest in a number of questionable real-estate deals the LHA completed in the past few years.

In 2006, the agency paid $1.1 million for a property that had been acquired a week earlier for $850,000.

Earlier that year, the Rocky Mountain News uncovered a transaction in which the agency eventually paid $500,000 for a property they previously had under contract for $370,000.

The first contract for the 1.8-acre property at 1571 Kipling was cancelled by Lunsford because the seller complained the property was worth more than the agreed-upon price.

That contract was cancelled, but Lunsford came back to the LHA’s Board of Directors less than two years later with another contract on the same property, for $130,000 more.

In 2002 the housing agency came under fire for making a $10,000 campaign contribution to help sell a sales and use tax increase to the citizens. It later admitted it acted improperly in order to avoid being found in violation of Colorado’s Fair Campaign Practices Act.

The admission came during a hearing at the Colorado Secretary of State’s Office.