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HUD’s suspensions on JRA remain a year later

By TED CARTER

The U.S. Department of Housing and Urban Development has little progress to report one year after suspending the Jackson Redevelopment Authority from further dealings with the agency.

The JRA remains suspended for mistakes it made in using HUD dollars to acquire properties for the Farish Street redevelopment, a project that has been dormant since the JRA voided its development contract with the Farish Street Group headed by Jackson developer David Watkins in October 2013.

A key failure: Not getting the JRA certified as a City “sub-grantee” before seeking HUD money for the project more than 15 years ago.

“The suspensions outlined in the letter remain in place until the City fulfills the corrective actions outlined by HUD,” HUD spokeswoman Gloria Shanahan said

HUD detailed the suspensions in a Sept. 8, 2014 monitoring letter that included a demand for repayment of $1.5 million used to buy 17 store-front parcels in a three-block area of the downtown portion of Farish Street. The purchases occurred from 1997 to 2002.

The HUD letter said the JRA failed to meet a host of conditions for receiving and spending the $1.5 million. JRA has since agreed to borrow the $1.5 million and repay HUD. The money is due in December 2016.

HUD’s overall gripe is that the City failed to ensure the JRA complied with requirements for the $1.5 million, including ensuring that the JRA as an entity legally entitled to receive HUD money for purchase of the parcels.

The suspensions included Jason Goree, a former Farish Street Group executive who now serves as Jackson’s economic developer.  Goree has not responded to phone calls and emails seeking information on efforts made to have his suspension lifted.

HUD based Goree’s suspension on a double role he took on as a registered agent for a prospective tenant while working for Farish Street Group.

HUD’s Shanahan said Goree’s suspension did not bear on his work the past year, since Jackson has not implemented any economic development plans using HUD formula funds.

The lengthiest finding in the monitoring letter, Finding #5, is still open, according to Shanahan. The finding charges that the City and the Redevelopment Authority failed to properly manage Community Development Block Grant, or CDBG, properties and guard against the “appearance of organizational conflicts of interest.”

Specifically, the JRA did not have a system for tracking property under its control that it acquired or improved with CDBG money, HUD said. The tracking should have ensured the money went toward national objectives such as historic preservation and creation of jobs for low-income residents, HUD noted.

The federal agency says the JRA lost control of “CDBG assisted Farish Street properties” in a number of ways, including the “appearance that CDBG assisted property may have been used as security” for loans from the Central Mississippi Planning District.

The planning district administered the loans, reported to be about $5 million, on behalf of the Mississippi Development Authority. The taxpayer-provided money has not been repaid.

HUD’s Finding #5 faults the City for failing to instruct the JRA concerning requirements for expenditures to be eligible for payment with CDBG funds. The result: A failure by the JRA and the City to provide HUD with “documentation that the JRA had solicited and procured the services of the Farish Street Group” in accordance with HUD rules. Accordingly, HUD said, “all CDBG funding provided to the JRA must be reimbursed.”

HUD insisted the City develop and implement procedures that require sub-grantees such as the JRA to follow. The goal should be to eliminate organization conflicts of interest in carrying out CDBG projects, HUD said.

Mayor Tony Yarber’s office said Monday it would consider giving details on steps taken to meet the lengthy list of HUD conditions for reinstating HUD eligibility. However, the mayor’s office did not respond to phone calls on Tuesday.

Shanahan, the HUD spokeswoman, said HUD is working with Jackson city officials on the two initial findings. The first finding was that the JRA never received HUD certification for HUD funding and the second that the City could not show it monitored what JRA was doing with the federal money.

Meanwhile, both the City and JRA have erased the effort to transform the vacant first block of Farish Street into an entertainment district from their to-do lists. Yarber last year suggested the project be “parked out back” until the City can come up with a solution for redeveloping the once thriving African-American shopping and entertainment district.

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