EDITORIAL: Reason to be wary of housing agency

The Virginian-Pilot, 2012-12-01

By The Virginian-Pilot

Dec. 01--The center for Community Development Inc., which helps spend federal housing aid in Portsmouth, has done good work. Thanks to its efforts, dozens of first-time homeowners and businesses have benefited from renovated homes and better neighborhoods.

But the agency's own financial picture is considerably murkier, according to reporting by The Virginian-Pilot's Gary Harki. He turned up allegations of federal rule violations on one property, as well as delinquent city taxes.

"[L]ast month, the City Council took the unusual step of giving the organization $68,000 to help pay the [tax] bill. Just weeks earlier, the group had received another check for about $114,000 from the city to help it with operating expenses."

City officials have questioned the agency's administration, including $101,000 spent on a house "it bought from its then-executive director."

According to Harki, the federal Department of Housing and Urban Development initially objected to that arrangement but then reversed itself and "encouraged Portsmouth to review its relationship with the nonprofit to determine if the agency's actions met the city's standards."

One CCDI official, Harki wrote, seems to think the disagreement stems from animus on the part of city officials.

"We can call it any number of things that we want, racially based, class based," CCDI founder Maury Cooke said at a City Council meeting in September, "I don't care what we call it. It's mean spirited."

CCDI is now asking the city to exempt the organization from property taxes, a violation of Portsmouth policy. That regulation may be wrong, but it's the current rule in the city.

So put it all together. The city has paid considerable thousands on delinquent taxes and more to make up CCDI's operating expenses. The federal government has raised issues with a purchase. And the agency has asked to become exempt from city taxes. City officials appropriately have questions.

"When CCDI received city money to pay the delinquent taxes, it appears they used that money instead to pay their personnel," said Councilman Steve Heretick.

Even the nonprofit's supporters on the council have raised issues with its management and viability.

"I'm mainly concerned with their business model," Councilman Bill Moody said. "I'm not certain it will be able to produce a return on an investment to make them operate in the black. If that doesn't occur, I won't support any funding going forward."

Given the city's subsidies, the nonprofit's financial situation seems precarious. Its management has been called into question. It does good work, and that is not a small thing. But until several issues are sorted out to the satisfaction of the City Council, Portsmouth should hold off on further investments into the Center for Community Development.

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