JACKSONVILLE, Fla. – Former Mayor Alvin Brown, who signed off on the property deal for Eureka Gardens in 2012, responded Thursday to claims that he sidestepped protocol in approving the deal.
The board that approves bonds that finance affordable housing in Jacksonville was bypassed in the 2012 deal that green-lighted Global Ministries Foundation's purchase of its six properties in Jacksonville, including the troubled Eureka Gardens complex. That transaction included a $34.5 million bond issue that critics said was a bad deal both for taxpayers and tenants.
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Brown signed off on the Global Ministries deal in a highly unconventional move, according to Mark Hendrickson, a financial adviser hired by the Jacksonville Housing Finance Authority.
Hendrickson, who worked with JHFA for eight years and has been in public housing since 1976, said he's never seen a deal like the one approved for GMF.
"I think he ought to man up and tell everyone why he did that, but I don't think he will," City Councilman Bill Gulliford said.
Gulliford said he's confident politics are to to blame for the deal, which skirted the JHFA's vetting process and was instead approved directly by Brown.
Brown responded to the allegations that he sidestepped protocol with a written statement Thursday:
"When this agreement was created in 2012, it was privy to a formal process including a public hearing and the advice of city staff and attorneys. No objections regarding this project were ever brought to my attention. I encourage Global Ministries Foundation to finish the job it told this community it would do."
READ: Full statement from former Mayor Alvin Brown | City financial advisers' report on Eureka Gardens | JHFA letter to Mayor Lenny Curry
Hendrickson said the board only became aware that Tennessee-based GMF was attempting to buy the Jacksonville properties in 2012 because a city employee spotted an ad in the newspaper, alerting the public to a hearing for the proposed financing.
Hendrickson said the board contacted the general counsel to encourage Brown not to approve the purchase, but the next the JHFA board heard about the deal was that it had been approved. He said that was surprising from a public policy perspective but not from a political one.
Hendrickson said the JHFA process is normally very transparent and involves financial experts and the City Council taking steps like credit underwriting, appraisals, physical needs assessment, proposals and background checks on the proposed owner.
"Why didn't they come to the JHFA if they were legitimate? What is it about our process that someone didn't want to deal with? I think that in and of itself is a red flag," Hendrickson said.
He said the JHFA has a system in place that makes sure the money is spent as it's supposed to be, that the rehab is done as it's supposed to be and that includes ongoing monitoring.
"The best we could tell on this transaction, none of those things took place," Hendrickson said.
Hamlet used bonds funded by the Capital Trust Agency, which is based in Santa Rosa County, Florida. Through public records, News4Jax confirmed the Capital Trust Agency paid a high-powered lobbying group in Florida in 2012 -- the Southern Strategy Group -- somewhere between $40,000 and $100,000.
That is the lobbying group founded in part by John Thrasher, who was working as a state senator representing the Jacksonville area at the time.
Hamlet and GMF have come under fire since Eureka Gardens residents complained to News4Jax and city leaders about the inaccuracy of the passing Department of Housing and Urban Development score the complex received. Those complaints led to a two-day city code inspection sweep that uncovered violations in 163 of 400 units.
HUD has since voided that passing score and inspected all 400 units last week. The results of those inspections have not yet been released.