Kansas City News Blog

We have a housing department again, which is nice. And the city seemed well on its way to getting its assets back. Remember how a federal judge ordered that a receiver control all of the city's properties and its loan portfolio until the city's housing program gets its shit together? And how the city paid $350,000 to hire Chicago-based experts at Applied Real Estate Analysis to tell the staff what to do?

Well, wouldn't it suck if you paid someone to do your homework for you, only to have it handed back with a below-average grade?

That's kind of what happened. On February 1, 2009, the city submitted their "Asset Transfer and Capacity Building Transition Plan" to the U.S. Department of Housing and Urban Development (HUD). HUD has to sign off on the city's plan before it can be sent to Judge Gary Fenner for his final approval. But according to a letter dated March 9, 2009 that Theresa Porter of HUD sent to City Manager Wayne Cauthen, there are some boulder-sized holes in the city's plan.

Some of HUD's choice phrases:
Page 2: The Plan ... does not fully describe how the transferred assets (including existing projects, future developments and cash assets) will be integrated into the City's existing housing strategies.

... Critical findings in HOME project completions and in the environmental area remain outstanding and must be resolved prior to HUD's approval of the Plan ...

Page 3: ... the City has indicated it plans to acquire certain named properties in Beacon Hill by July 1, 2009, and that it will utilize HEDFC assets for the acquisition ... The City must clarify in the Plan whether the $2.5 million to the Beacon Hill Colonnades project will be CDBG or HOME assistance; the Plan states it will be CDBG but in work group discussions the City has stated it will be HOME assistance.

Page 4: ... to date, progress in Beacon Hill has been minimal. The continued failure to demonstrate reasonable progress has resulted in HUD's consideration of a suspension of its approval of the strategy ... This would have significant impact on the City's implementation of its Minor Home Repair Program in Beacon Hill as the City would no longer be able to provide assistance to households whose incomes exceed 80 percent of the area median income.

... HUD has not been provided an update to the Beacon Hill Master Plan since the city secured Section 8 loans for the development in 1998. Most, if not all, development milestones in the existing Master Plan have passed without accomplishment.

Page 5: ... Even with the City's establishment of a new Housing Department, HUD is still concerned about the management of Federal funds.

Page 6: ... Given the scarce resources currently available for program administration, coupled with the City's imminent responsibilities regarding the administration of the Neighborhood Stabilization Program, HUD believes the City's suggested approach to the single-family loan portfolio is neither practical nor prudent.

Page 8: ... The City was charged with the demolition of the buildings [at Lovett Place, 2826 Prospect Avenue] which has not occurred.

... The current ownership entities of the tracts [at Lincoln Gardens] need to be researched to determine who holds title to each tract.

Page 9: Conclusion: While the City has made significant progress in achieving selected reform measures agreed upon in the February 22, 2006 letter, and restated in the June 3, 2008 letter, effort is still required in order for the City to make additional progress and fully satisfy all of the measures outlined in the letter. Additionally, it is critical that issues identified in this letter are satisfactorily addressed in order to ensure the City's programs are operated in full compliance with federal requirements both now and in the future.

In other words: We're still in deep shit. So much for experts.