Longtime City Employee: Mayor Brown Skirted Protocol In Eureka Garden Financing Deal

Oct 20, 2015

Then-Mayor Alvin Brown approved property purchase outside usual channels.
Credit News4Jax

The board that approves bonds for affordable housing in Jacksonville was bypassed in the deal that green-lighted Global Ministries Foundation's purchase of its six properties in Jacksonville, including the troubled Eureka Garden complex.

Mayor Alvin Brown signed off on the deal in 2012 in a highly unconventional move, according to Mark Hendrickson, the financial adviser for the Jacksonville Housing Finance Authority.

Hendrickson has worked with JHFA for eight years and has been in public housing since 1976.

He said in his eight years' experience in Jacksonville, he's never seen a deal like the one approved for GMF, which is owned by the Rev. Richard Hamlet.

The bond deal took Eureka Garden off the property tax roles because GMF is a nonprofit. The previous owner paid property taxes.

Hendrickson said the board only became aware that Tennessee-based GMF was attempting to buy the Jacksonville properties 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.

Hendrickson said the process is normally very transparent and involves the JHFA board 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 board 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 includes ongoing monitoring.

“The best we could tell on this transaction, none of those things took place,” Hendrickson said.

Hendrickson said after attempting to contact the general counsel about the proposed purchase, the next the 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.

“You lose property taxes and best that I can tell you just flipped a property to an owner who took it off the tax roles, to an owner without any kind of adequate rehabilitation taking place or valid resident programs or anything you'd want with this type of financing,” Hendrickson said.

Hamlet and GMF have come under fire since Eureka Garden residents complained to News4Jax and city leaders about the inaccuracy of 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.

“The section 8 program is a lifeline for a lot of elderly people and families that without it would be on the street,” Hendrickson said. “The thing people should be angry about is not that the programs are bad but that people take advantage of them.

“If you don't vet the owner and you don't make sure there is enough rehabilitation and you don't inspect it, then what do you expect at the end of the day?” 

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