Sweetheart Deals

By Cheryl W. Thompson and Mary Pat Flaherty
Washington Post Staff Writers
Sunday, July 6, 2008; A01

Prince George's County development deals worth millions of dollars have gone to people with ties to County Executive Jack B. Johnson, several of whom received the land at cut-rate prices, had little or no development experience or were given no-bid contracts, according to government records and interviews.

Since Johnson (D) took office in December 2002, his administration has agreed at least 11 times to sell county-owned land to people with connections to him, including a business partner, a former business partner, a golfing buddy and a campaign contributor who held political fundraisers for him.

Two of those who won contracts had created their development companies weeks earlier. In one case, the development group named in the contract was not incorporated with the state until a month after the deal was signed.

Johnson intervened in two of the deals, in one instance writing a letter that promised financing for a friend who did not have the money to get the project done, records show. Four of the projects were unsolicited or not put out to bid.

Johnson denied that he had been involved in awarding the deals, saying that most had been administered by the county Redevelopment or Housing authorities, which operate independently.

"I have never played any role directly or indirectly in any of these projects," Johnson said in a written statement. "Furthermore, I am personally unaware of any transactions involving these authorities that violated any rules, processes or procedures of the county charter or code, or laws of this state."

Johnson said he has ordered an internal review of the disposition of public land and asked his staff to "develop processes" so that no land will be sold to a for-profit entity without competitive bidding. The review came after Johnson was questioned by The Washington Post about the projects.

The land deals follow a pattern during Johnson's tenure: In his first four years in office, Johnson awarded more than 50 consulting and other contracts to 15 of his friends and political backers and created a dozen high-profile positions that he filled with supporters and fraternity brothers. Records also show that hundreds of thousands of dollars in charity grants from owners of the National Harbor development went to groups associated with Johnson or with those distributing the money, The Post reported last year.

In the case of the surplus land, the developers stand to make millions of dollars when their projects are completed. Most of the projects have stalled, however, as the developers have sought financing, partners and zoning changes or waited for the real estate market to improve.

Because little has been built, there has been little tangible benefit for the county.

"They're giving away the county revenue," said Carolyn Scriber, former director of the agency that handles county-owned property, whom Johnson replaced shortly after taking office. "That doesn't seem like a good deal for the taxpayers."

The sale of public land begins with the county executive, who sends the County Council a list of properties he has determined are no longer needed -- often vacant sites, unused school property or aging public housing. The acreage is a fraction of the land sold in the county on the private market, but the deals are nevertheless significant: "These properties represent an integral part of the revitalization of Prince George's County," the county said in a March 2004 invitation for bids on 11 parcels.

The invitation, by the Redevelopment and Housing authorities, drew broad interest: More than 200 people attended a briefing before the bidding, said Thomas M. Thompson, who until June 27 was director of the Department of Housing and Community Development.

The county awarded contracts for six of those properties, Thompson said. All six went to people with political, business or personal ties to Johnson, records show.

Among them were Richard Amatucci, a golfing friend of Johnson's, and William A. Youngblood, who had held political fundraisers for the county executive.

Youngblood has won four contracts from the county since 2003 to build condominiums and commercial space in Cheverly, townhouses in Lanham and single-family houses in Upper Marlboro and near National Harbor in Fort Washington, records show.

Thompson, who reported directly to Johnson and signed most of the contracts, defended the process. "I think we selected the best developers," he said. "I'm pretty proud of what we've done and the proposals we selected."

Thompson said his agencies used "a fair, open and competitive procurement process" that complied with federal and local laws. Johnson, who appoints most members of the Redevelopment and Housing authorities' boards, said that the proposals were evaluated by teams and that he had "no personal knowledge" of who served on them.

But county officials declined to release records on the bid competition, saying they were not public because they contained internal deliberations. The county also would not turn over many other documents on the land sales despite repeated requests filed since June 2007 by The Post under Maryland's public records law.

"I've never done anything that didn't follow the rules," Thompson said, adding that he was confident in his integrity. "I have no idea what he's [Johnson's] done."

Johnson fired Thompson last month. He declined to discuss his decision, saying it was a personnel matter. Thompson said in a phone message that he was fired for "professional and policy disagreements."

'They're Not Developers'

The proposals, according to the county's bid invitation, were to be ranked on five criteria, including minority representation.

"This did not guarantee work for any individual or company, but it did provide opportunities for minority-owned companies to participate," Johnson said.

One requirement was that bidders demonstrate they had planned, built and marketed comparable projects. But several of the winning bidders had little development experience.

Youngblood, for example, said in an interview that his experience is limited to converting a house in Mitchellville into an assisted-living facility and subdividing building lots in Bowie.

"They're not developers," said a longtime county businessman who spoke on condition of anonymity for fear of jeopardizing future contracts. "They haven't developed anything."

In addition to the 2004 invitation to bid, Johnson has made land available for sale by placing it on a surplus list when he determined it was no longer needed by the county. Since 2003, the county has signed contracts to sell more than a dozen surplus properties, including three awarded to buyers with ties to Johnson, according to available records.

Two buyers were awarded contracts after submitting unsolicited proposals to the county.

"If someone sends me an unsolicited bid, I feel compelled to grant it serious consideration," Thompson said. "But I'm not doing it in a certain way to enhance anyone."

Thompson said the contracts that were not put out to bid were given "due process." The county did not release its policies about bidding despite repeated requests.

Raymond A. Skinner, state secretary of housing and community development and a former Prince George's housing director, criticized the no-bid contracts.

"You have to allow other folks to have a competitive process," Skinner said. "That's just good public policy. . . . You want to go through a process that allows you to get the best deal for taxpayers." In 2004, Skinner consulted for a group that bid unsuccessfully on a Prince George's development project.

Whether they develop or sell the land, those who were awarded contracts have a distinct advantage.

"You control the deal," said John A. Lally, a lawyer who has worked on real estate in the county. "Whatever it took for you to get that land tied up, it now has a floor value on which you can build."

In several cases, more-established development companies joined in partnerships once a deal was set. Johnson said such partnerships were an accepted practice to "build the capacity" of developers.

On three projects, for example, Youngblood brought in Alan C. "Skip" Gault Jr., a vice president at the Virginia-based Peterson Cos., developer of National Harbor. Gault, a nephew of company founder Milton V. Peterson's, has built townhouses in Fairfax County and an office building in Loudoun County.

Gault said that he brings financing and experience to his collaboration with Youngblood and that Youngblood brings "access and influence in the community. . . . You partner with them because they bring bigger access than you would have."

Richard Amatucci: Golfing friend

County officials passed up at least two experienced developers when they sought bids to rebuild McGuire House, a vacant senior high-rise on four acres in Oxon Hill, in 2004. The deal instead went to the Amatucci Group, headed by Richard Amatucci, who has helped Johnson raise campaign funds.

Amatucci said he has developed "a handful" of single-family houses in South Carolina but declined to say where.

Other bidders included D.C. developer H.R. Crawford and Philadelphia-based Pennrose Properties. Crawford said he could not remember how much he bid, and Pennrose proposed leasing the property for 99 years for $100 or less a year, a company official said.

County officials selected Amatucci's proposal, agreeing to sell the parcel for $1, according to records from the U.S. Department of Housing and Urban Development, which had to approve the sale.

When a HUD official asked why the county was not charging fair market value, Prince George's officials wrote that the arrangement would reduce the financing costs for the developer and allow for rent subsidies.

Amatucci, 59, described himself as a minority partner in the project, which he envisions as 120 units for seniors. "I'm just a small component of the overall awarding of McGuire House," he said. The Amatucci Group operates out of Amatucci's Potomac home, according to state records.

The main developer, Amatucci said, is AHD, a Bethesda-based company. Together they formed a company called McGuire House LLC, he said in an interview in February.

But the 2006 HUD records approving the sale list only Amatucci because, HUD spokeswoman Donna White said, the county proposed that the land be sold to the Amatucci Group, without mentioning AHD. Amatucci blamed the error on "confusion" at HUD.

Also, state records show that McGuire House LLC wasn't incorporated with Maryland until this March, after The Washington Post asked Amatucci about the company.

"I have no idea," Amatucci said of the incorporation delay. "It's a Maryland company now."

Nothing has been built on the site.

Amatucci has arranged fundraisers for Jack Johnson and contributed $5,600 to his campaigns since 2003. In November 2002, Johnson tapped Amatucci to head his housing transition team.

While Amatucci was trying to secure the McGuire House property, he was also awarded county contracts totaling $300,000 to examine the Prince George's pension system. A retired Fannie Mae administrator, Amatucci said he had no pension experience. Johnson said he hired Amatucci for that work because he "understands performance." And county spokesman James Keary, in response to questions submitted to Johnson, said Amatucci's experience in finance was "relevant and critical" to the McGuire House project.

Amatucci said his relationship with Johnson had nothing to do with his getting the development contract.

He said he "proposed very high-quality senior affordable housing," adding that he had bid on several county projects that he was not awarded. "There was a lot of effort put into this."

Mirza H.A. Baig: Doctor owned property with Johnson

Laurel internist Mirza H.A. Baig, another longtime friend and former business partner of Jack Johnson's, won three development deals during a 19-month period.

In April 2005, his company won approval to buy land near the Addison Road-Seat Pleasant Metro station. Two months before, county officials had sold another Baig company 11 houses in a low-income federally subsidized development in Upper Marlboro known as Sugar Hill. Baig paid $610,000, records show. It was a no-bid contract, said Bradley Farrar, who was deputy director of the Redevelopment Authority until late 2006.

Baig was collecting about $16,300 each month from HUD and the tenants at Sugar Hill, said HUD spokesman Lemar C. Wooley. Under an agreement with the federal agency, Baig was required to maintain the property as subsidized housing until 2012.

But in February, HUD told Baig that it would stop paying and that tenants would have to move because his company "failed to keep and maintain the Project in a decent, safe, and sanitary condition," according to an agency letter. Baig said he had made repairs to the property. "We are trying our best," he said.

HUD's decision clears the way for Baig to sell the property, which he said he intends to do. In January, the county assessed the properties at nearly $3 million, five times what Baig paid three years earlier.

Baig, 64, and Johnson, 59, owned property together in Laurel, purchased in 1992 for $450,000, according to Johnson's financial disclosure form. Johnson sold his portion for $1 million in October 1994, a month before he was elected the county state's attorney.

Baig and his family contributed $11,800 to Johnson's campaigns between 2000 and 2005, and Baig was co-host of a 2005 political fundraiser for Johnson that collected more than $27,000, records show.

Another Baig company signed a contract in November 2006 for a four-acre parcel on Maryland Park Drive in Capitol Heights after bringing the county an unsolicited offer.

Baig, who said he has done real estate deals in the county for 25 years, brought in to the deal his friend Muhammad Yusuf, a Laurel cardiologist and Johnson campaign contributor, and Ernest Peterson, who owns property with Johnson in the District.

Peterson, 62, who attended law school with Johnson at Howard University, initially denied being involved in the Maryland Park Drive project but said he was one of the developers when shown a copy of the contract.

"Doc Baig called me," Peterson said. "He explained what he was trying to put together, and I said, 'Okay, I'm interested.' "

Yusuf said he didn't recall details of the deal. Baig, he said, "mentioned something one time, but I have not really talked to him about it."

Melvin Forbes, another partner, said in an interview that he remembered talking with several people about the property but that he did not recall Baig.

"What does he look like?" Forbes asked.

When told that he signed the contract with Baig, Forbes expressed surprise.

"I signed the contract?" he asked. "I need to find my paperwork and find out exactly who this gentleman is."

Baig and Forbes signed the contract Nov. 17, 2006. But the company they formed, Maryland Park LLC, was not registered with the state, as is required to do business, until Dec. 13, records show.

According to the contract, county officials agreed to sell Baig and his group the vacant land for its appraised value, which was $520,000, in 2005. Last year, a county appraisal put the value at $1.1 million.

Baig said he has abandoned the project, giving conflicting explanations. Thompson, the county's former housing director, said that early this year the county "canceled it because we didn't like the deal anymore" but declined to produce documents on the decision.

William A. Youngblood: Friend held fundraisers for Johnson

Bill Youngblood, who had helped Jack Johnson by holding campaign fundraisers, received help himself when Johnson stepped in on a development deal, according to records and interviews.

In November 2003, Youngblood was struggling to find money to buy a three-acre parcel on Annapolis Road from the town of Cheverly, where he wanted to build luxury condominiums. In a letter to then-housing director Thomas M. Thompson, Youngblood urged that the county commit in writing to provide an $800,000 grant for the project, as well as help him secure a $5 million bond for a parking structure at the site.

The county came through: Two months later, Johnson wrote to Cushman & Wakefield, the group helping Youngblood find a partner and financing. The county executive promised that the Prince George's Redevelopment Authority would contribute $6.85 million, including the $5 million bond -- more than Youngblood had requested in the letter to Thompson.

"In return for the above, I would like to see your company not only finalize the negotiations . . . but also move quickly to finalize the construction financing shortly thereafter," Johnson wrote in the letter, which was obtained by The Post. "As I am sure you know, there are many more opportunities for your company and this County to collaborate . . . "

Cushman & Wakefield succeeded in finding an established developer as a partner for Youngblood: A month after Johnson's letter, Republic Land Development, a Northern Virginia-based company, joined the Cheverly project, said Stacy C. Hornstein, Republic's director of development.

Youngblood had also received help in 2003 when he failed to make a $2,800 monthly interest payment required in his agreement with Cheverly. The county paid it for him, according to records and interviews.

"The directives to pay the interest payment came from the county executive's office," said Bradley Farrar, former deputy director of the Redevelopment Authority. "There's no doubt in my mind about that. Tommie [Thompson] told me that the county executive wants us to make sure this gets handled appropriately.

"I can't recall us ever doing that in another transaction," Farrar said. "Now, would they have done that for any other Joe Blow developer who walks in off the street? Probably not. That really is unusual."

Asked about Farrar's statement, Thompson said, "I don't remember giving him those specific instructions, but that was some time ago."

James Keary, the county spokesman, said that "no such payment was ever made according to public records."

Youngblood's deal with Cheverly fell apart in April 2004, however, and the county helped again. Three months later, the Redevelopment Authority signed a contract to buy the land from Cheverly and, without seeking other bidders, eventually gave Youngblood and Republic the contract to develop it.

"No, it didn't go out to bid at all," Farrar said. "It should have, yeah. . . . Did he get favorable treatment because of his relationship with Jack and Tommie? Probably more likely than not."

Youngblood denied that his ties to Johnson have yielded him special treatment.

"Jack had nothing to do with me getting this land," he said.

Youngblood became friends with Johnson after meeting him when he was running for state's attorney. "I've always maintained a good feeling about him," Youngblood said. "He's done more than an admirable job."

Youngblood, 48, and his wife, Colette, contributed $7,000 to Johnson's campaign between 2002 and 2005, records show. He held a fundraiser for Johnson in October 2005, less than three weeks after his bids won two contracts for land. The event raised $42,000, according to Maryland campaign finance records.

Youngblood has had ongoing money troubles, records show. He defaulted on a loan for property on Prospect Hill Road in Glenn Dale when he fell $60,000 behind, according to an Oct. 9, 2007, letter to his company, Stepping Stones Development, from an attorney for the sellers, obtained by The Washington Post.

In August 2007, a bank began foreclosure proceedings on his Bowie home when he fell more than $45,000 behind, records show. Youngblood said that the house is no longer in foreclosure and that he has paid $7,000 and "worked out a plan" to pay the rest.

Kareem Abdus-Salaam: Contributed to Johnson campaign

Kareem Abdus-Salaam, who said he met Jack Johnson through Laurel internist Mirza H.A. Baig, has landed several deals for county property, records show.

In December 2004, county officials sold him101 acres on Swanson Road in Upper Marlboro for $1 million, passing on a $1.75 million bid from Prince George's developer Mark Vogel, according to county records, which show it was the highest submitted.

Abdus-Salaam said he paid "fair value" for the land. "There has been a clear, open policy, so no one can ever say it wasn't open," he said.

County spokesman James Keary said the highest bid was rejected because the bidder said he was a broker and "was merely someone who would acquire the property and flip it for a profit to develop large single-family homes."

But records show that Vogel's bid made it clear he was a developer, not a broker, and in an interview, he said the suggestion that he was planning to flip the property was "absolutely false."

In 2005, Abdus-Salaam won a contract to buy an 18-acre former public housing site known as Baber Village for $800,000. Five months later, the county, without explanation, dropped the price for that Capitol Heights property to $600,000.

Keary said the price was reduced to compensate for requirements that the developer offer affordable housing, lower density and more green space.

Abdus-Salaam's development experience includes working with a New York company to develop housing in Capitol Heights and with an Atlanta-based company on two student housing projects, including one at Bowie State University. In both cases, he acted as an intermediary.

"He was going to be the developer but realized he needed someone with experience developing student housing," said Cecil Phillips, president of Place Properties in Atlanta. "He was the one who interfaced with the administration of the university."

Abdus-Salaam, 48, made contributions to Johnson's campaign totaling $3,040 in 2004 and 2005. He said in an interview that he supported Johnson's opponent, Rushern L. Baker III, in Johnson's first run for county executive, in 2002.

But he became familiar enough with Johnson to seek his help in getting another property, about 10 acres in Laurel.

Abdus-Salaam said he proposed to Johnson on May 15, 2004, that he develop the land on Laurel-Bowie Road, according to a transcript of a Redevelopment Authority board meeting. He submitted the proposal nine days after his company contributed $1,000 to the county executive's campaign. Johnson accepted his plan and later declared the land to be surplus. Abdus-Salaam signed a contract to buy the land last year.

Johnson, through his spokesman, said he never discussed the project with Abdus-Salaam.

Although a county appraisal had set the value at $845,000, an appraisal submitted by Abdus-Salaam eight months later set the value at $567,000, the figure he paid. He said the lower price reflected the newer appraisal and the costs he would incur, including a required donation in the future of $225,000 to set up multimedia rooms at three local public schools and $50,000 to a county housing fund.

Staff researcher Alice Crites contributed to this report.

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