D.C. May Cut Ties With 2 Nonprofits Over Troubled SE Housing Projects

Fairlawn Estates, Randle Highlands Manor
By Paul Schwartzman
Washington Post Staff Writer
Monday, August 4, 2008

The administration of D.C. Mayor Adrian M. Fenty (D) is threatening to sever ties with two long-established nonprofit agencies set up to lure new housing and other investment to the city's poorest neighborhoods.

Home buyers in two development projects in Southeast Washington have criticized the organizations, in one case for chronic construction delays and in the other for persistent building flaws.

Fairlawn Estates, featuring 21 houses with views of the U.S. Capitol and Washington Monument, remains a boarded-up ghost town three years after prospective buyers began paying deposits to East of the River Community Development Corp. The organization has run out of funds to complete the project.

The second developer, the Anacostia Economic Development Corp., completed 10 townhouses two years ago. Owners complain about shoddy workmanship, including heating and cooling systems that do not work properly.

In June, the District's Office of the Attorney General charged AEDC's contractor with failing to seek or obtain final inspection at Randle Highlands Manor, as the townhouses at 27th and R streets SE are known. The builder is contesting the charges.

"Right now, the District is not going to do any further projects with these two entities unless there's a clear demonstration that the quality of their work and services has significantly improved," said Neil O. Albert, deputy mayor for planning and economic development.

Albert added: "The District wants to work with organizations that are professional and have the capacity to deliver. The District wants no role with mediocre organizations."

After the 1968 riots, community development corporations emerged as key players in rebuilding ravaged neighborhoods. Because of the organizations' grass-roots connections, urban leaders viewed them as effective funnels for federal grants to create housing and other investment.

With funds from the District and the federal government, as well as private sources, the East of the River and Anacostia corporations are among nine local organizations that have focused on development in blighted areas.

Over the years, critics have assailed community development organizations, many of them politically connected, for producing few tangible results after receiving millions of dollars in public subsidies. A 2002 Washington Post investigation found that eight groups got more than $100 million in taxpayer dollars over a decade and had completed 70 of 200 projects.

Leaders of AEDC and East of the River say that they are responding to buyers' complaints and that the troubled projects should not tarnish their reputations.

Albert "Butch" Hopkins Jr., AEDC's president and chief executive, said that his organization has built 155 units of housing, plus commercial and office projects, and that the problems at Randle Highlands are largely isolated. "I'm not going to let 10 townhomes keep us from moving ahead," he said. "I'm going to clean up this mess."

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