Little to Show for the Price
D.C. Effort to Fix Empty Buildings Comes Up Short of Expectations

By Debbie Cenziper
Washington Post Staff Writer
Thursday, August 14, 2008

In the spring of 2005, the District government set out to repair a ramshackle building sitting empty on an overgrown lot near the Anacostia River.

The city paid to rebuild the roof and repair the floors, take out trash and cut the grass and then billed the owner for the cost of repairs, plus interest. The Department of Consumer and Regulatory Affairs had signed off on the project, which was meant to help clean up a run-down stretch of mom-and-pop shops on Martin Luther King Jr. Avenue SE.

Three years later, the building is crumbling, the city is out nearly $100,000, and Pat Boykins, who owns the beauty shop next door, is left with a lingering question: "Why does the building still look like this?"

The project was among hundreds of repair jobs subsidized in recent years by a $30 million fund established to rid the District of dangerous, dilapidated properties.

As tenants across the city complain of squalid conditions, the DCRA is struggling to account for the millions it has spent.

Records show the agency has repeatedly directed jobs to small home-improvement contractors without business licenses, in some cases for costly projects at empty buildings. Years later, haphazard oversight and record-keeping at the DCRA make it difficult to track what projects were ordered, whether the city paid a fair price, or how much work was done.

The fund is a crucial piece of the city's efforts to protect renters in rotting buildings. Because of a thriving real estate market, landlords in the past four years emptied hundreds of rent-controlled apartments, then made millions of dollars by converting the apartments to condominiums. Some landlords forced renters out by refusing to make repairs; city inspectors have chronicled more than 3,000 housing-code violations, including leaks, broken stoves and toilets, cracked walls and no electricity, at newly vacant buildings.

In recent months, D.C. Council members have chastised the DCRA for diverting the bulk of the repair fund to pay for a failed computer system, support staff and other expenses while thousands of tenants suffered in dangerous buildings.

Now, some council members have questioned the DCRA's dealings with repair-fund contractors and have requested an accounting of projects and payments. The members also want to know why the agency spent so much money, almost $540,000 from 2005 to 2007, on buildings without tenants.

"There has been so little done in terms of remedying problems. It's an outrage," said council member Jim Graham (D-Ward 1). "Who is DCRA working with, and what have they done with the money?"

DCRA officials also said that repairs have been made only at neglected properties that pose a danger to tenants and neighborhoods.

"We want [buildings] to be safe and habitable," said Nick Majett, deputy director of the DCRA. "That is our only mission."

Agency officials also said D.C. law requires them to work with local small businesses and that the Office of Contracting and Procurement is responsible for verifying that companies have basic business licenses. Officials at neither agency could say why city money went to unlicensed contractors.

A review of the DCRA's dealings with one of those contractors reveals a string of projects tainted by sloppy records, questionable invoices and hefty fees for profit and overhead.

Dailey's Paint & Home Improvement, which was paid nearly $100,000 to fix the building on Martin Luther King Jr. Avenue SE, lists a nondescript rowhouse on Benning Road NE as a business address. In four of the past six years, records show, Dailey's did not have a business license, in violation of District law. Dailey's obtained a license in January.

Records show Dailey's has one employee, Junia Dailey, 80, who was acquitted in a bribery and theft scandal in Prince George's County in the early 1990s. Dailey was accused of helping the county parks director steal almost $30,000 in public funds. Prosecutors at the time said Dailey was paid fr a greenhouse that was never built and instead passed most of the money back to the parks chief and his son. Defense attorneys said that the men had tried to sidestep purchasing rules to buy welding equipment.

In 2006, records show, the federal government assessed a $47,000 lien against Dailey for unpaid taxes from 2002 and 2003. The money was repaid in late 2006.

Dailey, reached by phone, declined to comment.

Since 2000, Dailey's company has received $1.2 million in contracts from the District government, mostly from the DCRA, city records show. Dailey retired in 2007, agency officials said, and has not worked with the DCRA since.

The company's payment of nearly $100,000 for work on the vacant building on Martin Luther King Jr. Avenue SE was one of the largest single expenditures from the fund. The payment also was $25,000 more than the building's assessed value at the time.

The owner of the building has not repaid the city, records show.

Three years after repairs were ordered, neighbors said, the building has rusted gutters, unsecured siding, windows without glass and a warped metal grate that does not keep out squatters. Boykins, who owns the beauty shop next door, said she often smells smoke from small fires set inside the building.

"It should have been gutted from top to bottom for $100,000," she said.

The DCRA would not comment on the project, but Majett said the agency makes only emergency repairs and does not renovate properties. He said Dailey's has been one of the DCRA's most responsive contractors and has frequently offered the lowest prices.

"Dailey's regularly responded day or night, on weekends or holidays, when we requested emergency services," Majett said.

The former owner of a rowhouse on Meigs Place NE said there was no emergency when Dailey's was hired in 2004.

The DCRA asked Dailey's to cut the grass, install gutters, repair the roof and replace the porch. Dailey's billed the agency $58,000, including $12,000 for trash removal. Dailey's had no building permit for the project, records show.

The company submitted a second invoice of $5,250 for architectural and engineering drawings of the house; the DCRA paid the money but could not produce the drawings.

A handwritten case log shows a DCRA rehabilitation specialist signed off on the project with a stamped signature and few words: "Contractor completed the [scope of work] in accordance with national standard. Case closed."

Valeria Tomlin, whose company bought the house about the time Dailey's was paid for repairs, said she was "floored" at the price and questioned why the government had stepped in at all. She said the property had been boarded up and secure.

"It seemed odd to me that the city had renovated," she said. "No one was living there. . . . The structure itself was fine."

Tomlin said she eventually repaid the city because the DCRA had placed a lien on the property. The DCRA waived $11,000 in interest after Tomlin said she challenged the bill. She later converted the property to condominiums.

Other repair projects also raise questions.

At a small apartment building on Gault Place NE, Dailey's charged the DCRA $700 in 2006 to install a towel bar, two locks, two vent covers and three smoke detectors.

At an apartment building on U Street NW, Dailey's reported hiring a subcontractor in 2005 to provide labor at the job site for $3,142, which included a 20 percent markup for overhead. The charges were included in Dailey's $15,867 bill to the DCRA, which also added a markup of 35 percent for profit and overhead.

At a house on Park Place NW, Dailey's charged $6,700 in 2005 to cut down a tree and build a cinderblock wall, which included a 53 percent markup for profit and overhead, although the invoice incorrectly noted it as 35 percent.

DCRA officials said the industry standard for profit and overhead is 15 to 20 percent.

Council members said they might ask the city auditor to study the flow of repair-fund dollars if the DCRA does not provide more information about its spending.

In some cases, it was unclear whether the DCRA calculated a fair price for repairs, based on industry standards, or simply accepted contractors' estimates. In other cases, records do not indicate whether DCRA officials visited job sites to determine whether work was done. The agency's handwritten activity logs are at times indecipherable.

The agency, which keeps some contractors, including Dailey's, on retainer for quick repairs, could not easily say what properties have received work under those contracts.

Council member Mary M. Cheh (D-Ward 3) said the DCRA's new director, Linda Argo, should examine the companies and contracts.

"It's time to see whether we're getting our money's worth, whether work is actually being done and whether we should start fresh," Cheh said.

Graham added: "There should be a detailed report. Here are the contractors, here is how much we spent, here is what they did. Isn't that elementary?"

Staff researcher Meg Smith, database editor Dan Keating and staff writer David S. Fallis contributed to this report.

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