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Housing funds are at risk in Pr. George's
County has till week's end to earmark $5 million in federal grants for projects

By Jonathan Mummolo
Washington Post Staff Writer
Friday, October 30, 2009

Prince George's County could lose more than $5 million in affordable housing grants if county officials do not notify the federal government how they plan to spend the money by the end of the week.

The funds at stake come from the U.S. Department of Housing and Urban Development's HOME Investment Partnerships Program, known as HOME. The program, begun in 1992, gives states and localities money each year for the development of affordable housing, and the grants come with a 24-month commitment deadline.

By the end of two years, a jurisdiction has to reach legally binding agreements with developers who will use the funds, and the agreements have to be transmitted to a HUD database. The projects must begin within 12 months after that, HUD officials said.

Prince George's has an uncommitted balance of $5.17 million that is due to expire Saturday, HUD said. If information on how the county plans to spend the money is not submitted to HUD by then, federal law requires that the funds be reclaimed and distributed among all 650 participating jurisdictions.

"The law is clear that unless Prince George's County commits these funds before Nov.1, the County will forfeit its ability to draw on them," HUD spokesman Brian Sullivan said in an e-mail.

Prince George's officials acknowledged Thursday in an e-mail that the uncommitted funds were a "problem." They said agreements had been reached for projects and that they were "in the process" of updating the HUD database.

County officials also said the employee in charge of the program had been reassigned within the Department of Housing and Community Development. They said the department is "currently in the process of improving its policies and procedures for the HOME program."

"There's been a change in the administration of the HOME program because of failures to process these in a timely fashion," said James Keary, spokesman for County Executive Jack B. Johnson (D). "That person is no longer there in that position."

Keary announced the personnel change after a Washington Post inquiry on the matter this week, but he said the move had been made earlier.

History of problems

Prince George's has yet to have funds reclaimed by HUD, officials said, but this is not the first time the county has been in this predicament. According to federal statistics and interviews, the county is among the nation's worst jurisdictions at committing and distributing HOME funds in a timely manner.

According to a HUD report on how jurisdictions were doing as of June 30, Prince George's had received $44,667,687 since the program started. At the time, 80.1 percent of the county's funds were committed, and 98 percent of jurisdictions that receive similar allotments had committed a larger share. The county had disbursed about 66 percent of its total HOME funds, placing it in the second-lowest percentile among comparable recipients nationwide.

Arlington, Montgomery and Fairfax counties have all met their deadlines this year, according to HUD. The District has until the end of November to commit $2.3 million.

Montgomery ranks in the 92nd percentile among comparable localities, having earmarked about 98 percent of its funds for projects. Fairfax ranks in the 10th percentile for fund commitment, and Arlington ranks in the 12th. The District ranks in the 13th, although it is in a different funding category than Prince George's.

Four proposed projects

This week, James E. Johnson, acting director of the county's Department of Housing and Community Development, presented four proposed projects to a committee of the County Council. Those projects would make use of $4.8 million of the uncommitted balance.

According to county documents, a project called Sugar Hill would get the largest share of the funds, $1.7 million. A group called Roots of Mankind would "acquire, renovate, manage and rent" 11 single-family homes in Upper Marlboro, the documents say. A call to the group was not returned Thursday.

Another project would use $1.3 million in HOME funds to convert the vacant Singer Building in Mount Rainier into 11 units of affordable housing with commercial space on the bottom level. County documents describe the building as a "nuisance" that has "contributed to the presence of drugs and prostitution" in the area. A call to the project's proposed developer, the Housing Initiative Partnership, was not immediately returned.

Another developer, Stavrou Associates, would get $1 million in HOME funds for the renovation of a housing project for the elderly on Queens Chapel Road in Mount Rainier. The project would reduce the number of units from 104 to 98 but would "provide extensive amenity spaces, implement green improvements" and increase resident services, county documents state.

Stephen Stavrou said his company applied to the county for the HOME funds around May. He said the county signed off on the funding within the past month but has not disbursed the money. "We should have gotten this commitment probably two months ago," Stavrou said.

For the final project, Park View at Laurel, the Shelter Group -- a real estate company -- would get $800,000 to buy and renovate a 153-unit apartment community for age- and income-qualified seniors. Donna Creedon, a project director with the Shelter Group, said Thursday that it was unclear whether the HOME funds had been officially committed by the county and that she was looking into it.

Staff writer Ovetta Wiggins contributed to this report.

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