The company of a businessman at the center of a controversy over an affordable housing complex in Southeast Washington has accused the city in a lawsuit of breaching a property-management contract by installing a new firm this year.
Capitol Services Management is owned by Phinis Jones, a prominent political supporter of Muriel Bowser, the Ward 4 council member and Democratic nominee for mayor. Between March 19 and May 3, the company managed the Park Southern apartments, a 362-unit development on Southern Avenue SE whose financial troubles and dilapidated conditions were documented by The Washington Post last month.
The city’s Department of Housing and Community Development replaced the firm after it declared Park Southern three years and more than $600,000 in arears on a $3 million city-backed loan.
The company filed suit July 24, less than two weeks after the first article about Park Southern’s troubles appeared in The Post. The lawsuit was first reported Thursday by Washington City Paper.
Jones’s firm was hired to manage the building by the tenant corporation, which is led by the Rev. Rowena Joyce Scott, another Bowser supporter. The property’s troubles have spilled over into the mayor’s race as a result of accusations made by one of Bowser’s opponents, council member David A. Catania (I-At Large), who contends that she improperly intervened in the Park Southern case to protect Scott and Jones at the expense of the tenants.
Bowser pushed for a meeting between Jones, Scott and city housing officials and questioned the city’s takeover of the property.
But Donald Temple, who is representing Capitol Services Management in the litigation, said Thursday that it is Mayor Vincent C. Gray (D) who acted badly — not Bowser, Scott or Jones. “The devil’s going to be in the details: the timing, the agency, the players who made decisions and the reasons for those decisions,” Temple said.
Scott has suggested that Gray, whom Bowser defeated in the Democratic mayoral primary this past spring, urged his administration to declare the Park Southern loan in default to retaliate against her for switching her loyalties to Bowser during the primary.
“The politics are pretty transparent here,” Temple said.
The lawsuit alleges the city should have given the company at least three months notice of its termination and seeks more than $50,000 in damages.
Temple said Jones “has become a target” of political attacks related to the mayoral campaign, in which Catania, who is running as an independent, has sought to use the Park Southern controversy to smear Bowser’s housing record.
City officials have asked about the whereabouts of more than $300,000 in rent payments collected by Capitol Services Management during its time managing Park Southern. Jones has offered an accounting that he said shows much of the money going to pay vendors.
A portion remains in escrow, Temple said, pending the outcome of the lawsuit. “That’s the honorable thing to do,” he said. “If [Jones] was stealing, he would put it in his pocket and run. We have nothing to hide.”
The District has not responded to the company’s claims in court. Ted Gest, a spokesman for the D.C. attorney general’s office, would not comment on the case. An initial hearing is set for Oct. 24 before D.C. Superior Court Judge Maurice Ross.