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D.C. Council approves contract for housing developer scrutinized by auditor

Council members attend one of the final D.C. Council meetings before summer break at the Wilson Building on Tuesday, June 18, 2019, in Washington, DC.
Council members attend one of the final D.C. Council meetings before summer break at the Wilson Building on Tuesday, June 18, 2019, in Washington, DC. (Jahi Chikwendiu/The Washington Post)
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A pair of D.C. Council members on Tuesday unsuccessfully tried to block a contract for a developer under scrutiny for winning millions to build affordable housing despite submitting a low-scoring proposal.

Council members Elissa Silverman (I-At Large) and Mary M. Cheh (D-Ward 3) urged their colleagues to hold off on awarding more than $100,000 annually to subsidize five units for extremely low-income residents at 3500 East Capitol Street NE.

That project was one of several found by the D.C. auditor to have won money from the city’s housing production trust fund despite poor ratings from evaluators.

The East Capitol Street project was also the subject of a complaint by a whistleblower who alleges that city officials manipulated the procurement process to guarantee that the project would be funded.

“There are allegations of political considerations in how we award money in our most important affordable housing program, and that should disturb every one of us,” said Silverman, who sought a delay until the allegations are investigated.

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But the council voted 7 to 3 to award the contract, with supporters saying they accepted the city’s explanation that there were valid reasons to award money to low-ranking housing proposals, including an unexpected availability of housing vouchers that changed the feasibility of projects.

“It would be a travesty if we don’t approve this project today and allow it to go forward,” said council member Vincent C. Gray (D-Ward 7), who represents the district where the project is located. He said his constituents need more affordable housing options east of the Anacostia River.

Council member Brianne K. Nadeau (D-Ward 1) said she appreciated the concerns raised by Silverman and Cheh but was more worried about slowing down the project.

“In a lot of ways, we are stuck between a rock and a hard place on this one,” Nadeau said. “This is a project that the community desperately needs, it’s a project that’s in process, it’s a project where local residents have already been hired to do jobs, and voting against that today will put all that in jeopardy.”

Council Chairman Phil Mendelson (D) and council member Anita Bonds (D-At Large), who chairs the housing committee, said they were satisfied with the Bowser administration’s explanation that lower-ranked housing proposals won funding for valid reasons.

The East Capitol Street project is being developed by MRP Realty in conjunction with Taylor Adams Associates, which is led by David Jannarone, a former D.C. government employee.

Julie Chase, a spokeswoman for MRP Realty, said the company was aware of the audit. She noted the project has been well received by the community.

Jannarone did not return requests for comment.

The Washington Post obtained a copy of the ethics complaint about the project filed by a former high-ranking official with the D.C. Department of Housing and Community Development.

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The official alleged that the Office of the Deputy Mayor for Planning and Economic Development directed the housing agency to steer funding to the East Capitol Street project. The complaint to the D.C. Board of Ethics and Government Accountability was filed June 14, 2018, the day after the administration of Mayor Muriel E. Bowser announced the project was one of nine selected for affordable housing grants.

The complaint does not cite specific evidence of political interference. The D.C. auditor’s office also did not conclude whether there was pressure or favoritism in awarding the housing dollars.

Polly Donaldson, who leads the Department of Housing and Community Development, previously told The Post that she spoke to the deputy mayor about which projects would receive housing production trust fund dollars but that she made the final decisions.

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The whistleblower said the project’s failure to secure funding from the housing trust fund in earlier grant cycles was “controversial and was the subject of lengthy and at times heated discussions” with the agency’s deputy director.

A spokesman for the D.C. Department of Housing and Community Development did not immediately return a request for comment on the complaint.

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