Quick city deal with Struever to overhaul Lexington Terrace criticized

April 20, 1995|By JoAnna Daemmrich | JoAnna Daemmrich,Sun Staff Writer

C Baltimore's partnership with Struever Bros. Eccles & Rouse to transform the dilapidated Lexington Terrace development prompted a new round of criticism yesterday over the selection of contractors for high-profile projects.

For the third time this year, the Housing Authority of Baltimore City has come under fire for its methods and its choice of a contractor that did not offer the lowest price.

Critics questioned the hurried selection of Struever Bros. as the lead developer with the city in a proposed $68 million overhaul of Lexington Terrace, a cramped, worn public housing high-rise on the west side.

Some elected officials and others raised concerns about last week's telephone vote on the company, in which the city housing chief used to be a partner. The vote was made public Tuesday.

"It seems quite disturbing given everything else that's been going on," said 3rd District Councilman Martin O'Malley, a Democrat who chairs a committee looking into the housing authority's $25.6 million no-bid emergency repair program. "What's the emergency now?"

City Council President and mayoral candidate Mary Pat Clarke said, "Welcome back to family and friends. This is a continuing pattern, which means our valuable resources are being spent on family and friends of the administration instead of poor people."

An indignant Daniel P. Henson III, the city's housing commissioner, was quick to fend off the criticism.

He stressed that he has no financial ties to Struever Bros. anymore and was not involved in the decision. But he said his agency properly followed federal procedures in asking prequalified developers for proposals and assessing them based six factors, of which cost was just one.

"I don't know how far away I can get from a process around here than I did from this one," Mr. Henson said.

Baltimore already has lined up about $28 million to tear down the five towers at Lexington Terrace and build a community of 303 row homes, a 99-unit midrise building for the elderly, and student housing. Struever Bros.' plans also call for creating a community center, and day care and job training programs.

The authority is now competing for another $20 million federal grant, which requires a designated developer. Housing officials learned late that the money was available and had to scramble to put together an application.

A selection panel made up of seven staff members, three Lexington Terrace residents and two community leaders rated the proposals by three development companies. Struever Bros. received the highest rating based on factors including the concept, resident involvement, cost and ability to leverage private money, according to documents provided by the authority yesterday.

Five days later, without posting any notice, the chairman of the five-member Board of Housing Commissioners, Reginald Thomas, convened the conference-call vote. Two members opposed the selection of Struever Bros.

Telesis Inc.'s proposal had the highest cost, with $19.4 million for construction and a potential public-private partnership of $72.9 million. Struever Bros. came in next, with $16.8 million for construction and a $58 million partnership. A&R Development, which, like Struever, has close ties to the administration, offered the lowest prices -- $12 million for construction and a potential $42.7 million partnership.

Mr. Henson said that with private investment, the actual cost is expected to be $68 million.

Those raising questions about the selection made clear they supported rebuilding Lexington Terrace, which has languished for years and has two boarded-up buildings.

But they said the process should have been more open, given the criticism over the authority's no-bid renovation program and its selection of a security agency affiliated with the Nation of Islam, even though it was the highest bidder.

"By this sequence of actions at this particular time, it would seem as if the administration is inviting criticism," said Michael A. Conte, director of regional economic studies at the University of Baltimore.

The redevelopment of Lexington Terrace is the second stage in an ambitious $293 million program to rebuild four outdated high-rise projects.

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