HUD threatens city plans for new Hollander Ridge Congress must OK grant, Gaffney says

September 24, 1998|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

Threatening Baltimore's already troubled effort to replace the Hollander Ridge public housing complex, the chief investigator for the U.S. Department of Housing and Urban Development has concluded that her agency must obtain congressional approval to preserve a $20 million federal grant for the project.

Susan Gaffney, the HUD inspector general, has notified Congress that the HUD grant violates federal law and only legislative action can "legitimately allow the Hollander Ridge plan to move forward."

In response, HUD officials yesterday were drafting the needed legislation, but Maryland's two senators said they would not introduce it. But they refused to say whether they would oppose an attempt by other lawmakers.

While Gaffney can make recommendations, she doesn't have the authority to kill the grant. Nevertheless, a senior HUD official said that if Congress does not act to preserve the funds for Hollander Ridge, "as a practical matter the department would have no choice but rescission."

The Gaffney move marks the latest setback in the Schmoke administration's attempt to deal with Hollander Ridge, a decaying 1,000-unit public housing project on the eastern border of the city. Opened 22 years ago, it has long prompted complaints about crime from its own residents and neighbors in the adjacent Baltimore County community of Rosedale. It also has been a source of friction between the city and county governments.

The $20 million grant -- half of what the city sought -- was awarded to Baltimore two years ago for a plan to reduce the size of the project, rebuild portions of it and construct 151 new houses.

A year later, Gaffney issued an audit which said that most of the federal grant money -- $381 million of the $480 million awarded by HUD in 1996 -- had gone to 37 ineligible applicants; a claim that HUD vehemently disputes.

Gaffney recommended cancellation of only one grant: the $20 million for Hollander Ridge. She cited poor prospects for the long-term viability of a rebuilt Hollander Ridge, deficiencies in the city's application for the funds and irregularities in the award of the money.

In the meantime, the city revised its proposal, asking HUD to approve a plan to demolish the entire project -- now only 40 percent occupied -- and replace it with a 450-unit development for senior citizens. Families who are public housing residents would be moved out and not allowed to return.

HUD has indicated that it would approve the plan -- despite Gaffney's recommendation to rescind the funds -- if the city meets several conditions. The most critical condition seems to be HUD's insistence that the city get the OK of a federal judge overseeing the settlement of a 1996 suit that accused the city and HUD of segregating public housing tenants for decades.

City settlement

In the settlement, the city agreed not to seek funds for any public housing construction in poor high-density areas -- including the Hollander Ridge area -- until it completes replacement of its four major high-rise public housing projects.

Prompted by HUD, the city asked for court approval for the new Hollander Ridge proposal, a move that was opposed by the American Civil Liberties Union, which filed the initial suit. A court hearing is set for Oct. 30.

City housing chief Daniel P. Henson III said yesterday he had not considered what would happen if the city lost the $20 million -- the biggest bloc of funds it is counting on for its proposal for a $51.5 million demolition and reconstruction of Hollander Ridge.

"It appears that HUD is still willing to make the award and consider our revised plan," he said. "We're moving forward."

In Baltimore County, a spokesman for County Executive C.A. Dutch Ruppersberger was incredulous. "What would she have happen there now?" Michael H. Davis asked of Gaffney's recommendation. "If you take the money back without anything happening, that would be ludicrous. "

Rep. Robert L. Ehrlich Jr., who represents the county on Capitol Hill, had a different perspective. "I support Susan Gaffney 1 million percent," he said. "I do feel it is important for the process to be followed and the IG to be listened to. My concern is not simply the money -- it's the integrity of the IG process," claiming that HUD has "an abysmal record."

Gaffney's latest action came in a Sept. 11 letter to HUD NTC Secretary Andrew Cuomo, citing a law which requires her to "notify you immediately of particularly serious or flagrant problems, abuses, or deficiencies in relation to the administration of HUD programs and operations." She said that the Hollander Ridge award violated federal law and regulations.

Gaffney and Cuomo have been engaged in a bitter feud over a number of issues in recent months, including an investigation she proposed to conduct in Baltimore and two other cities. Mayor Kurt L. Schmoke claimed the targeting of Baltimore, San Francisco and New Orleans was racially biased, an accusation that infuriated Gaffney.

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