Baltimore loan agency official is leaving in `negotiated exit'

`Wanted my own person in there,' O'Malley says

June 23, 2000|By Gerard Shields | Gerard Shields,SUN STAFF

Wayne R. Frazier Sr., a top official of a once-troubled city loan agency, has stepped down with a $48,000 cash severance package as part of a "negotiated exit" arranged by Mayor Martin O'Malley.

The mayor is replacing Frazier, executive vice president of Community Development Financing Corp. (CDFC) for the past five years, with Gary M. Brooks. Brooks was recently hired as the city's community reinvestment coordinator to encourage Baltimore banks to invest in impoverished neighborhoods.

"It's just such an important position, I wanted my own person in there," O'Malley said when asked about the switch.

The $48,000 payment equals six months of Frazier's annual salary and was granted in return for Frazier severing the rest of his one-year city contract extension, O'Malley said.

Former Mayor Kurt L. Schmoke created the CDFC in 1989 to provide city money for low- and moderate-income housing projects. Frazier, a former vice president and chief loan officer at Harbor Bank of Maryland who joined the agency in 1995, called his departure an expected result of the political changes rippling from O'Malley's election in November.

"The administration wants to make a change, and I'm comfortable with that," said Frazier, who said he does not have a job.

Since its inception, the nonprofit corporation has been criticized for making a number of bad loans, including to politically connected borrowers such as Schmoke campaign contributors.

Supporters of the agency said that despite some loan defaults, the CDFC has met its goal under Frazier: to help revitalize city neighborhoods by bringing 3,300 housing units onto the market, mostly for low-income homeowners. In addition, 26 commercial projects have sprouted as a result of agency loans, which also brought 1,100 blighted city homes back onto tax rolls.

"By and large they've done a good job, but I've always been concerned by the lack of checks and balances," said Anthony J. Ambridge, the city's real estate officer, who as an East Baltimore city councilman was critical of the agency. "Risk is a function of their business, but they've made loans that are a little too risky for my blood."

One of those risks involved Arnold V. Hawkins, the president of Harbor Title Guarantee Co., a now-bankrupt company and a CDFC favorite for handling agency deals.

The CDFC granted Hawkins a second mortgage on 213 St. Paul Place, a five-story office building that housed Schmoke's 1995 mayoral campaign. It is being leased by two city-funded agencies. As part of his bankruptcy last month, Hawkins defaulted on the loan, with about $70,000 owed the city.

Frazier used Hawkins' Harbor Title to help close the purchase of a property overlooking Lake Ashburton at 3229 Powhatan Ave., documents filed in Baltimore Circuit Court show. Frazier and Patricia Merrick bought the property for $30,000 on Feb. 17, 1999, from Hanlon Place LLC, whose president is Solomon Akwara, records show. In January, 11 months later, Joshua Properties LLC, another Akwara company, received two CDFC loans totaling $100,000 to build a separate project at 3705 Yosemite Ave., records show. That property was purchased from the city Dec. 6, 1999, for $1, according to the records.

Frazier said he did not mention his private business dealings to CDFC board members because he bought the property at market value. He said he saw no conflict in working with the firms, saying he knew the businesses before becoming CDFC director.

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