Haste led to woes at complex, critics say

Annapolis public housing deal was done quickly

tenants wait to move in

October 20, 2003|By Jason Song | Jason Song,SUN STAFF

Alice Johnson is getting ready to move from a run-down public housing unit into a brand-new, red-brick waterfront home complete with brass mailbox and white columns.

Most people would smile at the thought of such a swap, but mention the long-delayed move of Bloomsbury Square residents in Annapolis to their new homes and Johnson grimaces.

"The whole thing is a mess," Johnson said.

Although the 51-unit complex -- a joint effort of the state, the city and its housing authority -- is nearly finished, it seems no one is happy with the way the process has unfolded.

Gov. Robert L. Ehrlich Jr. labeled last week the complex -- once envisioned as a model public housing community -- as an example of "what not to do" in business.

Among the problems: developers starting to build without a contract; cost overruns; the failure to address critical issues with performance bonds; a dispute over city fees; and repeated delays of the move-in date for residents.

Last week, nearly all of the parties involved in the complicated deal took turns blaming each other for the problems at a Board of Public Works meeting.

How did Bloomsbury Square become such a mess? Most agree on one thing.

"This deal was put together in haste and all of the i's weren't dotted and t's weren't crossed," said Boyd K. Rutherford, state Department of General Services secretary.

Even before ground was broken on the project, Comptroller William Donald Schaefer called it a "tragedy." He didn't like the idea of the state building a public housing development on prime land at the main gateway to Annapolis.

The new Bloomsbury Square sits on state-owned waterfront property within view of the State House. The townhomes could fetch as much as $400,000 on the open market, experts say.

Most of the families scheduled to move into the complex live less than 100 yards away in the current Bloomsbury Square, an eyesore wedged between the new development and legislative offices. That land is owned by Annapolis' housing authority, an independent agency that oversees public housing in the capital.

For more than a quarter-century, the state tried to acquire the site of the current Bloomsbury homes, but negotiations always fell through.

Then about two years ago, the administration of Gov. Parris N. Glendening struck a preliminary deal: The state would develop the new Bloomsbury Square and then give it to the housing authority, which would manage the property. The housing authority would then give the state the old Bloomsbury complex, which would be razed for legislative office buildings and parking.

Gene Lynch, Glendening's chief of staff, acknowledged last week that the deal was put together quickly.

The developer, A&R Development Corp. of Baltimore, broke ground in June last year -- before the contract had been finalized and signed. But Lynch said this "isn't unheard of."

"They needed to make their deadlines," Lynch said.

Lynch said the deal was solid. "I thought we had dealt with all of the issues," he said.

But problems arose quickly. The development went over budget and the state had to approve an extra $800,000 for it in October last year. A&R threatened to stop construction a month later, alleging the housing authority was holding up approval of a final contract over project changes it wanted.

The glitches rankled members of the Ehrlich administration. At last week's meeting, Assistant Attorney General John Thornton said he didn't think officials from the previous administration had done their jobs completely.

Lynch conceded that the original contract did not address two issues that came back to haunt the project.

In February, the housing authority and the developer claimed they weren't responsible for a city sewer hookup fee of nearly $250,000 that was not in the original budget. The housing authority and state tried to persuade Annapolis officials to waive the fee, but they wouldn't budge.

The dispute was eventually settled when the city agreed to place a lien on the project.

Then, in late September, A&R sued the state and the housing authority over a contract dispute.

The developers had placed $6.5 million worth of bonds, which would guarantee the quality of work, in their contractor's name. The state wanted to put the bonds in the name of A&R -- with whom it had a contract -- and withheld nearly $1 million in payment, according to the lawsuit. This effectively blocked transfer of the property to the housing authority.

Both parties said they tried to resolve the problem but were unable to reach a compromise. Meanwhile, the tenants' move-in date was pushed back from spring to summer to fall.

Lynch said that building housing of any kind is often a messy process, but that Bloomsbury Square has proved particularly difficult.

"Anytime you have that many public and private entities [involved], realistically, you have to expect some last-minute delays," he said.

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