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City Council facing complex issues as the housing board

May 26, 2002|By AARON CLAVERIE, Staff Writer

CALEXICO — Among the complex issues the City Council will have to resolve while sitting as the Calexico Housing Authority's board of commissioners is an issue that involves a past action of the City Council.

A conflict of interest? Maybe.

A can of worms? Definitely.

In October 2000 the City Council, which included current members John Renison, Victor Carrillo and Frank Montoya, voted to rescind its promise of a $400,000 loan to the Housing Authority. Earlier that year, the Housing Authority had committed $1.2 million toward a tax credit application.

The authority and its partners, Beyond Shelter Housing Corp. of Los Angeles, sent in the application to the state Tax Credit Allocation Committee in the hopes of securing millions in tax credits that would be used to build an 80-unit apartment complex for seniors.

In November 2000 the partners were told $8.3 million in credits had been reserved for the senior apartments project. Using the promise of those credits, Beyond Shelter Housing Corp. brokered a deal with Simpson Housing Solutions of Long Beach. Simpson took out loans to build the apartment complex on the corner of Highway 98 and Rancho Frontera Avenue.


According to a Simpson press release, the total development cost is about $9.2 million. Construction is almost complete.

Now that everything is almost ready for Calexico seniors to begin moving into the apartments, the authority and Beyond Shelter Housing Corp. must submit all financial records of construction costs and the $1.2 million from the authority to the Tax Credit Allocation Committee to get the $8.3 million in tax credits.

The authority has claimed it doesn't have the $1.2 million to give to the committee.

Before the City Council took over operations of the authority board, representatives of the Housing Authority, including former interim Executive Director Christina Rojas, told the council the authority has only $800,000 of the $1.2 million it committed to the application.

Rojas said the authority needs the $400,000 loan from the city's Redevelopment Agency that had originally been pledged to the project.

City councilmen and City Attorney Michael Rood have said the city has no legal obligation to give the authority $400,000 since it rescinded the loan in October, a month before the partners were told that tax credits had been reserved.

According to a resolution approved by the council, the city was only obligated to give the partners a $400,000 loan after they received the tax credits.

City council members have said the Housing Authority can find other ways to come up with the $400,000.

Here's where things get interesting.

At last week's Housing Authority board meeting, the City Council, seated as the housing commission, acknowledged receipt of a letter from the law offices of Beverly Hills lawyers Turner, Aubert and Friedman.

The letter asks how the authority is going to come up with the $1.2 million it said it would, according to Renison. He didn't say who hired the law firm.

During public discussion of the letter at Thursday's authority board meeting, Carrillo asked Rood how the council, as authority commissioners, is going to deal with the $400,000 issue.

Rood said, "We're going to figure that out and have a recommendation for you next week."

Carrillo said, "If we put on our hats at city councilman and continue in support of the position that they (the authority) will have to look for alternative funding, then we're going to have to change hats and see where we're going to find that alternative funding.

"Is there going to be a conflict of interest there?"

Rood said, "It's an interesting dilemma. Whether it poses a legal conflict of interest is a question we're going to look at."

Rood said he expects to have a legal opinion ready by Tuesday in preparation for a special Housing Authority board meeting Wednesday.

Renison was asked if Rood writing an opinion on the issue would be a conflict of interest in itself. He said that's another issue that's yet to be determined.

>> Staff Writer Aaron Claverie can be reached at 337-3419 or

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