Housing authority chairman questions lease
MORGAN CITY, La. — A land-lease agreement approved by the Morgan City Housing Authority has been questioned by Board of Commissioner’s chairman Victory Ho.
The lease has been submitted along with other documents to the regional office of U.S. Department of Housing and Urban Development as well as to an investigator of the Office of Inspector General, he said.
According to minutes obtained from the housing authority from a June 20, 2007, public meeting, the board of commissioners “had asked that an agreement be made” between the housing authority and Glinda’s Convenience Store “for the use of the vacant property adjacent to the main office. The agreement has been made.”
Barbara Walker was chairwoman of that board at that time with James Johnson Sr., Gina Burise and Raymond Morrison serving as board members.
The agreement stipulated that the housing authority would lease the land to Timothy Armond, co-owner of Glinda’s Convenience store for a dollar a month.
The lease was for 10 years for the sum of $120 with an option to be renewed another 10 years on the same terms. A diagram associated with the lease shows the property is about an acre and a half and located along La. 70. The leased property is part of the tract which houses Brownell Homes.
Armond said that for many years he and/or his father-in-law maintained the property, keeping the grass cut per a verbal agreement with the housing authority that existed for many years. That verbal agreement allowed Glinda’s Convenience Store, which was then located next door, to utilize the property.
A few hours before submitting his resignation as executive director of the housing authority on June 4, Charles Spann said, “There is no policy governing vacant housing authority property, that includes leasing it out … It would have been nice to have such a policy.”
Spann cited his “responsibility for the recent failures that came out in the 2012 audit report by Kolder, Champagne, Slaven & Co.” as the reason for his resignation. The 2007 land-lease agreement was not part of the audit scope.
Ho, who owns and operates a community convenience store, said last week that as a businessman he sees the terms of the lease as very generous. He said that after conversations with the HUD regional office, he believes that contracts cannot exceed five years.
“The previous board (of commissioners) must have felt it was a fair deal,” Ho said. “I am a businessman and I can tell you that I would never have approved that.”
The Housing and Urban Development regional public affairs officer in Ft. Worth, Texas, Patricia Campbell, offered some guidelines regarding housing authority property.
“Under HUD regulations, any housing authority property or asset that has HUD funding involved with it must operate it “solely for the purpose of providing … housing for eligible families in a manner that promotes serviceability, economy, efficiency, and stability of the projects, and the economic and social well-being of the tenants,” Campbell said.
Ho said that since the housing authority has maintenance employees that cut grass, the lease did not benefit the authority. He said his understanding of policy is that contracts cannot be subject to terms extending longer than five years.
Ho said the New Orleans regional office is investigating whether the contract was appropriate and enforceable or even if it was legal.
Campbell said, “We can’t say anything with regard to how the regulations might, or might not, apply to Morgan City at this time.” She said there remain several unanswered issues that are being investigated.
Both Armond and Spann said that a draft lease was reviewed by Sostenes Ruiz III who made some recommendations in the wording of the lease. The lease was brought back, signed by Armond and Spann and notarized by Ruiz. The signatures are not dated.
The cover letter to the lease said the lease was entered to allow the store owners “to keep items of value on MCHA property.” The terms of the lease allow Armond to use the property “to place and install personal property … and other temporary installations in and upon the (leased property).”
After entering the lease, the grocery store business was moved out of the building next door that was leased from a private owner. A new building was constructed on the housing authority property to which the business moved its operation.
A copy of the land lease agreement was sent to Vera Cheers of the Office of Receivership Oversight in Memphis, Tenn. At the time the housing authority was in receivership. The attached letter asked that the Morgan City Housing Authority be contacted if there were any questions about the agreement. Spann said that he was not aware of any further communication to or from HUD regarding the lease.