Harris County Texas Veterans’ housing proposal scrutinized, cancelled

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By MIKE SNYDER

The Harris County Housing Authority board killed a $4.9 million land purchase for a veterans’ housing development this week, forfeiting $25,000 in earnest money by terminating a contract the agency’s executive director had executed without its approval.The board also retroactively approved contracts with architectural, engineering and real estate advisory firms that began work months ago and have been paid more than $460,000. The agency’s chief executive, Guy Rankin, said the board authorized him in January to execute the consulting contracts, but minutes of the January board meeting do not support his statement

     

The Harris County attorney’s office is reviewing the transactions, and County Judge Ed Emmett said he was concerned the board had not been sufficiently involved in preparations for the project.

“I intend to follow it closely,” Emmett said Thursday. “This project is not a bad project, but we need to make sure that the board is doing things properly. The board is supposed to approve contracts.”

The board remains committed to the development, a $165 million master-planned community known as Patriots on the Lake, board chairman Casey Wallace said Thursday. It paid $6.5 million for a 91-acre site for the first phase this year but canceled the contract to buy land for a planned second phase because it has not secured approval from the Department of Veterans Affairs to move certain facilities to Patriots on the Lake.

The housing authority says the VA facilities would generate $9.2 million in annual lease payments that would help pay for the project.

Marvalette Hunter, the authority’s chief operating officer, said the contract to purchase 69 acres for the second phase did not require specific board action because the amount of earnest money at risk was $25,000, the limit the board had authorized Rankin to spend without its approval.

Assistant County Attorney Douglas Ray, who is reviewing the transactions, disagreed.

“He didn’t enter into an agreement to spend $25,000,” Ray said. “He entered into an agreement to spend several million dollars.”

Wallace said the failure to place the consulting contracts on the agenda before the companies started work was an “administrative error.”

“I hope that your article on what I have described three times, I think, as an administrative error does not jeopardize this project,” Wallace said. “This is a wonderful project.”

But Ray said the matter was serious because the contracts may not have been valid until the board approved them Wednesday. He said he was unsure what the effect could be on the project or the housing authority.

Ray said he was reviewing the transactions to protect Harris County, which funnels millions of dollars in federal funds to the housing authority every year. County Commissioners Court members appoint the authority’s board, but the agency is not a division of county government.

In January, the board authorized Rankin to spend up to $7 million to buy land for the development, according to board minutes. The minutes do not mention authorization for consultants.

Rankin said the minutes were incomplete, and that the authorization included hiring the consulting firms.

Wallace and Rankin said the consultants were chosen without a formal competitive process, such as requests for proposal or requests for qualifications, which local governments often use to award no-bid professional service contracts. Such procedures are not required, and Wallace said the authority does not always use them.

Gilbert Herrera, a board member appointed by Commissioner Sylvia Garcia, said he did not learn until Wednesday that the authority had put land under contract for the second phase.

Herrera said he has grown increasingly concerned that Rankin and other staff members were exceeding their authority and failing to keep board members properly informed.

“We’ve gone from an agency that administered 1,800 rental vouchers to an agency with $125 million in contract revenues,” Herrera said. “Now we’re morphing again into a real estate development agency.”

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