Phila. wins reprieve on HUD funds

U.S. Housing and Urban Development Secretary Alphonso Jackson tendered his resignation yesterday, an abrupt move that caps a tenure dogged by claims of favoritism, including an allegation that he sought to punish the Philadelphia Housing Authority because of its dispute with music legend Kenny Gamble.

Also yesterday, PHA announced that HUD had given the local housing agency a one-year reprieve that would spare its losing $40 million in federal funds. The offer was contained in a letter sent Thursday and made public yesterday.

PHA Executive Director Carl Greene Jr. said the reprieve was a positive step that spares the agency from having to lay off 186 employees. PHA was set to lose special HUD funding status at 12:01 a.m. today. "It gives us a one-year transition period to exit the program as opposed to [today] being Black Tuesday," Greene said.

The reprieve and Jackson's resignation, however, do not derail a federal lawsuit that Greene has filed against HUD, alleging that Jackson tried to penalize the agency for a rancorous, yearlong dispute with Gamble over land in South Philadelphia Gamble wanted to develop.

Jackson, 62, has been suspected of steering HUD contracts to friends and away from Bush administration opponents. He is the target of investigations by HUD's inspector general, the FBI, and the U.S. Justice Department.

Greene said the next year gives the Housing Authority an opportunity to work with Sens. Arlen Specter and Bob Casey to "get us fully restored in the program."

Both Specter and Casey have been drawn into the fracas between HUD and PHA.

At separate Senate hearings in the last two weeks, both pressed Jackson for answers on what was going on, only to be met by his reticence.

The focus of the dispute is HUD's decision to strip Philadelphia of special status as a "Moving to Work" (MTW) city, which brings with it broad flexibility in how federal funds can be spent. HUD said it was taking away PHA's MTW status because it did not supply sufficient housing for disabled residents.

Jackson and HUD have denied any connection between the Gamble matter and the MTW action. Greene argued that the two were linked and sued HUD in federal court here.

Specter said yesterday that he did not call for Jackson's resignation, but added that with his departure, "it improves the chances of resolving" the HUD-PHA dispute.

"There's a good chance we can mediate this," Specter said.

Casey also said the departure of Jackson from HUD would allow both sides to make "a fresh start" in resolving the dispute.

"It's best for that agency to get someone new," Casey said, adding that the dispute with PHA was "symptomatic of a larger problem at HUD."

HUD's dispute with Greene and PHA stems from the redevelopment of the Martin Luther King Jr. public housing project in South Philadelphia.

PHA had been working with Gamble's nonprofit, Universal Community Homes, to develop the site, but the housing agency later alleged that Universal was not doing the work it had been contracted to do. PHA would not follow through with terms of the agreement, including the transfer to Universal of two parcels to build 19 townhouses as well as control of a shuttered community center and an empty block to convert into a neighborhood park.

The land was valued at $7 million, which Greene said Gamble's group wanted for a fraction of that.

Gamble reached out to Jackson. He met with him at least three times - once inviting the HUD secretary to tour the Martin Luther King site with him.

Jackson called former Mayor John F. Street, who is also chairman of PHA, pressing the case that the Martin Luther King project must be completed as originally planned. At the time, each remaining phase of the project - the building of 19 townhouses, a renovation of the community center, developing a park - was tied to Gamble's nonprofit.

Greene balked. At the same time, his agency was put on notice that it was losing its MTW status.

Greene said he worked for Jackson years ago when both were at the housing authority in Washington. "We had a wonderful relationship," Greene said. "But he became a man of immense power who wanted to take care of the socially elite."