Camden must repay U.S. for failed housing projects

Just when they thought they had addressed all of this fiscal year's financial woes, Camden officials have to hand over $290,000 to the federal government for five failed affordable-housing projects from the 1990s.

The money was to have gone toward overtime pay for members of the Police and Fire Departments, which recently experienced massive layoffs.

It was the only place where there was any "wiggle room," said Glynn Jones, the city's finance director.

The U.S. Department of Housing and Urban Development has demanded a refund of its grant money for years, and on April 6 the city received an ultimatum. If it doesn't pay by May 6, it will face a penalty.

"I don't even want to know what it is," Jones said.

The police and fire cuts will bail out a defunct Camden nonprofit agency that spent $2.5 million to develop a 28-unit affordable-housing complex in Lanning Square. The project was never completed, and the group, Lanning Square West Neighborhood Corp. - at the time led by Mangaliso Davis and Roy Jones - eventually went bankrupt, city officials said.

Normally, the city would have gone after Davis and Jones to get the grant money back, Glynn Jones said.

"I'm not sure what steps were taken in the past to address this," he said.

Efforts to reach Davis and Roy Jones were unsuccessful.

The other projects that received HUD funds between the late 1990s and early 2000s but failed to create promised affordable housing were Liberty Park, Brightstar Housing, and a city effort to transfer privately held tax-delinquent properties to nonprofits for redevelopment.

Since the city was the direct grantee, it is responsible for returning the money, a HUD official said.

Camden wants to stay in good standing with federal housing officials, so city authorities decided to pay the money and be done with the matter.

"We're coming in and fixing 15-year problems," Jones said of the city's frustration in having to pay debts mostly incurred by others.

A planned $289,682 repayment, to come equally from Police and Fire Department funds, includes $193,000 Camden owes for the Lanning Square failure, city officials said.

In 1998, the Lanning Square West Neighborhood Corp. received a $50,000 federal grant to start developing 28 townhouses between Washington and Berkley Streets and West and Fourth Streets.

Within a year, the group had acquired all of the parcels it needed and 100 percent of the financing through grants and a $1.5 million loan from Sun National Bank. Yet by 2002, only 40 percent of the project had been completed, according to HUD's 2002 annual report.

In the late 1990s, Roy Jones told The Inquirer that city politics were jeopardizing multimillion-dollar grant applications needed to complete the project.

A few of the townhouses were sold, but residents found serious problems with the structures. In 2007, the Camden Redevelopment Agency agreed to purchase the townhouses that were unoccupied. It also vowed to help those who had bought homes sell them to the city, said former agency director John Kromer.

"The construction problems were serious enough that we couldn't fix them," Kromer said Wednesday. The plan was to raze everything and use the land for the city's Lanning Square Redevelopment Project.

The city's 2008 plan for Lanning Square designated most of the Berkley Street development as "to be acquired" and in a residential zone.

Jones did not know what the city's current plan was for that development. City spokesman Robert Corrales did not return multiple phone calls seeking comment.

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