Housing authority seeks to renegotiate $1/month lease

The Morgan City Housing Authority said Thursday it will not allow Glinda’s D & B Seafood to continue using its land for $1 a month, but the owners will be offered an opportunity to continue operating their business on La. 70 property at what commission chairman Victory Ho called a “fair market value.”
The commissioners authorized the executive director, Clarence Robinson, and attorney for the authority, Robert Duffy, to offer a renegotiated lease of $225 per month to the business based on an assessment of the value of the property which the business has used for about seven years at far below market value.
Voting to renegotiate the lease were Ho, Vice-chairman Jerome Guidry, Charles Pye and Mark Griffen Jr. Commissioner Carolyn Long was absent.
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.”
The current lease arrangement “almost constitutes a giveaway,” according to Duffy, and had never been approved by the U.S. Housing and Urban Development department.
Ho said he was confident the owners would find the offer of the renegotiated lease fair and it would not harm their business.
Timothy Armond, co-owner of the business, said he had heard the issue was discussed but would not comment except to say, “We will see what they have to offer when they get here.”
Duffy told the commissioners it was not legal for the authority to continue to allow an individual or business what is basically free use of government property. If the owners do not accept a renegotiated lease at fair market value, the housing authority will have to consider other legal options, he said.
The current lease was questioned in the 2013 fiscal year audit, released on June 9.
The 2007 lease agreement stipulated that the housing authority would lease the land to Armond, co-owner of Glinda’s Convenience store, for a dollar a month. The document Duffy provided states the property is about 25,385 square feet, which is a little more than half an acre.
The lease was for 10 years for the sum of $120 with an option to be renewed another 10 years on the same terms.
Armond said for many years he and/or his father-in-law maintained the property, keeping the grass cut through a verbal agreement with the housing authority that existed for many years. That agreement allowed Glinda’s Convenience Store, which was then located next door on private property, to utilize the property.
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. Then Director Charles Spann said he was not aware of any further communication to or from HUD regarding the lease.
Also questioned in the audit, was entire amount of about $56,000 in bonuses the housing authority had paid to staff. The audit report stated bonuses paid to staff appear to be based on calculations not in compliance with housing authority policies.
The report stated, “this is a repeat finding from the prior audit and the matter was previously referred to the HUD OIG as well as the Morgan City Police Department for consideration. … Bonuses were … in violation of federal and state laws and regulations.”
Duffy presented commissioners with a letter from U.S. Sen. Mary Landrieu, D-New Orleans, to the Office of Inspector General for Housing and Urban Development that urged “an investigation in the misuse of federal funds in the bonus payments questioned in the past two housing authority annual audits.”
Landrieu said in a June 23 letter to Inspector General David Montoya the “recently released report causes me great concern, as it shows the continued and fraudulent mishandling of public money that should be used to provide housing assistance to the poor, elderly and disabled.”
Duffy has said that he has been unable to ascertain what federal investigators are doing because they are unable to confirm or deny even the existence of an investigation. Marta Metelko, OIG spokeswoman, said it is standard policy not to confirm or deny investigations.
Landrieu points out that any delay in the completion of a federal investigation impedes the local housing authority actions.
The housing authority is “unable to move forward with civil proceedings aimed at recouping the misappropriated funds until such an investigation is complete.”
Taxpayers deserve to “know that their tax dollars are being used in the way that was intended,” Landrieu said in the letter and it is her “duty to ensure that fraudulent waste of this kind is not tolerated.”
Ho expects a letter from Landrieu will be helpful if the federal authorities are not already aggressively pursuing the issue.
“I am sure that a senator’s letter, not to local HUD people, but the head of the OIG as appointed by the president, will be helpful in making sure this moves forward,” Ho said after the meeting.
The commission spent about 15 minutes in executive session to discuss its legal strategy regarding bonus payments that have been questioned by the audits. After the meeting they voted unanimously to reconsider the bonus issue in two months.
None of the questioned bonuses were paid under the administration of interim director Clarence Robinson.