The city of Fort Worth and an affordable housing nonprofit, run as recently as last year by City Council member Kelly Allen Gray, have agreed to settle a 4-year-old, $220,000 dispute, with the nonprofit surrendering its remaining real estate, cash, and mineral rights.
The city would cover the $10,000 in estimated closing costs of transferring eight vacant lots – seven to the city, and one to a neighborhood using it for a community garden. The nonprofit, United Riverside Rebuilding Corp., would be allowed to remain open.
The organization, based in Riverside, had sought to stay in business, keep mineral rights, and have the city cover costs.
“It’s probably best for everybody,” Phyllis Allen, a United Riverside director and Gray’s sister, said, speaking for the nonprofit board.
The City Council was scheduled to vote on the agreement Tuesday, but the staff pulled it back because the documents didn’t have all of the signatures. The council is scheduled to vote June 4, said Jay Chapa, Fort Worth’s acting Financial Management Services director.
United Riverside has no remaining assets, no executive director, and no immediate plan, Allen said.
But “it does other things in the community other than build houses,” Allen said. “We just want to be alive. We just don’t want to fold up our tent and slink away into the darkness, as if we had done some horrible thing. Because we hadn’t.”
Gray, who stepped down as executive director last Spring to run a successful bid for City Council, declined comment Tuesday.
Under the settlement, the city will receive five lots in the 2600 and 2700 blocks of La Salle Street in the Riverside area, one lot at 1209 E. Robert St., and a seventh at 2805 Ennis St. It will pay $1,091.52 – its remaining cash - to the city and convey an eighth lot it owns on Chenault Street to a neighborhood association.
The Tarrant Appraisal District values the seven lots being transferred to the city at a total $54,700 at market, and the Chenault lot at $3,850.
The nonprofit got its start with a grant in 2000. It built 25 houses and remodeled two others, investing $1.2 million and selling at below-market value to allow buyers to move in with equity, Gray, executive director from inception until she stepped down, has said.
The dispute hinged on two homes United Riverside built and sold. In May 2006, United Riverside, with Gray as director, accepted $287,000 in federal Housing and Urban Development money administered by the city's housing department.
Under the grant, the money was to be used as seed to construct six infill homes. United Riverside would build two, sell them and use the proceeds to repeat the process.
United Riverside built two homes and sold them. But the city said it found the buyer of one turned it into a rental, violating federal affordable housing rules, and the second buyer's income was too high. In 2008, after United Riverside sold the homes, the city, as is routine under the HUD process, sought documentation that the home buyers met requirements.
United Riverside maintained that it sent the documentation early on but that the originals were later destroyed by a flood in its offices. The city has said it never received the documents.
The city repaid $220,719.29 to the government. Of that, the city and HUD determined that $190,843 went to building the two homes, $12,544 was for a lot not built upon within the allowed time, and the remainder was for expenses the city said United Riverside couldn't document.
Allen and Gray have said the dispute unfairly blemished United Riverside’s record.
“Every single dime that was entrusted to the United Riverside Rebuilding Corp. was spent the way it was said it was going to be spent," she said in a February interview as negotiations between the city and United Riverside proceeded.
"We built homes, we remodeled houses, we provided social services, we brought families back into the community," she said then. “We built the best houses [under the affordable housing program] in the city. The houses are there."
- Scott Nishimura, Star-Telegram Fort Worth City Hall reporter