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Marta Mossburg: Questions aplenty for DHCD deal

The stink emanating from the planned move of the Department of Housing and Community Development from Anne Arundel County to Prince George’s County rivals rot exposed from corruption trials this year of politicians from the agency’s future home.

Financial concerns are one component of the stench. Abandoning the agency’s current headquarters — owned by taxpayers — in Crownsville for a new $170 million development in New Carrollton will cost about $3 million per year in rent, not counting any state financing for the developer. Even more important, the state is broke and legislators likely will raise taxes next year to cover core expenses.

But money and economics are not the only issues.

Carl S. Williams is the other. He is the developer who for years has been trying to build the large mixed-use project known as Metroview that the state selected as the new DHCD headquarters.

Williams will not discuss his background with me. And his record has so far been shrouded by the state, which chose his project over 16 others but will not release the bids, which include information on the background of the developers, their financing and past history.

Williams is part of a development group, but the state will only release his name and the fact that he is from Prince George’s County — both important factors for a project to be built there.

Keeping a low profile

As it turns out, it’s easy to see why Williams would like to maintain a low profile.

Public records raise many questions about Williams’ ability to finance the $170 million project, his credibility and the prevalence of crony capitalism in Maryland.

This comes on the heels of legal troubles for two Prince George’s County political figures — former County Executive Jack Johnson, who pleaded guilty to a federal extortion charge for shaking down developers and business owners, and state Sen. Ulysses Currie, the former head of the Budget and Taxation Committee who is facing possible legislative censure after a federal jury acquitted him of corruption charges in hiding his financial connection to Shoppers Food Warehouse while advocating on the company’s behalf.

Public records show that Williams is firmly entrenched with Democrats. Williams gave $19,000 to candidates from the state’s dominant party from 2003 to 2011, including $4,000 to Lt. Gov. Anthony Brown, $4,000 to Currie and $1,400 to Johnson.

The records also reveal someone with many debts rising from his businesses, The Carl Williams Group and the nonprofit St. Paul Community Development Corp.

The Carl Williams Group website lists the firm as a partner in Metroview. However, according to the State Department of Assessments and Taxation, the company status is “forfeited.” This means “its existence has been ended by the State for some delinquency.”

A 2008 legal notice showed the company was the subject of a foreclosure sale by UrbanAmerica, a previous partner, to recoup $5.5 million. UrbanAmerica did not return a phone call seeking information about the sale.

DHCD, the agency whose new headquarters Williams is supposed to build, rejected a loan application from him for senior living apartments he wanted to build in 2005 and 2006.

In response to a Maryland Public Information Act request, the department would not release information about its reasons for rejecting Williams’ loan application, saying that was private information not covered under the state public information law.

Questionable DHCD loans

DHCD is not known for its high lending standards.

One of its questionable decisions, according to a state audit, was extending $385,000 to Tom Kiefaber, the previous owner of the Senator Theatre in Baltimore. When Kiefaber defaulted on that loan, DHCD loaned him another $378,000.

Prince George’s County court records show judgments against Williams in relation to his capacity as head of St. Paul Community Development Corp.

He owes MMA Capital Corp. $1,995,611.97 from a 2009 judgment listed as still active. In 2005, LaSalle Bank won a judgment against him of $718,468.21. That case is closed.

Publicly available tax records from 2006 to 2008 list Williams as executive director of the nonprofit St. Paul Community Development Corp., where his salary reached $125,000 in one of those years.

Also of note: The Carl Williams Group spent $125,000 lobbying the state legislature in 2008 — the same year as the $5.5 million foreclosure sale noted above and one year before the nearly $2 million judgment against him.

Bills listed as subjects of lobbying include one that codified transit-oriented development, important for Metroview, and one to allow bond proceeds to be used for tax increment financing in Prince George’s County.

According to Prince George’s County court records, The Carl Williams Group did not pay Gally Public Affairs, its lobbyist, in full. A judgment against the company for $73,801.96 in 2010 is still active. Eric Gally did not return a phone call for comment.

The members of the state Board of Public Works — Gov. Martin O’Malley, Treasurer Nancy Kopp and Comptroller Peter Franchot — should not vote on the project when it comes before them without knowing Williams’ background. It would be like hiring someone without a resume, interview and background check.

The agency’s current building is already owned by the state and meets its needs, so the proposed move should be cancelled. Maryland taxpayers deserve better than a secretive, expensive deal at a time they can least afford it.

Marta H. Mossburg is a senior fellow at the Maryland Public Policy Institute. Her email address is [email protected]