FORT WORTH, Texas (CN) – Fort Worth claims a community developer used federal money “to amass a real-estate empire,” after the city contracted with it to build affordable housing. The city claims the Near Southeast Community Development Corporation used HUD grant money to buy 41 properties, none of which were developed into affordable housing.
Most of the lots lay empty, the city claims in Tarrant County Court, and one was used for Near Southeast’s office.
The city says it gave Near Southeast $178,000 to create at least four jobs, but none were created.
By contract, Near Southeast was supposed use $812,000 to develop eight properties into affordable housing, Fort Worth says, but only five were created.
Near Southeast sold the five properties and used the profits to buy property for itself, the city says.
As a result, the city says, the U.S. Department of Housing and Urban Development penalized Fort Worth taxpayers because Near Southeast did not meet national objectives for job creation and affordable housing. The city says the people of Fort Worth will have to cough up $665,000 to repay HUD.
Fort Worth wants Near Southeast Community Development Corporation to pay the HUD penalty and to give up the 41 properties.