Feb. 23, 2003 – The head of the consulting firm whose contract to oversee the building of public and affordable housing on St. Thomas and St. Croix was canceled last month by the head of the Housing Authority — who announced the action publicly last week — is urging the agency executive to reconsider.
In a release distributed on Sunday, C. Knox LaSister, chief executive officer of Smart Inc., called on VIHA's executive director, Ray Fonseca, to sit down with him "and figure out how to move forward" on the contract.
Smart Inc. was contracted in 2001 to oversee the construction a new housing community at Estate Hoffman/Nullyberg on St. Thomas and affordable housing for the Louis E. Brown Villas on St. Croix. (See "VIHA chief axes affordable housing contractor".
Fonseca canceled the contract on Jan. 7, saying the company had collected nearly a million dollars since September 2001, yet had not laid "one block" at either construction site, had missed deadlines set out in the contract, had failed to secure financing by a specified closing date, and had upped the cost for completing the project by $5 million.
LaSister accused Fonseca of "mis-characterizing" the contract with Smart. Under the "co-developer agreement," LaSister said, the Housing Authority was supposed to act in partnership to secure financing, meet deadlines, monitor construction and manage the new housing communities.
Fonseca said the contract was a developer consultant grant, which is different from a co-developer agreement.
The cost escalations, LaSister said, were the result of design changes ordered by VIHA and "the rise in construction costs everywhere."
According to Fonseca, reached by telephone on Sunday, Smart has been paid $440,000 over the amount of services rendered under the contract, which took effect in 2001. "I hope he can see fit to return that money," Fonseca said, referring to LaSister.
LaSister also challenged Fonseca's statement about the company having made no progress in the actual construction 16 months after Smart began receiving payments. Smart was hired to monitor the work of three contractors already on the project payroll, but in spite of continuing payments to them, LaSister charged, those contractors have not yet filed approved construction documents.
All the more reason to cancel the Smart contract, Fonseca countered on Sunday, adding that if there were contractors getting paid and not performing, further action may be necessary.
According to LaSister, had the Smart contract stayed in place, "construction would have started on St. Croix and St. Thomas this summer."
Further, LaSister said: "Years of planning and hard work by the former residents of the Louis E. Brown community, community representatives, local banks and VIHA and other agency senior staff are being destroyed by Fonseca's decision to terminate Smart, Inc.'s development agreement."
Fonseca said he is preparing a letter to deliver to the Smart principals outlining the reasons the contract was canceled and formally demanding the return of the $440,000.
However, according to LaSister, "There was no overpayment. VIHA owes us money."
The release described Smart as a company that "has received several recognitions and contracts from the U.S. Department of Housing and Urban Development and also has completed contracts for major projects in New Orleans; Camden, New Jersey; and New York City." It said LaSister is "an attorney with over 20 years experience in real-estate law, business development, public housing law, mixed-income/mixed-use development and finance law, management analysis, business re-engineering, financial management, automation, marketing and regulatory compliance."
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