Fenty’s DCHA Contracts: Some Questions
Posted byMike DeBonison Oct. 23, 2009 at 8:16 pm
You have questions about the $82 million dollars in parks-and-rec spending that MayorAdrian M. Fentyis sending to the D.C. Housing Authority? LL has (some) answers!
What are these projects?
According to data furnished by the D.C. Council, they are 12 projects to renovate 12 parks or recreation facilities. One, to build a $1.3 million ballpark at EmeryRecCenter, was awarded in January. The rest---concerning 7th and N park ($800,000), Bald Eagle Rec Center ($5.3M), Barry Farm Rec Center ($15M), Chevy Chase Playground ($1.3M), Fort Stanton Rec Center ($12M), Guy Mason Rec Center ($3M), Justice Park ($12M), Kenilworth Rec Center ($12M), Park View ballfield ($1.2M), Rosedale Rec Center ($16M), and a new park in LeDroit Park ($1.7M)---were awarded last month.
Why are contracts being sent to DCHA?
From the Fenty administration's perspective, going through DCHA allows projects to get off the ground faster. "We build housing, we remodel housing, we have extensive experience in construction management," says DCHA spokespersonDena Michaelson. "We have in-house skill set to do all this stuff. That's what we bring to the table." DCHA has what's called "independent contracting authority," meaning it's not subject to the usual onerous procurement requirements of the rest of government. But there's also the question of transparency: Today, after this arrangement hit the papers, Attorney GeneralPeter Nicklesdetermined that DCHAwas required to send contracts worth more than $1 million to the D.C. Council for approval. But it seems that DCHA was not already in that practice. In any case, the use of DCHA as a city vendor has been on the rise as of late. According to a review of city purchase orders, DCHA had been sent $20.6 million worth of District work in 2006, $29.8 million in 2007, and $22.5 million in 2008. So far this year, DCHA has been handed $57 million from the city, not counting the bulk of the controversial contracts.
What is DCHA's contracting process?
According to Michaelson, the agency's procurement procedures are modeled on the federal government's. The vast majority of DCHA's funding comes through the federal Department of Housing and Urban Development; the city money being sent to DCHA is a "drop in the bucket," she says. The DCHA board, which is appointed by the mayor with the consent of the council, reviews all contracts let for more than $250,000. In this particular case, the contract to serve as manager for all 12 parks-and-rec projects was released for bids simultaneously; 13 firms competed, Michaelson says. A joint bid by Banneker Ventures and Regan Associates won. How individual contracts were then let to construction contractors for each project is still unclear.
How are these firms profiting from the city?
In many ways. Since July 2008, Banneker Ventures, run by Fenty frat brotherOmar Karim, has been authorized to receive $1.6 million in direct city funding. That was to serve as construction manager on a pair of projects: the reconstruction of Walker-JonesElementary School and the rebuild of the DeanwoodRecreationCenter. Banneker is also a developer as well as a construction consultant, having been part fo the team selected in 2007 to rebuild the Sursum Corda/Temple Courts area as "Northwest One." Those two roles have entangled: Earlier this year, Karim was also included on a panel convened by the deputy mayor's office to review submissions for the redevelopment of StevensElementary School in Foggy Bottom. Sources close to the process expressed concern at the time to LL about Karim's dual role as a developer and a city-paid consultant. In the latter role, there was concern that Karim would have access to bidders' closely-held financial data---information that could give Karim a leg up in future projects he might bid on. There's also RBK Landscaping & Construction, the company owned byfamed Fenty chauffeurKeith Lomax, which has raked in $16.6 million in authorized funds since 2005, most of it throughAllen Lew'sschool construction office---which, like DCHA, has independent contracting authority and is exempt from the usual procurement processes.
What is fishy about all this?
First, the cast of characters. Virtually all of the firms involved (Banneker, RBK, Blue Skye Construction, Capital Construction, Dustin Construction, Forney Enterprise Construction, Forrester Construction, Hamel Construction, Winmar Construction) are major Fenty donors or allies. And Banneker isn't just an ally---it has been associated with some of Fenty's closest associates. Besides Karim, the firm has in the past employedWarren C. Williams Jr., whose involvement in a lottery contract bid drew immense political heat, andSinclair Skinner, the street activist turned sharp-dressed consultant who seems to be caught up in every mayoral mess.
Second, the timing. The contracts were let in the waning days ofMichael Kelly's tenure as DCHA general manager; he left amid rumors that Fenty wanted him out---perhaps to be replaced by Skinner's running buddyDavid Jannarone, the mayoral director of development. Add to that the parks-and-rec angle:Clark Raywas mysteriously ousted from the head of that agency earlier this year among reports that he clashed with his superiors---was this the reason why?
Third, the secrecy. Even if you buy the implication of Nickles' ruling---that the Fenty administration in no way condoned the letting of big contracts behind the council's back---the contracts went out through the back door. Rather than "reprogram" the funds in a council-reviewed process, it seems to funds were simply granted by the parks department over to the housing agency in a process that wasn't discovered until some council staffers stumbled over the arrangement this week. For a guy who ran for office on accountability and transparency, it's awfully opaque.
The New CroniesAdrian Fenty, some frat buddies, and $86 million in city spending.
ByMike DeBonison October 30, 2009
Grecian Formula: Fenty + frat pal Skinner + city contracts = embarrassing headlines.
Darrow Montgomery
He calls him “God.”
He says things like this: “I spoke to God, and God wanted me to have this.” Or “God wants us to live well.” Or “God’s going to make it rain.”
Those sound like the words of a priest. But this man is not a priest; he is a developer namedOmar Karim.
He does not speak in churches; he talks about “God” in VIP rooms and cigar lounges and in private meetings with investors.
And “God” is not God; “God” is MayorAdrian M. Fenty.
Has “God” been good to Omar Karim? Someone, somewhere, has been good to Karim.
His firm,Banneker Ventures, has been cut in on one of the biggest redevelopment deals in the city—the sprawling project to turn the old Temple Courts and Sursum Corda housing projects into a gleaming mixed-use, mixed-income development calledNorthwest One. Banneker has also won lucrative contracts to serve as co-construction managers for a pair of city projects: a rebuild of Walker-JonesElementary School and a new DeanwoodRecreationCenter—projects that have helped send $1.8 million to Karim’s company since July 2008.
And nowcomes the revelationthat Banneker has won the right to manage tens of millions of dollars in parks construction contracts—contracts that had been sent to the D.C. Housing Authority (DCHA) in a governmental sleight of hand engineered in such a way as to elude D.C. Council oversight or at the very least, short-circuit city procurement practices.
Banneker Ventures, over the past two years, has been the subject of much whispering in political and development circles. That’s thanks, in no small part, to its ties to three of the most controversial characters in Fenty’s political sphere.
First comes the 36-year-old Banneker co-founder Karim, a law school classmate andKappa Alpha Psi fraternitybrother of Fenty’s. The other co-founder isWarren C. Williams Jr., the businessman whose involvement in a bid to operate the D.C. Lottery led to a political showdown at the D.C. Council. Williams has since split with Karim, forming his own development enterprise, theWarrenton Group.
And then there’sSinclair Skinner, thecontroversial street activistturned consultant and fixer who has maintained his place in the Fenty inner sanctum. He has done work for Banneker in the past, though the nature of his ongoing relationship with the firm is unclear. But his utility to Fenty is ongoing; Skinner was spotted last week campaigning in Hillcrest with Hizzoner.
Banneker’s emissaries know where to find top officials in the city development apparatus—especially development directorDavid Jannaroneand former deputy mayor and now City AdministratorNeil O. Albert. They’ve been planted in the city entourage at the yearly Las Vegas retail convention; they’re fixtures at the regular happy hours that the deputy mayor’s office throws at swank locales; Jannarone and Skinner famously traveled together to the Dominican Republic,gifting city emergency equipmentin the process.
Whether Banneker could compete for city contracts on its own bona fides is a matter of debate. It’s a small, young firm without the sort of track record this city’s premier developers—theJim Abdos andChris Donatellis andDoug Jemals—can point to. Not by a long shot. Yet the company has found sustenance away from the teat of D.C. municipal contracting. It competed for, and won, the right to develop a highly sought Metro-owned parcel. Banneker iscurrently trying to come to terms with financiersto start construction on what’s tentatively called Jazz @ Florida Avenue.
And Karim’s expertise is apparently such that he appeared earlier this year on a panel of judges tasked with choosing who wouldredevelop the former Stevens Elementary School. Multiple developers expressed concern to LL that Karim, as a potential competitor in future projects, would have had access in his judging role to their proprietary financial figures.
If there are any holes in the Banneker CV, perhaps the deal with DCHA will close them. The company—jointly bidding withRegan Associates, a well-regarded Herndon management and development firm—won the right from DCHA to manage the parks projects, beating out 12 others. By LL’s deadline on Tuesday evening, much was still unknown about the contract. The D.C. Council was circulating a contract list of unknown origin showing that the deal involved12 projects to renovate parks or recreation centerstotaling $82 million and that the individual projects had been let to several construction firms, all of which had donated early and heavily to Fenty’s re-election campaign. DCHA would confirm only that Banneker had won the single contract to manage all of the projects, saying the remainder of the contracting had not been approved.
After months of CFSA and DPR and AG, DCHA is a refreshing acronym to find in the headlines. Here’s an agency that has escaped public attention for most of the nine years since it left receivership, and that’s part of its appeal as a channel for hassle-free contracting. The parks deal was done through theD.C. Housing Enterprises, a nonprofit wholly owned by DCHA that manages projects for other government agencies. “It’s a win-win,” says DCHA spokespersonDena Michaelson, referring to a process in which her agency uses its managerial muscle and other agencies get their projects done faster.
And there’s been a lot more winning of late. From 2006 to 2008, DCHA transfers never broke $30 million. But since January, more than $57 million has been sent to the quasi-governmental entity, accountable to its own mayorally appointed board. That doesn’t include the bulk of the parks money. (Not all of the money, however, is apportioned to construction projects.)
Funneling contracts through DCHA aligns with Fenty’s git-’er-done governing ideology. Besides a new school, nothing makes an impression on constituents (and voters) like a sparkling new park or rec center. In an attempt to become the Domino’s of new-parks delivery service, Fenty last November tried to hand DPR projects over to the independent schools facilities shop administered byAllen Y. Lew. The power move ran into opposition from council parks committee chairHarry Thomas Jr., whopushed through a billpreventing any transfer of DPR projects outside the agency—and thus evading his oversight.
Timing, as they say, is everything. The Banneker contract, Thomas says, was approved in late September, as DCHA's longtime executive director,Michael Kelly, already had one foot out of the door towardhis new jobas New York City’s public housing chief. It also may shed some light on the reason for thesudden terminationthis spring ofClark Rayas parks-and-rec chief. Says Ray, “I can tell you without a doubt, we went by the book on every contract we had over $1 million.”
In February, Raysigned a memorandumsending $57 million in parks money over to the deputy mayor for planning and economic development, which in turn handed it to DCHA. Under his successor,Ximena Hartsock, that amount was increased to $68.4 million and then, last month, to $86.9 million.
Bypassing the council appears to be the driving force behind all the maneuvering. From all indications, the funds moved to DCHA not through a “reprogramming,” which comes with legislative oversight, but through “intradistrict transfers” to the deputy mayor and grants to DCHA, which do not. The parks contract was bid among 13 companies, then vetted by housing agency board members, but not sent to the council for approval.
Fenty denies trying to circumvent the council in getting his rec centers and parks built. And now that the issue has blown up in his face, he has continued down that path. On Monday, Attorney GeneralPeter Nicklesruled that the Banneker contract, already awarded,doesn’t need to be sent backto the council, even though it should have been sent there in the first place. The Nickles opinion seems likely to force the court showdown that councilmembers have long been threatening.
That the Fenty administration, intentionally or not, came so close to slipping $86 million in spending past the D.C. Council is scary enough. The scheme was revealed this week after council staff noticed a spate of public groundbreakings without seeing any submitted contracts, coupled with the concerns registered by an aggrieved contractor with another council office.
Says Thomas, “The mayor’s PR machine got him in trouble.”
On Tuesday morning, LL attended another PR event—anannouncement of the imminent constructionof one of the first pieces of the Northwest One development. There, Fenty announced the many benefits to come, introducing megadeveloperChris Smithof theWilliam C. Smith & Co.Present, but not taking the podium was Williams, whose Warrenton Group is codeveloping the 300-unit building (located, incidentally, next to DCHA headquarters).
After the announcement, LL asked Hizzoner how to describe the city-contract beneficiaries that have been painted in the media with the broad brush of “frat brother” (as opposed to his “running buddies,” who tend to get appointed to relatively minor boards and commissions.)
How to describe Karim, Skinner, et al.—friends, frat brothers, acquaintances, some other moniker?
“All of the above,” said Fenty. He declined to elaborate.
Why Adrian Fenty’s Parks Contracting Scheme Is an Outrage
Posted byMike DeBonison Oct. 30, 2009 at 8:46 pm (City Paper blog)
Faster, better, cheaper.
That was the rationale offered today by the administration of MayorAdrian M. Fentyfor why at least $120 million in city money has been sent to the D.C. Housing Authority and, in turn, handed to politically connected contractors with the faintest whiff of oversight.
The revelations at the D.C. Council hearing today shocked LL's conscience. And LL's conscience, for the record, is not easily shocked. The revelations included:
---That tens of millions of city dollars were moved around the city budget without independent review, in clear violation of the Home Rule charter.
---That the money was handed to a so-called 'quasi-independent' public concern, the D.C. Housing Authority, who in turn engaged in a contracting process that saw little, if any, legal review. For their trouble, that concern was paid $700,000.
---That project management functions were outsourced by DCHA to a private company, Banneker Ventures, that was paid more than $4.2 million to do a job---capital project management---that the Department of Parks and Recreation already employs a staff of 11 to do.
---That Banneker Ventures, in turn, was allowed to run a subcontracting process with only the faintest adherence to accepted procurement practices, with immense power to distribute millions of dollars in public money to the contractors of their choice (including, incidentally, toSinclair Skinner's Liberty Engineering & Design). And, with the input, LL might add, of the deputy mayor's office.
---That Banneker Ventures' contract described the scope of the work to be done for several projects---in some cases costing taxpayers more than $10 million---in a single paragraph of about 100 words. (An Office of the Inspector General chief noted that the language was "problematic" and "needs to be redone.")