Affordable homes contract ends up in court - KUAM.com-KUAM News: On Air. Online. On Demand.

Affordable homes contract ends up in court

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by Mindy Aguon

Guam - While the Guam Housing and Urban Renewal Authority wrapped-up its Affordable Housing Symposium today, questions have surfaced about the agency's recent decision to recommend $2.5 million in tax credits to a Georgia-based company that intends to build 60 low-income housing units.

With a well documented need for more than 1,000 affordable homes for low-to-moderate income families on the island, not to mention the more than 700 people currently on the closed Section 8 waiting list, GHURA declined to award the tax credits to a company offering to build 108 single family homes.

Low-income housing is something that Guam is in dire need of and with hundreds of families on the Guam Housing and Urban Renewal Authority's waiting list, there's simply not enough of at this time.  Deputy Director Mike Duenas said, "At a minimum we will need to develop 1,400 housing units geared to low- and moderate-income families. Those are units that are not generally provided by the private housing market."

The need for affordable housing is further supported by the comprehensive housing study of 2009.  The study found that 86% of potential buyers wanted single, 3 or 4 bedroom family homes that was at least 1225 square feet.

While 61 percent of buyers indicated a preference for northern or central Guam, 40% of those said they would at least consider purchasing a home in southern Guam.

Similar results were found for those who wished to rent.

Two companies submitted their plans for low-income housing - Ironwood Heights Guam II and Agat Housing Partners.  The companies developed the plans as they were contenders for $2.5 million in tax credits through the Low-Income Housing Tax Credit Program.  Ironwood Heights II Guam proposed building 60 units on a 2.5-acre lot on Ypao Road.  36 of the condominium units would be three-bedroom units, with a dozen one-bedroom, one-bath units and 12 two-bedroom, two-bath units and the average square footage was estimated to be 1,000 square feet.

Agat Housing Partners proposed 108 single family homes on 25 acres of land in the Santa Rosa Subdivision.  44 three-bedroom units, 44 four-bedroom units and 20-five bedroom units.  The homes would be 3- to 5-bedroom units with an average of 1,307 square feet.

GHURA put together a selection committee that recommended the approval of tax credit reservations be awarded to Ironwood Heights II; Duenas wouldn't make specific comments about the award to ironwood, but says his agency's efforts are not just to ensure low mortgages but to also look at the affordability of the cost of transportation and access to schools, medical facilities, work and more.

He said, "We're looking at designing communities where we minimize the amount of driving so we're learning about designing communities that foster walking, bicycles and designing it in such a way that you don't have to drive 2-3 miles to get to a grocery store or drive 30 minutes to where you work."

According to documents submitted to GHURA, Ironwood Heights II purchased the Ypao Road property from Attorney David J. Lujan.  The total cost of land and existing buildings for the project is listed at $1.4 million. (Lujan's law firm is also GHURA's legal counsel.)

Agat Housing Partners, however, has filed a protest of that award, alleging that GHURA didn't follow through with the qualified allocation plan, the selection scoring was wrought with problems and that Ironwood Heights II did not exist at the time they awarded the tax credits.  It's a similar situation as their sister company Ironwood Heights Guam attempted to bid for the Guma Trankilidat project.

You may recall the Attorney General's Office determined that Ironwood's proposal had discrepancies and had to be cancelled.  The AG's Office determined in that bid that Ironwood did not exist as a legal entity until after it got its articles of organization signed and filed, which was after they had submitted their proposal.  In the low-income housing case, Ironwood Heights Guam II submitted their application on January 19, attempting to garner tax credits for the Guma Trankilidat project and the low-income housing project.

But Agat Housing Corporation alleges Ironwood Heights Guam II, LLC. was not a legal entity authorized to submit applications for Government of Guam proposals because it failed to be an organized entity under Guam or any jurisdiction prior to submitting its application.

Additionally, the company argues that the GHURA board approved the Selection Committee's recommendation of tax credits without reviewing the tabulation sheets which they contend were wrought with problems.  A certificate of organization from the state of Georgia shows the company was duly organized on April 12, just a few days after the GHURA board made their selection.

GHURA meanwhile alleges that the company was a legally recognized entity effective December 14, 2009, but that certificate shows the company as Ironwood Heights Guam and the application submitted to the agency was from Ironwood Heights II Guam, LLC.

Agat Housing also alleges that GHURA did not include any mechanisms for a protest, complaint or remedy which is why they pursued the legal action.  GHURA meanwhile has filed a motion to dismiss, alleging Agat Housing has no legitimate claims and Ironwood Heights II Guam had the better offer.

Superior Court Judge Vern Perez gave Agat Housing Partners until June 21 to file an opposition to the motion.  A hearing is scheduled for July 7.

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