Bids Thrown Out as Selection of Burbank Developer Draws Fire

Burbank City Council members Tuesday accused the city’s community development chief and housing officials of improper practices in choosing a developer for a low-cost housing project. City Manager Bud R. Ovrom said the selection process must start over.

Councilmen Robert R. Bowne and Michael R. Hastings said they were surprised that director Larry Kosmont and his staff favored Jamco Development Corp. over two other developers who had sought to build low-income housing on city-owned property at Peyton and Grismer avenues.

One of the other developers, Charles P. Cusumano, had offered to pay the city $65,000 for the land, but the staff recommended simply giving the land to Jamco.

However, Jamco failed to meet four of the requirements the city asked of developers in a solicitation that was sent to 62 construction companies.

Ovrom said Housing and Grants Administrator Linda Malzek had an “inappropriate conversation” with Cusumano about the value of the land and the number of housing units to be built. The process should have been confined to written exchanges, Ovrom said.

Jamco officials also waited until after the filing deadline to submit their plans, even though the city had said that late applications would not be considered, Ovrom said.

Kosmont also sent a letter to Jamco executives telling them that they “had been selected” to negotiate with the Housing Authority, although Kosmont was not authorized to make that decision, Ovrom said. Only the city’s Redevelopment Agency can make the final selection of a developer.

Bowne called Kosmont’s letter an example of “arrogance” and an “attempt to usurp the authority of the legal body of the council.” He said the letter “boggles my mind. This is something that we can’t accept in government.

“What apparently took place was some very loose and sloppy administration,” Ovrom said of the selection process. He said Wednesday that he is writing to all three bidders, telling them that all proposals will be rejected “without prejudice,” and the process of finding a developer will begin again. He said he will meet with council members to discuss ways to improve the process.

The selection process came to the city’s attention when Cusumano complained in a letter last April to then-Mayor Mary Lou Howard that the city had failed to act in good faith in considering his proposal. “This failure represents a direct loss of $65,000 to the taxpayers of Burbank,” Cusumano wrote.

An investigation by Ovrom and the city attorney’s office found no evidence of criminal action by Kosmont or other city officials.

The 15,140-square-foot site had been bought for $517,000 in federal Community Development Block Grants to be used for low-cost housing. Burbank has only one other low-cost development.

Officials said that, of the 62 letters sent to developers last February, responses were received only from Cusumano, Jamco and Del Rey Properties.

Ovrom said that, although Jamco officials presented their final plans for the site almost a month after the March 21 deadline, the firm did submit preliminary plans by the deadline.

He said that Kosmont, who is on vacation, had explained in his letter to Jamco that the firm had been selected to negotiate with the Housing Authority. Kosmont said the letter gave preliminary notification, pending approval of the council and the Housing Authority, and did not mean that the firm had been “selected” in any final sense.

Although Jamco did not offer any money for the site, and Cusumano offered $65,000, the Housing Authority staff felt the money was “insignificant” because Jamco proposed to build 14 low-cost housing units, whereas Cusumano proposed only eight units, Ovrom said.

Ovrom declined to say Wednesday whether he was seeking disciplinary action against Kosmont and other officials, but Mayor Mary E. Kelsey and Howard, who is still on the council, said they thought such action would be unnecessary.