Housing Panel to Review Montijo

San Diego Mayor Maureen O’Connor on Thursday scheduled a closed session of the Housing Commission for next week to inquire about an apartment rehabilitation project now under federal investigation and the job performance of embattled commission Executive Director Ben Montijo.

“It’s an executive session, and you talk about personnel issues and that could come up,” O’Connor said about rating how well Montijo has done on the job. “I’m not going to say it won’t come up because it very well may come up.”

O’Connor, chairman of the city’s Housing Commission, said she also called the closed session for Monday to ask Montijo about his agency’s practice of using word-of-mouth to advertise a federal housing subsidy program. U.S. Department of Housing and Urban Development rules require that the availability of the program be advertised in a general-circulation newspaper.

Later Thursday, mayoral press secretary Paul Downey confirmed that the closed session would indeed include discussion of Montijo’s performance. “That’s one of the reasons for the session,” he said.

The closed session comes after revelations that HUD is investigating the way that the commission arranged the deal to rehabilitate the Island Gardens Apartments, a 122-unit complex in the 3500 block of Island Avenue. In the complicated deal, the housing agency purchased the apartment complex in December, 1984, and held onto it for nine months so the developer could line up financing, part of which included a $709,000 loan at 16% from the public agency.

In the interim, the agency picked the project to qualify under the HUD Section 8 Moderate Rehabilitation Program, a coveted designation for property owners because it means guaranteed high rents for 15 years.

HUD approved the Island Gardens application under the subsidy program, but in a letter dated Feb. 6, 1986, a HUD official warned the commission that the agency’s involvement “could be construed as an identity-of-interest transaction or favoritism to an owner.”

Last week, HUD officials dispatched an employee to the commission to look through the Island Gardens files in response to questions raised by The Times about the project. HUD Regional Administrator Duncan Howard said he asked his agency’s inspector general to conduct the investigation after commission officials refused to let the HUD employee inspect the files.

A Times review of the Island Gardens deal showed that the commission apparently violated HUD guidelines by not advertising the availability of the Section 8 program, and commission employees conceded that they often rely on “word of mouth” in the development community to generate interest in the program.

The Times also revealed that Montijo’s teen-age son, Randy, was hired by the developer for three weeks to work on a construction cleanup detail last year. Montijo said the commission’s attorney cleared the arrangement, advising that the $15-an-hour job for the youth posed no conflict of interest for his father.

Montijo has vigorously defended his agency’s conduct in the Island Gardens deal, saying the agency took similar financial steps for other developers who were included in the federal rehabilitation program. He also said his staff cooperated with the HUD employee last week and never barred her from the files.

On Thursday, commission spokesman Ken Guyer said his boss welcomed the chance to meet in executive session with housing commissioners, the majority of whom are City Council members.

“As a matter of fact, Ben Montijo suggested that very thing to the mayor’s office two weeks ago,” Guyer said. “He’s looking forward to discussing at length with the commissioners his performance. He feels that he’s been a very effective leader and is very proud of his performance.

“I would say you cannot judge a man’s performance on accusations. I think you can judge it on the results of the investigations, which all have cleared this commission of wrongdoing.”

The controversy over Island Gardens is only the latest to hit the agency recently.

A whirlwind of news stories about the way the commission conducts business--how it arranged the deal for its new headquarters at 1625 Newton Ave., what Montijo billed in travel expenses, how he furnished his office and purchased a weight machine for employees with federal funds--prompted the City Council to take tighter control of the agency.

Citing a lack of “public confidence,” the council ousted five Housing Commission board members last year and appointed five council members in their place. Two tenants’ representatives complete the board.

Councilwoman Gloria McColl, one of those appointed to the commission, said she found the news of the HUD probe “very, very troubling.”

“Now the details I cannot comment on, but the fact that there is a federal agency investigating us is always cause for concern. . . . I think that any time the term ‘favoritism’ pops up, it is a very serious allegation and something that has to be fully investigated,” McColl said.

Councilwoman Judy McCarty, another housing commissioner, said she is curious about what the HUD probe will turn up.

“We can’t even have the appearance of favoritism,” McCarty said. “They may be able to prove that there wasn’t favoritism, but if there is an appearance that there was favoritism, then that affects the credibility of the city and that concerns me.”

McCarty also took issue with the fact that Montijo sent a telegram Wednesday demanding that Howard, the regional administrator, publicly apologize to O’Connor and other housing commissioners for his comments. Montijo apparently included the names of the mayor and Council members on the telegram without telling them first.

“They don’t owe me an apology because they haven’t attacked me,” McCarty said. “I don’t think what HUD did was directed at the directors. What they did was directed at the staff of the commission.

“I’m actually glad that they are acting on the information that they have by conducting this investigation.”