CITY HALL — Amid allegations that one of the city’s main affordable housing developers had bilked the city out of millions, the Housing Authority on Tuesday adopted a set of stringent oversight policies for future projects.
The discussion came days after the city filed a lawsuit against the developer, Advanced Development & Investment Inc., which is under federal investigation for allegedly over-charging cities throughout the state and transferring millions to personal accounts.
Among the new regulations are a checklist of documents required for all developer proposals, oversight of the project auditor, additional controls on construction costs and a requirement that any proposal for city-owned property go through a competitive bidding process.
“It’s been demonstrated, not only here in Glendale…the competitive process brings out the best in a project and project economics,” said Peter Zovak, the city’s deputy housing director.
Since 2005, Glendale paid ADI roughly $34 million in city housing funds for the construction of four developments. While the full extent of the alleged fraud is unknown, it is estimated to have reached into the millions on at least one project.
At the same time, internal memos show that city housing officials had raised concerns about the quality of ADI projects and the rising costs of the most recent building, Vassar City Lights.
On Tuesday, the Glendale Housing Authority, which includes the City Council and two other appointed members, voted 6 to 1 to approve the new regulations, which city officials said would help prevent a similar situation in the future.
“We all know what’s happened in the past six months with regard to ADI,” said City Manager Jim Starbird. “We’re trying to avoid that again.”
Councilman Rafi Manoukian voted against the new regulations, which he said would add additional staff costs.
But in voting to support the new policy, Councilman Ara Najarian again pushed for purchasing and rehabilitating existing housing units for far less than the hundreds of thousands of dollars spent per unit on new construction.
“For some reason, our focus is only on new construction, and I think that is wrong,” he said. “I think it’s myopic.”