Mayor Says City is Working to Preserve the Wilmington Housing Partnership Mission; Report from City Auditor Points to Financial Problems; Focus is on Current WHP Projects and Other Property Assets
Mayor Purzycki Directs RE&H Director Weir to Oversee Remaining WHP Projects; WHP Executive Director Martin Resigns
Mayor Mike Purzycki said today that the Wilmington Housing Partnership, which is a publicly and privately funded non-profit, quasi-governmental agency, is suffering from financial challenges, but he is determined to preserve the WHP’s mission of stabilizing and reviving City neighborhoods and providing affordable housing. The Mayor said a report he requested from the City Auditor confirms the weakened financial condition of the Wilmington Housing Partnership.
The Mayor said the City has made attempts over the past several months to seek additional funding to support the agency. Mayor Purzycki has asked Wilmington’s Real Estate and Housing (RE&H) Director, Bob Weir, to oversee two current and ongoing WHP housing projects—Bennett Street and Vandever Avenue—in an effort to get them completed and sold as soon as possible.
“I feel it’s important that we assist the WHP in completing current projects and seeing to it that all contractors and vendors are paid,” said Mayor Purzycki. “The WHP has a lengthy and outstanding record of accomplishment over many years regarding neighborhood stabilization. The organization has provided affordable homes for more than 100 families in recent years. So, I want to make sure that the WHP’s emphasis on rebuilding our neighborhoods continues, and that its property assets are preserved and hopefully developed.
“The WHP’s financial imbalances have been building for a number of years,” said the Mayor. “In fact, neighborhood development agencies such as the WHP must subsidize their housing projects so citizens can purchase a home that is affordable. That means these agencies have to spend more to build or redevelop a property than they can ever hope to gain back from selling the property.” Mayor Purzycki went on to say that if you couple the subsidy requirement with WHP’s aggressive property acquisition plan, and the fact that substantial private funding did not materialize, you begin to understand how some of these problems developed. Because the WHP was not able to complete the Vandever Avenue and Bennett Street properties over the past few years as planned, the Mayor said, the agency did not receive revenue from those sales to help offset debt or even help it leverage additional funding.”
The Mayor said he asked City Auditor Terence Williams last spring to review the agency’s financial records. The report from the Auditor, which was finalized this month, is attached as part of today’s announcement. Prior to the Mayor’s request to the Auditor, the City initially learned of potential WHP funding problems when the News Journal ran an article about a WHP contractor who had not been paid for his work. The Mayor said while the contractor was eventually paid, it was clearer to him by the middle of last year that the WHP needed additional funding.
To bolster the WHP’s financial situation, the City helped it secure a half-million dollar bridge loan last May from the Urban Development Action Grant Corporation, as well as a $275,000 loan in November from the Real Estate and Housing Department. The City most recently has approached Cinnaire for a half-million dollar construction loan for the WHP and is awaiting that decision. The Mayor said the plan from this point forward is for RE&H Director Weir to get the Vandever Avenue and Bennett Street projects completed.
The Mayor said the WHP also has an inventory of approximately 150 properties acquired in recent years as part of a campaign to preserve City neighborhoods. So, in addition to helping the WHP complete current projects, he also wants Director Weir to determine a course forward regarding the other WHP property assets.
In a related move, WHP Board Chair Rob Buccini, who was appointed WHP Chair nearly 10 years ago, announced today that WHP Executive Director Steve Martin has resigned. Buccini said the agency does not have the resources to keep staff in place at this time. Buccini also added that he does not absolve himself from blame regarding the WHP’s current financial condition. Buccini said an aggressive property acquisition plan, coupled with shortfalls of anticipated funding, led to the WHP’s current problems, but even so, he said these problems still should have been managed better. However, Buccini said he is proud of the WHP’s efforts to preserve Wilmington’s neighborhoods.
Mayor Purzycki said four members of his Administration—Chief of Staff Tanya Washington, the late Finance Director Patrick Carter, Planning Director Herb Inden and since July of 2018, RE&H Director Weir—sit on the 12-member WHP Board of Directors, as well City Council Member Charles “Bud” Freel. Purzycki said it is troubling to him that none of these officials was provided information that would have indicated the financial condition of the agency.
To read the Auditor's report, click here.