HUD wants Jackson to repay $1.5 million
The U.S. Department of Housing and Urban Development is demanding the city of Jackson repay $1.5 million used to acquire property for the much discussed Farish Street Entertainment District project that has never materialized.
In a letter to city officials, dated September 8, HUD is demanding the city repay the money, saying the city never established Jackson Redevelopment Authority as a legal entity to receive the HUD money and once JRA received the money, the city failed to provide proper oversight over JRA's handling of the money.
The city used the HUD money to purchase property along a three-block area of Farish Street for the proposed entertainment district, but almost 17 years after receiving the money, no building has opened as part of the entertainment district.
Mayor Tony Yarber is expected to present to the City Council next week a plan to satisfy HUD's demand, said Ward 2 City Councilman Melvin Priester Jr., who chairs the city budget committee.
Yarber is expected to discuss a possible payment plan of about $500,000 per a year for the next three years to satisfy HUD's demand.
"It's a very serious situation," City Councilwoman Margaret Barrett-Simon said. "I can't minimize the seriousness of this on the city's budget."
Barrett-Simon said the mayor's office briefed some council members Wednesday on the plan to satisfy the HUD demand.
"The Farish Street project has been a long running saga and the saga continues," Barrett-Simon said.
On Monday when the City Council approved the 2014-2015 year budget, which begins Oct. 1, members were told by budget officials the city only had $1.44 million in cash reserves in the budget. The HUD payment could further reduce that amount.
Earlier this week, Priester asked if the HUD demand letter would be a liability against the city for the upcoming budget year. Priester said today that HUD wants back the money it provided the city about 17 years ago for the stalled Farish Street project. The Council is expected to discuss the payment plan at Tuesday's meeting.
The city has until Oct. 8 to respond to the HUD letter, which outlined corrective measures that must be taken. HUD has suspended the Jackson Redevelopment Authority, developer David Watkins' Farish Street Group, and former Farish Street Group official Jason Goree from participating in further HUD projects until the issues are resolved.
For decades, there has been talk of returning the historic Farish Street District to its glory days of a thriving black business and entertainment district.
In the mid to late 1990s, efforts began to acquire property for an entertainment district on Farish Street. Today, the Farish Street Entertainment District project not only is stalled, but mired in a legal dispute with no one knowing when and if the project will resume.
The project was awarded to Performa Entertainment, a development company based out of Memphis, in 2002.
In 2008, the project was taken back and given to developer David Watkins. Last year, the Jackson Redevelopment Authority removed Watkins from the project, citing a lack of progress.
Currently, JRA is locked in a lawsuit against Watkins and his organizations, Watkins Development and Farish Street Group, demanding the removal of liens on the property taken out by the developer after he was dismissed last yeart.
Watkins has said he filed the liens to protect what he says were $4.7 million in improvements on the land.
Yarber said he supports the Farish Street Entertainment District. Yarber said earlier this week he didn't want to discuss the HUD matter in a public forum when council members asked about the letter during discussions about the budget. He said it went beyond just the Farish Street project.
The HUD demand isn't the first for the city of Jackson. Two years ago, HUD sent a letter saying the city may have to reimburse more than $300,000 to get $1.15 million in housing funding restored.
A HUD monitoring report found that lax oversight by the city led to the misuse of more than $1 million in federal HOME grant money over several years at housing projects that were at risk of failing. The city received the money during the administrations of Mayors Frank Melton and Harvey Johnson Jr.
Priester said HUD regulations mandate the repayment of money when a demand is made or HUD will reduce the money it provides to the city.
Contact Jimmie E. Gates at jgates@jackson.gannett.com or (601) 961-7212. Follow @jgatesnews on Twitter.