The Durham City Council received a report Monday about the troubled development process for a neighborhood where a developer has not closed the deal on an auction he won with the city more than a year ago.
Two years ago, Southeast Durham Development Corporation, which was in charge of building 56 housing units in the Rolling Hills neighborhood, found itself unable to repay a loan from the city. The city then foreclosed on SDDC, according to a memo from Charlene Montford, the city's director of housing and community development.
Left with 47 unfinished homes, the city auctioned off a contract to complete the development, which R.D. Construction won in 2000 with a bid of $316,000. But R.D. Construction has not yet closed the deal with the city, although they have done some work on the problem.
"The bid process should not take 16 months," council member Jackie Wagstaff said. The council also discussed what legal recourse it might have to force closure on the deal.
But the new development at tonight's meeting came when Denise Hester, SDDC executive director, told the council that another firm, Roberts Construction Company, had earlier offered $800,000 to the city to take over the construction of the project. She presented documents from Roberts outlining that offer.
Because the city had to approve all sales regarding the contract, Hester said she met with then-city manager Lamont Ewell, but he rejected the deal.
That puzzled some city council members.
"Why would we accept a $300,000 bid over an $800,000?" Wagstaff asked rhetorically.
Mayor Nick Tennyson said he did not remember any such offer being brought to the council's attention by the city manager, and thus could not speak with any certainty about it. But he said not to jump to conclusions about Ewell's decision. "Offers are not necessarily credible depending on what is contained in the entire offer," he said.
Montford said after the meeting that she had "no knowledge of the $800,000 prior to tonight."
Further complicating matters is a request from the current developer, R.D. Construction, for a $400,000 grant to help develop streets in the neighborhood.
Montford said Ewell, and later then-interim city manager Greg Bethea, both discussed approving such a grant for the corporation.
But council members Monday expressed disapproval of the grant. "It would certainly not be my intentions at this time to support providing those $400,000 when this issue comes up," council member Floyd McKissick said.
City Manager Marcia Conner stressed that her staff is still investigating the details of the project. "I don't think we're going to have the answers this evening to the questions you raised," she told the council.
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