Houston's Housing

Similar pressure was being applied to the city by homeowners' associations in the Fondren Southwest area. The groups met with Lanier on January 11, 1993, to discuss the Bellfort Southwest III and Bellfort Southwest IV complexes, which were on the "fast track" for purchase from the RTC.

A follow-up letter to the mayor's office outlined the homeowners' demands, which included a city-funded capital reserve for any future repairs; input into who would manage the complex (specifically not to be the city's housing authority); right of first refusal of prospective buyers; and a promise from the city that it would "remove nearby nuisances," such as a local nightclub that had the neighborhood up in arms.

At this point -- January 1993 -- negotiations with the RTC were well under way. In addition to the above three complexes, the city was also attempting to work out deals for Tara Hall Apartments, near Hobby Airport, and Winwood Club.

Also at the time, the city was in the process of choosing a real-estate consultant to help it negotiate the tangle of federal regulations and guidelines that dictated the purchase of property from the RTC.

The city was apparently in a hurry to find someone. The RTC's marketing period for the first four complexes the city wanted to buy was running out. The city's office of housing and community development issued a request for proposal on November 4, 1992; the deadline for responses was just nine days later.

One respondent was Abraham Koshy, head of A.K. Realty Inc. Koshy says his company has been in the real-estate management business in Houston for 15 years. He scurried to meet the city's deadline, but he never heard back.

"They did not even give me the courtesy of a response," he recalls. "I called them three times to find out what happened, and finally someone told me that they had canceled it. The person on the phone said they weren't going to go through with the purchases."

Koshy says he doesn't remember whether the short time he had to prepare his proposal hurt his chances. Max Uzick, the man in charge of preparing a proposal for the Duddlesten Management Group, says he doesn't remember that either.

"We had 30 to 45 days to respond, as I recall," Uzick says.
It's hard to say whether Uzick's memory is poor or if, for some reason, he had different time constraints to contend with. However, he does remember what happened when he asked the RTC for information on the affordable housing program.

"It came back in boxes," Uzick remembers with a chuckle. "I mean, stacks of paper a foot high. When we reviewed the program, we decided that, in our minds, it could be very successful. So we sent in the proposal."

Suzy Hartgrove, a spokeswoman for the office of housing and community development, says Duddlesten wasn't given any more time than any other real-estate firm to prepare and submit a proposal, though many such companies, including Duddlesten's, had previously contacted the city about the RTC's affordable housing program.

Like a lot of close friends of Bob Lanier, Wayne Duddlesten stays out of the public eye. He served with Lanier on the Texas Highway Commission and has given thousands of dollars to the mayor's political campaigns. One thing in particular about Duddlesten that some people have noticed is the prominent role he has assumed in Lanier's low-income housing strategy.

In addition to handling the city's RTC purchases, Duddlesten is currently negotiating a contract for a $50 million, federally funded redevelopment of Allen Parkway Village. The selection of Duddlesten, whose master plan team includes some Boston architects, disturbed at least one housing authority board member, who said the team's proposal was second-rate.

Many housing advocates were also angry when the city's housing authority moved its centrally located offices to a building outside the Loop that's owned by a client of Duddlesten's realty management firm. They say it's difficult for the housing authority's clientele to reach the new office, which is on Fountainview between Westheimer and San Felipe.

"They moved further out to the west side of town, and now it takes a couple of bus transfers to get there," says Sissy Farenthold, a prominent housing activist in the city. "It seems like another flagrant example of not serving the needs of their people."

On March 3, 1993, Duddlesten Management Group and Duddlesten Realty Advisors Inc. contracted with the city for due diligence -- physical inspection, financial analysis and market research -- of Tara Hall, Winwood Club, Bellfort Southwest III and Bellfort Southwest IV. Austin attorney Larry Paul Manley was hired on to negotiate the purchase prices and the percentage of low-income units to be set aside.

Bingham said it was around this time that she started to hear the question, "Why was the city going into the apartment business?"

"We felt going in that the city could not only purchase the properties and put the rent restrictions on them, but rehab them if necessary," she says. "We felt that, opposed to them falling into the hands of some groups that might want to come back to us and borrow money to do it, we may as well do it ourselves."