Sweetheart Deal

How does Virginia McGuire make a profit in the nonprofit business of creating affordable housing? Simple. She pays her husband.

During the 2001 session, McGuire had some potent allies, most notably millionaire developer John Condit of San Antonio, and a Fairfax, Virginia-based nonprofit called American Village Communities Inc., which has been on an apartment-buying spree in Austin and Amarillo.

According to its 1999 federal tax form, 75 percent of American Village's $396,000 budget went to pay the salaries of its four officers--two of whom worked only part-time--with much of the rest going to "property pursuit costs." One of its biggest costs last year was the hiring of lobbyists to keep Texas' tax holiday on the books with as few restrictions as possible. American Village Communities reported spending between $55,000 and $125,000 to hire four lobbyists during the 2001 session, state records show.

McGuire, meanwhile, helped the group's president, Brant Baber, make introductions around Austin, according to several sources. Ocanas, whose group was behind the fast-sinking reform plan, says McGuire set up a dinner so the two of them could discuss the issue. "We agreed to disagree," Ocanas says.

Sheila Dixon, at the Cascade Park apartments in Mesquite, says the complex under the McGuires was worse than the public housing project she had fled.
Mark Graham
Sheila Dixon, at the Cascade Park apartments in Mesquite, says the complex under the McGuires was worse than the public housing project she had fled.
Sheila Dixon, at the Cascade Park apartments in Mesquite, says the complex under the McGuires was worse than the public housing project she had fled.
Mark Graham
Sheila Dixon, at the Cascade Park apartments in Mesquite, says the complex under the McGuires was worse than the public housing project she had fled.

By the time the reform measure was passed and signed into law, it was all but gutted by amendments that exempted groups such as Green Bridge and American Village Communities from being forced to provide social services.

Ocanas and others say they are gearing up for a new round of debate next year, and they expect to have a few more allies. Properties have been going off the tax rolls in large enough numbers over the past two years that local jurisdictions are beginning to complain, says state Representative Bill Carter, chairman of the House Urban Affairs Committee, who is gathering facts for a hearing in June.

The break is costing schools and cities in Harris County about $5 million this year, Carter says. In Dallas County, 261 properties valued at $132 million have been granted the exemption, tax officials say. That is about $3.5 million in local taxes waived this year. Green Bridge's two projects--Williams Run and the Richardson apartments--would be paying about $800,000 a year in taxes were they not exempt.

Carter, a Republican from Haltom City, says he suspects some of the chodos that formed in the last few years are not in it for charity, and he is pushing for an emergency rule this year that would stem the flood of applicants until the Legislature has a chance to act.

In Carter's view, reputable chodos offering services to tenants "are the backbone of our affordable housing program, and we don't want to hurt them in any way." The problem is the abundant tax breaks have allowed profit-seekers to take over. Between tax-free bond financing and total abatement of property taxes, groups can "double-dip" the tax structure and be made to give little in return.

"We've opened this up," Carter says. "And greed has walked through."


In the world of public housing policy, Virginia McGuire is a well-known and highly respected figure. In April 2000, the Business Women's Network and the National Foundation for Women Legislators honored her at a National Press Club luncheon as an "Entrepreneur of the Year." The event brought McGuire back to Washington, where she began her career 27 years ago as a staff member for a congressional committee.

At the time, her father, Jim Wright of Fort Worth, was ascending to the top Democratic leadership of the U.S. House of Representatives. His daughter, meanwhile, embarked on what was to become a long career in housing, working as a lobbyist for the National Association of Home Builders and, later, a prestigious New York law firm.

In 1991, McGuire returned to Texas when former Governor Ann Richards appointed her deputy executive director of the Texas Department of Housing and Community Affairs. The same year, Scott McGuire became the director of the department's housing finance division--reporting to Virginia, whom he married in 1995. Together, they oversaw the very same bond-financing program they would eventually tap to purchase Williams Run.

The couple later worked together in Dallas for the Enterprise Foundation, a Maryland-based nonprofit that metes out money to rebuild impoverished neighborhoods. A major force at the national level, its board includes Kweisi Mfume, president of the National Association for the Advancement of Colored People, and former U.S. Housing and Urban Development Secretary Henry Cisneros.

In 1999, Virginia McGuire left her position as the foundation's southwest regional director to create Green Bridge Development, becoming the company's president and only paid officer.

Its first deal was Williams Run.

On May 23, 2000, five days before Green Bridge signed the sales contract to buy the complex for $11.3 million, Virginia and Scott McGuire sat down and hammered out a handsome arrangement for themselves.

McGuire agreed to pay her husband's company, Elsinore Group, $400,000 and reimburse all its expenses for being the "developer" of the deal. A copy of the document shows the couple signed on behalf of their respective organizations, she as the president of her one-man outfit, he as the vice president of Elsinore, which was formed in 1998 and has an office in Dallas and headquarters in a Washington suburb.

Besides her husband, two other Elsinore executives have close ties to Virginia McGuire going back years. The web of relationships is so thick that, legal divisions aside, it is a bit difficult telling where Elsinore ends and Green Bridge begins.

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