Ignore All the Smoke Around HUD's Case Against Dallas and See Something Ugly in the Mirror

Ignore All the Smoke Around HUD's Case Against Dallas and See Something Ugly in the Mirror
Alvaro Diaz-Rubio

The U.S. Department of Housing and Urban Development's accusation of racial segregation lodged against Dallas has probably reached a point of incomprehensibility for most people, but there is still a simple question in it: What if it's true?

As far as understanding most of what they say now, the city and HUD might as well be two Inuit seal hunters arguing over a dead dog. The cloud of obscurity — both sides shooting acronyms and neologisms at each other — has descended into jibber-jabber.

But last week Dallas Morning News editorial writer Rudy Bush rushed into that cloud — it's his right and duty to do so — and came back out waving chunks of bloody bone and hanks of hair, claiming to know something. Bush said HUD has agreed to drop its demand that Dallas pay back Curtis Lockey the $40 million the city cost him when it kicked the pins from under his downtown tower re-do project in 2009.

I don't think it's true. Bush won't say how he knows it's true, and I won't say how I know he's wrong, so that's helpful, too, isn't it? More seal hunters. I do think, however, that we can dip back in time and recapture a little bit of sanity.

Lockey is the guy who complained to HUD four years ago that Dallas elected officials and City Hall staff had been colluding for a decade to increase racial segregation in the city. Lockey said Dallas pulled the rug out from under his own deal and cost him $40 million when he tried to obey federal law by including low-income rental units.

Lockey told HUD that Dallas broke several laws by taking federal desegregation funds then using the money to subsidize fancy condo towers downtown, smacking down any developer who made his own project affordable for low-income minorities and disabled persons.

The Lockey complaint — put together with help from a top D.C. law firm that has a track record on housing discrimination suits — said much more than that. It painted a picture of Dallas City Hall as a place so racist in its basic assumptions about life that it didn't even know it was racist, which I think adds up to being racist and stupid. The complaint also named names, and for that you can bet the people at City Hall hate Lockey's guts forever.

HUD carried out a four-year investigation of Lockey's accusations. Last November the agency issued a "letter of findings" saying Lockey was right. They said Dallas had broken several laws. More recently, HUD sent Dallas another letter telling the city what it has to do about it.

Why does Dallas have to do anything HUD tells it? If Dallas tells HUD to buzz off and ignores this latest letter, or if Dallas simply fails to negotiate a deal that HUD will accept, HUD can refer the matter to the Justice Department. Doesn't mean they will, but they can. So there's a pretty solid incentive to get it taken care of before that point.

After an interview with Mayor Mike Rawlings at his home last week, Bush wrote an editorial for the Morning News in which he painted Lockey and a partner of his, Craig MacKenzie, as a couple of fly-by-night shysters with a bad project, trying to gouge the city for money they didn't deserve.

"So who are Lockey and MacKenzie?" Bush asked. "Two developers who in the mid-2000s tried to get the city to partner on redeveloping the vacant 1600 Pacific building. Their request? $112 million in government subsidies. Their product: a refinished building worth $37 million with units as small as 375 square feet.

"The city's economic development team, the Downtown Connection TIF board and anyone else at City Hall with a modicum of business sense turned the deal down flat. Lockey and MacKenzie's partnership not only went bankrupt on the building, they were in arrears on their taxes and had completed no significant development project."

I have been reporting pretty much the opposite of this since 2009, that Lockey is a solid guy with sound business credentials, good enough credit to get HUD to lend him $52 million and also to raise tens of millions of dollars in private capital, that his deal was solid and that things only went south when he told City Hall he was going to put low-income units in it.

But before you feel that cloud of obscurity blowing out around you again, let me point something out. The HUD letter of findings is a solid reality check on many of these points

HUD sent federal investigators into the field for four years. The city shipped boxes and boxes of documents and memos to Washington and debated every point HUD came up with, rebutting them on every single issue. So what did HUD find? What did HUD claim it could prove?

I went back over the letter last week. I want to hit the highlights for you here: First, a major finding was that Dallas officially and formally drew a line across the city from east to west dividing the city into what it called sectors:

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3 comments
joe010
joe010

Based a quick read of your article, I'm not sure if the "truth" will ever be determined as perception of the situation is a big part of identifying what is "true". Sure ultimately a jury or judge may make a ruling. But is that the "truth"? That is a court decision, but does that lead to the "truth"? Much information does not make it in to court and a court is about an adversarial situation, which is not necessarily the best means of revealing "truth". It sounds like there were multiple motivations by both the city and the accusers. I can quickly see that both parties can easily be painted as good or bad guys by the media depending on the nuances behind their actions. Personally I have a hard time picturing Dallas city hall as being overtly malicious or intending to circumvent HUD regs or cost a private party millions of dollars. I am wondering if it is a combination of factors and misjudgments by many parties that led to the current situation. Of course if you can have the 800 lb gorilla on your side so much the better.  

MaxNoDifference
MaxNoDifference

"We have seen the enemy, and he is us." - W. Kelly (Pogo)

riconnel8
riconnel8

@joe010 " Personally I have a hard time picturing Dallas city hall as being overtly malicious or intending to circumvent HUD regs or cost a private party millions of dollars."

Why don't I have a hard time imagining it at all?  For the 21 years I've lived in this area all I've ever seen out of Dallas was one huge con job after another.  I thought HUD monies were meant only for low income.  If HUD monies can be used for high income housing...it's time to get rid of HUD.  They can finance and build their own complexes...my tax dollars shouldn't play into it.   Talk about corporate welfare...sheesh.  And then they refuse to pay their fair share in taxes.  Go figure.  

 
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