Low-income housing developer Virginia McGuire has resigned from the troubled nonprofit that paid her and her husband's company roughly $500,000 to buy an aging East Dallas apartment complex.
In late April, on the same day the Dallas Observer published a story about the big fees McGuire and her family collected in her self-described mission to help the poor (see "Sweetheart Deal," April 25), the organization's board met in a conference call and accepted McGuire's resignation, several board members confirmed last week.
McGuire, a former state housing official and daughter of former U.S. House Speaker Jim Wright, made no mention of plans to leave Green Bridge Development Co. during interviews with the Observer in late March and early April. She was asked then to justify the fees paid to her and her husband, and whether Green Bridge was simply a vehicle for profit-making companies to cash out the generous tax breaks afforded nonprofits doing real estate deals. When asked last week to comment on her resignation, McGuire pointed her index finger toward the door of her Lakewood office and uttered one word: "Out."
Green Bridge's new director, Robert Russell, confirmed that McGuire's departure was sudden. "A mutual business acquaintance got me with her to see if I could help solve some of the company's problems. I got with Ginger, and Ginger decided it would be best for Green Bridge if she resigned," says Russell, who has spent most of his career in for-profit real estate. The meeting with McGuire happened in early April, he says.
Russell declined to identify the acquaintance, but there is only one entity that has a financial interest in Green Bridge, and its interests are substantial.
When McGuire's company bought the 252-unit Williams Run apartments 18 months ago, it financed the entire purchase with a $12.8 million tax-exempt revenue bond. The bond was purchased by Charter Municipal Mortgage Assistance Corp., known as Charter Mac, a publicly traded company that holds about 150 such bonds on apartments in 19 states.
Because Green Bridge Development put no money into the Williams Run purchase and has no financial liability if the bonds go into default, Charter Mac took on all of the risk in the transaction. It is on the hook should the property fail.
Charter Mac's most recent federal filings, which report occupancy rates at the properties to inform investors of their financial health, show Williams Run's 75 percent occupancy rate is among the worst in the Charter Mac portfolio. Further, state records show Green Bridge last year began to draw money from its emergency reserves to make its payments to Charter Mac, a sign of a shaky project, those familiar with the business say.
John Sorel, vice president of Related Capital, which is affiliated with Charter Mac, says the company would not comment on McGuire's departure or Williams Run.
New York-based Charter Mac is also financing another Green Bridge apartment project, a $20 million complex under construction in Richardson.
McGuire acknowledged in earlier interviews that Charter Mac exercised considerable authority over decision-making at Green Bridge, and she made it clear she was displeased with some of the company's ideas. She said Charter Mac picked a management company to run the complex--one of three in the past 18 months--and prohibited her from managing the complex herself.
In an April 5 e-mail that McGuire sent to Jim Buie, director of the Texas Bond Review Board, McGuire repeated those thoughts and said the manager Charter Mac picked presided over a big drop in occupancy at the complex.
In the long and friendly missive, McGuire described criticism of her and her organization by two former Williams Run tenants as "harassment" and told Buie that an article was being prepared by the Observer, which she called "the local Dallas rag."
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The former tenants, brothers Hal and Ted Barker, say they have talked at length with Internal Revenue Service investigators about Green Bridge's tax filings and have contacted various state and federal agencies to complain about what they allege are violations of rules and regulations. Russell, the new director, confirmed that the IRS requested documents this spring from Green Bridge, although the IRS would not confirm or deny it is investigating the nonprofit.
Since hiring Russell in April, all six members of Green Bridge's board have resigned, and Russell is currently recruiting his own board. "It isn't uncommon for the director of a small nonprofit to want to bring in his own people," says David O'Brien, formerly Green Bridge's secretary/treasurer and the director of a housing nonprofit in Fort Worth.
So none of the officers and directors who were in place when Green Bridge purchased its two complexes, and hired McGuire's husband at a $400,000 fee, is with the nonprofit today.
McGuire, meanwhile, found no trouble landing a new job. The Siegel Group, an Austin-based real estate and consulting company, has hired her as a vice president in charge of its Dallas office. Among other things, the company helps nonprofits acquire apartments and move their requests for publicly subsidized financing through the state housing department and bond review board.