NEW PORT RICHEY — Hours after rejecting money for a low-income housing project in Zephyrhills, county commissioners on Tuesday reversed their decision after the developer threatened to sue the county.
As part of the reversal, the county agreed to provide a $450,000 loan that would be paired with $2.5 million in state money and private funding to build 30 subsidized homes in the Ten Oaks subdivision for teachers, firefighters and other government workers. Half of the homes would be reserved for families making 80 percent of the county median income, with the rest set aside for those making slightly more than the average income.
Commissioners had approved spending $700,000 on a larger version of the project in 2008. But they backed out in April 2011 after developers asked the county to commit $1.3 million.
When they first debated the issue Tuesday morning, commissioners reaffirmed their 2011 decision. Several said they didn't want to compete with private industry.
"I personally think by doing a project like this, we're just stalling the market rebound," said Commissioner Kathryn Starkey, who was part of a 3-1 majority to reject the money. Commissioner Ted Schrader abstained from the vote, noting his brother is a part owner of the project.
But the project was revived Tuesday afternoon. County Attorney Jeff Steinsnyder said the county could be sued if it pulled out of the deal.
"The representation from the developer ... was that this whole deal will unravel without the board's contribution," he told commissioners. "Your piece of the puzzle was integral to the state's action. If you pull that off the table, that makes you potentially liable for the deal unraveling."
Tom Smith, president of General Home Development Corp., argued the county was bound by its 2008 decision to spend $700,000 on the project.
"We're here requesting a lesser amount of money to serve these families," he said. "The 700 never went away."
That's not true.
In April 2011, commissioners had the option to refuse increasing the county's subsidy while affirming the original $700,000 award.
They didn't do that. On a 4-0 vote, the commission rejected spending any money on the project.
"How do we come back today and say we're bound from something two agreements ago?" Commissioner Jack Mariano said Tuesday.
Mariano was part of a 3-1 majority that approved the money Tuesday afternoon. He made the motion to approve the $450,000 county loan after Steinsnyder said it was his legal advice that commissioners approve that reduced amount to avoid a lawsuit. Commissioner Henry Wilson dissented.
Reached after the meeting, Steinsnyder said he recalled that the $700,000 offer was still in place.
"My concern today was there was an existing commitment that he was asking to reduce and they were taking it off the table," he said. "How is that going to look to a reviewing entity, the court system?"
At the 2011 meeting, though, Steinsnyder said commissioners wouldn't be liable for changing their mind.
"You're being asked for a different way to salvage this grant, and you don't have the money to do it," he said at the time.
On Tuesday, he said that advice focused on refusing to increase the county money, not scrapping the money completely.
At the meeting, Smith said today was a "drop dead" deadline for the project. Steinsnyder said his office didn't review the latest request until Tuesday.
Mariano said he was frustrated with the last-minute decision.
"We should have a lot more information than this and we should've been briefed on it," he said at the meeting.
Lee Logan can be reached at [email protected] or (727) 869-6236.