NEW PORT RICHEY — Commissioners rejected an affordable housing deal in Zephyrhills on Tuesday, saying they were given incorrect information before approving the project two weeks ago.
The decision to withdraw $450,000 in county matching money puts a major roadblock in an effort to build 30 subsidized homes in the Ten Oaks neighborhood for teachers, firefighters and other government workers.
"It killed the deal," said developer Tom Smith of General Home Development Corp. "There'll be a lawsuit against the county."
But County Attorney Jeff Steinsnyder said Smith made incorrect statements to his office and commissioners when the issue was discussed two weeks ago.
Based on those statements, Steinsnyder said, he gave bad legal advice to the board.
"It appeared at least two commissioners based their vote on advice which I now believe was in error," he said.
That advice — and the statements at issue by Smith — centered on whether the county was bound by a decision in 2008 to allocate $700,000 for a similar project.
A reshaped deal came up again in April 2011, and commissioners decided then to scrap all funding for the project. But two weeks ago, Smith said the $700,000 "never went away." Steinsnyder advised commissioners that they could be liable for killing the deal.
After the Times reported details about the 2011 vote, Steinsnyder reviewed a recording of the discussion.
"It seems fairly clear to me that the board, in a unanimous vote, voted to take all the funds away from this project," he said.
Before commissioners revisited the item Tuesday, Smith promised legal action.
"We can litigate this in either state or federal court," he said. "I'm sure it's going to cost a couple hundred thousand dollars before it's all over. I'm sure I'm going to win. Maybe I'm wrong."
Several commissioners asked Steinsnyder if they could be liable.
"Whether or not Mr. Smith can prevail if the board decides to vote it down again is up to the court system," Steinsnyder said. "I believe that we have a number of very good defenses and the county can defend a position to not fund this project."
There were other procedural hiccups. At the Dec. 4 meeting, Smith argued that day was a "drop dead" deadline for the deal. After talking with state officials, Pasco's Community Development manager George Romagnoli wrote that he could not find "anything preventing the board from continuing the matter" until Tuesday's meeting.
Romagnoli said the project also relies on a "legally dubious" method of requiring home- owners to repay the county's $450,000. That amount is a loan, not a grant.
Despite the procedural problems, Romagnoli supported the project. He said it would provide housing in an underserved area where foreclosures are being bought by investors. The construction money would also provide jobs.
"Speaking as the person responsible for affordable housing in Pasco County, in our mind it's still a worthwhile project," he said.
But a majority of commissioners said they were uncomfortable competing with private developers.
"I do think we see the housing industry coming back," said Commissioner Kathryn Starkey. "I sure don't want to compete with companies that are just starting to come back."
Commissioners voted 3-1 on Tuesday to reject the funding, after reconsidering their earlier decision. Commissioner Pat Mulieri cast the lone dissenting vote. Commissioner Ted Schrader abstained from the vote and discussion because his brother is a minority owner of the project.