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Developer of failed projects secures $500,000 from Congress

TAMPA — David Foster made government officials a promise. If they would give his non-profit public money, he would develop seven properties into affordable housing for one of Tampa's poorest neighborhoods.

Eight years and more than $560,000 later, five of the properties sit vacant and rotting. All seven ended up in foreclosure.

Given this history, it's hard to imagine that Foster and his Central City Community Development Corp. would receive more taxpayer money for development projects.

Unless you're U.S. Reps. Bill Young, Gus Bilirakis and Kathy Castor, or U.S. Sen. Bill Nelson.

Last year, those lawmakers helped Foster get a $500,000 federal earmark for a huge Tampa project called Veterans Commons. It is supposed to provide housing to homeless veterans, mentoring for at-risk students and put 400 people to work.

But the federal earmark process involves little vetting of recipients. So the four members of Congress didn't know that Foster had never successfully completed a housing project.

They didn't know he exaggerated the involvement of his partners in the proposal he presented to them.

They didn't know he has a record of mishandling grants for much less ambitious projects.

And they didn't know his nonprofit has faced legal troubles, including IRS liens for unpaid payroll taxes.

The lawmakers, who represent Florida and the Tampa Bay area, say they made their decision based largely on information provided by Foster.

Others say he never should have gotten a cent.

"I am flabbergasted that this guy's getting another $500,000. That's just insane," said Craig Rothburd, an attorney working pro bono for the Hillsborough County Homeless Coalition.

The coalition directed a $400,000 state grant to Foster to develop housing for homeless people. It is now suing Foster for fraud and breach of contract.

When asked why his previous taxpayer-funded projects failed, Foster said he doesn't know. He believes his nonprofit group has a larger purpose.

"It's about building community,'' he said. "It's not necessarily about building buildings."

• • •

You wouldn't know that from looking at the master plan for the Veterans Commons project that Foster submitted to Young, Bilirakis, Castor and Nelson. It calls for the construction of eight new buildings surrounding the D.W. Waters Career Center, an alternative school near downtown.

Foster said he is working with nationally recognized companies this time and deserves another chance.

"When you're dealing with nonprofits, most of the small ones are passion-driven. And many do not have the experience," he said. "Hopefully, we learn. That's what makes us better and not quit."

Foster, 61, has an unconventional background for a developer. After studying for the priesthood and briefly teaching in Catholic schools, he moved to Tampa in the late 1990s to attend architecture school at the University of South Florida.

A professor, he said, encouraged him to get involved in the Tampa Heights neighborhood.

He created a nonprofit that became the Central City Community Development Corp. in 2002. That year, Tampa housing officials awarded his group $163,000 in federal grant money to buy three properties in Tampa Heights. Foster promised to renovate them and make them available to low-income buyers.

When Mayor Pam Iorio took office in 2003, Foster tried to get more city money to renovate the homes.

But with the first three properties untouched and decaying, city officials balked, asking Foster for detailed business plans. That never happened, and the city stopped working with him.

"We didn't have grant funds to give him unless he could prove he could make them affordable," said Cyndy Miller, who heads Tampa's growth management and development department.

The city tried to recover its investment in the properties. But Foster had taken out $280,000 mortgages on two of the homes and the banks were first in line for any money from a sale. The homes ended up in foreclosure.

The Homeless Coalition experienced similar frustrations. Its 2005 contract required Foster to use a $400,000 state grant to rehabilitate four properties and make them available to homeless families for 10 years.

Three of the properties were ultimately occupied, but only for about one year.

After fixing up the buildings, Foster transferred the properties to himself and mortgaged them for $561,000. When the Homeless Coalition questioned him about the change, he transferred the deeds back to the nonprofit group, along with the new debt.

Foster said he needed the money to maintain the properties, although two are now uninhabitable.

The Homeless Coalition tried to recover its investment. But once again, the new mortgage holder was first in line, leaving the coalition out of luck.

Foster's spotty record extends beyond the mishandling of government grants. Tax records and court documents show a number of problems involving his organization:

• It paid more than $8,400 in back taxes on board member Willie Dromillo's home.

• It bought properties from Foster's roommate, Francis Roy, and Roy's sister, paying $140,000 more than the two had paid for them one year earlier.

• The IRS has two liens totalling $22,457 against the corporation for unpaid payroll taxes.

• Two properties were sold to its board chairwoman, Joni Stewart.

Foster dissolved the Central City Community Development Corp. in October, citing a difficult economy. Weeks later, he established the nonprofit Veterans Commons Community Development Corp. and the for-profit Veterans Commons Development Corp.

• • •

So how did Foster so easily win his $500,000 congressional earmark?

He filled out an appropriations request on the Internet. He sent letters of support, including one from Hillsborough schools superintendent MaryEllen Elia saying that she backed Foster's mentoring programs.

Letters from the Disabled American Veterans Tampa Chapter and the Marine Corps League of Tampa described Foster's success with the renovation of D.W. Waters School, though school officials say he did little more than advocate for the project.

In early 2009, he traveled to Washington, D.C., to meet with Young, Bilirakis and aides for Nelson and Castor.

With five veterans at his side, he delivered the pitch for the multimillion-dollar Tampa development. He said it would provide offices for veterans groups and student mentoring programs. He talked of affordable housing for veterans and teen parents.

All he needed was money to get started.

Lawmakers were convinced.

"Since I was working with the veterans and at-risk youth, they thought it was a good idea," Foster said.

Foster also enlisted the help of David Jolly, a lobbyist who once worked in Young's office. Jolly said he was impressed by the involvement of the Marine Corps League and the disabled veterans group, two "very reputable veterans organizations."

"My understanding going forward was that, collectively, all the organizations involved had either provided cash contributions, in-kind contributions, or property contributions," he said.

A "white paper" that Foster presented to lawmakers reinforced Jolly's understanding. It said his corporation already had secured $500,000 in "land equity" from his partners and $100,000 in cash.

The school district said Foster overstated its involvement.

"It's not an official partnership," district spokeswoman Linda Cobbe said. "We don't have any kind of agreements."

As for the land equity, that consists of the Marine Corps League's promise to let Foster buy a building — the same one Foster bought in 2007 from the Disabled American Veterans and sold later for a $40,000 profit.

Asked about the cash contributions, Foster said he can't recall who they're coming from.

In Washington, Foster and his group met for about 30 minutes each with Bilirakis and Young. They shook hands in the hallway with Castor. They met with a Nelson staffer and spoke with the senator for a few minutes.

Ultimately, all four forwarded Foster's request to appropriations committees.

Young and Bilirakis, both Republicans, said they were swayed by Foster's idea, the support of the veterans groups and the backing of Democrats Castor and Nelson, which gave the project bipartisan support.

"The Marine Corps League is a very well-known, well-respected organization. And they were one of the people who told me they were in favor of this project, along with the Disabled American Veterans. It was a very impressive group," Young said. "When we visited about it, I said, 'Hey, since it's in Hillsborough County, is Kathy Castor in favor of the project?' They assured me she was."

He admits knowing nothing about Foster or his Central City corporation but said he was confident the U.S. Department of Housing and Urban Development, whose budget the earmark comes from, would look into the organization before giving access to the money.

HUD spokesman Brian Sullivan said it would take an act of Congress to stop the money. All Foster's group has to do to receive its $500,000 line of credit is complete an application showing it will be used as intended, he said.

Although Castor assisted Foster by forwarding his request to the House Appropriations Committee, her spokeswoman insisted it was Young, Bilirakis and Nelson who pushed it.

"They did not get the money through our appropriations process. They requested the money of us and we submitted it to the Appropriations Committee," spokeswoman Ellen Gedalius said.

Nelson gets about 1,000 earmark requests every year, spokesman Dan McLaughlin said. Most of them make it to the Appropriations Committee, where their fates are hashed out, he said.

"We kind of try not to play favorites," McLaughlin said. "We have one or two folks on staff and we don't have the wherewithal to be auditing or investigating."

If the requestor has letters of support and a history of receiving government funding — both of which Foster had — the request will go forward, he said.

Although the Senate didn't approve the request, the House did. The $500,000 earmark was included in the final conference report from House and Senate negotiators with Nelson's, Bilirakis' and Young's names on it. President Barack Obama signed the bill into law in December.

• • •

To Taxpayers for Common Sense, a nonprofit that wants to make earmarks competitive and merit-based, Foster's case "sounds like the poster child" for reform, said Steve Ellis, the group's vice president.

"Here's a case where you had multiple lawmakers submitting a request for someone with a fly-by-night organization," Ellis said.

Others, though, aren't surprised that Foster landed the earmark. Russ Versaggi, a real estate broker and developer, met Foster in 2002. Versaggi was among a group of people hoping to stop deterioration in Tampa Heights, and he thought Foster had the same goal.

He joined the board of Foster's corporation, but soon concluded Foster would never be able to follow through on his plans. He left the board after less than a year.

"It makes me sick that my tax dollars are in his hands," he said. "It makes me sick.

Staff writer Jeff Testerman contributed to this report. Janet Zink can be reached at or (813) 226-3401.

The four local congressmen who helped David Foster's non-profit secure a $500,000 earmark got a total of almost $117 million in earmarks for their districts in 2010. Here's a look at some of them:

U.S. Rep. Bill Young, R-Indian Shores

41 solo earmarks totaling $90 million, including $21 million for a communications facility at MacDill Air Force Base, $2 million for the National Forensic Science Technology Center in Largo, and $500,000 for bus rapid transit in St. Petersburg.

U.S. Rep. Kathy Castor, D-Tampa

Nine solo earmarks worth $4.6 million, including $1.8 million for battlefield injury research at the University of South Florida, $500,000 for Hillsborough Area Regional Transit buses and $250,000 for construction of a community center in Manatee County.

U.S. Rep Gus Bilirakis, R-Palm Harbor

Seven solo earmarks totalling $5.6 million, including $350,000 for All Children's Hospital, $500,000 for the widening of Cross Creek Boulevard in Hillsborough County, and $500,000 for wastewater treatment in Clearwater.

U.S. Sen. Bill Nelson (D)

19 solo earmarks totaling $16.7 million, including $974,000 for commercial space transportation research, $1.2 million for a water storage tank at Eglin Air Force Base, and $1.1 million for launch complexes at Kennedy Space Center.

Bringing home earmarks

The four lawmakers who helped David Foster's nonprofit secure a $500,000 earmark got a total of more than $117 million in earmarks in 2010. Here's a look at some of them:

U.S. Rep. Bill Young,

R-Indian Shores

41 solo earmarks totaling $90 million, including $2 million for the National Forensic Science Technology Center in Largo, $250,000 for a Pinellas County sheriff's gun range and $261,000 for Florida Gulf Coast University in Fort Myers to develop small business software.

U.S. Rep. Kathy Castor,


Nine solo earmarks worth $4.6 million, including $200,000 for Hillsborough County's Family Justice Center, $500,000 for Hillsborough Area Regional Transit buses and $250,000 for construction of a community center in Manatee County.

U.S. Rep Gus Bilirakis,

R-Palm Harbor

Seven solo earmarks totaling $5.6 million, including $350,000 for All Children's Hospital and $500,000 for the widening of Cross Creek Boulevard in Hillsborough County.

U.S. Sen. Bill Nelson,


19 solo earmarks totaling $16.7 million, including $974,000 for commercial space transportation research, $250,000 for methamphetamine enforcement in Hillsborough County, $1 million for BayCare Health Systems equipment and facilities and $700,000 for H. Lee Moffitt Cancer Center.

Developer of failed projects secures $500,000 from Congress 05/01/10 [Last modified: Saturday, May 1, 2010 11:37pm]
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