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Unhappy residents call offer a pittance

An attorney for residents who claim their city-financed homes were built on an abandoned dump said Saturday that a settlement offer of $500 to $1,000 per home will do little to assist those who face repair bills of up to $90,000.

"If you had to move from your home, what would you do with $500?" asked Miami attorney Gary E. Davidson. "No one cares about these residents."

Davidson, who was in Tampa on Saturday, represents 21 residents who bought homes in Martin Luther King Village in East Tampa before noticing cracking walls and shifting foundations. They blame the problems on the developers' decision to build their homes on shaky ground.

The residents filed a $2-million lawsuit in May, alleging fraud, deceptive trade practices, conspiracy and racketeering. The lawsuit named as defendants the city of Tampa; Allstate Homes, the construction company that built the homes; and two nonprofit agencies involved in the housing project: the Tampa Hillsborough Action Plan and Tampa United Methodist Centers.

The residents claimed the defendants conspired to use money from the Mayor's Challenge Fund to construct low-income homes on what was called the 26th Street tract, an abandoned dump they say remains environmentally dangerous.

A judge has dismissed most of the counts against the city, but an amended complaint was filed.

Last month, Tampa United Methodist Centers offered $500 to $1,000 per home to settle.

Officials with the organization could not be reached Saturday for comment. But residents were not pleased.

It's "not even enough for a U-Haul," said Iris Nelson, who gathered in the rain with 10 other residents Saturday for a news conference.

"And when we get the U-Haul, where are we going to go?" asked Yvonne Dudley, another resident.

Davidson dubbed the group "The Unlucky 21." He said the residents can no longer get insurance for their homes, which were once valued at $60,000 to $70,000. And they can't sell because "mortgage companies are not going to touch these homes with a 10-foot pole."

Problems with the structures continue to mount, residents said.

Deborah Hearns said two months ago, a small sinkhole within feet of her house opened up beneath her son while he was mowing the grass.

From the sinkhole, "you could see underneath the house," Hearns said. "This building cannot be saved."

The civil lawsuit added heat to a simmering grand jury investigation into former city housing chief Steve LaBrake and the Tampa Hillsborough Action Plan, known as THAP.

The lawsuit alleged that under LaBrake's direction, the city's program to develop small subdivisions like Martin Luther King Village "evolved into a veritable "slush fund' used variously to benefit its administrators and to offer low-cost and guaranteed mortgages to insiders and their cronies."

THAP purchased the 26th Street tract in September 1994, the lawsuit says, just 10 days after receiving an engineering report that said the property was covered with "surface fill containing unsuitable materials" that would have to be hauled away before homes were built.

THAP ignored the engineering recommendation and 15 months later sold the tract for $75,000 to the Tampa United Methodist Centers, which partnered with the city and Allstate Homes to build the homes, according to the lawsuit.

LaBrake, who left his city position in December, is the subject of a state ethics investigation and a grand jury inquiry into the building of a 4,100-square-foot home in South Tampa with his fiancee and former city aide, Lynne McCarter.

THAP's former chief, Chester M. Luney, is the target of federal investigators from the FBI, Housing and Urban Development Department and the inspector general for the Veterans Affairs Department. Agents are scrutinizing Luney's role as a VA psychologist who wrote grants funneling federal money to THAP, as well as his use of THAP money to provide contracts and favors to McCarter.

The city maintains that the 26th Street tract was never identified as a dump site or landfill during a comprehensive cataloging of waste sites.

The plaintiffs contend the centers never insisted on remedying problems after buying the land, even when Allstate Homes discovered troubling subterranean material after beginning home construction.

After finding a layer of "fibrous organic material" underground, according to the lawsuit, Allstate president Steve Hansen demanded an additional $350 per house, apparently to pay for buttressing the foundation.

The Tampa United Methodist Centers' Harriett Stone rejected the demand after consulting with LaBrake, telling Hansen in a 1996 letter that Allstate had been given notice of "possible problems on the site."

The lawsuit asserts that Stone's letter shows the centers and the city recognized hazardous conditions in the soil before the homes were built but did nothing about them.

Davidson said three independent soil engineers examined the property last year and confirmed the previous engineering report: A significant amount of concrete, asphalt, metal, nails, glass, plastic and wood were found at a depth of 4 to 6 feet, suggesting soil that might shift and raising the specter of possible sinkholes.