Pinellas County encourages nonprofit agencies to build affordable housing for residents by offering incentives - forgiving loans they get through the county to build an apartment complex, for example.
But a new internal audit shows that the vast majority of concessions for rental housing have gone to just one agency - one with close ties to county government.
Contemporary Housing Alternatives of Florida, which has built 500 affordable apartment units for the county, received "abnormal" and "excessive" breaks and possible "preferential treatment," according to the audit by the Inspector General Division, an arm of the Clerk of Courts Office.
The St. Petersburg-based nonprofit received 87 percent of the county's concessions, which include debt forgiveness, lower interest rates, increasing loan amounts and deferred payback dates.
That amounts to at least $4.7 million in loan forgiveness since 1994.
"The effect of granting significant financial concessions to CHAF is the county has fewer resources available to develop affordable housing for its citizens," the audit says.
Without naming names, the audit mentioned one other fact. For most of the past decade, Contemporary Housing Alternatives of Florida has carried board members with ties to county government.
Former County Administrator Fred Marquis joined in 2001 after retiring. Jake Stowers, now a consultant, came on as chairman by 2008 after he retired as an assistant county administrator in 2006.
Stowers joined as Marquis returned to be interim county administrator after the 2007 Jim Smith land purchase scandal.
Marquis and Stowers denied pushing county officials for favors, as did John Carr, the president of Contemporary Housing Alternatives.
At least three county commissioners - Nancy Bostock, Neil Brickfield and Calvin Harris - are now seeking a deeper accounting of how the county's housing programs run.
"In this instance, affordable housing has been such an important part of our program of work, we just have to take it seriously," Harris said.
On Thursday, County Administrator Bob LaSala promised the commission a public explanation of the actions of the county's two housing groups, the Community Development Department and the Housing Finance Authority.
"I think this is significant enough consequence and scope that I should do it at that venue," said LaSala, who was still digesting the audit's findings.
The two county housing agencies share a staff and a director, Anthony Jones.
Marquis and Stowers both had oversight of Community Development in the 1990s.
"I don't think the fact I used to work for the county is providing some benefit or Mr. Marquis is providing some benefit. ... I have never gone out and said, 'Gee whiz Anthony, you ought to do this or you ought to do that, ' " Stowers said.
Jones and Carr both defended the nonprofit.
The 17-employee operation helps get people into homes in a county where housing costs are high, they said. The nonprofit focuses on multi-family housing, such as the 55-unit Ashley Place near 46th Avenue N and Park Street in St. Petersburg.
Carr said such concessions are necessary because the nature of affordable housing makes traditional private financing unworkable. The county requires that 20 percent of units be offered at low rents to qualify for funding help.
If anything, Carr and Jones said, the volume of loan forgiveness was because the county has designated the nonprofit as a preferred developer, essentially guaranteeing it a share of funding.
The nonprofit also went through significant private and public loan restructuring several years ago, generating more favorable terms as it fought the nation's financial crisis, Carr said.
"We didn't make any money off it," Carr said. "We just took on a hell of a lot more debt that we're struggling to pay back now."
The nonprofit's 2008 tax return shows it spent $3.4 million that year, almost $300,000 beyond its revenue. It paid management $270,000, and reported no one making more than $100,000.
Carr would not disclose his salary. Neither Marquis nor Stowers are paid by CHFA, according to the 2008 tax return.
Besides accusing auditors of a personal grudge, Jones said the audit was imperfect because some projects require no repayment, and forgiven debt can be a condition of a loan agreement and aren't concessions.
Questions over the nonprofit came in the same audit that revealed the two county housing agencies threw an $8,000 party in 2007 that was paid for by firms that do business with the groups. Raising the threat of "pay to play" politics, auditors accused managers of intentionally withholding records.
However, finance authority chairman Rodney Fischer criticized the Times for delivering a "cheap shot" in reporting the findings, though he said he hadn't read the entire 117-page audit because it would be a "waste of time."
"There's hundreds and hundreds of people that we have helped, and that's the story," he said.
David DeCamp can be reached at email@example.com or (727) 893-8779.