The Martin Luther King Housing Development Association (MLKHDA) had a dream, a $26 million mixed-use center at the corner of South 11^th and MLK Way. Trumpeted as the savior of the Tacoma Hilltop business corridor it now lays fallow. Just another victim of the then association director Felix Flannigan and his highly placed political cronies self fulfilling prophecies.

Prophecies and high risk ventures that have gutted the 1989 founded non-profit to a shell of its former self. A non-profit dedicated to “homeless prevention service, emergency shelter service, and community-based owner, developer, manager and seller of housing for low-income families and individuals throughout Pierce County”.

Due to mismanagement, denied by Flannigan, the agency’s current board is now scrambling to keep the organization out of bankruptcy court, a place where real answers would be sought.

In a meeting with city officials on August 27, board members said they would be getting out of the development business, selling properties, and returning to their roots.

But what the board didn’t delve into was the failure of the first so-called “double bottom line” real estate fund in Washington. Created in 2006, Flannigan said the fund was so named because it aims both to satisfy investors by providing market-rate returns and also benefit the community by investing in emerging neighborhoods.

Total development cost was an estimated $750,000.

A partnership was formed with Sound Community Initiatives (SCI), a high risk, pie in the sky, dream that brought MLKHDA to its financial knees according to documents received by The New Takhoman.

The SCI board consists of  Larry Koop, President; Former Tacoma City Manager James Walton, Vice President; Former Tacoma City councilmember and now Pierce County Deputy Executive Kevin Phelps, Treasurer; Whitney Dixon, son of  Hilltop Black leader Tom Dixon and Rick Olson.

Felix Flannigan served as the non-profit SCI’s Chief Executive officer while at the same time employed as the Director of MLKHDA.

According to our sources SCI board agendas, meeting minutes and expenditure records still exist and that the board was not financially compensated.

MLKHDA expended approximately $890,000 on the development of the “double-bottom line” initiative using over $200,000 from financial institutions and foundation grants. The balance, according to our sources, came from MLKHDA’s operating cash flows and liquidated investments in affordable housing.

Approximately $650,000 of those funds went to pay consulting firms; Economic Innovation International of Boston and Strategic Development Solutions of Los Angles both selected by Flannigan with no competitive bid.

Former Tacoma mayor Brian Ebersole was also hired as a consultant.

Ebersole was quoted in The News Tribune as saying, “I’m so pleased this is happening in Tacoma. It’s a very big deal for our city. Getting investors in low-income areas is exactly what Tacoma needs. We view low- and moderate-income areas of Tacoma as new and emerging markets. There’s social good and money to be made.”

According to our sources a $50 million pipeline of real projects was developed by SCI staff, but no investments were made due to the inability to close the fund because of micro-managing by CEO Flannigan, Board President Koop and the highly paid consultants.

Kennedy Wilson a for-profit Fund Manager was selected through a competitive process, but again was second guessed by Flannigan, Kopp and the consultants. Because of the internal delays in moving the fund to closing, the initiative was stalled and died in the third quarter 2008 economic meltdown our sources say.

Your guess is as good as mine, Dear Readers, if there are any monies left in this “It’s good for Tacoma” fund. It was certainly good for somebody.

But the good news is the City has joined with the State in investigating exactly where the public dollars have gone, the legislated public dollars that have been pumped into MLKHDA over the last several years.

In June of 2008 The New Takhoman asked why MLKHDA paid $1,212,000 more to acquire property than they had to. Former MLKHDA Chief Financial Officer Val Tiller is also the State registered agent of Upper Tacoma Business Development LLC (UTBD). It was UTBD that bought property in the 10^th and South J Street area for $1,088,000 in 2005 and 2007. It was then UTBD that sold the property to MLKHDA in October of 2007 for $2.3 million. And the managing partner of UTBD is who? You guessed it, MLKHDA.

So now that Tacoma City Manager Eric Anderson and several members of the State Legislature have taken a heightened interest in MLKHDA’s apparent financial shenanigans we all might get the answer to that year old question and many, many more.

No one named in these observations returned phone calls for comment prior to publication.

This entry was posted on Saturday, September 12th, 2009 at 8:00 am and is filed under Local News, Tacoma. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.