LAWSUIT RAISES QUESTIONS ABOUT COLUMBIA HOUSING BOONDOGGLE
Wanna know what caused the recent recession? It wasn’t lax regulations, corporate greed or any of those “99 percent” talking points … it was the federal government’s insistence on extending the American dream to people who simply couldn’t afford it.
Government-mandated politically correct lending isn’t a particularly popular cause of the “Great Recession …” but it is one, and to pretend that the $2.4 trillion in “mortgages for affordable housing” authorized in 2000 didn’t play a primary role in inflating the subprime bubble is to delude oneself.
But hey … that’s big government for you. Betting large with “other people’s money,” and getting involved where it has no business.
In fact other than “economic development,” we can’t think of anything government should have less to do with than “affordable housing.”
Anyway, back when he was running for mayor of Columbia, S.C. (on the buzzword of “transparency”), Steve Benjamin told the press that he had sold his interest in a controversial project called The Village at River’s Edge. In fact Benjamin bragged to The (Columbia, S.C.) Free Times that he had “left seven figures on the table” in selling his piece of the action to developer Jonathan N. Pinson for roughly $500,000.
But did he actually sell? According to a lawsuit filed in Richland County, S.C. by NBSC – Benjamin could still be involved with/ on the hook for the development, which is now in foreclosure. In fact the lawsuit names him as a defendant.
Wait … how could that be? If he sold his share, why is he being named in this suit? And why is one official at NBSC telling Free Times‘ reporter Eva Moore than Benjamin has no ownership stake “that he knows of” in the project – and refusing to answer any additional questions?
This development is a classic big government boondoggle, a replacement ghetto for the last round of government subsidized “affordable housing.” It has received $7.8 million in federal “stimulus” money and millions more in grants from the U.S. Department of Housing and Urban Development (USHUD).
Columbia, S.C. taxpayers are also shelling out money for the project thanks to Benjamin’s 2006 pitch to city leaders – and doing so under the assumption that their mayor has no ties to the deal.
“If he has sold his interest in the property the bank has not recognized it,” one local real estate attorney told us. “Until the bank recognizes that he has sold his interest in the property, he is still a guarantor on the note and is legally liable.”
FITS spoke with an aide to Benjamin this week who assured us that Benjamin has “no stake” in the deal – referring us to the mayor’s statements in The Free Times report which indicated that he had no “ownership interest” in the project.
Benjamin and Pinson do have stakes in other deals involving tax dollars, though.
Either way, this development – which is clearly not going to get new private sector financing in the current economic climate – is yet another example of government money being pissed away. It’s also further proof that government needs to get out of the speculative real estate business.
VILLAGE AT RIVER’S EDGE (.pdf)