Red Carpet deal delayed to allow for investigation
By KAYLEIGH KARUTIS, The Leader-HeraldGLOVERSVILLE - The city's first-time home buyers grant is on hold as city officials await the results of an investigation by several state agencies.
Philip Lentz, spokesman for the Affordable Housing Corp., said the city's $459,000 grant to build 12 homes on city lots for income-qualified, first-time home-buying families is on hold after his agency received a number of letters from concerned city residents.
The city applied for the grant last year and accepted it at a Common Council meeting last month.
The letters focused on an alleged conflict of interest in the selection of Red Carpet Housing in Johnstown as the sole builder for the grant. Red Carpet built a home for Mayor Tim Hughes, a relationship some letter writers have called into question.
"We decided the [state] comptroller [Thomas DiNapoli] should look into it," Lentz said. "The AHC is not really an investigative agency."
Lentz said his agency awards similar grants as often as a dozen times in one month, and such controversy around one is unusual. He said there is no time limit on the grant and some projects take years to get started.
He said one way the city might expedite the process would be to choose a different builder. City grant writer Nick Zabawsky and Hughes said they did not think that would be a possibility.
"It's a no-win situation for the city," Zabawsky said. "We got proposals from three [builders]. Does [choosing another builder] mean we choose someone other than the lowest bidder?"
Zabawsky said he would be worried Red Carpet officials might have possible legal recourse if the city drops them from the grant.
"[Red Carpet owner Ted Leto] could successfully argue that he was the lowest price," he said. "It would be hard to justify tossing him out."
Zabawsky acknowledged someone could argue the city did not have formal competitive bidding, but pointed out competitive bidding was not a requirement in the grant application.
Hughes said he feels the controversy surrounding the grant is "ridiculous."
"I don't think any of the people who have complained have actually looked at the grant application," he said. "It's mindboggling that someone would try to make a mountain out of a molehill."
Hughes said he does not believe going to another builder would be the best option and said he encourages the state attorney general and DiNapoli's office to investigate the accusations in the letters.
"Let the attorney general do his thing. People can say whatever they want. That doesn't mean it's true," he said.
Hughes said he has heard nothing from either state office concerning the letters or any alleged impropriety in the selection of Red Carpet.
Officials in the state attorney general's office and the state comptroller's office did not return calls seeking comment.
