Wilmington Mayor Mike Purzycki acknowledged the Wilmington Housing Partnership (WHP) is in financial difficulty and vowed to continue to help the agency deal with two troubled developments
Prominent Wilmington developer Robert Buccini, who chairs the board of the partnership, accepted blame for not knowing more about the finances of the organization, a release from the mayor’s office stated.
Buccini is co-president of the Buccini/Pollin Group. BPG is engaged in multiple development projects in Wilmington and suburbs.
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Purzycki said a report he requested from the city auditor confirmed the weak financial condition of the partnership.
The mayor said the city has made attempts over the past several months to seek additional funding. Purzycki asked Wilmington’s Real Estate and Housing Director, Bob Weir, to oversee two troubled WHP housing projects — Bennett Street and Vandever Avenue — in an effort to get the developments completed and sold as soon as possible.
“I feel it’s important that we assist the WHP in completing current projects and seeing to it that all contractors and vendors are paid,” said Purzycki. “The WHP has a lengthy and outstanding record of accomplishment over many years regarding neighborhood stabilization. The organization has provided affordable homes for more than 100 families in recent years. So, I want to make sure that the WHP’s emphasis on rebuilding our neighborhoods continues, and that its property assets are preserved and hopefully developed.
“The WHP’s financial imbalances have been building for a number of years,” Purzycki stated . “In fact, neighborhood development agencies such as the WHP must subsidize their housing projects so citizens can purchase a home that is affordable. That means these agencies have to spend more to build or redevelop a property than they can ever hope to gain back from selling the property.”
Mayor Purzycki said if couple the subsidy requirement with WHP’s aggressive property acquisition plan, and the fact that substantial private funding did not materialize, it becomes clear as to how some of the problems developed.
The partnership was not able to complete the Vandever Avenue and Bennett Street properties over the past few years as planned, deepening its problems.
The city initially learned of potential WHP funding problems when the News Journal ran an article about a WHP contractor who had not been paid for his work. The myor said while the contractor was eventually paid, it was clear to him by the middle of last year that the partnership needed additional funding.
The city helped it secure a half-million dollar bridge loan last May from the Urban Development Action Grant Corporation, as well as a $275,000 loan in November from the Real Estate and Housing Department.
The city most recently has approached Wilmington-based Cinnaire for a half-million dollar construction loan for the WHP and is awaiting that decision.
The Mayor said the plan from this point forward is for city real estate director Weir to get the Vandever Avenue and Bennett Street projects completed.
The partnership has an inventory of approximately 150 properties acquired in recent years as part of a campaign to preserve City neighborhoods. Purzyki is asking Weir to plot out a path forward for the partnership.
In a related note, partnership board chair Rob Buccini, who was appointed WHP chair nearly 10 years ago, announced today that partnership Executive Director Steve Martin has resigned.
Buccini said the agency does not have the resources to keep staff in place at this time. Buccini also added that he does not absolve himself from blame regarding the WHP’s current financial condition.
Buccini said an aggressive property acquisition plan, coupled with shortfalls of anticipated funding, led to the WHP’s current problems, but even so, he said these problems still should have been managed better. However, Buccini said he is proud of the WHP’s efforts to preserve Wilmington’s neighborhoods.
Purzycki said four members of his administration—Chief of Staff Tanya Washington, the late Finance Director Patrick Carter, Planning Director Herb Inden and since July of 2018, RE&H Director Weir—sit on the 12-member partnership’s Board of Directors, as well City Council Member Charles “Bud” Freel.
Purzycki said it is troubling to him that none of these officials were provided information on the financial situation at the agency.
