WEST PALM BEACH — It started out as a partnership between an influential church and a city anxious to encourage the building of affordable homes.
But the nine-year-old pact between the development arm of Redemptive Life Fellowship Church and West Palm Beach has soured to the point where one of the nation’s most successful personal injury attorneys is threatening to take the matter to court.
The dispute centers on whether the church’s Redemptive Life Urban Initiatives Corporation, headed by its bishop, Harold Ray, properly spent more than $2 million to construct homes in the Coleman Park neighborhood.
The corporation signed a contract with the city in 2003 to build the Coleman Park Housing Redevelopment project. Ray said the city provided funds to build the first five homes and the proceeds were used to build the next five. To date, 30 new homes have been constructed, eight of them funded by Redemptive Life, costing a total of $3.9 million, Ray says.
The city provided about $2.4 million for operation costs and $1.2 million for the actual building of the homes, out of Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD), Ray says. Such grants are intended to benefit low- to moderate-income families, aid in the prevention or elimination of slums or blight and support community development needs.
West Palm Beach spokesman Elliot Cohen says the city wants a clear explanation of how the money was spent.
“Our number one concern is making sure that all the public dollars were spent properly,” he said. “We had the federal government looking at some of the documentation that Redemptive Life provided to the city to explain a couple of outstanding questions.”
HUD’s inspector general conducted an audit in 2008 of the project and concluded that there had been several deficiencies in the city’s handling of the housing project.
According to the report, deficiencies in the administration of the CDBG program included poor contract administration, poor monitoring, inadequate supporting documentation and program income not recorded.
The audit concluded that the deficiencies occurred because the city did not follow HUD requirements and had ineffective policies and procedures. Regardless of the HUD report, West Palm Beach is continuing to pursue the matter.
Ray says the city’s concerns center on a belief that board members had been paid for working on the housing project. But, he says, those persons had been off the board more than 10 months before they started on the job.
The city gave Redemptive Life a June 15 deadline to turn over additional documents on how funds were spent. Ray said those documents would be submitted but the city already has most of that information in its possession (from documents already submitted).
Cohen says Redemptive Life sent a response in the form of a letter with attachments and that information has been forwarded to the federal government which requested the additional documents.
Cohen says several issues need to be defined and the city wants clarification of these concerns.
“One was to provide explanation for certain dollars and why they went to certain accounts. Two, to clarify whether Redemptive Life was properly certified to do the work,” he says. “Were they recertified on an annual basis and (how did) they use profits that were made from the sale of the homes?”
Redemptive Life project manager Earl Hamilton says amending the contracts for the project would resolve the outstanding issues.
“We followed the contract and West Palm Beach followed the contract. We fulfilled our part and then some,” he says. “The city made missteps concerning HUD regulations. They can simply amend their contracts to reflect what actually happened.”
Ray has brought in a legal heavyweight, Stuart-based attorney Willie Gary, to represent him and the corporation.
“We’ve tried every way possible to avoid a multimillion-dollar lawsuit for harassment and defamation,” Gary says. “(The city) is giving us no choice. The allegations are damaging, defamation, breach of contract, destroying Bishop Ray’s name.”
Gary says the way city officials have presented questions and concerns to the public has cast a negative light on the corporation.
“There has been significant damage to Bishop Ray and the church,” he says. “This has to stop somewhere. The city has to step up to the plate.”
Ray says he does not want to sue the city but that claims which he says are false have been made even though information is available in the contracts.
“This is not something we wanted but the city is making illegitimate claims and ignoring the facts,” Ray says. “From day one, everything was reimbursements. We had to provide invoices (and other documentation).”
Photo: Harold Ray