Tax credit apartments for extremely low income families focus in Dallas public corruption trial

A request to get the Dallas City Council to waive requirements that a portion of the apartments built by Low Income Housing Tax Credit Developer Brian Potashnik be rented to extremely low income renters surfaced this week at the center of the public corruption trial in Dallas Federal District Court.

Dallas Morning News reporter Jason Trahan blogged about what transpired Thursday in Potashnik’s testimony.

Busch [the federal prosecutor] plays a call from April 26, 2005, between Potasnik and Lee. They are discussing swapping favors.

Potashnik tells Lee about his problems with the Walker Consent Decree. He tells Lee that he wants Hill to make a motion on council to have the requirements of the decree, which mandated a much higher percentage of units in his housing developments set aside for very low income tenants, removed from projects approved earlier that year. Other evidence has indicated that Potasnik would save about $1 million if the decree requirements were removed from his pending projects.

On the call, Lee says he’ll talk to Hill about it.

Potashnik then complains to Lee about the fact that Lee’s friends, Andrea Spencer and Ron Slovacek, have submitted a bid a quarter of a million dollars higher than the lowest bid for a concrete contract. Lee previously has urged Potashnik to hire Spencer and Slovacek, or, according to Potashnik’s testimony, risk losing his and Hill’s support for Potasnik’s other pending housing projects.

“You’ve got to let the guys make some money,” Lee tells Potashnik, talking about Spencer and Slovacek’s much higher bid.

The transcript of the secretly recorded phone conversation makes for interesting reading.

The Walker Consent Decree the City of Dallas was subject to required that a portion of the apartments be rented to “extremely low income” families (earning less than 30 percent of the area median income). Potashnik asked former Dallas City Planning Commissioner D’Angelo Lee and former Dallas Mayor Pro Tem Don Hill to convience the Dallas City Council to waive the requirements and let Potashnik charge higher rents for some apartments. Potashnik had earlier agreed to city rules that the apartments be built under the provisions then in place through the Walker Decree. Evidence was submitted that seemed to indicate that he was unaware of the requirement until shortly before he approached the Dallas City officials now on trial to seek their help in getting out the requirements.

In the transcript right after talking about getting the officials to waive the requirements Potashnik and Lee discuss how much of a profit a minority contractor group Lee is promoting to Potashnik will be allowed to charge for a concrete contract for building one of Potashnik’s low income housing developments. Potashnik complains to Lee that the minority contractor has bid $250,000 over the low bid. Lee pleads the case of contractors.

The Walker Decree came about as the result of a massive public housing desegregation lawsuit that involved the City of Dallas and the Dallas Housing Authority. The affordable housing units were required in order to break up the extreme over concentration of extremely low income African American families in Dallas public housing projects.