Saturday, December 08, 2007

City Finally Moves Against Phoenix Apartment Owners

The Indianapolis Housing Agency is trying to force the owner of the troubled Phoenix Apartments to pay back rent subsidies it has received in Section 8 housing payments for its poor management of the troubled complex. "The agency wants Connecticut-based RCM Phoenix Partners to return more than $300,000 in federal welfare rent payments for failing to evict unruly tenants and disclose business problems in other cities," the Star's Ted Evanoff writes. This is the same complex where 3-year-old Tajanay Bailey was beaten to death by her mother and live-in boyfriend. According to the Star, Indianapolis police received 421 crime reports from residents of the Phoenix in the past 18 months alone. The Star describes the owner of the complex, RCM Phoenix Partners, LLC, as a high profile Manhattan developer. Evanoff writes:

The firm is part of Belfonti Associates, a high-profile developer of Manhattan real estate run by Michael Belfonti, Hamden, Conn. Calls to the firm seeking comment were not returned.

Federal rules require welfare landlords to "screen tenant and visitor behavior'' and disclose troubled business deals, the administrative notice says. If they don't, the Housing Agency can remove them as a landlord eligible to receive rent payments directly from the U.S. government under the Section 8 program.

"They certified information to us that is not true,'' said Rufus "Bud" Myers, executive director at the Housing Agency.

In the administrative notice, the agency contends Belfonti failed to disclose legal difficulties involving an Aruba hotel loan and that Connecticut rental apartments had lead paint, and withheld information about the bankruptcy of Northeastern Oaks Limited Partnership in Connecticut. The agency also claims Belfonti failed to disclose all the partners in the purchase of the Phoenix Apartments.

Any of those actions is considered grounds for barring a landlord from the Section 8 program, Myers said.

RCM has until Dec. 14 to respond to the administrative notice. It can repay the money or challenge the order, Myers said.

The agency claims to have a pretty good track record of getting results from landlords against which it takes action. "In recent years, the Housing Agency has taken administrative actions against about 55 landlords," Myers said. "Of those, half have returned the federal welfare rent payments, a quarter have been prosecuted for criminal acts and the remainder dropped out as welfare landlords." The question is why the agency waited so long to take action against the Phoenix?


Anonymous said...

Bud Myers has done a fantastic job of uncovering fraud and getting those responsible prosecuted. I am afraid he will be a casualty of the change of administrations and will be gone.

Anonymous said...

Belfonti Associates received a 20 year extension from the Housing Authority on this 328 unit, 12 acre property in 2006.
Belfonti Associates also secured a $7 million dollar loan after the extension was granted to "upgrade" the complex.
Belfonti Associates,lead by Michael Belfonti (a graduate of Harvard Business School), originally purchased the former Meadows Apartments for $2.8 million.
RCM Phoenix Partners,LLC is not meantioned on the Belfonti Associates website.
My knowledge of the former Meadows Apartments which is now called The Phoenix Apartments leads me to believe that RCM Phoenix Partners, LLC is made of Michael and his father Richard in addition to some local Indianapolis investors.

Would anyone care to wager who these local investors are? Without these "local" investors it is fairly certain that Belfonti Associates would never have gained hold of this very profitable yet notorious piece of real estate.
A look at who owned and operated these apartments before Belfonti stepped in will give you some idea of who is really responsible for the conditions there.

Anonymous said...

Are you joking? Bud Myers is anything but effective. He should be forced to live there at the phoenix and then he would learn what his job requires.

Anonymous said...

One should go back and look at the history of the Phoenix and the relationship of Oscar Robertson to it. Jack Davis wrote a great piece on how Mayor Goldsmith sold out City Hall while he was Indianapolis mayor. The part of it dealing with Oscar Robertson has a direct relationship with this project. You should not be surprised that the "R" in "RCM" stands for Robertson. This is what Davis wrote about Robertson and Goldsmith:

The next big scandal shows how truly innovative the mayor is in creating the illusion of savings. The Sherman R. Smoot Company joined with Oscar Robertson to form Oscar Robertson/Smoot (ORS), a construction management firm that had been formed expressly to oversee the city's half-billion-dollar infrastructure rebuilding program. ORS, chosen over experienced firms in the city, didn't even exist until just before its new officers signed a no-bid contract with the mayor ... and what a contract it was! One would have thought the contractor himself wrote it, which he did!

A businessperson's dream come true, the contract allowed a 2.75 multiplier for all wages, salaries, and raises that ORS paid to employees. The city also provided the office space (an entire floor of the City-County Building), utilities, equipment, supplies, phones, vehicles, and gasoline! This translated into a built-in 50% annual profit over the three-year contract!

Additionally, what used to be operating expenses could now be charged to the capital budget (the city's credit card). The mayor's plan was to phase out $55,000-a-year city engineers and replace them with compliant, cooperative, pro-privatization ORS people. ORS engineers were also paid $55,000, but the city was billed $152,000 plus expenses (remember the 2.75 multiplier)! To show their gratitude, officers of ORS formed a political action committee cynically named "Business Leaders for Better Government." This PAC and individuals with ORS gave over $30,000 to Goldsmith campaigns. The public remained in the dark until the mayor made a big mistake. He demoted a dedicated, highly qualified city engineer who was critical of the way ORS was being allowed to operate unchecked, with no management oversight. George Tomanovich then blew the whistle to the media about the shoddy work, ghost employment, bid-rigging, waste, and fraud that he said he had witnessed while working with ORS contractors.

After he was replaced by one of the contract engineers hired by ORS, Tomanovich filed a lawsuit in federal court to get his job back, charging that the mayor was punishing him for being critical of privatization. Goldsmith dismissed the whole affair as a "purely political" attempt to embarrass him in an election year. Facing the prospect of giving sworn testimony about his cozy reciprocal relationship with ORS, however, the mayor settled with Tomanovich for $300,000 in taxpayers' money and an apology.

In 1996 alone, to replace this one $55,000-a-year city engineer with a private contractor, the taxpayers were charged nearly half a million dollars for salaries, multipliers, expenses, and settlements, not to mention overhead and interest on the bonds the city had floated to pay ORS.

One might expect that the mayor would be so proud of the privatized work done by his hand-picked construction managers that he'd have stacks of glowing performance audits to cinch his case for privatization. In fact, very few performance audits have been done and there has never been an outside audit. One of the most revealing internal audits examined work at two parks representing about one-half of one percent of the $530 million in projects managed by ORS. City auditors found documents altered or missing and learned that ORS had paid for shoddy, incomplete work with the approval of yet another ORS employee. A second contractor was then paid to redo and finish the job and even then, according to city auditors, "... there are some items that appear not to have been completely rectified," according to the city's Internal Audit Agency, Final Report. In his seven years as "Municipal CEO," Goldsmith has not allowed outside, independent performance audits of any construction, remodeling, repair work, or services that he has contracted out.

Anonymous said...

Here is some information regarding the Phoenix Apartments.

RCM PHOENIX PARTNERS, LLC is comprised of the following:




Robertson, Carson and Mays are the investors provided with funding thru Bilfonti Associates. This special arrangement between RCM and Bilfonti allowed access to minority business loans and other consideration.
Bilfonti was simply the cash machine and RCM was devised as a means to increase profits for Bilfonti and RCM Phoenix Partners, LLC thru special minority loans etc.
The Bilifonti's were simply getting a nice cut thru this arrangement but it was Robertson, Carson and Mays that were to profit handsomely for their inside work.
The Bilifonti's never saw this property before locking up a purchase price of $2.8 million for the 12 acres and the buildings.

If someone would like to provide evidence that this is not correct please feel free to do so.

Anonymous said...

This is something that must, I repeat, must be followed to the very end. It is criminal if true and criminals need prison time. These so called well to do people steal from the most poverty entrenched people. It,s ok to make a buck, but not on the backs of these poor people. Shame on the public for accepting this.

Anonymous said...

Perhaps this explain why Mays became such a supporter of Mitch Daniels.

Anonymous said...

Anon 5:58 -

How about you provided the source of your information, rather than challenging someone to disprove it.

Wilson46201 said...

Anon @ 5:58 is most likely Jocelyn Tandy who specializes in lies about Julia Carson and then demands folk disprove Tandy's fabrications.

Responsible blog owners wouldn't permit such slanders to be published on their blogs...

Lets see ... hmmm ...

RCM stands for:
M=Mary (Cheney)

See? It's a Republican lesbian neocon conspiracy!!! Disprove it!!!

Anonymous said...

For just over $2.00 one can go to the Secretary of State website and find out who the principle players are.

Anonymous said...

1:15, No you can't. RCM Phoenix Partners LLC are not required by Indiana law to list the "managers" (investors) of this LLC. In otherwords, don't waste the 2 bucks.
Be patient, you'll have the parties in RCM identified soon and they will be the same as noted prior.

Anonymous said...

Anonymous said...
Bud Myers has done a fantastic job of uncovering fraud and getting those responsible prosecuted. I am afraid he will be a casualty of the change of administrations and will be gone.

Response: You've got to be out of your mind. The Indianapolis Housing Agency's Commission Chair is Aaron Haith, the crooked lawyer who currently has disciplinary complaints pending due to his behavior as counsel to the councilors. Imagine his behavior over at the commission, where there are no cameras or audiences, scarey!!!!.

Bud Meyers, a guy I really like, needs to step aside a let a younger person clean out the garbage and manage our public dollars properly. "ALL" political patrongage jobs should be removed from the payrolls.

Check out this Audit report on the housing agency, it's shocking.

Anonymous said...

Randle Pollard is also on the Board, Pollard is running in the special election tomorrow for 7th district and is a lacy johnson flunky.

Anonymous said...

The last annual report the Housing Agency has posted is a 2003-2004 report. Maybe they, like Monroe Gray, are oldschool and don't keep records.

Nanette said...

How is it Michael Belfonti's fault that a three year old was beaten to death? I live in public housing in NYC and there were two shootings right in front of my building. It's the GOVERNMENT, HUD, that is responsible for conditions. In my apartment, I am lucky if I have heat twice a week. Because of the animal savages who live here and throw food around the complex and in elevators, I had rats in my apartment, though my apartment is clean. HUD is to blame. And the savages are to blame.