Mayor Sylvester Turner fired city housing director Tom McCasland on Tuesday, just hours after McCasland accused the mayor of running a predetermined process to allocate $15 million in federal Hurricane Harvey relief funds to a favored developer.
McCasland’s comments, made during Tuesday’s city council housing committee meeting, came in response to the city’s announcement that two affordable housing developments have been selected to receive a total of $25 million in funding from the Harvey Multifamily Program — money that comes from the U.S. Department of Housing and Urban Development and is intended to help replace damaged housing lost in Hurricane Harvey.
What looked like a competitive process to award funding in fact had a pre-determined outcome, McCasland said, with the Huntington at Bay Area development selected to receive $15 million.
McCasland told council members at Tuesday’s meeting that he felt the Huntington at Bay Area project wasn’t the city’s best option when awarding Harvey Multifamily Program funding. The one project alone would cost $15 million for 88 affordable units, while projects recommended by city housing officials would provide 362 affordable units at a similar cost, he said.
Those projects were rejected, and McCasland accused Turner of “bankrolling a certain developer to the detriment of working families who need affordable homes.”
“I’m being forced to participate in a charade that this was a competitive process when I know it was not a competitive process,” McCasland told council members, “and I’m being forced to ask my teammates to participate in that charade. And that’s not something we can do and that’s not something we will do.”
State documents also show a company named Harbor Venture Group attached to the project. The company is run by the mayor’s former law partner Barry Barnes, and a partner at Barnes’ firm, Jermaine Thomas, according to the Houston Chronicle. Turner has not been with the firm since being elected mayor in 2015.
In a statement Tuesday afternoon, Turner denied any wrongdoing, and announced McCasland’s termination.
“There is no charade,” Turner said. “Comments made by the former Director of the City of Houston Housing and Community Development Department are puzzling, inflated, and wrong.”
The Texas General Land Office, which oversees distribution of Harvey recovery funds, released a statement Tuesday saying it was looking into the city’s use of the funds.
The city’s livestream of the meeting experienced technical difficulties at the time, making it nearly impossible for members of the public to hear McCasland’s comments.
Council members appeared to be caught off guard by the former housing director’s allegations, with committee chair Tiffany Thomas telling McCasland that they needed time to digest the information he’d shared. She then moved forward with the meeting agenda, rather than questioning McCasland.
Thomas said she was concerned that Turner’s administration and individuals involved with the development weren’t present at the meeting to respond to the allegations.
According to the city, the Huntington at Bay Area is a 148-unit affordable housing project serving senior residents. The city touted the project as its first new affordable housing project in District E since 2015.
The second project selected, New Hope at Berry, is set to receive $10 million.
The Huntington at Bay Area project was also awarded the Texas Department of Housing and Community Affairs highly competitive 9% tax credit this year, after receiving a recommendation from the city. The mixed-income project includes 88 units reserved for low-income residents, plus 60 market-rate units. State records list the developer of the project as Mark Musemeche with MGroup Companies.
McCasland argued that by awarding the project both the Harvey funding and the Texas Department of Housing and Community Affairs tax credit funding, $6.6 million in taxpayer dollars would be going to build the 60 market-rate units in the Huntington at Bay Area project.
“One of the things I committed to when I came to the city was that affordable home funding would go to develop affordable homes. That had not always been the case in this department,” McCasland said.
McCasland did not allege fraud within the Turner administration or by developers. But he implored council members to take his allegations seriously. He accused the administration — in particular Turner’s chief of staff, Marvalette Hunter — of pushing his department to select the Huntington at Bay Area project, which McCasland argued went against the department’s policy for making recommendations.
The former housing director told council members that his department had moved ahead with deals that it didn’t recommend in the past. But he said he felt compelled to speak up in this case in part because it underscored what he called a culture of “do it because I said so” within the Turner administration.
In his comments to council, McCasland took a parting shot at Houston’s “strong mayor” form of municipal government. The city of Houston, unlike most other Texas cities, is designed to give outsized power to the mayor, rather than the city council or a city manager.
“I need both you and the general public to be aware that the structure of strong mayoral form of government should not mean that the strong mayor is free from public or city council scrutiny,” McCasland said. “Nor should it mean that the strong mayor has free rein to make decisions without providing legitimate justifications for those decisions.”