On January 27, 2021, then Gov. Larry Hogan announced some good news for affordable housing in Maryland: nearly $40 million in competitive awards to spur construction of 18 low-income housing projects. “During our administration,” Hogan said, “The State of Maryland has provided financing and tax credits to create or preserve more than 20,000 affordable rental units across the state—an unprecedented level of production.” But there was one detail Hogan didn’t mention: one of the projects was being developed on his own family’s property.
[time-brightcove not-tgx=”true”]The bucolic land in Frederick County, roughly 50 miles north of Washington, D.C., had been in the Hogan family since the governor’s father, former Congressman Larry Hogan, Sr., and his second wife, Ilona Hogan, bought it in 1983 for $230,000. Now, three years after Hogan Sr. had passed away and six years into his son’s tenure as governor, Hogan’s stepmother was converting the ten-acre property into an income-restricted housing facility. Ilona Hogan had transferred the property into a limited liability company (LLC) she owned, according to land records reviewed by TIME. Osprey Development, a listed client of Hogan’s real estate brokerage firm, HOGAN, had been engaged to helm the project. The $15 million in low-income housing tax credits over ten years and $1,035,000 in state funds that Hogan announced that day made Crestwood Manor, as the 60-unit affordable housing complex would become known, a reality. It also paved the way for the ultimate sale of the property. In November 2022, Ilona Hogan sold it to Osprey for $3.75 million.
The Crestwood Manor project is the latest example of a potential conflict of interest between Hogan’s authority over Maryland housing dollars as governor and his family’s real estate businesses. Maryland law says that officials cannot knowingly participate in decisions in which they or a close relative have an interest. “Approving transactions which benefit you personally or your family or your affiliated interests is, I would say, at a minimum, unethical,” says Warren Deschenaux, former director of Maryland’s nonpartisan Department of Legislative Services. “The governor is responsible for what happens under him.”
TIME tried to contact Ilona Hogan for comment through Manchester Partners LLC, HOGAN, and former Governor Hogan, but she couldn’t be reached. Responding to questions from TIME, a Hogan spokesman, Michael Ricci, says the former governor had nothing to do with selecting the Crestwood Manor project. “Governor Hogan and his office played no role in the evaluation or selection process for these merit-based awards,” Ricci says. “All decisions are made by agency officials on a competitive basis as part of a rigorous application process held by the Department of Housing and Community Development (DHCD). These safeguards prevent any personal or political considerations from entering the process.”
Three Hogan Administration officials tell TIME that Hogan and his deputies reviewed and approved all awards. One attended the late 2020 meeting with the governor and his staff regarding the slate of awards that included Crestwood Manor, weeks before the official announcement in January 2021. “The governor and his office announced the awardees after review and approval,” says the official, who was granted anonymity because they were not authorized to speak publicly on state business. Ricci did not respond to questions asking whether Hogan knew the awards were benefiting his stepmother or whether Hogan himself profited from the development at any stage.
TIME reported on Oct. 10 that nearly 40% of all the state’s competitive affordable housing awards that Hogan approved as governor went to listed clients of his real estate firm, in which he maintained principal ownership interest after handing day-to-day control to his half-brother Timothy. As one of three members of the Board of Public Works, an administrative body that determines how Maryland taxpayer money gets spent, Hogan voted on five occasions to issue additional loans or grants to four of those same developers, according to public records. Osprey was among them. On February 22, 2017, he voted in favor of a grant easement for improvements to a site it owned and operated, according to public documents reviewed by TIME.
Hogan is currently locked in a high-stakes U.S. Senate race against Prince George’s County Executive Angela Alsobrooks. Since the first story was published, Maryland Democrats have vowed to enact tighter ethics laws and, echoing government ethics experts, have called for an investigation into Hogan’s handling of housing issues while in office. “This is a shocking ethical lapse on the part of an individual who was in the most powerful position in a state,” says Walter Shaub, former director of the U.S. Office of Government Ethics.
Hogan Sr. bought the Frederick property in the 1980s after he retired from politics. He had made history as the first Republican on the House Judiciary Committee to announce his support for articles of impeachment against Richard Nixon in 1974. After an unsuccessful run for the U.S. Senate in 1982, Hogan Sr. moved to the spacious colonial with columns on the front porch, nestled in the woods a stone’s throw from the I-270 highway that runs from the Capital Beltway outside Washington D.C. to Frederick. He and his second wife, Ilona, also based their law practice there.
On June 10, 2016, Hogan Sr. transferred full ownership of the property to Ilona, public records show. She signed it over that same day to Manchester Partners LLC for $0 and received a special tax exemption on the transfer only available when the seller is the sole shareholder of the entity acquiring the property. Manchester Partners LLC shares the same address as HOGAN, the brokerage firm principally owned by Larry Hogan and run by his half-brother Timothy, the son of Ilona and Larry Hogan, Sr. An Osprey executive who worked on the project, Brian Lopez, confirmed the LLC belonged to Ilona.
A year later, in November 2017, then Gov. Hogan announced the beginning of construction on a $65.5 million project to rebuild a highway interchange where Route 85 crosses I-270, within earshot of his father’s house. Hogan had earmarked that money his first year in office, after canceling a $2.9 billion light rail in Baltimore and diverting those funds to highway, road, and bridge projects. “This interchange project is critical for Frederick County residents, motorists, and business owners who spend too much time in traffic every day,” Hogan said in a press release at the time. (In 2020, Hogan was the subject of multiple ethics complaints for advancing transportation infrastructure projects near properties his real estate firm owned.)
Lopez, who also served as Gov. Hogan’s chair of the Maryland Medical Cannabis Commission, told TIME that Osprey became the controlling entity of the Crestwood Manor property in 2020 to flip the Hogan family home into an affordable housing site. Osprey, which had been a listed client of HOGAN since 2011, applied for competitive affordable housing awards for the project through DHCD’s fall 2020 application round. Those applications go through a competitive points-based scoring process and are reviewed by an internal committee inside the agency. The Housing Secretary then takes the recommendations to the governor.
Multiple officials who worked in his Administration described Hogan’s involvement in the process. DHCD officials would send memos to the governor and his staff outlining the applications and proposed awardees, the officials say. Hogan would periodically receive updates from senior staff. Two of the officials confirmed that Hogan oversaw the fall 2020 award round that included Crestwood Manor. One says they attended a meeting with the governor and his staff in late 2020 regarding the final decisions and planned announcement.
Hogan announced those awards to great fanfare in January 2021, saying the slate broke the record for most rental units financed in a funding round in Maryland history. Seven of the 18 developers whose projects he greenlit, including Osprey, were HOGAN’s listed clients. The Crestwood Manor project met all the criteria for selection, according to the DHCD official, and there is no evidence of wrongdoing by Osprey or Ilona Hogan. It is not clear whether HOGAN played any role in the development or other transactions around the Crestwood Manor property.
Neither Governor Hogan nor Timothy Hogan responded to multiple emails asking whether HOGAN brokered the sale of Ilona Hogan’s home to Osprey. The details of the award that preceded the $3.75 million sale of his stepmother’s property are raising new concerns about conflicts of interest during his time in office. Says Shaub, the former director of the U.S. Government Ethics office: “Anyone serving in a position as powerful as governor and running for the position of Senate owes the public a very specific explanation as to why the facts are different than they appear to be.”
from TIME https://ift.tt/n43zyX5
via IFTTT
No comments:
Post a Comment