THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Tuesday, November 8, 1994 TAG: 9411080362
SECTION: LOCAL PAGE: B4 EDITION: FINAL
SOURCE: BY TONY WHARTON, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Medium: 68 lines
The rest of the City Council on Monday night endorsed Councilman Robert Nance's call for state and federal criminal investigations into past land deals at the city housing authority.
Council members heard that one of the city's concerns with the Chesapeake Redevelopment and Housing Authority may be resolved by a new document that was recently delivered to the city.
But City Attorney Ronald S. Hallman also cautioned he has not yet closely examined the document, a legal note that may restore city and housing authority rights to land in Campostella Square.
``We still have questions to answer,'' Hallman said.
The council voted 7-0 in the special session, with members John W. Butt and W. Joe Newman absent, to request an investigation by the U.S. attorney, the Virginia attorney general, and the commonwealth's attorney in Chesapeake.
Nance, one of the council's liaisons to the housing agency, had already sent letters to those officials on Thursday requesting probes. He has not received a response.
Mayor William E. Ward reminded the council and the public Monday that an investigation only would be into the authority's previous board of commissioners, which the council removed last year on misconduct charges. Any probe would not concern the actions of the present board. Council members praised present board members for their effort to straighten out the authority.
The request for an investigation grew out of two main questions: how the price of land the authority bought in 1991 in Campostella Square rose by $60,000; and whether the authority had lost claim to that land, valued at $715,000, in a complicated land transfer and mortgage agreement.
``We found some things that concerned us very seriously,'' said Jay Poole, the city's internal auditor, at Monday's council meeting.
The housing authority had transferred the land to the Chesapeake Housing Corp., which passed it on to the Campostella Commons Limited Partnership. City and federal housing officials feared that the city and the authority might have lost their claim to that land in the transfer along with any money they were due.
Hallman said Monday that he had just received a new note from Chesapeake Housing Corp. and Campostella Commons that might resolve the land transfer problem. But he said an investigation was still needed into the question of the increased price and how the land transfer came about.
Council members also raised questions about how the IRS might view the transaction and whether the housing authority's attorney, John E. Zydron, has a conflict of interest.
Although housing officials said Zydron no longer represents Chesapeake Housing Corp., Nance said that Zydron still stands to collect $180,000 in development fees from that corporation.
``Your attorney gets $180,000 in development fees from CHC at the same time he's trying to represent you?'' Nance asked housing commission chairman Walter Berry. ``I have a bit of a problem with that.''
Nance and Councilman Arthur Dwyer already have told housing commissioners they do not want the commissioners to rehire Zydron, who represented the previous board. Zydron is the subject of an ethics investigation by the Virginia State Bar, based on a complaint brought by Hallman. The bar's probe has not been completed.
The CRHA is to meet today, at 6 p.m., in its new offices at 2133 Smith Avenue, Suite 100.
KEYWORDS: CHESAPEAKE REDEVELOPMENT AUTHORITY ENDORSEMENT by CNB