Judge gives KC until Sept. 1 to have housing program restoration plan

U.S. District Judge Gary Fenner on Thursday morning gave Kansas City officials until Sept. 1 to develop a plan to restore its housing program.

This is the first clear sign of the end of the federal receivership of Housing and Economic Development Financial Corp., the city's old housing agency.

Both Fenner and David Bahner, a St. Joseph banker appointed receiver in May 2005, stated Thursday in a federal court meeting of parties in the HEDFC case that they want the receivership to end.

"We're not here to point fingers (for past wrongs)," Fenner said. "We're here to get it right and make sure it stays right."

Bahner added, "It's not my lifetime career goal (to remain as HEDFC receiver). But I want housing to be restarted in Kansas City...I think Kansas City deserves a program that's a model for the country. That's my goal."

City Attorney Galen Beaufort _ who appeared with City Manager Wayne Cauthen, Housing Committee Chair Cindy Circo and Tom Coyle, director of planning and development _ offered to have a plan ready in 45 to 60 days. The plan would include the transfer and future handling of federal housing assets now under the receiver's control.

But HUD officials cautioned that the city still has significant lapses it has yet to resolve. Theresa Porter, HUD's regional director of community planning and development, said the city has several reform efforts left undone. For example, it is close to losing $2.1 million in federal housing dollars because it has been delayed in contracting for expenditure of the funds.

Fenner set Sept. 1 as the city's deadline to submit its housing-transfer plan to HUD and Bahner. HUD's approval will be required, he said. He also hoped the plan would meet with Bahner's approval.

Fenner set a Nov. 13 hearing date for his review of the new plan.

Fenner suggested that he may not cut all strings once the city's plan is approved. He'll want some sort of oversight, he said, "to make sure things are done in accordance with the plan."