December 4, 2011

Eye of the storm: MaineHousing chief addresses costs, mission

Driven by a social agenda, the director won't rein in spending, critics claim, but she says they ignore her cost-control efforts . . .

By Susan M. Cover scover@mainetoday.com
State House Bureau

AUGUSTA — The embattled director of MaineHousing says she's tired of the schoolyard taunts that critics have been hurling at her agency.

click image to enlarge

Dale McCormick reacts to comments by MaineHousing board Chairman Peter Anastos, right, at an Oct. 18 board meeting where the agency was taken to task for the cost of a Portland project.

2011 Kennebec Journal file

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Dale McCormick, MaineHousing executive director, takes a conference call Friday in her Augusta office. McCormick said she feels blindsided by criticism of her oversight of the agency after she had already formed a cost-containment committee.

Joe Phelan/Kennebec Journal

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THE AGENCY AT A GLANCE

MaineHousing, which acts as a bank for affordable-housing projects, is a $1.6 billion financial institution that can issue bonds and accept federal money for state programs. It has an annual operating budget of about $13 million and 143 employees. The agency manages 800 properties, serves as an administrator for 35 programs, and typically raises $30 million a year in private capital to finance apartments and $100 million for first-time homebuyers.

Dale McCormick, 64, of Augusta has been a fixture in Maine politics for decades, first as an activist for women and gay and lesbian issues, then as a legislator and state treasurer. But now, as the head of a large independent agency overseeing 800 affordable-housing properties, she finds herself making headlines as critics accuse her of spending too much money and driving a social agenda instead of the bottom line.

Tremors were felt across Maine's political landscape a year ago when voters elected Republican Gov. Paul LePage and Republican majorities in the House and Senate. The long Democratic control of the Legislature was shattered, leaving McCormick, a liberal Democrat appointed by Gov. John Baldacci, to navigate rules set by a new administration with new goals.

Her biggest critic is Treasurer Bruce Poliquin, a one-time Republican candidate for governor who sits on the MaineHousing board and blogs, emails and appears on radio shows to question the cost of affordable housing under McCormick's watch.

Just last week, he sent an email from the Office of the State Treasurer with a link to two radio interviews by new MaineHousing board Chairman Peter Anastos. During the interview on WVOM, Anastos was asked how McCormick could lose her job.

"Probably an act of God," Anastos responded. "I believe there's no way unless there's malfeasance, which I am not in any way or form suggesting."

Yet Poliquin and Anastos are both critical of McCormick's decisions to approve what they consider to be costly projects, as well as guidelines put in place that they believe have driven up the price.

McCormick said she's ready to listen -- and change -- if necessary.

"Let's have the discussion," she said. "Where do we want affordable housing to be? Do we want to put poor people on the edge of town? Do we want to partner with cities and towns by bringing people downtown, restoring eyesore historic buildings that have gone empty for years? Or do we not want to do that? That's a policy discussion. It should not be decided by two guys in a smoke-filled room.

"We shouldn't be having this gotcha, neener-neener, discussion," she said.

At issue is Elm Terrace, a 35-unit development in a historic building on High Street in Portland. It's one of four developments statewide in the past three years that have exceeded $270,000 in per-unit costs. McCormick said she rejected a proposed $314,000 per-unit cost for Elm Terrace, insisting that it be lowered to $265,000. Yet Poliquin continues to cite the $314,000 figure.

"I have given Bruce Poliquin the facts many times, but it doesn't seem to move him," she said. "What I've learned over the years is when the facts don't move someone, there's another agenda. Something else is going on. I think the last board meeting was an eye-opener. It's been really frustrating to have put the facts out and nobody seems to pay attention."

At that board meeting, held Oct. 18, Poliquin contacted several media outlets and conservative groups to ensure a big crowd when the new members of the GOP-controlled board took their seats.

While critics paint McCormick as unconcerned about costs, she says she began raising the issue well before Poliquin focused on the Portland project.

As early as last March, she began talking with developers, architects and others about the need for better cost controls, she said. She later formed a cost-containment committee to seek ways to encourage developers to submit lower bids. She was prompted by federal discussions about tax reform, and the possibility that federal support for the agency would soon dwindle.

The point system that's used to award projects -- which, Republicans say, has not encouraged developers to rein in costs -- has become a point of contention.

One of the "two guys in a smoke-filled room" that McCormick referred to is Anastos, the new board chairman. He and fellow board member David Bateman recently presented McCormick with some suggested changes to the point system. The changes included zeroing out points for the historic tax credit, and cutting the points for anti-sprawl, McCormick said.

It's all part of his plan to lower the cost of each unit, which would allow more developments to be built and reduce the number of people waiting for housing, Anastos said.

"It needs a business approach," he said. "We can't be running off willy-nilly into these social issues."

Republicans don't like many of the philosophical decisions made by McCormick and Baldacci, who encouraged things such as the use of solar water heaters, particularly when the price of oil was high. They also wanted construction workers to have health insurance and to make sure workers were properly classified as either employees or independent contractors.

The Legislature, then under Democratic control, also passed a law that bars MaineHousing developments from being built on the outskirts of town. The anti-sprawl legislation was designed to keep developments on city sewer systems and to keep people in cities and towns where they can be closer to work.

Also, the state and federal governments began offering tax credits to encourage reuse of historic buildings, which drives up the cost of the projects.

LePage has since reversed some of those priorities -- including the health insurance incentive -- but Poliquin and new board members will continue to push for other changes.

Joe Wishcamper, a developer who has worked with McCormick, said the issue of cost is complicated. Local permits, legal fees and investor capital all drive up costs. But, he said, McCormick is willing to listen and make changes.

"Dale is very intelligent," he said. "She's open-minded. She listens well. She solves problems through dialogue."

Anastos and Poliquin were careful not to level personal attacks against McCormick. But both raised concerns that the way the system is set up, McCormick does not answer to the board and has the authority to approve projects without the board's approval. Both men come from the private sector, where CEOs always answer to the board.

McCormick was reappointed to a four-year term by Baldacci in February 2010. The director's position was designed to not coincide with a governor's term in hopes that the agency would not be unduly influenced by politics, McCormick said.

"MaineHousing is an independent agency ... and we must be separate from state interference," she said.

But there's a difference between interference and oversight, which is what concerns Poliquin.

"We have no ability for holding her accountable for implementing policy," he said. "This is all about fulfilling Maine State Housing Authority's mission, which is to do everything we can to get families into affordable housing. It's about the numbers."

Anastos and Poliquin have also complained that they can't get information from McCormick. She said she and her staff have worked to fill all the requests, although it has taken several weeks to compile some of the data. Mostly, she feels blindsided by attacks that she says seem to come from nowhere after she had already formed a committee to focus on controlling costs.

"We were working merrily along in complete consensus, holding hands and singing 'Kumbaya,'" she said. "We all thought it was great to bring costs in to the point system, and then comes this attack -- 'You dirty rat, how could you not know, how could you not have done this new idea before.'"

This is not the first time she found herself in the eye of a political storm.

It was during her successful 1990 state Senate campaign that McCormick endured what she described as the most stressful part of her public life -- threats she received because she is gay.

"I got death threats," she said. "This has not come up to that level yet. I had a police escort home, and the police officer went around the house and checked everything. That was pretty hard. I rate that up there near 10 on the scale of stress."

MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at:

scover@mainetoday.com

 

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