vdt moody housing

Unfinished homes in a Moody AFB housing project on Bemiss Road are seen in this file photo.

VALDOSTA — Rep. Jack Kingston’s office made a long-awaited announcement Thursday after a letter of intent was signed by the Hunt Pinnacle Group with the American Eagle project owners for the acquisition of the Moody, Little Rock, Hanscom and Patrick Air Force Base housing privatization projects.

The LOI, which was dated April 1, stipulates terms for ongoing discussions between the parties, which can culminate in a future Purchase and Sales Agreement. Although not a party to the LOI, the Air Force has signed the letter acknowledging the terms of the agreement, according to information submitted by Kingston’s office.

In March 2004, the Moody family housing project was initiated. Carabetta was named the property manager and created Moody Family Housing, LLC, to be the developer and project owner. The groundbreaking ceremony for the 383 single-family home development was held Oct. 13, 2005. The ribbon-cutting ceremony for the first two homes took place Jan. 31, 2007, shortly before work on the development was halted after liens were filed on behalf of subcontractors who had not been paid for the work they had completed.

Within two months of the highly-anticipated ribbon cutting, the keys handed to the first two Moody families were taken away and the housing area was locked down. American Eagle Communities, LLC, in partnership with the Shaw Group Inc. and the Carabetta organization were awarded the contract for the project three years before that ceremony and, according to the original timeline, should have completed more than 150 houses by that time.

The estimated cost of the project exceeded available funding by $25 million and the project lenders stopped funding in March 2007 to prevent all funds from being expended.

By November 2007, Kingston had visited Valdosta to meet with subcontractors numerous times to answer questions and concerns and by that time, most had been informed that they may not be compensated for their work.

Senators Saxby Chambliss and Johnny Isakson also visited Valdosta and Moody to visit with subcontractors and see firsthand the state of the housing development.

On Dec. 12, 2007, Chambliss and Sen. Mark Pryor, D-Arkansas, introduced legislation requiring a more

rigorous process in vetting bidders, developers and lenders for housing privatization projects.

During a visit to Valdosta in February, Isakson said, “This was a bad situation made worse by poor contracting management. I have spent a lot of time on this issue, and we are working our way through other issues associated with Moody Family Housing ... The progress is great, but there are still many, many issues to work out and contractual negotiations are ongoing.”

Isakson added during that visit that the goal was to have a new contractor assigned to the project by Feb. 29.

Many of the questions raised by subcontractors were directed toward the U.S. Air Force and its involvement in the project.

At a Nov. 13 meeting at the Valdosta-Lowndes County Chamber of Commerce, the two main concerns raised were that the Air Force approved the contracts with the subcontractors, but seemed to alleviate itself of any liability in regards to payment and that the bond amount was never enough to cover the entire project. Subcontractors were concerned that when a new project owner was determined, and the property sold to the company, the liens would be sold as well allowing the company to dictate how the subcontractors would be compensated. That compensation would come from any money left over following the compensation of bondholders and may not be enough to cover the total expenses of the subcontractors.

On March 27, Kingston met with subcontractors once again to discuss the status of the project. The most recent concern to arise from that meeting was the question of where all of the money went. According to Kingston, no audit has been conducted of the project. Among other issues, Kingston stated that he would address the GAO (General Accountability Office) or Air Force on conducting an audit to determine where the unpaid wages have ended up.

Investigations into the process by which Carabetta was selected as the contractor determined that the company was selected by a two-step process as a “low-to-moderate risk” contractor though the company had filed bankruptcy in 1992 and 1993 and was in federal litigation with HUD.

“On March 14, we met with the Air Force. In audacity beyond audacity, Carabetta contested the naming of a new owner or contractor as Carabetta would like immunity from future lawsuits and the federal Watch List,” Kingston said.

The project was placed on the Watch List in 2004.

Though Carabetta’s immunity request held up the letter of intent, the project, which is worth 40 percent less now than it was 12 months ago, will soon be in the hands of someone else alleviating one concern for subcontractors while leaving open the lingering concerns of payment and accountability. Now that the new contractor has been selected, the government is expected to be of assistance by allotting a $23 million low interest loan toward the estimated $60 million-plus project.

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