The Denver City Council voted unanimously Monday in favor of a controversial $500,000 loan to help a housing project for HIV-positive homeless people.
But city officials said the Juan Diego project in the Highland neighborhood may not go forward because of the owners’ actions on the property.
The low-income housing project has been under negotiations for more than a year. But council members have said they dreaded Monday’s public hearing because of neighbors’ concerns and a series of issues around nonprofit developer Del Norte Neighborhood Development Corp.
Nearly 200 speakers – mostly in favor of the project – showed up for a planned one-hour hearing, filling the council chambers and exceeding the allotted time.
But because of a paperwork oversight, it is the U.S. Department of Housing and Urban Development that will make the final call on whether to allow the facility.
In December 2003, Del Norte knocked down a building at 2449 Dunkeld Place – the property where the Juan Diego project is planned. The site is part of a national registered historic district, and neighbors fighting the development pointed out that Del Norte obtained a proper permit only after the demolition.
Jackie Morales-Ferrand, the director of Denver’s Division of Housing and Neighborhood Development, said the city made a mistake. “We failed to contact the historical society,” she told the council.
Assistant City Attorney David Broadwell said the project is facing a “serious allegation.” But he said “there was no intent to circumvent the law.”
To be safe, however, the city plans to take the issue back to HUD, which awarded Denver the $500,000 the council voted to give Del Norte in a deferred loan.
The demolition is the latest wrinkle in a dispute over the Juan Diego project and the city’s involvement.
Neighbors have raised questions about Del Norte’s past history paying loans, its failure at one point to pay property taxes and its relationship with the city.
Neighbor Adam Hostetter told council members that Del Norte had “a track record of fiscal incompetence.”
Even as the council passed the HUD loan Monday, it also passed a bill to recoup a different loan from Del Norte that had been past due.
Deborah Ortega, president of Del Norte’s board, is also chairwoman of Mayor John Hickenlooper’s Commission to End Homelessness.
Del Norte board member Ron Tilton, who is also First Bank president, defended Del Norte, pointing out that nonprofits often have difficulty with funding.
“We would list them as one of the best nonprofits for low-income housing in Denver,” Tilton said.
