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State probed apartment rental by Grand Forks official’s daughter; lease violation of federal rules

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A state official said Tuesday, city officials had fixed an apparent conflict of interest in which the daughter of Grand Forks’ Director Urban Development director rented an apartment subsidized by federal funds that came through her father’s department.

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The controversy became news when conservative blogger Rob Port wrote about it Tuesday on his Say Anything blog. Port wrote he had been tipped off by a reader about an April 1 public notice ad in the Herald paid for by the city revealing the “adverse finding” by the state Department of Commerce.

According to letters provided Tuesday to the Herald from state and city officials:

On March 4, Paul Govig, director of the community services division of the commerce department, wrote to Mayor Mike Brown about the apparent conflict of interest with Urban Development Director Greg Hoover and his daughter, Ashley Hoover, who works in his office.

Govig said a routine monitoring process last year found one of the city’s affordable apartment projects was “out of compliance” with a federal rule prohibiting “a conflict of interest, real or apparent,” involving an immediate family member of “an employee, officer or agent of the grantee or subgrantee” of such a subsidized program.

The fact that Ashley Hoover’s father was in charge of the city’s Urban Development department and that he “signed the relevant documents” which authorized federal funding for The Aurora on Griggs Square before the project was developed, and the fact she worked in the Urban Development department provided at least the perception of a conflict of interest, Govig said.

Govig told Mayor Brown that Govig needed to be sure that “Ms. Hoover’s lease not be renewed for 2014,” because of the violations of the HOME regulations and that notice of the violation had to be published in the local newspaper.

In a reply letter April 4, City Administrator Todd Feland told Govig the city had complied, noting Ashley Hoover’s apartment lease being terminated effective April 30 “and her employment with the city of Grand Forks will terminate in May.”

Despite some reports to the contrary, Govig said Tuesday he had made no demand that Ashley Hoover lose her job over the violation.

Moving out

Mayor Brown and Greg Hoover both said Tuesday Ashley Hoover is leaving her job next month of her own choice, unrelated to the conflict of interest issue.

“She decided months ago, that she would quit at the end of the school year,” Greg Hoover said. His daughter has been attending UND and working part-time.

Aside from federal program rules, there is no city regulation against nepotism, said City Attorney Howard Swanson.

Govig said Tuesday the problem’s been fixed.

“We are satisfied. How I see it is, it was an honest mistake.”

He said it’s easy to do, even for a veteran of federal housing programs like Greg Hoover.

“Many of these federal programs have many, many rules and regulations and lots of red tape and it would be easy to do,” Govig said. “We have a great working relationship with the city of Grand Forks and with Greg and the mayor. We thought it was just an honest mistake that they need to correct.”

Hoover said of the federal program rule: “I completely forgot about it.”

And his daughter probably could have obtained a waiver to the regulation, based on her situation, Hoover said.

He said the important thing is he had nothing to do with his daughter qualifying for the low-rent apartment.

“I don’t make the decisions on who gets the apartments, that’s up the leasing agent,” Hoover said.

Terry Hanson, executive director of the Grand Forks Housing Authority, corroborated that, saying Greg Hoover has no say in the management or leasing decisions of such an apartment project once it’s built.

Federal funds

In 2011, Govig’s state office awarded $170,000 of federal HOME funds to the city’s Urban Development department to help build the $5.5 million 40-unit project called The Aurora on Griggs Square, completed in 2012, at the 600 block of First Avenue North.

Part of the deal is devoting eight of the units to special, lower-rent HOME-assisted levels for eligible low-income tenants.

Hanson said for one person to qualify for a HOME-assisted one-bedroom unit in The Aurora on Griggs, her annual income must be no higher than $29,340, which is 60 percent of the area median income for one person.

His daughter “definitely qualified,” Greg Hoover said.

Like other renters of the eight HOME-assisted units, Ashley Hoover receives an effective subsidy of about $275 per month in rent.

The rent for such a unit would be $512 to a qualified renter, about 65 percent of the $786 charged for similar apartments in the same building which do not get the HOME funding, Hanson said.

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