THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, September 12, 1996 TAG: 9609120381
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: 61 lines
If you're planning to hire a gardner, would you choose someone in town or someone 2,000 miles away?
That's the question that perplexed real-estate agents in Hampton Roads have been asking themselves.
Several local Realtors are angry and outraged about the possibility that an Arizona firm will win a real-estate management contract to manage Housing and Urban Development Department-owned properties in Virginia Beach.
``There are four or five of us who have done this work for some time,'' said Sara Shield, the broker/owner of Shield Realty Co. ``Why would they look so far afield?''
The Housing and Urban Development department guarantees property financed by Federal Housing Administration loans. When consumers default on FHA loans, HUD takes over the property, usually a house. These HUD-owned properties are then managed and maintained by a real-estate company until they are purchased.
In past years, different local real-estate companies or even firms elsewhere in Virginia have managed HUD-owned property in Hampton Roads. Many of those same firms bid on HUD contracts, set aside specifically for real-estate companies that qualify as small businesses. A small business is one whose gross income doesn't exceed $1 million in the previous year, according to federal standards.
On August 26, the HUD contracting office in Philadelphia notified local firms that had submitted bids that HUD was contemplating awarding the contract for its Virginia Beach properties to Tuscon, Ariz.-based Citiwest Properties.
HUD plans to announce the contract winner soon and has confirmed that it is an out-of-state applicant.
Calls to Citiwest Properties were not returned. Citiwest has managed HUD-owned property in the past, HUD contracting officer Jane Atkinson said. It has two HUD contracts,one in St. Louis, Mo., and another in Camden, N.J.
Local Realtors blamed the change on the transfer of HUD's contract evaluation process from its Richmond office to its Philadelphia office. Some, like Robert Schaefer, president of Century 21 at the Mall, wrote letters to HUD Secretary Henry Cisneros and other political officials to spark some action.
``These area firms are in shock that HUD found a firm 2,500 miles away more suited to handle homes in their own back yards,'' Schaefer wrote.
``It's incomprehensible to think that there isn't at least one qualified contractor in Virginia Beach,'' said another Realtor, who asked not to be named. ``We can't quite seem to understand how the conclusion was made that they needed to make an award to a small business in Arizona.''
Other real-estate agents expressed more practical concerns.
``We would rather have someone here get it than go far afield, mainly because we all sell these properties,'' Shield said. ``Properties aren't static. They have to be maintained. The farther you get from the locality, the less you're acclimated to that locality.''
HUD officials didn't see it that way. They tried to determine the best candidate based on qualifications, federal outlines and bid price.
``We're not underhanded. We're just doing our jobs,'' said Atkinson, who works in HUD's Philadelphia contracting branch. ``The fact that they've gotten it in the past doesn't guarantee they're going to get it again,'' she said about previous Hampton Roads companies who have held HUD contracts. ``They must be lucrative contracts.'' by CNB