10 Investigates Tampa Housing Authority $6 milllion bid to unlicensed partnership

11:07 PM, Jan 20, 2014   |    comments
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Tampa, Florida -- When agencies spend millions of your tax dollars, you hope they follow all the rules and spend the money wisely.

But 10 Investigates the Tampa Housing Authority, which gave a multi-million dollar contract to an organization that wasn't licensed to do the work. This is the latest in problems we have uncovered in the agency.

SEE ALSO: Feds investigate Tampa Housing Authority

This one centers on the Cedar Pointe Apartments, a $6 million Tampa Housing Authority project South of Temple Terrance, which is being renovated with good intentions.

The plan was to get some of the public housing residents out of decrepit, outdated, non-air conditioned apartments, and into a new home.

Reva Iman lives in one of the run-down complexes, Robles Park. She says, "I just think it's awful. I feel like it is awful, what we the people who are living here are going through."

Families were scheduled to move into Cedar Pointe August of 2013, but the project sits as a vacancy and the "for lease" signs are being removed because it's still not ready.

A contractor who was one of the higher bidders on the project says, "It kind of makes me wonder what they are doing over there."

The contractor -- who asked us to conceal his identity because he bids on several projects with the public agencies -- was never in the running to get the project after the bids were opened, so he has no ax to grind. He says when the Tampa Housing Authority selected the company to do the project at Cedar Point in June of 2012, it was through what he calls a "questionable process."

Questions surfaced after several contractors made bids to the project and the Housing Authority said in a memo that after a "long and thorough review and due diligence" on the part of the Housing authority, "ZMG-Malphus submitted the lowest and most responsible bid."

That would be nice if it was true... but the contractor says the joint venture of Malphus and ZMG wasn't licensed.

"And so they never should have been one allowed to bid the job," the contractor adds. "But more importantly, [they] should have never made it past the review process."

We went to Housing Authority CEO Jerome Ryans and asked what kind of due diligence the agency did if it hired a venture that wasn't licensed by the state of Florida.

SEE ALSO: Housing Authority CEO was under fire at another agency

Ryans, who continued his pattern of refusing to sit down and talk with us when we uncovered problems with his agency, would only say over and over as he was rushing to his car, that Cedar Pointe was a great project.

Meantime a losing bidder protested, and the Housing Authority discovered ZMG-Malphus was not licensed and not qualified to bid.  However, THA didn't give the contract to the second qualified bidder; instead it rejected all bids, rebid the project and gave the bid back to ZMG-Malphus, which by that time had obtained a valid license.

Our contractor source told us, "It just seemed unusual that it all took place with their licensing getting in order." He added in every project he has worked on, if the winning bid is not qualified, the second place bid gets the project.

Then more questions surfaced after one of the men in charge of ZMG-Malphus and Cedar Pointe, Richard Zahn, was arrested within four months and was convicted in South Carolina for bribery charges on another project.

Zahn immediately retired from the company.

The Housing Authority CEO, Ryans didn't want to talk about that either. When we asked him if he was concerned when Zahn was arrested, Ryans slammed his car door in our face and drove off.

SEE ALSO: U.S. senator blasts Tampa Housing Authority

But those who are suffering the most are people like Reva Iman, waiting to get into decent housing. Iman says, "It's not fair to the people."

The Tampa Housing Authority says it is planning a Cedar Pointe opening in the next 60 days. Even though the agency didn't catch that ZMG- Malphus wasn't licensed, the agency says "In all respects, this procurement process was handled in an exemplary manner, in accordance with all laws, policies and procedures, and we vehemently deny any assertion to the contrary." 

We thought you'd want to know that Malphus and ZMG -- which didn't want to comment -- also has close ties with the Housing Authority, as they are major players for the $800 million Encore project, which is the key to Tampa's urban renewal.

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