Philadelphia Sues HUD, Citing Threat of Losing Aid

The director of the Philadelphia Housing Authority has accused the federal housing secretary of ordering the city to turn over a $2 million property to a politically connected developer, then threatening to withhold millions of dollars in federal aid after his directive was refused, according to a federal lawsuit filed by the city.

But officials at the Department of Housing and Urban Development denied those charges Monday, saying that the secretary, Alphonso R. Jackson, had no personal, political or business relationship with the developer who was seeking the $2 million parcel of vacant land, Kenny Gamble, the soul songwriter and producer. A spokesman for Mr. Jackson, Jerry Brown, also said that Philadelphia’s financing was in jeopardy because the city had failed to meet the requirements of a decade-old housing plan.

The accusations against Mr. Jackson by Philadelphia officials, first reported Monday in The Washington Post, come as the housing department’s inspector general and the Justice Department are reportedly investigating whether he improperly steered government contracts to friends in New Orleans and the Virgin Islands. Department officials did not address those accusations, but they were vehement in disputing the charges in the Philadelphia lawsuit.

“There was no retaliation,” Mr. Brown said in an interview Monday. “These two things had nothing whatsoever to do with each other.”

Neither Carl R. Greene, the executive director of the Philadelphia Housing Authority, nor Abbe Fletman, a lawyer representing the authority, returned calls requesting comment.

The lawsuit, filed by Philadelphia housing officials in December, involves a long struggle over the city’s efforts to overhaul the blighted Martin Luther King Jr. projects. Mr. Gamble’s company, Universal Community Homes, was part of a partnership selected to build the first phase of the project in 1999, in a deal that promised to reward the developers with a parcel of vacant land in return for building 236 low-income units and providing counseling services to incoming residents.

Only 80 units were built when Universal’s partner withdrew from the project, forcing the authority to help with the rest of the construction. And Mr. Greene said Universal never fulfilled its obligation to provide counseling so he turned down its request for the $2 million parcel of land, where the company intended to build 19 homes at full market rates.

The dispute continued in 2006, when Mr. Jackson called John F. Street, who was the mayor of Philadelphia at the time, to urge that the land be turned over and the project advanced. In an affidavit, Mr. Greene said federal housing officials had continued to exert pressure on behalf of Mr. Gamble, whom it described as having political connections. Housing officials said Mr. Jackson’s call was an effort to move the project forward, not to bestow a favor on Mr. Gamble.

“The call wasn’t motivated by any desire to help Kenny Gamble,” said Mr. Brown, the HUD spokesman. “The secretary is closer to Carl Greene than he is to Kenny Gamble.”

As the city housing authority rebuffed Mr. Gamble’s effort to get control of the property, it was also in a dispute with housing officials in Washington about whether Philadelphia had failed to meet a federal requirement that 5 percent of its public housing be made accessible for the disabled.

In the lawsuit, Philadelphia officials said that they had exceeded that by 1 percent and provided detailed studies by experts who contend that federal housing inspectors had undercounted the city’s efforts. Mr. Greene’s affidavit stated that he and other Philadelphia housing officials had repeatedly urged federal officials to reconsider, even traveling to Washington last summer to make the case in person. But in his affidavit, Mr. Greene said that Mr. Jackson’s deputies told him that Philadelphia would get credit for its efforts to provide housing for the disabled — and qualify for millions of dollars in federal aid — only if the city agreed to transfer the property to Mr. Gamble.