Your Tax Dollars Not at Work

"I wrote to everybody at CDC, and they kept telling me I need to talk to somebody else," Turner says. "Everyone kept passing the buck."

On July 2, 2004, Turner's son came home to discover that the house was on fire. In 2006, she filed suit against the CDC-KC to recoup the repair costs; according to court documents, an investigator concluded that the fire was linked to improper wiring for the microwave. In December 2007, a judge ordered the CDC-KC to pay Turner $3,300 to fix the exterior of her house.

That's not the only time that the CDC-KC has been to court in the past two years. In 2006, Douglass National Bank sued the CDC-KC after it defaulted on a $500,000 promissory note. A circuit judge ordered the CDC-KC to repay the note plus $50,000 to cover interest, late fees and attorneys' costs.

Three months after the ruling, the CDC-KC handed over $200,000 to settle another lawsuit in federal court. That dispute dated back to 2004, when the Aldi supermarket chain contracted with the CDC-KC to assemble property near 30th Street and Prospect for a new grocery store. Aldi pulled out of the deal and for two years tried to recoup $200,000 it had put in trust. The CDC-KC ignored or denied Aldi's requests to release the money. In June 2007, the CDC-KC returned the money and the case was dismissed.

The CDC-KC was held in contempt of court last year. That dispute had to do with the CDC-KC's partner in the Citadel Plaza development: New Markets LLC, based in Las Vegas. In 2003, New Markets failed to pay a Pittsburgh architectural firm $64,000 for design services. Attempting to recover its costs, the architectural firm sued to garnish New Markets' stake in the Citadel Plaza.

The CDC-KC and Citadel Plaza LLC were decidedly uncooperative. For months, Citadel Plaza LLC — represented by Phillip Kusnetzky, also the attorney for the CDC-KC — ignored the court's order to respond to questions. In March 2007, Threatt didn't show up to his deposition, even after being served with subpoenas and rescheduling the deposition three times. In September, a Jackson County judge held the CDC-KC and Citadel Plaza in contempt. (New Markets satisfied its debt with the Pittsburgh firm in late October 2007, and the contempt charge against CDC-KC was dropped.)

Threatt says the New Markets lawsuit was nothing more than lawyers fighting with each other, and that his attorney told him not to attend the deposition. He says there was no wrongdoing in the case of the 7th Street Investors loan, and because the money stopped flowing from the city, the CDC-KC had inadequate financial resources to deal with the now-demolished building at 2901 East Linwood. Threatt also insists that Turner's lawsuit was without merit and that, in the supermarket case, it was the Aldi chain that violated the contract, not the CDC-KC.

Lawsuits and loans aside, even CDC-KC's successes have been qualified — most notably, the Linwood shopping center at 31st Street and Prospect.

Threatt acknowledges that the original concept — to create a shopping center featuring only mom-and-pop retailers — failed. In recent years, though, Threatt says the CDC-KC has lured regional and national chains to the center and invested $4 million to improve the look of the decade-old development.

"These shopping centers have been a resounding success," Threatt says. "Go into Ashley Stewart or Foot Action, and you don't know if you're at 31st and Prospect or Oak Park Mall."

Outside, it's a different story. On the west side of the street, the parking lot undulates with uneven pavement, and a security guard lingers in front of the abandoned anchor-tenant space. The former grocery store is empty and dark but for a few forgotten shopping carts and discarded buckets. It's been more than six months since the supermarket closed. Threatt says the CDC-KC is looking for a replacement.

Hearing that Threatt calls the shopping center a "resounding success" worries Pat Keeling. A former president of the Blue Hills Neighborhood Association, she doesn't want the Citadel Plaza development to end up like Linwood.

"For the life of me, I don't see why they're allowed to continue," she says of the CDC-KC. "They did that Linwood shopping center, and it's a disaster. And I've said from the very beginning that we didn't want an extension of that here."

What they got has been much worse.

In the late 1990s, Keeling was excited about the promise of a new shopping center that would spur development along Prospect. A longtime neighborhood advocate, she's proud — and protective — of Blue Hills. So it galls her that the Citadel Plaza project has faltered over the past seven years.

After the CDC-KC started buying and tearing down houses, the area turned into an eyesore, residents say. The CDC-KC bought homes and let them sit vacant for months. Criminal activity flourished around the abandoned structures, and the ghost blocks turned into illegal dumping grounds. Paul Tancredi, the current president of Blue Hills Neighborhood Association, says it got so bad that the fire department and SWAT teams used the structures for training.

When workers finally tore down the houses, they didn't bother to clean them out, recalls resident Janet Boggess. "Debris, furniture, toys," she says with disgust. "It was a mess, a literal nightmare."