Hensley’s housing vote pays off for her employer.3/16/2016
Maybe Councilwoman Chris Hensley didn’t have a conflict of interest last December when she cast a critical “yes” vote that allowed local developers to apply to the Iowa Finance Authority for low-income-housing tax credits.
But it sure worked out well for her employer last week.
Hensley is a director and paid consultant at Midwest Housing Equity Group, an Omaha-based firm that syndicates and sells tax credits from developers. It works this way: A developer plans a low-income housing project. It applies to the state for federal tax credits. It wins the tax credits. It sells the tax credits to a syndicator, giving the developer the equity it needs to build the project. The syndicator then puts together several deals and then markets them to corporations who use the credits to reduce their own federal tax bills.
And the syndicator gets a tidy piece of the action.
So when the council voted 4 to 3 to extend a deadline and allow a new batch of applications to the Iowa Finance Authority, it was clear that Midwest Housing Equity could benefit. It had regularly bought credits won by some local developers, including Anawim Housing and James Conlin’s development company. Hensley, under pressure and knowing the vote was 3 to 3 without her, asked the city attorney if she could vote.
Technically, at that moment, there was no conflict, city lawyers said. “However, there are significant factors due to your MHEG board membership and consultant contract that may create the appearance of a conflict or the potential for a conflict that should be taken into serious consideration….Should you wish to avoid even the appearance of a conflict, then our recommendation would be that you abstain from voting.” (The city paid the Ahlers law firm $367.50 for work on the issue.) But she voted anyway.
Last week, the Iowa Finance Authority awarded the credits. One winner: Anawim Housing of Des Moines. The application indicates Anawin intends to choose Midwest Housing Equity as its syndicator.
Anawim was awarded $456,296 of annual credits. Multiply that times 10 years, and the credits amount to $4,562,960. Anawim will sell the credits to Midwest for 95 cents on the dollar, meaning it will get $4,334,812 of equity for its $5.6 million, 30-apartment Brickstones at Riverbend project at Fifth and Forest streets. (Though Anawin ends up not owning the project, it makes its money through development and management fees. And the risk of failure lies with the investor.) Midwest will sell the credits, but not before adding a fee — probably 5 percent to 10 percent — to the price, meaning the syndicators will walk away with about $250,000 to $430,000 in revenue.
Hensley is believed to get about $100,000 a year as a consultant for Midwest, which is set up as a nonprofit, but the organization’s 2014 and 2015 tax returns are not yet public. In 2013, she was paid $67,333 for less than a year’s work as acting executive vice president.
Midwest says its mission “is to change lives for a better tomorrow.” One of those lives is clearly Hensley’s. …
The estate of Kirk Blunck last week sent real-estate agents a flier asking for bids — by today — on an undeveloped lot at 1430 Walnut St. in downtown Des Moines. The parcel is one of seven properties that were owned by the architect who was found dead in January in a stairwell at his Teachout Building in the East Village. The estate apparently will seek to sell all the properties as it gathers cash to try to pay off a growing list of creditors.
It’s unclear what the properties can sell for, and it’s equally unclear how many claims will be filed against the estate of Blunck, an acclaimed architect with messy — really messy — business practices. Counting a large second mortgage that is held by the city and is years in arrears, the claims already are around $1.5 million.
Three of the properties owned by the estate are commercial properties in the East Village — the Teachout and Hohberger buildings and the Locust Tap — one is the once-troubled Navarre apartment building in Sherman Hill, another is in Perry and the final one is the Hotel Stuart in Stuart, a partially restored building that also has had a series of troubles.
The Walnut Street lot, adjacent to the Crane Building that Blunck once owned, is assessed at $98,700, but the estate says it was recently appraised at $182,000. That’s the minimum the estate will accept, according to the flyer. The Teachout and Hohberger buildings have a combined assessment of a bit more than $2 million, and the Locust Tap properties are assessed at $237,000. The Perry Building is assessed at around $82,000. The value of the hotel in Stuart is unclear.
On Feb. 29, Doreen Blunck paid about $30,000 in back taxes and interest to redeem the stately Blunck home on Waterbury Road to regain clear title. It had been sold at a tax sale in mid-2015, though the Bluncks had two years to clear the title.
Meantime, the county medical examiner has issued a death certificate, but it lists the cause of death as “pending.” Police apparently are continuing to investigate, and one person close to the investigation says they haven’t ruled out murder. CV
Our Town: The feminist
The year was 1950, and Neal and Bea Smith were just graduating from Drake Law School. Jobs were not plentiful.
But a local insurance company — Neal politely says he “can’t remember for sure which one it was” — offered jobs to the young married couple from southern Iowa. They would be sitting side by side, doing the same work settling claims.
The insurance company offered Neal $265 a month. It offered Bea $165.
“We turned it down right then,” Neal recalled last week, saying well, yeah, that probably makes him a feminist.
Things turned out all right, of course.
The Smiths hung out their own shingle in May of 1950. “It was amazing how we lucked out” in getting clients, Smith said. “People just walked in. There wasn’t any good reason for it. We just lucked out.”
At first, Bea did better. There were only three women practicing law in Des Moines then, Neal recalls, and women who “felt they had not been treated very well by lawyers” quickly came to see Bea. “She got walk-in business from women.” And pretty quickly, too, “I got labor unions. We just had a good business.” They pooled their fees, he recalls.
After a couple of years, the Smiths joined forces with Wade Clark, and before long the firm of Clark, Smith and Emery — presumably both Smiths were the “Smith” in the title — had eight lawyers, making it one of the biggest firms in a town where most lawyers practiced alone or with just one or two partners.
In 1958, Neil Smith was elected to Congress, “and I wanted Bea to go with me — I just had to have her,” so the Smiths closed up shop in Des Moines for what turned out to be a 36-year run in Washington.
So every time you marvel at the Des Moines River Greenbelt, or you visit the wildlife refuge near Prairie City, or you walk across a skywalk in Des Moines, or you take your boat on Saylorville or Red Rock lakes, or you bite into a hamburger knowing the government has inspected the meat, or you do any of a million other things in this state, you can thank that insurance company in Des Moines.
If it had offered Bea Smith the same pay it offered Neal, their lives — and ours — might have been a lot different.
• • •
Neal Smith, hale and hearty, turns 96 next week. Bea, 91, is ailing and lives in a care facility. He drives out from his downtown apartment to be with her each day. (He just renewed his driver’s license.) They were married in 1946 — 70 years ago — just after he got out of the Air Force, where he was a much-decorated bomber pilot, and just after she graduated from Grinnell College.
For a while when he was practicing law in Des Moines, he was also an assistant county attorney. He says the newly elected county attorney, Clyde Herring, wanted to close down the taverns — liquor by the drink was illegal in Iowa in those days — and “one reason he called me was he knew I was never in a tavern” and wouldn’t be susceptible to any blandishments of the bar owners.
In fact, Smith doesn’t drink, smoke, or drink coffee. He never has. Or almost never. “I had two bottles of beer when I was 17 or 18. I didn’t like the taste. So I thought, ‘Why do I want to learn to like something that isn’t good for me?’” He smoked for about six weeks as a young man but had the same reaction. “I knew I was getting hooked, so I quit.”
As for coffee, his fourth-grade teacher told her students it was a stimulant that they should avoid.
Who knows why Neal Smith is vital and vigorous at 96? But maybe…. CV
— Michael Gartner