On the second floor of the City of Odessa’s Municipal Plaza, the Odessa Hispanic Chamber of Commerce rents a suite of offices where the publicly-funded organization is supposed to work on developing the local economy.
But for years, unbeknownst to city officials, this publicly-owned space has also been home to a for-profit company that runs an apartment complex for low-income tenants. The relationship between the long struggling Hispanic Chamber and other related entities, including this company, highlights the opaque nature of the organization as it faces a loss of public funding amid claims by its own leaders of possible misconduct related to public spending.
The company is The Grove Apartments LP, a partnership between a charity of the Hispanic Chamber and a low-income housing developer, Indiana-based Herman and Kittle Properties. The 68 apartments themselves, at 401 Lasseter Ave., are managed by a third-party company.
Ector County Appraisal District records show The Grove Apartments owes more than $79,000 in outstanding taxes for 2017, including more than $15,000 in unpaid taxes to the city.
Several city officials, including Mayor David Turner, Odessa Development Corporation President Betsy Triplett-Hurt and city attorneys, said they did not know about the apartment business operating out of the city building until the Odessa American began asking them about it in recent weeks.
Hispanic Chamber CEO Ben Rubio said there is no financial connection between the Hispanic Chamber and the charity or the apartments. Rubio also said Hispanic Chamber officials do not benefit financially from the charity and the apartments.
The Hispanic Chamber had disclosed the existence of the apartment complex to the city as recently as last summer, as it sought public money.
“The Grove Apartments is a good example of commitment on providing affordable housing in Odessa,” Hispanic Chamber officials wrote.
Ultimately, public funds budgeted for the Hispanic Chamber this year totaled more than $305,000, paid in monthly installments.
City officials are seeking a third-party audit of the Hispanic Chamber, prompted by the abrupt removal of new leaders last month. The ODC has never required such an audit of the Hispanic Chamber as it does with other organizations it funds. But the recent shake-up spurred concern by members of the ODC, which funds the Hispanic Chamber, about how public money was being spent.
Triplett-Hurt said Hispanic Chamber officials are cooperating so far with the inquiry. But it has not included a request for information about the apartment complex. Turner said he wanted to know more about the Hispanic Chamber and other entities operating out of the same city office.
“Those are questions that certainly need to be asked,” Turner said. “It may be totally innocent, and that’s fine.”
Public records list the managing partner for the charity in The Grove Apartments LP as Raymond Chavez, who until recently received a publicly funded salary for his work managing a city-effort to build business ties with Mexico.
Chavez founded that effort, the Mexico Initiative, which was enveloped in repeated controversy in recent years that included criticism of poor management and a struggle to document results for the public money spent.
His duties with the charity, as described in the application for a tax credit to the state, include monitoring the management company, overseeing marketing activities, keeping track of leasing rates and interacting with residents, neighbors and city officials to make sure the property meets expectations.
But Chavez said this work never overlapped with his job managing the Mexico Initiative. The city paid him about $58,000 for the latter job for six months of work through the end of March.
Chavez said he isn’t paid for his work on The Grove Apartments.
“It’s not a moneymaker for me — We just wanted to get housing built, because even now there is not enough housing here,” Chavez said, stressing that the apartments are not low quality.
But the project is designed to make money. Profits would flow into the Odessa Hispanic Chamber Charitable Foundation, Chavez said. But Chavez, who is also the president of the charity, said any profits would be used to develop more low-income housing.
“It hasn’t happened yet,” Chavez said.
Even then, Chavez says Hispanic Chamber officials would not benefit financially.
The charity is another organization operating out of the city-owned building without the knowledge, until recently, of city officials. As a local nonprofit, the Hispanic Chamber’s charity played a key role in helping the apartment complex win a tax credit from the state.
The Hispanic Chamber charity partnered with Herman and Kittle Properties to develop The Grove in 2014.
Chavez said the charity formed for that purpose.
“It never was structured to be setup as a full-fledged foundation that does fundraisers and things like that,” Chavez said. “It was actually setup to do what it did, to be just a 501c3 to partner with the investor, with the investors that own the apartments.”
Land for the apartments was donated by the Ector County Independent School District through the City of Odessa, which also agreed to support the development through means such as road work. The city valued the total in-kind contribution as worth about $850,000.
The apartment complex opened in 2016.
Herman and Kittle spokeswoman Laurren Brown said a third-party company was hired to manage the apartments and that Chavez does not have a day-to-day role doing that.
Instead, Chavez, in his role as president of the charity, oversees the business. Brown said Chavez is not paid through the limited partnership, and officials of the charity do not own personal stakes in the business.
Any payments to Chavez for work related to the apartments would have to come through the charity, and Hispanic Chamber officials say no one involved with the charity is paid.
But the Hispanic Chamber was unable to produce financial records that similar 501c3 charities are required under state law to keep at their offices and allow the public to inspect.
Such records would show, among other things, whether officials get paid. But Chavez, along with an office manager for the Hispanic Chamber, said the records are not kept on site. He said that he will release them after meeting this week with an outside bookkeeper.
Records the organization did produce contain errors, Chavez and other Hispanic Chamber officials said. This includes tax forms the organization files with the Internal Revenue Service that report no compensation for board members of the charity. The most recent documents, covering the years 2015 and 2016, list only about $16,000 in assets for the charity.
The forms also list District 5 Odessa City Councilman Filiberto Gonzales as the treasurer. But Gonzales and Chavez insist this is incorrect and that the council has no role with the charity.
“I’ve never served on that board,” Gonzales said. “I don’t know what happens with the money. I don’t know how that apartment was built.”
Chavez said he did not know why Gonzales’ name is on the forms. Chavez said the IRS is only concerned with the charity’s exempt status and incorrectly listing officers should not cause a problem.
“They don’t even look,” Chavez said. “They look at the 990 itself and whether you are exempt or not, and the foundation is exempt.”
The relationship between the charity and the Hispanic Chamber seemed problematic to the ousted CEO, Price Arredondo. He said he was asking questions about the charity and the apartments before his removal on March 8, which came as he was about to propose changes to the Hispanic Chamber that included doing away with Chavez’ paid position managing the Mexico Initiative.
Now, Arredondo says he believes his efforts to distance the Hispanic Chamber from the charity and chang
e the approach to the Mexico Initiative influenced his ouster by a group that included Chavez’ family members and Gonzales.
People would call the Hispanic Chamber about the apartment complex, and mail for The Grove would arrive at the city building, Arredondo said. He said he wanted to make sure there were no financial ties between the charity and the publicly-funded Hispanic Chamber.
“If they are not related, then they should be separate, right?” Arredondo said. “I don’t know exactly what activities were conducted from the foundation in the chamber office.”
Chavez said Friday using the city building was “just a convenience” but that he came to agree with Arredondo. Chavez said he will move the charity and the apartment company to new addresses from the city building so the Odessa Hispanic Chamber Charitable Foundation and the Odessa Hispanic Chamber do not appear to be tied together.
“It needs to be done,” Chavez said. “We need to get it done.”