Comptroller rejects $91 mil contract for Bronx homeless shelter; cites ‘possible fraud’

In a stunning move, city Comptroller John Liu rejected Friday a $91 million, 21-year contract for a controversial homeless shelter in Wakefield.

He cited “possible fraud,” raising procedural questions over whether a proper vote was taken by the city Local Redevelopment Authority.

City officials were quick to respond, charging the mayoral contender with playing politics.

The U.S. Department of Housing and Urban Development was seeking approval from the LRA – comprised of Borough President Ruben Diaz and Deputy Mayors Robert Steel and Linda Gibbs – to convert the former Muller Army Reserve Center at 555 Neired Avenue into a 200-bed homeless shelter for men. The contract to operate the shelter was to be with the Doe Fund.

The Bloomberg administration has maintained that a legitimate vote of the LRA took place in Nov. 2010, but Diaz has argued that it was only an informal meeting to discuss approving or denying the plan for a homeless shelter.

“Time and again since Mayor Bloomberg took office, serious questions have arisen about whether the administration has broken the rules protecting the rights of neighborhood residents and homeless people,” said Liu in rejecting the contract.

“City Hall’s failed record on homeless policy cannot and should not become the excuse for skirting rules in this Wakefield siting or for the many emergency shelter contracts proliferating in certain neighborhoods.”

Borough and local officials, as well as residents in the area have expressed overwhelming opposition to the plan. Shortly after a town hall meeting on the matter at P.S. 21 in June 2011, the city administration announced that an approval vote had indeed taken place.

“This administration has worked to force this contract to completion and has used fraudulent means to reach that goal, blatantly ignoring the input of the community and its representatives,” said Diaz.

The borough presidenty thanked Liu for rejecting the contract and for “his thorough examination of the evidence, which proves that this administration failed to follow the correct process regarding the closure of the Muller Army Reserve Center.”

Diaz noted that he has said all along that the site was inappropriate for use as a homeless shelter.

“I hope that we can now move forward on a better, military use for this site,” a pointed reference to the possible transfer there of a National Guard unit now housed in a building next to the Kingsbridge Armory. Kingsbridge residents have long advocated for new – and much needed – schools to be built in the space now occupied by the National Guard unit.

Community opposition on the homeless issue piqued not only in Wakefield but also in Woodlawn because a homeless housing facility in Muller would be the fourth one within waking distance of the others.

Homeless housing is also being readied in a former warehouse and factory diagonally across the street from the Muller Center.

Community Board 12 chairman Father Richard Gorman had expressed strong opposition to the facility on behalf of the board since the homeless Muller plan was first proposed.

The Bloomberg adminstraiton quickly responded, with Linda Gibbs, deputy mayor for health and human services, charging potential mayoral contender Liu with playing politics by releasing his decision in a press release – “an irresponsible and blatant attempt to advance his political ambitions.”

“…after nearly two years of engagement with the federal government his summary announcement, without any communication with the City, defies credibility,” she stated.

City officials noted that the federal housing agency has been deeply involved in the review of the project since June 2011, when the city first submitted its redevelopment plan.

Patrick Rocchio can be reach via e-mail at or by phone at (718) 742-3393

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