Bayou housing board shakeup leads to resignations, criminal inquiry 

The entire board of the Bayou La Batre Housing Authority (BLBHA) and its only two full-time employees have resigned since July, and now new members are launching a forensic audit to examine their predecessors’ financial practices and exorbitant executive contracts that include multimillion-dollar retirements, which have drawn the attention of law enforcement. 

BLBHA is tasked with managing Safe Harbor — a residential community built with $17 million in federal grant funding to provide affordable housing options in the wake of Hurricane Katrina. After the terms of its grant were satisfied, the city turned ownership of Safe Harbor — consisting of 99 modular homes — over to BLBHA in 2016.

The idea at the time was the BLBHA board would be better suited to finance improvements or build new houses at Safe Harbor if they owned it outright. However, over the past two years, plans to add on to Safe Harbor fell apart as the board began exploring options to sell the property instead.

In December the board voted unanimously to sell the property, but a dispute with the city of Bayou La Batre about the zoning for Safe Harbor has delayed those efforts. Since then, Mayor Terry Downey — the board’s appointing authority — has replaced several board members after a series of resignations. He’s also openly stated his opposition to selling the property — a view his recent appointees seem to share.

“I don’t think the zoning is going to allow it to be sold, and I don’t know that it needs to be sold,” board member Johnny Hatcher said. “I also find it strange that the [former] administration asked the city for the property to build houses and expand, but the first thing they did was turn around and try to sell it.” 

When Hatcher was appointed in July, the other board members included Chairman Marcia Stork, former Bayou La Batre Police Chief Johnny Joyner, Annette Thornton and Wilbur “Scotty” Scott. Since then, all of those members have also resigned, with the exception of Scott, who was still serving on the board when he passed away in early August. Joyner, Thornton and Stork have resigned within the last month.

This massive shakeup seems to have intensified after Hatcher and retired sheriff’s deputy Mike Burdine were appointed to the board and announced their intention to begin examining its finances. Last week, Mobile County Sheriff’s Office Capt. Paul Burch was also appointed to the board by Downey.

The new members are now conducting an external audit to review what Burdine called “questionable purchases” and the lucrative salary and benefits packages previous board members approved for former Facilities Manager Darryl Wilson and former Executive Director Virginia Huddleston — the husband and wife duo who abruptly resigned last weekend when new members became the majority.

In her resignation letter, Huddleston accused the city of Bayou La Batre of “directly blocking expansion” of Safe Harbor and “denying its own citizens access to safe and affordable housing.” She also brought up the zoning dispute with the city that has delayed the planned sale of Safe Harbor multiple times.

Wilson suggested “unprofessional, unethical, illegal and retaliatory actions” by board members and city officials had effectively breached his contract, though he did not cite any specific grievances in his letter.

As Lagniappe has reported, an extension to Huddleston’s and Wilson’s employment contracts and an addendum related to their retirement packages was approved during a July 21 meeting. The contract was proposed and passed without any deliberation among board members at the time, and requests for copies of those documents during and after that meeting have been denied or ignored.

However, newly appointed board members provided copies of those documents last week, which detail multimillion-dollar, “lump-sum” retirement payouts for Huddleston and Wilson that would require BLBHA to prioritize their retirement should any of its assets be sold or the board ceases to exist. The addendums also require the board to pay the couple’s legal bills if the contracts are ever contested.

Burdine noted the combined total of the $2.5 million lump-sum retirement payout for Huddleston and the $1.6 million package for Wilson is close to the appraised value of the Safe Harbor property and the $4.5 million reserve price set as part of an agreement with Ten-X to market and auction the property.

That sale is currently pending, but the board has indicated it does not intend to move it forward. 

The contracts approved in July also renewed Huddleston’s and Wilson’s salaries, which were $120,000 and $89,000, respectively. Records provided by BLBHA also indicate Huddleston and Wilson each received a $69,000 bonus from the board in February and have received other bonuses and raises in recent years.

To put their compensation in perspective, data released by the U.S. Department of Housing and Urban Development (HUD) in 2018 indicates the average public housing director’s salary is around $69,186. Burdine said he can’t fathom why any board member would ever approve such high salary and benefits packages.

“There seems to have been some malfeasance going on here,” Burdine said. “This place was originally supposed to be sold in May. If that had gone through we wouldn’t be sitting here right now. This place would be gone, everything would have been closed up and we would have never known.”

It’s worth noting Huddleston and Stork have previously claimed the proceeds from the property would be used to invest in and repair blighted properties in other areas, but neither has responded to requests for comment since some of the board’s financial records have been released to the public.

In addition to the pending forensic audit, Lagniappe has also spoken to multiple sources close to the board who’ve indicated the matter is being reviewed by local law enforcement and possibly federal officials due to Safe Harbor’s origin as a federally funded grant project.

As he prepares to leave office, Downey said he’s hopeful someone will be held responsible for the actions of the prior board — one he acknowledges personally appointing. Speaking to Lagniappe, Downey indicated Wilson, who helped with his 2016 campaign, helped steer his selection of board members.

“I fully accept the fact that I was conned, and I own up to it,” Downey said. “But [the new board members] are going to get to the bottom of this once they conduct this forensic audit, and there’s going to be a long range of repercussions for whatever took place. You can’t let people do something like that and just walk away.”