The Nutter administration is ordering an audit of the Neighborhood Transformation Initiative - Mayor Street's anti-blight program - after discovering it may be as much as $30 million short in paying for property acquisitions.
Commerce Director Andrew Altman did not allege any wrongdoing, but said yesterday that the Redevelopment Authority, which oversaw the property acquisitions, didn't have proper oversight in place.
"There's clearly a huge accounting problem here," said Altman, who also chairs the city planning commission, "and it needs to be rectified."
The city will freeze property purchases and seek a firm to audit the program's acquisitions, Altman said.
NTI was Street's grand plan to revitalize city neighborhoods by knocking down blighted buildings, cleaning neighborhoods and packaging property for development. Street borrowed $300 million in bond money for the project, which he unveiled in 2001.
Altman said that since 2002 the city has committed to roughly $73 million in property acquisitions. About half of that will be paid for with funding that has no strings attached. But the city has a deficit because the rest of the NTI funding does have strings attached, namely that it must be used for transactions in which the property is sold at fair-market value.
That presents a problem because NTI often sells property below market value to encourage housing or neighborhood development.
The city's initial review showed that only about $5 million worth of the city's planned acquisitions could fall into the with-strings category. So it appears to leave the city up to $30 million short in "no strings attached" funds.
Altman said that they would have to go through all the planned acquisitions, property by property, and evaluate what to do in each case.
"I think the big issue here for us is, we've got to get our arms around the magnitude of this land-acquisition program," he said.
RDA spokesman Frank Keel said that the agency would cooperate with the audit.
"The RDA welcomes an audit of the NTI acquisition funds and will cooperate fully with the administration," he said. "We, too, want to ensure that the correct accounting practices are being followed."
Street did not respond to a request for comment. *