He calls him “God.”
He says things like this: “I spoke to God, and God wanted me to have this.” Or “God wants us to live well.” Or “God’s going to make it rain.”
Those sound like the words of a priest. But this man is not a priest; he is a developer named Omar Karim.
He does not speak in churches; he talks about “God” in VIP rooms and cigar lounges and in private meetings with investors.
And “God” is not God; “God” is Mayor Adrian M. Fenty.
Has “God” been good to Omar Karim? Someone, somewhere, has been good to Karim.
His firm, Banneker Ventures, has been cut in on one of the biggest redevelopment deals in the city—the sprawling project to turn the old Temple Courts and Sursum Corda housing projects into a gleaming mixed-use, mixed-income development called Northwest One. Banneker has also won lucrative contracts to serve as co-construction managers for a pair of city projects: a rebuild of Walker-Jones Elementary School and a new Deanwood Recreation Center—projects that have helped send $1.8 million to Karim’s company since July 2008.
And now comes the revelation that Banneker has won the right to manage tens of millions of dollars in parks construction contracts—contracts that had been sent to the D.C. Housing Authority (DCHA) in a governmental sleight of hand engineered in such a way as to elude D.C. Council oversight or at the very least, short-circuit city procurement practices.
Banneker Ventures, over the past two years, has been the subject of much whispering in political and development circles. That’s thanks, in no small part, to its ties to three of the most controversial characters in Fenty’s political sphere.
First comes the 36-year-old Banneker co-founder Karim, a law school classmate and Kappa Alpha Psi fraternity brother of Fenty’s. The other co-founder is Warren C. Williams Jr., the businessman whose involvement in a bid to operate the D.C. Lottery led to a political showdown at the D.C. Council. Williams has since split with Karim, forming his own development enterprise, the Warrenton Group.
And then there’s Sinclair Skinner, the controversial street activist turned consultant and fixer who has maintained his place in the Fenty inner sanctum. He has done work for Banneker in the past, though the nature of his ongoing relationship with the firm is unclear. But his utility to Fenty is ongoing; Skinner was spotted last week campaigning in Hillcrest with Hizzoner.
Banneker’s emissaries know where to find top officials in the city development apparatus—especially development director David Jannarone and former deputy mayor and now City Administrator Neil O. Albert. They’ve been planted in the city entourage at the yearly Las Vegas retail convention; they’re fixtures at the regular happy hours that the deputy mayor’s office throws at swank locales; Jannarone and Skinner famously traveled together to the Dominican Republic, gifting city emergency equipment in the process.
Whether Banneker could compete for city contracts on its own bona fides is a matter of debate. It’s a small, young firm without the sort of track record this city’s premier developers—the Jim Abdos and Chris Donatellis and Doug Jemals—can point to. Not by a long shot. Yet the company has found sustenance away from the teat of D.C. municipal contracting. It competed for, and won, the right to develop a highly sought Metro-owned parcel. Banneker is currently trying to come to terms with financiers to start construction on what’s tentatively called Jazz @ Florida Avenue.
And Karim’s expertise is apparently such that he appeared earlier this year on a panel of judges tasked with choosing who would redevelop the former Stevens Elementary School. Multiple developers expressed concern to LL that Karim, as a potential competitor in future projects, would have had access in his judging role to their proprietary financial figures.
If there are any holes in the Banneker CV, perhaps the deal with DCHA will close them. The company—jointly bidding with Regan Associates, a well-regarded Herndon management and development firm—won the right from DCHA to manage the parks projects, beating out 12 others. By LL’s deadline on Tuesday evening, much was still unknown about the contract. The D.C. Council was circulating a contract list of unknown origin showing that the deal involved 12 projects to renovate parks or recreation centers totaling $82 million and that the individual projects had been let to several construction firms, all of which had donated early and heavily to Fenty’s re-election campaign. DCHA would confirm only that Banneker had won the single contract to manage all of the projects, saying the remainder of the contracting had not been approved.
After months of CFSA and DPR and AG, DCHA is a refreshing acronym to find in the headlines. Here’s an agency that has escaped public attention for most of the nine years since it left receivership, and that’s part of its appeal as a channel for hassle-free contracting. The parks deal was done through the D.C. Housing Enterprises, a nonprofit wholly owned by DCHA that manages projects for other government agencies. “It’s a win-win,” says DCHA spokesperson Dena Michaelson, referring to a process in which her agency uses its managerial muscle and other agencies get their projects done faster.
And there’s been a lot more winning of late. From 2006 to 2008, DCHA transfers never broke $30 million. But since January, more than $57 million has been sent to the quasi-governmental entity, accountable to its own mayorally appointed board. That doesn’t include the bulk of the parks money. (Not all of the money, however, is apportioned to construction projects.)
Funneling contracts through DCHA aligns with Fenty’s git-’er-done governing ideology. Besides a new school, nothing makes an impression on constituents (and voters) like a sparkling new park or rec center. In an attempt to become the Domino’s of new-parks delivery service, Fenty last November tried to hand DPR projects over to the independent schools facilities shop administered by Allen Y. Lew. The power move ran into opposition from council parks committee chair Harry Thomas Jr., who pushed through a bill preventing any transfer of DPR projects outside the agency—and thus evading his oversight.
Timing, as they say, is everything. The Banneker contract, Thomas says, was approved in late September, as DCHA's longtime executive director, Michael Kelly, already had one foot out of the door toward his new job as New York City’s public housing chief. It also may shed some light on the reason for the sudden termination this spring of Clark Ray as parks-and-rec chief. Says Ray, “I can tell you without a doubt, we went by the book on every contract we had over $1 million.”
In February, Ray signed a memorandum sending $57 million in parks money over to the deputy mayor for planning and economic development, which in turn handed it to DCHA. Under his successor, Ximena Hartsock, that amount was increased to $68.4 million and then, last month, to $86.9 million.
Bypassing the council appears to be the driving force behind all the maneuvering. From all indications, the funds moved to DCHA not through a “reprogramming,” which comes with legislative oversight, but through “intradistrict transfers” to the deputy mayor and grants to DCHA, which do not. The parks contract was bid among 13 companies, then vetted by housing agency board members, but not sent to the council for approval.
Fenty denies trying to circumvent the council in getting his rec centers and parks built. And now that the issue has blown up in his face, he has continued down that path. On Monday, Attorney General Peter Nickles ruled that the Banneker contract, already awarded, doesn’t need to be sent back to the council, even though it should have been sent there in the first place. The Nickles opinion seems likely to force the court showdown that councilmembers have long been threatening.
That the Fenty administration, intentionally or not, came so close to slipping $86 million in spending past the D.C. Council is scary enough. The scheme was revealed this week after council staff noticed a spate of public groundbreakings without seeing any submitted contracts, coupled with the concerns registered by an aggrieved contractor with another council office.
Says Thomas, “The mayor’s PR machine got him in trouble.”
On Tuesday morning, LL attended another PR event—an announcement of the imminent construction of one of the first pieces of the Northwest One development. There, Fenty announced the many benefits to come, introducing megadeveloper Chris Smith of the William C. Smith & Co. Present, but not taking the podium was Williams, whose Warrenton Group is codeveloping the 300-unit building (located, incidentally, next to DCHA headquarters).
After the announcement, LL asked Hizzoner how to describe the city-contract beneficiaries that have been painted in the media with the broad brush of “frat brother” (as opposed to his “running buddies,” who tend to get appointed to relatively minor boards and commissions.)
How to describe Karim, Skinner, et al.—friends, frat brothers, acquaintances, some other moniker?
“All of the above,” said Fenty. He declined to elaborate.
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