Money for flood recovery used for design of public facility

Ascend Amphitheater opened in the summer of 2015. (WSMV file photo)

It's hard to imagine that eight years ago downtown Nashville was underwater.

Two days of record-breaking rain on May 1 and May 2, 2010, left 10 people in the Nashville area dead.

Shivering men, women and children were rescued from their flooded homes; some were stranded on rooftops.

Buildings floated down the interstate. An estimated 11,000 properties were destroyed or damaged.

The federal government sent tens of millions of dollars in aid; money earmarked for flood victims like Belinda Gentry.

News4 first met Gentry in 2010.

"This is where the boat hit the front door," Gentry pointed to a mark about three feet high on her front door jamb.

She still lives in the same house in the River Glen subdivision near Opryland in Pennington Bend.

"The water was actually about here,” Gentry said as she held her hand just below the kitchen counter top.

The McEwen’s live in the same neighborhood.

Carol McEwen showed News4 the aerial photo of her inundated neighborhood, which was featured on the front page of the newspaper.

"And this is our house," she picked out her house in the photo, as it sat surrounded by murky water.

"Awful. Muddy. Nasty. Turtles, varmints everywhere,” she said.

They had a ringside seat as the Cumberland River unleashed its destruction.

The SWAT team was in her neighborhood, evacuating people.

"And about that time, this wall of water came rushing down,” McEwen said. She saw the deluge engulf her neighbor’s house up to its window sills.

FEMA sent emergency flood recovery money.

Gentry got some of it, but she dug deep into her own pockets and liquidated her retirement funds to cover what FEMA did not.

"Tens of thousands of dollars,” Gentry said.

What did the McEwens get from the government?

"Nothing. Nothing,” Carol McEwen told the News4 I Team.

What happened to all that flood money from the federal government?

Nashville got $10 million from HUD’s Disaster Recovery Fund to start and received another $22 million in a second appropriation from HUD in 2011.

Our News4 I-Team investigation discovered that one-third of that $22 million - $7.4 million - never went to flooded homeowners.

It was used to design Ascend Amphitheater, a downtown concert venue.

"Where is it, why wasn't it used what it was appropriated for?” Gentry asked News4.

Three years after the flood, Nashville told the federal government they wanted to redirect the $7.4 million towards riverfront development; essentially saying they couldn't find any other homeowners who needed help.

“No applications for assistance have been submitted in recent months,” the city told HUD, referring to money earmarked for repair and rehabilitation of owner-occupied homes.

“Initial demand for this program was high, and approximately 400 households have been assisted,” Metro wrote to HUD.

“Upon completion of cases in progress, this activity will be closed,” Metro officials wrote.

The Metropolitan Development and Housing Agency told News4 that they originally allocated 68 percent of the $22 million to housing. MDHA partnered with The Housing Fund to administer the Rehab program.

“The amount programmed for Rehab was based on being able to reimburse homeowners for using their own funds for repairs,” said Angela Hubbard, the Director of Community Development for MDHA.

“However, HUD said this was not allowed, we could not reimburse people for their out of pocket expenses nor could we provide assistance if they had received insurance proceeds, FEMA or SBA assistance that covered the damage assessment,” Hubbard said.

MDHA said people were invited to submit public comments before the money was redirected for another purpose, but no one did.

"Who did they contact? How did they notify people about that? How?" Gentry asked News4.

"We never knew about that," said Carol McEwen. "If I had heard that, I certainly would have said, ‘Hey, we could use some help!’"

Phil Claiborne was a councilman at the time. He represented the River Glen subdivision.

"I'm surprised. Yeah, I am, I really am," Claiborne said.

News4 showed him what the city cut in order to move $7.4 million to the Ascend project.

$700,000 from neighborhood cleanup

$1,000,000 from homeowner rehab

$1,200,000 from rebuilding assistance

$2,200,000 from down payment assistance

"There are categories in here where this money could have possibly been used. I'm surprised," Claiborne said.

Metro Council did approve redirecting the flood money to the amphitheater project during a council meeting on July 16, 2013; though they may not have been aware of it, since the project was listed as “civic open space with improvements” in the document the council approved, “Action Plan for Disaster Recovery, Amendment Three, and Utilizing Supplemental CDBG Disaster Recovery Funding.”

The word “amphitheater” was never mentioned in the document, nor was it mentioned in an analysis prepared for Council members.

"It's not in there at all," said Councilman Steve Glover. He told News4 he voted for it, not realizing the money would go towards the amphitheater.

"It makes me angry,” Glover said.

Rich Riebeling was the city's finance director at the time; he's now Metro's Chief Operating Officer. The News4 I-Team asked him who decided to use the money for the amphitheater.

"I don't recall it,” Riebeling said.

“I think it was a group decision. I'm not the architect of anything. I work as a collaborative process with a lot of people to make things happen," he said.

He told News4 investigative reporter Nancy Amons he'd research it and get back to her.

"It didn't help us. I don't even know where the amphitheater is. I don't go," Carol McEwen told the I Team.

"Disgusted. Just disgusted," Gentry said.

According to MDHA, the $7.4 million covered design, engineering, and management fees costs for the amphitheater.

A total of $5.7 million was paid to three firms for design and engineering work. Another $1.6 million was paid as project management fees to Commonwealth Development, a company owned by Larry Atema.

Atema’s company was the subject of several News4 I-Team reports in March. The I-Team found that Commonwealth was paid management fees to oversee preliminary design work for a proposed professional soccer stadium at the Nashville Fairgrounds. Atema is a friend of Riebeling.

Documents discovered by the I-Team showed that Riebeling had taken money from a Bridgestone Arena fund to pay Commonwealth Development, without asking or telling the Sports Authority. Riebeling apologized. Atema announced to the Sports Authority his firm would no longer oversee work for the MLS stadium and that his company would not seek to renew its contract with Metro when it expired in less than a year.

Commonwealth Development earned a total of $2 million in management fees for overseeing the amphitheater project, according to city documents; Commonwealth was paid $1.6 million from the HUD flood money and $381,233 from other funds. The West Riverfront Park and Amphitheater project cost approximately $53 million, according to a 2016 Metro document. The majority of the funds, $46.3 million, came from other sources, including the Metro Parks and Public Works budgets.

MDHA told News4 there is still money available for victims of the 2010 flood.

“If there is a homeowner that meets the eligibility requirements and can clearly document that the rehab needed is related to the 2010 flood, they can get assistance,” Hubbard said.

To see if you qualify, contact Angela Belcher directly at, or by phone at (615) 515-2201 or (931) 572-8454.

To find out more about The Housing Fund

Angela Hubbard of MDHA sent News4 the following explanation regarding the flood funds: In June 2010, MDHA went to Council for approval to amend the 2010-2015 Consolidated Plan and 2010-2011 Action Plan to reprogram $2.9 million in regular CDBG funds and $2.9 in HOME funds to immediately begin addressing housing needs through homeowner rehab. At that time, we did not know if Nashville would directly get the CDBG-DR money. In November 2010, six months after the flood, HUD announced that the first round of funding ($10,731,831) would be available to Nashville. Our plan was approved in February 2011 and we could access the money. During this time, we were eight months into assisting people with the CDBG and HOME money. Of the first allocation of $10.7 million, $9.9 million was programmed for homeowner rehab. The other funding went to admin and planning. The second allocation was not even announced until April 2011, nearly one year after the flood. With the second allocation, additional activities were programmed. However, 68 percent was for housing. For the Rehab Programs, we partnered with The Housing Fund (THF) to administer it. The amount programmed for Rehab was based on being able to reimburse homeowners for using their own funds to repairs. However, HUD said this was not allowed – we could not reimburse people for their out of pocket expenses nor could we provide assistance if they had received insurance proceeds, FEMA or SBA assistance that covered the damage assessment. Further, to receive assistance, owners must have received a FEMA letter. Around 2013, THF was no longer receiving applications and could not spend the money for this activity. (The email below explains the situation and described other housing efforts they tried to undertake.) Because of little demand, we had to reprogram the funds to other activities in the Action Plan. However, because THF receives program income from loans made through the CDBG-DR program, they could continue to assist owners, but this far from the flood, there had to be clear documentation that the damage was a result of the 2010 flood and not subsequent flooding (another HUD requirement). A FEMA letter from the 2010 flood would still be required. These very questions were asked and addressed through the public comment period, before the MDHA Board and Metro Council, and responding to media inquiries, when we did Amendment 3.Kate Hinson, the Chief Financial Officer of The Housing Fund, provided this update:

We are still working with two individuals who have not completely drawn down their loans. Other than those two individuals, the last draw on a flood loan was in 2014. We have not received any applications in years.

When we realized that there would be additional funds, The Housing Fund developed two additional programs to assist flood victims and use the grant funds. Down payment assistance for individuals displaced by the flood Purchase and repair of properties with flood damage – available for owner-occupancy, resale or rentPeople did not use either of these programs, so we developed the program with Habitat where they could purchase and renovate home in the flood plain. But there wasn’t enough activity in that to use all of the original budgeted funds.

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