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Rice Subject of HUD Investigation

by Free Press Staff

Mayor Norm Rice, a leading candidate to replace Henry Cisneros as secretary of the U.S. Department of Housing and Urban Development, currently finds himself in the awkward position of being investigated by the very agency he's aspiring to lead.
In late November, HUD's Office of Inspector General began investigating whether Rice acted improperly by devoting a $24.2 million HUD-backed loan to the redevelopment of Seattle's downtown retail core. The city loaned the money at below-market rates to millionaire developer Jeff Rhodes, who pieced together the $400 million project. The plan calls for Nordstrom to move into the vacant Frederick & Nelson building, and for Rhodes to convert the old Nordstrom space and the F&N parking garage into an upscale retail/ office/entertainment complex.
Among many other things, HUD is looking into whether Rice or other city officials deceived the agency when they declared the F&N building "spot blight." As the Free Press reported last year (a href="../16/Nordstrom1.html">"In the Bag" WFP 16, June/July 1995), false crime statistics generated by the Seattle Police Department were used to justify the designation. HUD wants to know whether Rice knew the stats were phony when he signed the HUD loan application in April 1994.
Local HUD investigators are working virtually around the clock on the probe, hoping to complete it quickly so that President Clinton can either feel comfortable about nominating Rice for the Cabinet post, or find a scandal-free candidate.


Please see related story:
Nordstrom Deal Update


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Contents on this page were published in the January/February, 1997 edition of the Washington Free Press.
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