COMPTON — The City Council has approved a plan to recover some of the $5 million it has loaned over the last decade to a nonprofit housing firm that failed to build townhouses and produce jobs as promised.
Between 1978 and 1984, city officials steered a $2-million federal grant to the firm, Hub City Urban Developers Inc., along with $3 million in direct city loans to help set up a factory to manufacture prefabricated houses.
The firm spent the money without producing the houses or creating permanent jobs, and several inquiries by the city and the federal government failed to explain what happened. According to federal auditors, Hub City did not keep required financial records.
Authorities in the U.S. Department of Housing and Urban Development have been pressing the city to foreclose and recover at least the federal portion of the money.