On Aug. 23, Inside Investigator published the story of Normando Moquete, a minority subcontractor who accused Haynes Construction of stiffing him out of nearly $700,000 for his work on a state-funded affordable housing project, a practice that he and other subcontractors say is all too common in Connecticut. At 9:30 a.m. the next morning, Moquete said he received a call from Bernard Thomas, Board Chair of the Minority Construction Council, who told him he had just gotten off the phone with State Representative Toni Walker (D-New Haven).
“She said to him, ‘Look, the Governor’s Office reached out,'” Moquete recalled. “Bernard said, ‘Hey Normando, we gotta have a sit-down with Toni Walker.'”
Since then, Moquete, Thomas, Hector Rodrigues, another minority subcontractor who worked on the same project as Moquete and shared the same complaints, and Dr. Harold Foley, owner of HF3, an Atlanta-based housing development company who is currently suing both the state’s Department of Housing (DOH) and Connecticut Housing Finance Authority (CHFA), have been meeting with an ever-growing number of state lawmakers and other officials to share their grievances and propose solutions. The group presented a package of proposals, which they’ve named Project 2030, to Inside Investigator. Foley began putting the proposals together eight weeks ago after connecting with Thomas, Moquete, and other Connecticut subcontractors and developers who, he said, “felt as though they couldn’t break into the system.”
Project 2030 asks the state to allocate $400 million of taxpayer money over the next three years across four silos — $100 million in funds in lieu of bonding, a $100 million backstop for developers, $100 million in advance and bridge funding, and $100 million for Gen Z and Millennial-owned construction/development firms. The idea, Foley said, is to knock down barriers to entry that have traditionally excluded smaller contractors and developers so that “more people are rowing the boat” in Connecticut’s housing market. Ideally, the group wants the state to award 25 state-funded housing contracts to smaller, first-generation construction and development firms over the next five years.
“It’s still an evolving process,” said Foley of the proposals. “But we believe the tenets to a sustainable solution are crafted here.”
They believe their plan would include historically excluded players in the state’s construction field, and say that increased competition for state-funded projects will drive down the cost of affordable housing construction.
“This is an overall benefit to the state because right now — because you [only] have one, two, three key players that’s there — they are exploiting the system where now it’s $800,000 per unit,” said Foley. “When you start having more professionals that’s participating, that’s gonna ultimately drive the price down, and it’s a benefit to the state.”
The first silo, Foley explained, would act as a fund from which the state could insure projects given to smaller general contractors, instead of a payment and performance bond. Per state law, any state construction project valued at $500,000 or more requires the general contractor to take out a bond equal to 100% of the project cost. Minority contractors in the past have complained this is a significant barrier to entry. As Foley put it, the ability to take out large bonds requires a “very strong balance sheet,” larger companies are better able to absorb. He said the fund could be drawn from on a project-to-project basis and would give private financial institutions the assurance needed to invest.
“So, if a project is $15 million, the state could say put up the $15 million or provide a guarantee for that in lieu of a bond and, so as a result, that would encourage financial institutions such as the Carver State Bank, Wells Fargo, Webster Bank, to lend to that project, knowing that there’s an appropriate backstop in place,” said Foley.
The next silo would serve the same purpose but for aspiring developers, said Foley. He explained that many of the state’s requirements for developers on affordable-housing projects, such as liquidity or net-worth requirements, can also be difficult to meet. One of Foley’s associates and employees, Sheylla Daveiga, HF3’s Due Diligence Specialist and Asset Management Officer, said the Developer Engagement Process, DOH and CHFA’s process for screening developers applying for funding and tax credits, is opaque. CHFA requires developers to have completed six projects in Connecticut to qualify for tax credits, said Foley, who has developed Connecticut-based housing projects since 2013. Daveiga recalled submitting an application under Foley and being rejected for inexperience.
“It was spot on,” recalled Daveiga. “It had everything they wanted, but they got hung up on experience. But my submission was under Harold, who has 25 years of experience; how much experience do I need? They’re really picking and choosing who to give the experience to, who to give money to, and when I asked what’s wrong with the project, I never got an email back, never got a call back.”
The third silo would serve as a line of credit to provide bridge funds or advance payments, either to subcontractors like Moquete and Rodrigues, in instances where they’re being delayed payment from prime contractors, or to developers, like Foley and Daveiga, and other construction-based tradespeople that developers use, such as architects or engineers, to allow them access to projects they may not otherwise be able to afford.
“It’s multiple things,” said Foley. “It’s a relief fund, it’s an advance, it’s bridge financing to carry a vendor over, no matter who that vendor is — it could be an architect, could be a civil engineer, it could be a subcontractor, contractor, or developer — whatever. No matter what the scenario is, they’re going to all be very similar. They’re going to need bridge financing to bridge them over from pay period to pay period.”
Foley said that this would not only serve to bring smaller firms with less capital to the table, but would also increase construction efficiency by allowing various parties working on a state-funded project to do whatever is asked of them when it’s asked of them, instead of having to stop work and wait until they can afford to do so.
“[With this] I could go to Normando and say ‘Normando, I need you to press and get a certain amount of work done within two weeks,'” said Foley. “He’s gonna need the capital to buy materials, labor, so on and so forth, to push those guys to get it done. Otherwise, I’m waiting six weeks for him to fit me into his pay schedule. This pillar is very important because that interim financing, relative to the scale of the budget they have, that’s a small fee to be paid in order to improve the efficiency and expand the number of vendors that can participate in it.”
The fourth and final pillar would serve as a line of credit to first-generation-owned construction or development firms. The idea is to directly inject capital into smaller firms from the bottom up, instead of handing state contracts to large general contractors on the understanding that they provide a certain amount of work to minority subcontractors, a system that SMBEs have long complained has never been sufficient to reach the state’s set-aside goals. Foley said this goal could be achieved through funding provided through various programs already funded by CHFA, such as the Build4Ct and Homes for CT program, or the First Generation and Emerging Business Initiative or Community Investment Fund, overseen by the Department of Economic and Community Development (DECD).
Foley stressed that implementing Project 20230 would be a matter of savvy allocation, not increased spending, saying the $400 million is “already baked into the existing budgets.” In a slideshow he presented to legislators, Foley included the 2026-2027 budgets of several relevant state agencies to drive home this point: DOH has a budget of $1.7 billion, OPM $440 million, and DECD $402 million.
While the proposals are clearly born from the experiences of SMBEs in particular, Foley stressed that Project 20230 “isn’t a DEI initiative.” He and Moquete said that the more they interacted with other subcontractors and developers, the more they realized that the inaccessibility of state contracts and funding opportunities for smaller developers and the lack of timely pay for subcontractors were race-neutral issues. Foley recalled a previous project for which he applied for CHFA funding, for which he wanted to use Hawley Construction, a Danbury-based general contractor, but ultimately had to pass on it due to “resistance” from CHFA and DOH officials who would have needed to vet the firm. He described Hawley’s point of contact as a “young white guy” who “worked his ass off” to earn the contract.
“I felt as though I couldn’t use them,” said Foley.
Foley selected Haynes to lead construction of the development, despite Hawley offering to do it for $700,000 less, due to pressure from DOH and CHFA officials. The scenario is a microcosm of a larger issue that Foley has set his sights on: his belief that DOH and CHFA’s insistence on approving bids for a small group of general contractors and developers has reduced the efficiency of tax dollars used for affordable housing development. The group presented a list of state-funded developments Foley felt exemplified this issue to Representatives Toni Walker, Manny Sanchez (D-New Britain), and Anthony Nolan (D-New London) and Senator Saud Anwar (D-East Hartford) in the group’s first meeting on Aug. 27. Those projects cost $872,000 and $762,000 per unit. Moquete said these costs are “unsustainable,” and the lawmakers pledged to create a legislative task force to inspect the properties and investigate the issue.
After their first meeting, the group presented their proposals to an even larger group of lawmakers and stakeholders on September 2. Joining the first group was Connecticut’s U.S. Department of Urban Housing Director, Maricela Esquilin, as well as Senators Saud Anwar (D-East Hartford), Gary Winfield (D-New Haven), and Reps. Larry Butler (D-Waterbury) and Corey Paris (D-Stamford). It also included representatives of Carver Federal Savings Bank, an Atlanta-based bank that is one of the oldest black-owned banks in the country, and the Low Income Investment Fund (LIIF), a non-profit community development organization, both of whom shared their experience in working with public agencies to finance similar initiatives.
The lawmakers present largely spoke in support of the proposal, but indicated that such a sweeping initiative would require the support of the Governor’s Office. Moquete argued that the issue goes beyond electoral politics, boiling down to an issue of taxpayer efficiency.
“The governor is going to have to start counting taxpayers’ dollars and where the money’s going,” said Moquete.
In addition to their consideration and support of Project 2030, the group asked lawmakers to allow the Minority Construction Council to appoint three directors to CHFA’s Board, submit three names for consideration as the next DOH Commissioner, and stop providing additional funding to DOH until it can be properly audited. In return for their support, lawmakers asked the group to identify a total of seven housing development projects, five of which could be funded and turned around immediately, and another two that could be done so in the near future, to act as a test run. Moquete and Foley have since jumped into action, and Moquete said he’s already identified at least two sites that could be amenable.
“If we could prove that we could do 176 units right now in a year, then we’ve answered all the questions, right?” said Moquete. “‘Can you do it? Is this sustainable?'”
The group hopes to have their ducks in a row so their five-site pilot is ready to receive funding from the State Bonding Commission by the time they meet today, September 8. If that proves unfeasible, Foley said, then they hope to receive the funding at the Bonding Commission’s next meeting, on September 25. They are also seeking to enter a memorandum of understanding with any pertinent state officials or agencies to ensure the initiative moves forward.
Moquete said he’s already assembled a team of qualified professionals and has at least three people in mind who could serve as project managers. He would serve as the general contractor, and Foley would serve as the developer. The group hopes their test run would serve as a model for other smaller contractors and developers to emulate.
“We’re pioneers,” said Moquete. “We’re trying to overhaul the system that’s corrupt and a waste of taxpayer dollars and is making Connecticut less affordable.”
Was this article helpful?
Republish our articles for free, online or in print, under a Creative Commons license.
