AIDS housing nonprofit drops suit against Atlanta over unpaid funds

A local nonprofit that provides subsidized housing to people with AIDS withdrew a lawsuit against the city of Atlanta. (Photo courtesy Fotolia/TNS)

A nonprofit contractor that accused the city of Atlanta of holding up payments as retaliation because its executive director spurned the sexual advances of a city department head dropped its lawsuit, saying it was paid most of the money owed, court records show.

Atlanta-based Living Room made the decision voluntarily “in order to avoid the further expense and distraction of continued litigation,” according to an Aug. 21 filing in the Fulton County Superior Court case. The agency provided services for the city-run Housing Opportunities for Persons with AIDS program, or HOPWA, which subsidizes rent for low-income people with AIDS and HIV.

The dispute ignited a months-long crisis in the $23 million federal program that threatened to leave some 250 clients with AIDS and HIV homeless. The longtime city contractor said it could no longer pay its portion of its clients' subsidized rent because of the late payments. The city accused Living Room of failing to fix improper spending and providing shoddy housing. It cancelled the agency's contract July 3.

When payments stopped, landlords filed to evict clients, forcing advocates, city officials and others to scramble to ensure they did not become homeless. Atlanta’s program serves clients in and around the metro area.

Living Room Board of Directors Chair Alex Ortiz declined comment on the lawsuit. It dropped the suit before a judge could consider its request for a preliminary injunction that would allow the nonprofit to continue providing services. No settlement agreement was signed.

The city previously paid some 90% of Living Room’s revenue. It has worked to end homelessness for those with AIDS and HIV for nearly 20 years. On Tuesday, an automated phone greeting said the agency’s office was closed until Wednesday.

Living Room did not specify what amount the city paid the nonprofit in its Aug. 21 court filing, but city spokesman Michael Smith said it made $371,600 in reimbursements for the agency’s April and May expenses. Living Room confirmed receipt of the funds Aug. 16, he said.

Living Room said it was owed about $110,000 more, but the full amount could not be paid under the federally funded program’s rules, Smith said.

Trouble between Living Room and the city began last fall, after the nonprofit's then-Executive Director Jerome Brooks proposed that the city outsource administration of the HOPWA program to his nonprofit, the suit said. The city's program has been dogged by complaints of late payments and mismanagement for years and has left some $41 million in federal housing dollars unspent, according to federal figures. Workers for other HOPWA contractors said they did not complain publicly for fear of retaliation.

Former city Office of Human Services Director Preston Brant, who was in charge of the program, opposed Brooks’ idea. After Brooks began talks with Brant to smooth things over, Brant invited Brooks to eat dinner and watch the movie “If Beale Street Could Talk” Jan. 19, the suit alleges.

But the city department head allegedly became “incensed” after Brooks invited a third party to avoid the appearance of impropriety, the suit said, and launched a “secret plan” against Living Room and its leadership.

Afterward, according to the suit, Brant accused the Living Room of improperly releasing sensitive client health information. The data was on a laptop that the husband of a Living Room employee gave to one of the nonprofit’s clients.

Brant denied the accusations. He was fired in May on a separate accusation of behaving inappropriately with a client, his personnel file showed.

In Other News