2006 real estate deal coming back to haunt Rev. Flake

Rev. Floyd Flake, the former congressman and hugely influential pastor who came under scrutiny earlier this year for his involvement in a controversial bid to operate the Queens aqueduct racino project, is now facing questions about other real estate transactions. According to the New York Times, a 2006 million deal, in which Flake’s church sold a publicly subsidized Queens apartment complex to a for-profit partnership for $14 million, was engineered so that Flake himself could reap the financial rewards. As it turns out, the partnership that bought the 300-unit complex consisted of Flake, his church’s CFO, and two real estate developers. While the partnership is not required to disclose its finances, a $1.1 million fee for overseeing renovations at the project and $4.3 million in expected profits on the property through 2018 are among the cash sums Flake and his partners were allowed to divide as they saw fit. But despite that potential conflict of interest, the transaction received little oversight. The deal, which was financed with $21.3 million worth of government cash and loans, was not open to bidding from others and required no cash investment from the partnership, and was approved just five hours after it was filed in a Queens court. The court’s clerk, who signed off on the 600-page document along with a judge, was the mother of one of the partners. [NYT]