A federal grand jury is investigating a multimillion-dollar affordable housing deal in Scotlandville that has previously been at the center of controversy among East Baton Rouge city-parish leaders.
Federal authorities issued a subpoena ordering the city-parish to provide a slew of government documents related to the project and its developer, Bradly Brown, owner of KMT Holdings and Development LLC — which obtained $6 million in federal funds from the city-parish for the project — according to a copy of the subpoena obtained by The Advocate.
The subpoena outlines 24 requests for documents from the city-parish government, including emails and text messages involving Brown and KMT Holdings, internal documents discussing the project, and all contracts regarding the housing project since 2020.
It is unclear based on the document who is the subject of the investigation.
Brown has not been charged with any crimes, nor does he have any previous criminal charges in the U.S. Middle District Court of Louisiana or Baton Rouge's 19th Judicial District Court. Brown said Thursday afternoon he was not aware of the investigation and that he would “assume they were doing an audit.”
A spokesman for Mayor-President Sharon Weston Broome confirmed that KMT Holdings LLC signed a contract with the city-parish in 2023 and has received $961,971.50 thus far. But he did not comment on the grand jury investigation.
The U.S. Attorney’s Office for the Middle District Court of Louisiana was unable to respond to requests for comment Thursday.
The Metro Council approved $6 million for the Scotlandville housing development in 2021 as part of a $73 million package using American Rescue Plan Act dollars. The developers planned to use those funds, along with $5.8 million in private money, to construct 36 low-income apartment units near Swan Avenue and Sora Street, originally titled the “Housing for Heroes” project.
But the project was delayed two years by a public dispute between the developers and Broome’s office over the level of oversight the city-parish should have on how those federal funds were spent and their rate of disbursement.
The Metro Council had approved KMT Holdings LLC to be a subrecipient of the $6 million, which requires a formal cooperative endeavor agreement outlining rules like regularly reporting expenditures, limiting construction costs per unit and capping rent prices. Developers claimed last year the company should instead be a direct beneficiary of the money, which would require no oversight by the city-parish.
The disagreement came to a head at a community meeting organized by Councilwoman Chauna Banks, when developers and audience members yelled at Broome’s staff.
The public squabble came to an end last year with the signing of the contract between Brown and the city-parish after Brown cut two advisers from the project, Queen Muhammad Ali and Hakeem Khaaliq. Ali and Khaaliq moved to Baton Rouge to take part in the Scotlandville revitalization effort and film documentaries of the process.
Ali and Khaaliq accused several city-parish leaders and offices under Broome of corruption in how they handled the project on a website they created after being cut out of the deal. The two are not named anywhere in the subpoena.
Broome’s office said last year the project was expected to complete construction in 2025, but Banks said Thursday the project hasn't broken ground yet.
Banks said she was aware of the federal investigation regarding the project but wasn't sure what it pertained to beyond the ARPA funding.
"I don't really know," Banks said. "It's all speculation from me."