PROVIDENCE — Since its inception as a state agency just two years ago, Rhode Island’s housing department has faced the daunting task of addressing the state’s housing and homelessness crisis. Under Stefan Pryor, who stepped down on Wednesday after just a year and a half as housing secretary, the department has seen some successes, such as the $120 million housing bond to be voted on in November and a 32 percent increase in the number of shelter beds available to people experiencing homelessness.
“I’ve seen some signs of progress,” Pryor told the Globe on his last day in office. “But much more work needs to be done.”
Pryor previously served as the state’s commerce secretary, earning accolades for striking deals including the redevelopment of the long-vacant “Superman” building at 111 Westminster St. in Providence and the Tidewater stadium in Pawtucket. He was named housing secretary in January 2023, replacing Joshua Saal, who abruptly resigned following a series of missteps.
But under Pryor’s leadership, the housing department has been criticized for its response to tent encampments, the lack of shelter beds, the slow pace of funding, and incomplete projects. The federal government has also looked into some of the Housing Department’s practices: Earlier this year, the US Department of Housing and Urban Development found four deficiencies in how Rhode Island’s housing department managed certain grants from the federal CARES Act, particularly in how it failed to maintain financial records.
Months of reporting and interviews with nearly a dozen Rhode Island government employees reveal a 24-member department in disarray, with complaints about Pryor’s management style and that of assistant housing secretary Hannah Moore, whom Pryor brought with him to housing. And public records obtained by the Globe show a lack of transparency and a pattern of circumventing procurement procedures which may have cost taxpayers tens of thousands of dollars.
Unlike most state agencies, the Housing Department does not have an in-house general counsel. An opening for one has been posted since September 2023, but despite receiving nearly 90 applications, “many candidates did not possess the qualifications and subject matter knowledge we are seeking for this role,” housing spokeswoman Emily Marshall said in a statement. The in-house position would pay $128,000 to $145,000 per year.
Instead, most of the agency’s legal services are contracted through Savage Law Partners, a prominent Providence-based firm.
When Savage Law conducts work for the Housing Department, the firm charges $250 to $310 per hour for work performed by one of the company’s attorneys, and $100 per hour for work conducted by a paralegal. An attorney from Savage Law attends regular meetings for the Housing Department and the Housing Resources Commission, for which Moore is the executive director. On top of typical legal work, Savage’s attorneys have also performed daily tasks that state workers typically do, including answering public records requests and press inquiries, and signing off on meeting agendas.
Public records show the law firm has also hired contractors on behalf of the housing department, circumventing purchasing rules that require state departments to write a request for proposals, post it online for a minimum of 28 days, and then receive bids from companies interested in doing the work.
The Housing Department paid $1,009,992.75 to Savage Law for contracted legal services in Fiscal Year 2024, according to Cassius Shuman, a spokesman for the Department of Administration. That includes payments for subcontractors the law firm hired, Shuman said, as well as $375,000 held by Savage Law as a deposit to acquire the Charlesgate Nursing Center on Randall Street in Providence, which was made into a homeless shelter in 2023.
Shuman said the housing department is working to “further review” its contract with Savage Law “to identify any adjustments that may need to be made.”
According to a June 21 memo to the State Purchasing department, the housing department “anticipates purchasing” the former nursing home “for over $6 million for use as a shelter, and — eventually — affordable housing.”
According to other public records and emails obtained by the Globe, the Housing Department received approval in March to increase its payments to Savage Law, from $180,000 per year to $355,000. In them, the housing department’s CFO, Linda Makhlouf, wrote that the increase was for expenses related to the purchase of Charlesgate.
The spending request form to retain legal counsel had to be approved by multiple people. In another email obtained by the Globe, Claire Richards, an executive counsel to the governor’s office, told the Department of Administration she had discussed the legal expenses with Tony Afonso, the governor’s chief of staff. Richards wrote that Afonso said the housing department was encountering “a lot of new issues,” and to “let the amended RLC go.”
The June 21 memo acknowledges that Savage Law hired multiple contractors to do due diligence and conduct bore drilling on the Charlesgate property, which the housing department described as “in the interest of taxpayers.” As of early July, the housing department had paid Savage Law about $159,000 for work related to Charlesgate, and the law firm had disbursed $113,000 to Sage Environmental Inc., In Site Engineering, Peregrine Group Real Estate Advisory, and Peter M. Scotti & Associates, public records show.
On Wednesday, Pryor said the work pertained to the condition of the site, and could ultimately lower the purchase price, which would save taxpayers money. He declined to describe the condition of the property, or provide an estimate of the state’s potential savings because negotiations are ongoing, he said. He would not provide a timeline as to when the sale would close.
The June 21 memo also notes that Savage Law was paid to work on the redevelopment of the Superman building, one of Pryor’s signature projects while he was in charge of the commerce department, before he became the housing secretary. Questions over the viability of that project, which would convert the office tower into housing, have swirled as construction has been repeatedly delayed.
Savage Law was hired to help High Rock Development, the owner of the building, evaluate legal requirements and vet two federal programs that fund office-to-housing conversations. The law firm also contracted Jones Lang LaSalle to assist with “due diligence,” according to the June 21 memo.
A spokesman for High Rock did not respond to the Globe’s requests for comment.
JLL has also helped the Housing Department find sites around Rhode Island that could be used as homeless shelters. For example, JLL identified the state-owned land at the Route 146 on-ramp off Douglas Avenue by the Foxy Lady strip club in Providence where Pryor’s team planned to open a pallet shelter “village” this past spring. The project has been delayed over compliance issues with fire codes and zoning ordinances, and is now slated to open sometime in the fall.
Pryor declined to comment on Wednesday when asked about contractors and the procurement process.
Going forward, the Housing Department will need to “seek the Department of Administration’s approval before such subcontractors are secured,” Housing Department spokeswoman Emily Marshall said in a statement to the Globe.
McKee on Wednesday named Rhode Island Executive Office of Health and Human Services Chief of Staff Daniel Connors as interim secretary of housing, replacing Pryor, who announced in late June that he will work in the private sector for an investment firm focused on housing, education, and manufacturing (he has not named the firm). The governor’s office is still searching for a permanent housing secretary — its third in three years.
In addition to tackling these problems, Connors will also have to contend with complaints about mismanagement and toxicity within the department.
At least 10 people who currently or previously worked for Pryor at the Housing Department and in Commerce said staff are instructed to avoid emailing information to him. Housing department spokeswoman Patti Doyle told the Globe the organizational chart was still being drafted two years after the department was established as a state agency.
Eight current staff members, most of whom are women, have complained about being overworked, feeling dismissed by Pryor and Moore, and fearing retaliation if they voice their concerns. The Globe has confirmed that, after complaints reached the governor’s office, the state’s human resources office began conducting interviews with housing department employees and contractors.
When reached by the Globe, Shuman and Doyle offered the same statement: they “do not comment on personnel matters.”
Pryor told the Globe that he was not aware of “any formal complaints” regarding management of the housing department. He called Moore a “talented professional” who “demonstrated efficacy in her work at Commerce.”
Connors does not want to be considered for the permanent housing secretary job, McKee spokeswoman Andrea Palagi told the Globe.
“He has a lot of experience as an administrator, and that’s what the department needs right now,” said Palagi.
Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her @alexagagosz and on Instagram @AlexaGagosz.