Mayor Mitch Landrieu has dropped an ambitious $300 million plan to convert the old Charity Hospital building into a civic center housing City Hall and the Orleans Parish Civil District Court. Landrieu said Wednesday that a lack of state funding and a skyrocketing construction budget led him to cancel the plan.
“The plans do not pencil out to build a new Civic Complex or to relocate to a new building. My plan is to invest FEMA and capital funding into reasonable repairs of the buildings that will make them more efficient and safe,” Landrieu said in a statement. “Simply put, we cannot afford the project at this time, given our other critical needs.”
Landrieu was counting on a $100 million allocation from the state to help pay for the Charity transformation. He requested the money during the 2013 legislative session and received a commitment of only $13 million in the state’s capital budget. This year, the budget didn’t contain any money for the project. In addition, the statement said, the city’s budget estimate had increased by nearly $130 million.
“Due to increases in our construction cost estimates for the project and to properly repair the building’s foundation as well as its damaged limestone façade, our estimates for the cost of the project have grown by more than $100 million – up from $270 million to $397 million or more,” the statement said. Landrieu did not say how much it will cost to repair the current City Hall instead of renovating Charity, but a report by NOLA.com/The Times-Picayune said an earlier estimate of that option came to about $44 million.
The turnaround comes after a long public fight between Landrieu and the the Civil District Court judges, who wanted to build a new courthouse on a patch of state-owned land on Duncan Plaza. When Gov. Bobby Jindal did not sign off on the Duncan Plaza property, the judges accused Landrieu of hardball tactics to get his way on the civic complex.
Under a 2010 state law, the Judicial Building Commission — made up of the Civil District Court’s judges — can charge higher court fees to put toward a new courthouse fund. The fund will be used to issue and pay off bonds for construction. The law, which only authorizes a “new facility,” also has an August 15* deadline to solicit bids for construction. After that, the money must be used to repair the current courthouse.
House Bill 916, which cleared the Legislature this year and is awaiting Jindal’s signature, extends the deadline by a year and removes the word “new” from the law, also allowing the courthouse to move into a renovated facility.
The commission has yet to identify a site or come up with more than $100 million it would need for a standalone courthouse. Last year, the New Orleans BioDistrict, a bonding authority, voted against issuing bonds on the commission’s behalf after the Landrieu administration, including BioDistrict board member Deputy Mayor Andy Kopplin, lobbied against it. Civil District Court Chief Judge Kern Reese said the commission is looking for another bonding authority to issue the debt.
Though Landrieu’s statement said the city plans to renovate both buildings and keep them in the same location, Reese said the commission is still looking at alternate locations. The Civil District Court building is adjacent to City Hall.
“We can take a rest, but that’s all,” Reese said. “We only have a year.”
State leaders shied away from putting money toward the project because of the rapidly increasing costs, said a spokeswoman for the state’s Division of Administration.
“While we were committed to providing funding for this project, recent cost estimates by the City far exceed original projections,” Meghan Parrish said in an emailed statement. “As new plans are considered, we hope to continue working with Mayor Landrieu and the City of New Orleans to find an appropriate use for this site.”
New Orleans activist and journalist Jack Davis, who fought vainly to get LSU back into “Big Charity” rather than building a new hospital across Claiborne Avenue, said he’s disappointed that the mayor’s efforts fell through.
“It’s too bad. I’d love to see Charity Hospital get new use,” he said. “You’ve got to have something big. If you’re not going to have a hospital, the mayor’s plan was the best so far.”
Davis also serves on the board of the National Trust for Historic Preservation.
“The National Trust has remained interested in Charity Hospital,” he said. “It put Charity on its 11 most endangered places list shortly after Katrina, and would probably be interested in plans to renovate it.”
*Correction: A previous version of this story gave the incorrect deadline for the Civil Court decision.
Landrieu’s full statement:
When I was elected Mayor in 2010, the City of New Orleans was still recovering from one of the worst disasters in American history. Hurricane Katrina had left us with the most blight of any city in the country. Rebuilding projects were stalled, and our city teetered on financial collapse.
After [being] flooded by Katrina, Charity Hospital was the largest piece of blight in the City, sprawling nine city blocks. City Hall and Civil District Court were housed in outdated buildings that had fallen into disrepair. For years, city officials and members of the Judiciary had talked about the need to move into new buildings.
This was the backdrop when we began our due diligence on redeveloping Charity Hospital into a Civic Complex. In 2011, I put together a team of experts in public finance, real estate, architecture and engineering to analyze our options. They considered four scenarios: keep City Hall and the court in their current locations, build a new complex at Duncan Plaza, relocate to an existing building at 1515 Poydras Street or repurpose Charity Hospital.
After extensive review and analysis, the team recommended pursuing the Charity Hospital concept. It made the most economic sense because public funding was specifically attached to the redevelopment of this building and the project was eligible for millions more in tax credits. It also served a significant public purpose. The idea was pretty simple: put a historic, blighted building in the heart of downtown back into commerce, while moving city government from inefficient buildings into an iconic space.
While the idea was simple, we knew the execution of this project would be complex. We planned to finance the project with a mix of funding from the state, FEMA, historic tax credits, new market tax credits, recovery dollars and city issued revenue bonds and we planned to fill the facility with a mix of public tenants.
After a great deal of work, it is clear that we cannot move forward with our plans to repurpose Charity Hospital at this time. First, although the Governor and his team have been good partners and have offered to commit tens of millions to support this project, the State has not been able to commit the $100 million we have requested. Second, due to increases in our construction cost estimates for the project and to properly repair the building’s foundation as well as its damaged limestone façade, our estimates for the cost of the project have grown by more than $100 million – up from $270 million to $397 million or more. Finally and most importantly, I cannot in good faith ask the people of this city to assume close to $200 million in public debt for this project, when that money could otherwise be spent on long overdue street repairs.
With regards to City Hall and the Civil District Court, the plans do not pencil out to build a new Civic Complex or to relocate to a new building. My plan is to invest FEMA and capital funding into reasonable repairs of the buildings that will make them more efficient and safe.
“I made this decision with my eyes wide open, and with the best interest of the entire city at the forefront. Simply put, we cannot afford the project at this time, given our other critical needs.”
