New Orleans will kick in $107.4 million for the construction of a new Veterans Affairs hospital in Mid-City.
“That is the total as far as I am aware,” Deputy City Attorney Brenda Breaux told the City Council Thursday. Members wanted to know how much city money would be going to the $995 million hospital planned to replace an existing VA facility damaged in Hurricane Katrina.
The total amount of cash the city will contribute to the hospital translates to nearly a quarter of the city’s $455 million 2010 operating budget. None of it comes from the city’s operating budget, however; instead it will be pulled from other pots of federal and state money earmarked for recovery projects and economic development.
The majority of the money, $75 million, will come from a $411 million pot of federal disaster Community Development Block Grants given to the city to rebuild after Katrina.
Another $25 million will be taken from a $200 million revolving loan fund given to the city by the state for recovery projects. The final $7.4 million comes out of the city’s Urban Development Action Grant fund. That appropriation came up earlier in the meeting when the council was given information on how the fund has been spent in response to questions raised after the city gave a $400,000 UDAG loan to the Zulu organization.
Breaux’s pronunciation was the first time the public has been given a total on its tab for the VA hospital. While the city attorney emphasized that she was not “aware” of any other city money going to the facility, agreements signed by the city and the state obligate New Orleans to hand off the site to the VA cleared off all structures, with sewer mains and utilities sealed. An agreement signed by the city and state in October of 2007 allowing for the revolver fund to be tapped for VA project expenses caps the amount at the appraised value of the existing VA hospital in downtown New Orleans. That facility is to be eventually transferred or leased to the city, according to agreements with the VA. Neither a city spokesman, a state official nor a VA representative responded to requests from The Lens for the appraisal.
New Orleans spokesman James Ross said in an e-mail that the $25 million in revolver money will be used to relocate the sewer main and rebuild affected streets within the new hospital footprint. The $75 million in recovery money will cover the costs of acquiring the VA site, demolishing all structures and relocating people living or operating businesses within the footprint. The remaining money will go to pay for underground utilities and streetscape enhancement on Galvez Street.