A deadline passed today for the New Orleans Redevelopment Authority to prove that it could finish projects in an “effective and timely” way, or else lose $28 million in federal recovery money.
The threat of losing money was spelled out in correspondence between the U.S. Housing and Urban Development Department’s Office of the Inspector General and Robin Keegan, the head of the Louisiana’s Office of Community Development.
Keegan set the deadline in response to an August audit by the HUD inspector general urging Louisiana officials to strip the redevelopment agency of the money after the feds found that seven out nine recovery programs were running behind, “thus delaying the city’s recovery from the damage caused by Hurricanes Katrina and Rita.” In particular, HUD took issue with spotty state oversight, “a lack of controls” over the authority and a “strained” relationship between the city and NORA.
The agency satisfied the deadline by signing a new agreement with the city and committing to follow new state monitoring procedures for all disaster grants passed through Baton Rouge.
The agreement establishes how the city and NORA will work together, and on which projects. The monitoring plan has new requirements for tracking work and clear benchmarks for progress.
After Hurricane Katrina, NORA grew from an agency with only a few employees and an operating budget of less than $5 million in 2005 to a powerful recovery tool with a budget exceeding $70 million in 2010. But more money didn’t always make things easier for NORA, which is legally empowered to buy up land but is hamstrung by state laws that make it hard to take land even when it is abandoned.
HUD officials blamed NORA for slow progress on land acquisition efforts at the site of Lake Forest Plaza in eastern New Orleans, along South Claiborne Avenue in Central City and on Oretha Castle Haley Boulevard, where NORA is working with a nonprofit developer to transform a blighted block into a new mixed-use complex that will include the authority’s headquarters.
“There was a delay on these projects because the city added an additional layer” by requiring the authority to provide loans to developers to carry out projects, rather than handling the acquisition itself, the audit said.
“We are working really hard to finally get everyone on the same page,” NORA Executive Director Joyce Wilkerson said. “That takes a lot of relationship building and we are doing it.”
Wilkerson and Deputy Mayor Cedric Grant said the administration and NORA meet for an hour and a half every week to discuss projects.
“The City and NORA are steadily working to resolve the minor issues that caused strain,” Grant said in an email.
HUD did not single out members of the Nagin administration for blame. But as a spokeswoman for the state noted in an e-mail describing post-audit reform, the change in leadership at City Hall has indeed changed the tenor of conversation between the city, the state and NORA.
“Since the HUD OIG completed its review work, in April of 2010, there has been a transition to the Landrieu administration,” Office of Community Development spokeswoman Christina Stephens wrote. “As always, we are in close contact with the administration of the City and of NORA and we believe we have a good working relationship with them.”
Working together, however, doesn’t mean working quickly. Wilkerson could not offer timelines for specific NORA projects, saying that it is impossible to accurately predict when redevelopment will happen when so much depends on conditions in a tough real-estate market. In Philadelphia, where she managed a redevelopment program that reduced blight in poor neighborhoods, she says that the city invested significant time and resources into demolishing abandoned buildings. Then it had to manage the vacant land with the expectation that neighborhoods would have to improve before private investment would move in.
“We are talking decades, not years,” she said.
Time has softened the wooden boards covering the storefronts at the Gentilly Woods shopping mall at Press Drive and Chef Menteur Highway. NORA purchased the shopping center in 2008, putting $4.3 million in disaster recovery grants into the property with the intention of partnering with a developer to restore the retail shops there. The acquisition was one of nine projects assessed in HUD OIG audit, and one of only two deemed complete.
In December of 2009, the authority selected the a local real estate brokerage firm, Corporate Realty. But in the nine months since, little visible progress has been made, disappointing many in Gentilly who had expected faster progress given the public investment.
“You start to wonder if these projects that are so important to the community are a priority,” David Baker, a Gentilly resident and Louisiana Weekly web and associate editor, said.
This week, Wilkerson said NORA is working with the developer to close a financing gap of several million dollars.
“We are in constant contact with the developer, doing an assessment trying to figure it out,” she said. “One of the real challenges we face and the audit highlighted is the challenge of realistic deadlines.”