By Ariella Cohen, The Lens staff writer |
In August, when Mayor Landrieu announced his plan for spending New Orleans’ hard-won recovery dollars he warned a famously tradition-bound city that the time had come for change. “It’s especially important that we stop thinking about rebuilding the city we were and start creating the city we want to become,” he said, echoing his inaugural address.
A review of how the Landrieu administration is spending the city’s $411 million pot of discretionary recovery dollars, however, reveals a reality that doesn’t quite match the mayor’s rhetoric.
According to state records, the lion’s share of the discretionary Disaster Community Block Development Grant dollars – a total of $226 million of the $319 million that’s been obligated thus far — is going, not toward the invention of a smarter, more forward-looking city, but toward rebuilding streets and buildings, and for urban revitalization efforts in downtown areas that did not suffer the worst of Katrina’s wrath.
In the aftermath of Katrina, the federal government gave New Orleans a $411 million pot of CDBG disaster money. Designed by the U.S. Department of Housing and Urban Development as “flexible grants to help cities, counties, and states recover from Presidentially declared disasters, especially in low-income areas,” such money comes with relatively few restrictions beyond guidelines that projects must “principally” benefit areas or groups wherein a majority of people live in households with low-to-moderate incomes. In New Orleans, with a median income of $37,079, that means funded projects must principally benefit households with an annual income between $18,500 and $42,000.
Funneling money through the CDBG program was devised as a way around rigid rules that limit FEMA funding – the other principal source of recovery money. The CDBG money can be used for infrastructure, housing, economic development or safety improvements.
Given that broad latitude for spending the federal grants, the Unified New Orleans Plan that came out of months of post-storm public deliberation resolved that while FEMA money, supplemented with city bond funds and tax revenue, would go towards rebuilding public assets, the $411 million in CDBG disaster money should be primarily used for public-private economic development projects that would generate income for the city and create a “multiplier effect.”
“In that way, CDBG funds may be recycled,” the UNOP report stated in a section on recovery financing strategies.
Yet analysis of the most up-to-date spending plan for the CDBG disaster recovery funds shows that UNOP’s suggestion to leverage the federal investment wasn’t much heeded. While some Landrieu initiatives are in stride with the forward-looking spirit with which the CDBG disaster allocations were received, in some cases grant money is being used more routinely, even to cover recurring expenses such as staffing City Hall.
Of the city’s $319 million in CDBG disaster dollars that have been set aside for specific projects, $67 million, or a quarter, is earmarked for routine public works—tree plantings, roadwork and construction of public facilities such as libraries, fire stations and police stations. Roughly $1.2 million more will be used to bulk up staffing that coordinates the city’s Disadvantaged Business Enterprise program and code-enforcement operations.
Offsetting that meat-and-potato municipal spending is $161 million, or 39 percent of the total, earmarked for the large-scale economic development projects that were envisioned in post-storm public planning processes, including UNOP, the Bring Back New Orleans Plan and the Lambert Plan. The projects — creation of a mile-long linear park along the Mississippi River in the Marigny and Bywater, property acquisition in the footprint of a new Veterans Affairs Medical Center, the purchase of an abandoned eastern New Orleans hospital and the revitalization of Canal’s Street historic theater district— carry the potential to transform neighborhoods and inject new blood into the city’s economy.
But with so much money going to refurbish public assets and only a few economic development programs in the works, critics say the spending could set the city up to recreate a pre-Katrina geography of poverty.
“The real goal of (the CDBG disaster funds) program is to transform slums and blight by helping poor neighborhoods,” said Paul Lambert, a consultant hired in 2006 by the New Orleans City Council to assist with recovery planning in 49 flooded neighborhoods. “It’s a copout for the city to use this money to do things like street repair or rebuilding what was there before.”
Lambert, whose planning firm is based in Florida, contrasts post-Katrina New Orleans to Miami, where federal grants in the aftermath of Hurricane Andrew paid for a rapid-transit system that has connected low-income communities with jobs across the region. In Missouri, CDBG disaster dollars paid for job training programs in high-tech fields. “You need more than a beautiful street if you want to transform a neighborhood,” Lambert said, a view shared by planners at the University of New Orleans and advocates in neighborhoods who say the new administration should be funneling more money to programs and facilities in the neediest parts of the city.
“The money needs to be going back to neighborhoods that have lost population. If more people returned, the city could pay for all these other things with tax revenue and everyone would be better off,” said Tess Monaghan, the executive director of Build Now, a for-profit homebuilder that focuses efforts in areas hit hard by Katrina such as Gentilly, the Lower 9th Ward and Lakeview.
The Landrieu administration appears to be taking initial steps to bridge the gap between the mayor’s record and his rhetoric.
Earlier this month, Landrieu announced the launch of an innovative program of the type favored by Lambert and other planners. The Fresh Food Retailer Initiative will award $14 million in forgivable, low-interest loans to stores that commit to sell fresh fruit and vegetables in sections of the city now without supermarkets. The city’s investment of $7 million in CDBG disaster funds will be matched with $7 million from the financing institution that will administer the program, Hope Enterprise Corporation. Developed in the aftermath of Hurricane Katrina through a combination of public input and City Hall brainstorming, the supermarket incentive is one of a number of programs that eyed federal grants to provide opportunities for residents and businesses as communities were revived.
Landrieu’s decision to move forward with the supermarket program was widely cheered by residents, community advocates and businesses across the city. “We don’t have one single supermarket in the Lower 9th Ward, Desire-Florida, and eastern New Orleans has only one supermarket. Hopefully this program will bring opportunities to the communities that need it the most,” eastern New Orleans City Councilman Jon Johnson said at the news conference.
But while the $7 million city investment could bear fruit — literally — by the end of the year, other programs that were once in line for disaster grant funding remain on the drawing board. At least one, an urban gardening initiative, has already been cancelled. This $500,000 effort, known as the Urban Foods Garden Initiative, would have provided grants and loans to organizations willing to maintain productive vegetable and fruit gardens in fallow lots.
The cut coincides with the New Orleans Redevelopment Authority’s decision to scale back a program that provides incentives to homeowners to buy abandoned lots in their neighborhood and turn them into gardens or green space. NORA relies, in part on CDBG disaster dollars to pay for Growing Home and other redevelopment efforts.
Landrieu officials may also pull the plug on some $25 million that had been allocated to redevelop the 17 “target zones” that were the centerpiece of the blueprint developed by Ed Blakely, the recovery czar under former Mayor Ray Nagin. “We are currently re-evaluating the Neighborhood Commercial Investment Program (NCIP) to ensure that it is aligned with our economic development strategy and our goals to promote job growth and improve [Disadvantaged Business Enterprise] and local business opportunities,” Aimee Quirk, advisor to the Mayor on economic development, wrote in an email.
The news comes as a disappointment to Billy Fields, who directs the Center for Urban and Public Affairs at University of New Orleans, and participated in community planning efforts after Katrina. The commercial investment program in question was the city’s primary tool for attracting the desired development in zones that included Tulane Avenue near the intersection of Carrollton Avenue; Harrison Avenue at the intersection of Canal Boulevard; Paris Avenue at Robert E. Lee Boulevard; and South Claiborne Avenue near Louisiana Avenue. “It’s troubling to me that we spent five years working on plans, going to communities and saying this is what we are going to do in your neighborhood, and then there was no follow-though,” he said. In Mid-City, community garden operator Joseph Brock says that while he understands the tough choices facing the Landrieu administration he thinks investing grant money into organizations like his community garden management organization, Nola Green Roots, would pay off in jobs and healthier food for residents. Currently, a mix of private donations and revenue generated by the sale of produce grown at the company’s gardens in Mid-City and the 9th Ward. With support from the city, he would be able to build new gardens in low-income parts of the city where it is difficult to draw private support. “We can sustain operations once we start growing, but we need the start-up money to hire people, to build,” Brock, a New Orleans native, said.
But there are indicators that the city plans to invest unspent CDBG disaster dollars — including the $25 million set aside for the target zones — in a project that might well have a transformative impact on a stretch of parking lots along Loyola Avenue near City Hall. The project, named South Market District, calls for high-rise development of housing, shops and offices. Though never declared a “target zone” the now fallow downtown area was highlighted in UNOP and other public planning efforts as ripe for the dense, mixed-use redevelopment now proposed. If the development attracts the significant private investment it needs to get off the ground, it could bring jobs, and provide much-needed sales tax revenue, generating the kind of “multiplier effect” envisioned in the Unified New Orleans Plan.
The Landrieu administration has met with the team behind South Market District and vows to help make it happen, said Matt Schwartz, a principal of the Domain Companies, the prime mover behind the project. Based in New York, Domain Cos., made its reputation in New Orleans on Tulane Avenue, where it has erected several apartment buildings that have proved attractive to professionals as well as lower-income people whose rents are subsidized by the state through generous tax credits.
“It would be impossible to do a project like [South Market District] without municipal support and the administration understands that,” Schwartz said.
The Landrieu administration declined to comment on the development.
Given the city’s fiscal constraints in a tough economy, it is not surprising that Landrieu has chosen to be cautious about spending limited public dollars to spur business investment, Lambert said. Such initiatives are trickier to administer than capital spending on roads or buildings the city controls completely. Worse yet, these more ambitious investments sometimes flop, resulting in political embarrassment or outright scandal, a particular concern in New Orleans as the city attempts to overcome a long history of ineffectual and corrupt administration of government programs.
“It’s somewhat of a natural reaction of the Landrieu administration to say, ‘we gotta move, we gotta get things done and we don’t have the internal capacity so we’ll do what we know how to do, we’ll pave streets and plant trees,’ ” Lambert said.
But on the streets of the Lower 9th Ward, where plans have been plentiful and progress elusive for years, activists say they appreciate Landrieu’s approach. A $2.3 million rebuild of the Andrew “Pete” Sanchez Community Center is one in a handful of building, roadwork and infrastructure projects approved for disaster grant money since Landrieu took office. One longtime neighborhood activist, Vanessa Gueringer, says she is pleased to see the investment in the new building, even if it comes at the expense of programming that could be considered more innovative.
“I do think those things are going to come in time, but we’re going to have to look to foundations, donations, philanthropy,” she said.
The city has already taken steps in that direction. Recently, the mayor announced a $20 million loan program underwritten by the global investment-banking heavyweight Goldman Sachs and managed by Hope Enterprise Corp., the city’s co-partner in the supermarket program. An entirely private initiative, the Goldman Sachs program is not accountable to the public in the way a government program would be, yet it will provide the same kind of financing opportunities as the target-zone investment program established by Nagin and Blakely.A separately approved obligation of $27 million for the Finance Authority of New Orleans’ soft second-mortgage program is on hold while the city reworks its application, Office of Community Development spokeswoman Christina Stephens said in an email. If the application is approved, the funds will be directed to first-time homebuyers and those rehabbing damaged homes, she said. “We are committed to improving economic opportunities and access to capital for local businesses,” Quirk wrote.
Signs of that commitment have begun to show on the long-neglected blocks that surround the historic St. Roch Market in the Upper 9th Ward. In July, the mayor signed off on spending $1.8 million in CDBG disaster dollars to transform a privately owned, long-neglected St. Claude Avenue furniture store into a cluster of businesses – including meditation and yoga studios, a food co-op, a juice bar and the like — to be called The New Orleans Healing Center. The $10 million renovation of the mixed-use building, owned by developer Pres Kabacoff, is under way.
Across the street from the center, the city is starting work to rehab the shuttered St. Roch seafood market. A $1 million appropriation of CDBG disaster funds will supplement FEMA money previously pledged for the market, state documents show. Another $1.5 million is slated to go to the neighborhood for roadwork and improvements to St. Roch Avenue’stree-lined neutral ground.
Nearby, the Recovery School District with city support is sinking $15.5 million into a high-profile rehab of the Charles J. Colton Middle School on St. Claude Avenue. Three new dining spots recently opened within walking distance of the school, and in January, the Regional Transit Authority announced it would move forward with a long-anticipated “French Quarter Loop” streetcar line connecting the downtown tourist district to St. Roch and the Marigny, via Rampart Street and St. Claude Avenue. The streetcar line, which is being paid for with RTA bond money, not CDBG disaster funds, is expected to be up and running between Canal Street and Press Street by 2013.
Architect and urban planner Steven Bingler has worked with officials at City Hall and in the RSD to plan just these sorts of clusters of public and private investment. Though he laments there isn’t money for all the desired programs and projects, he says the city is starting to move towards achieving goals imagined over the past few years of post-storm planning.
“Part of the idea of UNOP was for people to vision and then get together and determine which parts of the vision are possible,” said Bingler, the founder and president of the design and planning firm, Concordia, which was hired to manage the UNOP process. “At this stage of the game, we are making hard decisions but it’s on a good track.”
Gueringer says she too feels like the mayor’s team has started to pay attention to community priorities and spend accordingly. “You see doors starting to open, a movement towards listening to the concerns of the community,” she said. “But when you’ve been so bruised and battered and lied to so many times, the optimism is still cautious.”