By Karen Gadbois, The Lens staff writer |
Cashier’s check in hand, local developer Peter Gardner showed up at Tuesday’s sheriff’s auction eager to bid on real estate – in particular a raised cottage on Governor Nicholls Street in the Seventh Ward.
Dozens of rundown properties are offered to the highest bidder at bi-monthly auctions held in the lobby of Civil District Court and hailed by City Hall as a key strategy in the fight against post-Katrina blight. Ten percent of the sale price is required at the time of the auction. Cash or cashier’s checks only – no personal checks allowed.
But after navigating the construction around City Hall and finding a place to park, Gardner reached the courthouse lobby only to discover that the fix was in.
Another developer, with a New Orleans Redevelopment Authority attorney at his side, had managed to halt the auction and claim the property without the risk of losing it to a higher bid.
According to Jeff Hebert, NORA’s newly named executive director, the agency was acting within its rights in making a “priority bid” for three properties on behalf of a development outfit called Redmellon. Hebert explained that Redmellon is one of NORA’s partners in something called the Neighborhood Stabilization Program.
The partnership, which is not listed on NORA’s website or on Redmellon’s, struck Gardner as a tad ad hoc. He called the process “unfair, not really an auction, poorly administered.” By working in cahoots with a favored developer NORA creates “the potential for corruption,” he said.
While Gardner was critical of the process he was quick to point out that he has no issue either with Hebert, as director of NORA, or Redmellon principal Neal Morris.
According to the website of the federal Department of Housing and Urban Development, the Neighborhood Stabilization Program focuses on neighborhoods “whose viability has been and continues to be damaged by foreclosure and abandonment.”
But the property that Gardner hankered to bid on was not in the Neighborhood Stabilization Program’s designated target area.
Morris said that adjacency to a Stabilization Program target area was sufficient and that his plan for the Seventh Ward neighborhood had been vetted and approved by the NORA board.
Morris said he had responded to an RFP for redevelopment proposals for the Seventh Ward, and that the houses pulled from the auction by NORA were part of his redevelopment plan.
“I’m a firm believer in removing blight by mothballing historic properties rather than demolishing them,” Morris said.
The properties he bids on have failed to sell at a first auction and are being re-offered with a lowered reserve price, he said, and the Gov. Nicholls Street property was in that category, Morris said..
Council Member Stacy Head was more than irked by word of Gardner’s experience. The “priority bid” process is ”something that has NOT been vetted by the council,” she said. “Properties that are marketable should be sold to the highest bidder, put back on the (tax) rolls and put into commerce,” she added.
Gardner put his grievance this way: “NORA is supposed to be the backstop against blight, not an agency that goes out of its way to shoulder out private development.”
Asked about NORA’s auction block maneuver, Hebert was contrite. In a statement issued in response to inquiry by The Lens, he said that “until the processes and procedures for exercising [the] ‘priority bid’ authority granted to NORA are revised and approved by the board of commissioners and made publicly available, NORA will not exercise priority bid at Sheriff’s Sales,” he said.
