NOLA for Life grantee fails to live up to promise of building publicly-financed community center

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Steve Myers/The Lens

When we visited the building in 2013, we found trash and a couple of signs advertising a "baby college." The signs and trash were cleaned up, but since then the site has taken a turn for the worse.

Family Center of Hope community center

A nonprofit organization called The Family Center of Hope has received more than $2 million in federal grants to build a community center at Washington and Broad streets. More than five years later, the building remains vacant, and work is at a standstill. Now the organization has been given $40,000 to provide counseling services as part of the city's NOLA for Life anti-violence program.

The nonprofit group The Family Center of Hope has failed to deliver on its promise of building a community center at Washington and Broad streets — a project backed by $2.7 million in federal funds routed through the city and state. But that hasn’t stopped the city from awarding the politically connected nonprofit another $40,000 from the city’s NOLA for Life anti-violence effort.

The Family Center of Hope started working on the community center in 2007. It’s still not finished. Due to legal disputes, no work has been completed in more than a year. The contractor claims the nonprofit owes him more than $900,000.

Those legal disputes have caused the city and state to hold off on issuing checks for $250,000 for the community center, according to a lawsuit the Family Center filed against the project’s architect.

But in March, the city and the Greater New Orleans Foundation decided to entrust The Family Center of Hope with another grant. The group is one of nine organizations to receive $40,000 “Community of Practice” grants from the NOLA for Life Fund.

Fourteen other groups received smaller grants ranging from $5,000 to $15,000. Among other things, that money is funding CD production, field trips and concerts.

The NOLA for Life Fund is a key part of the mayor’s comprehensive anti-violence campaign, which also includes New Orleans Ceasefire, the Mayor’s Strategic Command to Reduce Murders and the new Multi-Agency Gang Unit.

The city created the fund last year with a $1 million contribution from Chevron and $250,000 from the Wisner fund, the city-controlled charitable trust. The Greater New Orleans Foundation was enlisted to manage the grant, but the city has been involved throughout the process. It issued the request for proposals, half of the selection committee was made up of city employees, and the city announced the winners in February: “City Awards $500K in NOLA FOR LIFE Grants.”

Although the NOLA for Life Fund includes $250,000 in public money, the Greater New Orleans Foundation told The Lens that the fund is not subject to public records requests or the city’s open contracting process. Ellen Lee, the foundation’s senior vice president of programs, declined to answer questions about how grantees were chosen, claiming that the first round of grants came only from Chevron’s share.

“I do hope you realize that none of the funds disbursed to nonprofits in this round of grantmaking were derived from the public sector or Wisner funds,” Lee wrote in an email to The Lens.

The Lens has received other grants from the Greater New Orleans Foundation, and the two have worked together to pursue national grants from private foundations.

Despite Lee’s position, the city provided all grant applications in response to a public records request.

In emails to The Lens, Landrieu spokesman Ryan Berni said the city is “confident the Greater New Orleans Foundation has recommended organizations providing outstanding services.” He went on to describe the foundation’s vetting process.

“These philanthropic grants are helping fund organizations that deliver outstanding programs and services to at-risk youth,” he said in response to another inquiry about the Family Center on Wednesday.

Questions about grant process

The Family Center of Hope is run by the Rev. Pat Watson, who is married to the Rev. Tom Watson, a former mayoral candidate. Tom Watson came to the aid of former U.S. Rep. William Jefferson — for his sentencing, Watson wrote a letter of support seeking leniency — after Jefferson was indicted on federal corruption charges in 2007. The Watsons co-founded the group, and both sit on the board.

Tom Watson is currently in his second six-year term on the Audubon Commission, having been reappointed by Landrieu last year.

Also on the Family Center board is Dorothy “Dottie” Reese, the wife of Civil District Court Judge Kern Reese and a partner at business consulting firm DMM & Associates. Dorothy Reese is also a member of the board of trustees of the Urban League of Greater New Orleans, which oversees Ceasefire New Orleans. She is a Landrieu appointee to the French Market Corporation’s Board of Directors.

At a recent meeting of the New Orleans City Council’s Criminal Justice Committee, Councilwoman Stacy Head — who ran against the Watsons’ son Corey Watson in the 2010 election for her former District B Council seat — called for greater public accountability in NOLA for Life grantmaking.

Head asked what the grantees do “for the good of the NOLA for Life project” and questioned the finances of the organizations. “Of course we can get their 990s [IRS reports for nonprofit groups] online. But seeing how they leverage their dollars, whether they get money from other philanthropic sources, whether they only get government funds, whether they get, say, millions of dollars for capital projects, for example, and that’s their only source of income.”

She never mentioned The Family Center of Hope, but a recent audit showed that 99 percent of the nonprofit’s revenue came from government grants.

The NOLA for Life Fund request for proposals sought groups with solid track records “providing quality programs and services with demonstrated impact.” It also told applicants to provide projected budgets and, if they were seeking a Community of Practice grant, detailed financial information for the prior three months.

The Family Center of Hope submitted a perfunctory projected 2013 budget, but not the detailed financial information. The 2011 audit was the most recent financial information in its grant application.

Community center languishes despite influx of public funds

Since 2008, The Family Center of Hope, first founded in 1989, has taken in more and more public money, according to financial reports filed with the Louisiana Legislative Auditor and the IRS. The group’s annual revenues, according to its filings with the IRS, went from $73,000 in 2007 to more than $1 million in 2010.

According to its most recent audit submitted to the Louisiana Legislative Auditor, 99 percent — $873,000 — of The Family Center of Hope’s revenue in 2011 came in the form of federal, state and local government grants. The group generated just $1,642 in nongovernmental contributions that year, according to the audit, which also reported just $27,000 in expenses for the year.

Most of that income has been earmarked for construction of the community center at 4137 Washington Ave.

This week, the building was dark and empty. Visible through a tinted, dirty window was a placard showing the building as it was envisioned, with palm trees lining the sidewalk. Instead, one window was cracked, wires wires hung from a wall near the rear door, and a couple of signs advertising “Baby College Coming Soon” lay next to litter on the ground.

According to court filings from the contractor, Metairie-based M. Slayton Construction, no work has been done on the building since February 2012. The Family Center of Hope owes Slayton more than $900,000 in back pay, the contractor claims in legal filings. Nearly $350,000 of that is “downtime” pay for routine safety checks and maintenance that Slayton has performed since construction stopped.

In an interview, Pat Watson said she is not aware of a $900,000 claim from Slayton.

Her group bought the building in 2002 with a $350,000 federal Community Development Block Grant from the city. Between 2007 and 2009, it was promised nearly $2.3 million from the U.S. Department of Housing and Urban Development. Of that, $500,000 was routed through the state of Louisiana and, ultimately, $1.8 million through the city of New Orleans — a significant increase from the city’s initial commitment.

“We got, I think, $600,000 from the city at first,” Pat Watson said. “We went in and found that there was asbestos and all kinds of environmental issues in the building. So we had to use most of the beginning funds just for remediation.”

The original budget for the project was $1.5 million, according to court records. Total billings have grown to $2.6 million, due in part to change orders the group claims resulted from errors in the design by its architect, St. Martin Brown & Associates.

Pat Watson said design flaws necessitated “excessive change orders” for the community center project. Joseph St. Martin said his lawyer advised him not to comment due to the lawsuit.

“I don’t know why you’re dealing with our project as a stalled project,” Pat Watson said. “There are many stalled projects around the city for the same reason: money. That project is like any other project. Most projects go over budget.”

A number of subcontractors have filed liens against Slayton and the Family Center claiming they haven’t been paid. In addition, two glass companies and an electrical company have sued Slayton and the Family Center for breach of contract. Slayton president Michael Slayton did not respond to repeated requests for comment; a company employee would only be quoted if he weren’t identified.

Family Center focuses on counseling at-risk youth

As Pat Watson pointed out, the NOLA for Life grant doesn’t have anything to do with the community center. It’s for something called Project Restore, a “sentencing-alternative” program for offenders between the ages of 12 and 21, according to the application.

“We work with kids who were referred by the Juvenile Court, walk-ins, churches, those on electronic monitors, and we bring them through a series of cognitive behavioral work for 12 weeks,” said Pat Watson. “We’re working with those teenagers who are most at risk of killing or being killed.”

Three Orleans Parish Juvenile Court employees who deal with such programs told The Lens on Wednesday they hadn’t heard of Project Restore but weren’t able to speak on behalf of the court. The Lens hasn’t yet heard from the judicial administrator’s office.

The NOLA for Life website’s description of the Family Center’s work is wide-ranging, saying the group:

promotes services that address areas of community violence, drug use, school dropouts, teenage parenting and other dysfunctions within high risk families. Services include a workforce development program, empowerment seminars, conflict resolution programs, manhood development program, and parent involvement component.

Project Restore received a $60,000 city grant in 2010 to provide counseling services to 50 low- and middle-income participants who reside in New Orleans. The program surpassed its participant goal but did not collect residency or income information for 31 of the 56 kids, according to a city report filed after the grant period was over.

The counseling took place at the Family Center’s administrative offices, housed at the Rev. Tom Watson’s church on St. Charles Avenue.

The group reported receiving the grant in its annual audit, performed by an independent firm and provided to the state, but counseling is not mentioned in the audit or its Form 990. The 2010 Form 990, the last available on GuideStar, notes only one education program with a cost of $5,966.

The plan for this year is to serve 20 participants at a cost of $2,500 apiece, according to the application to the NOLA for Life Fund.

The group asked for $50,000, of which $10,000 was earmarked for Pat Watson’s salary. Sign-in sheets provided by the Greater New Orleans Foundation show Pat Watson has been attending the monthly Community of Practice meetings, a grant requirement.

As a condition of accepting the grants, groups such as the Family Center must agree that the money can be used only for NOLA for Life programs. All grantees are required to produce a report on their activities, but not until May 2014, two months after the end of the grant period.

The grant agreement says that the foundation can require a nonprofit to return the money if it doesn’t follow through on what it promised to do.

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