The New Orleans City Council on Thursday delayed voting on a city contract to hire the nonprofit group Family Center of Hope to operate an “evening reporting center” that would offer an alternative to detention for minors awaiting trial in Juvenile Court.
Mayor LaToya Cantrell asked the City Council to approve a $900,000 contract with the Family Center of Hope, despite the group’s past failure to deliver on a multimillion-dollar publicly funded project.
As The Lens previously reported, Family Center of Hope received nearly $2.7 million in public funds between 2002 to 2010 to build a community center at 4137 Washington Ave., near the corner of South Broad Street. The majority of those funds were routed through the city. But as of this week, the building stands vacant, with brown paper partially covering its dusty windows.
The Family Center of Hope, which was founded by the Rev. Tom Watson and his wife, the Rev. Pat Watson, also faced legal troubles as a result of the failed project. It was the subject of six lawsuits between 2012 and 2014, with one contractor claiming the organization owed $1.6 million in unpaid invoices.
But now, the city wants to contract with the nonprofit to operate the evening reporting center at that very same Washington Avenue building. The contract wasn’t approved, so council members were surprised on Thursday when they were informed that the city already signed a separate, short-term contract with the nonprofit and that the reporting center began accepting referrals this week.
Cantrell’s office did not respond to repeated requests for comment on this story.
Pat Watson told The Lens that the issues with the community center stemmed from a “fraudulent contractor” and “an architect who basically had faulty plans.”
Under the proposed cooperative endeavor agreement, or CEA, the nonprofit would receive $300,000 a year to operate an evening reporting center, a program designed as an alternative to the city’s juvenile jail.
CEAs are exempt from the city’s normal public bidding process.The contract is for a maximum of $900,000.
The City Council has been enthusiastic about creating an evening reporting center. But at a Thursday meeting, City Council members expressed concerns about the lack of detail in the contract regarding what the program would look like, as well as several typos and errors in the CEA. The council had received a draft policy and procedure manual, but it wasn’t attached to the contract and according to Cantrell administration officials, it isn’t finalized.
“I just think we need to see the final version of the policies and procedures before approving the CEA,” Councilwoman Helena Moreno said.
Councilman Jason Williams shared her concerns, and Councilman Jared Brossett pointed out that the Cantrell administration had yet to deliver a fiscal note for the contract that describes the budgetary impact the new program would have.
Throughout the discussion, not one council member brought up the more than $2 million the city has already poured into the nonprofit’s Washington Avenue building.
To surprise of council members, group is already operating evening reporting center
Several council members appeared surprised when Amanda Simkins, a management development specialist for the city, informed them that the evening reporting center and the Family Center had already started accepting kids into the program as of this week.
“So you’re saying there are kids in the program right now?” Williams asked.
Simkins explained that the administration had already signed a five-month contract with the Family Center of Hope. (The Lens was unable to find the contract on the city’s online contracting database.) The Mayor can sign agreements for less than a year without council approval. Simkins said the list of policies and procedures attached to that contract differ from the one sent to the council.
The kids aren’t being sent to the Washington Avenue building yet, however. Currently, they are going to the Family Center’s headquarters at 4400 St. Charles Ave., which is also the home of the Watsons’ church, the Watson Memorial Teaching Ministries. Patricia Watson told The Lens after Thursday’s meeting.
She said that the Washington Avenue building was “100 percent done” and ready for occupancy. She said that approval from the fire department, as well as a recent ransomware hack on Louisiana state servers, is delaying the opening.
“The furniture that we need right now, that’s sufficient, is there right now,” she said.
When The Lens visited the building, it didn’t appear that the ground floor had been furnished yet. Neither Patricia Watson nor city officials could provide an estimate for the building’s opening.
Ultimately, the council asked the administration to withdraw the contract and come back to the council with an updated version with more details on the structure of the program.
According to the draft policy given to council members, the reporting center would have 15 slots for teens that judges in Juvenile Court deem fit for the program. Those chosen would be routed to social programing instead of going to the juvenile detention center.
Not everyone would be eligible. According to a policies sent to the council, teens will be excluded if they have committed a “crime of violence,” have serious mental health or substance abuse issues or have a prior convictions for certain crimes including murder or rape.
The reporting center would be a pilot program with room for expansion. City Criminal Justice Commissioner Tenisha Stevens said the ultimate goal is to have an evening reporting center in all five council districts.
It’s unclear what process the Cantrell administration used to select Family Center of Hope, but we know it wasn’t the first choice. On May 9, the City Council approved an almost identical contract with a different nonprofit — the Youth Empowerment Project, or YEP. Less than two weeks later, however, YEP’s Executive Director Mellisa Sawyer wrote a letter to city officials announcing they were dropping out of the project.
On May 9, the same day the council approved CEA with the Youth Empowerment Project, Cantrell attended a press conference regarding an attempted car burglary that escalated into a shootout that left the car’s owner dead.
“They’re armed, this is serious, and they’re brazen, and they have no fear,” Cantrell said. Later in the press conference, she said there was “absolutely” a push to increase detention time for juveniles.
The press conference marked what some saw as a major shift in the administration’s rhetoric on juvenile crime. In the following weeks and months, more emphasis was put not just on rehabilitating youth, but keeping supposedly dangerous teens off the streets. It was shortly after that press conference that the administration announced it would start strictly enforcing a summer curfew for kids under 17.
In an email to Stevens, Sawyer articulated the central reason they were leaving the project.
“Ultimately, we acknowledge that the environment surrounding this project has shifted dramatically since we began planning for it,” she wrote.
In the letter, she also cited “significant community concern regarding the recent increase in juvenile arrests for vehicle burglary offense.”
Long history of financial troubles
Federal non-profits must submit an income form, called a Form 990, to the IRS every year. According to Family Center of Hope’s 2014 form, 100 percent of its funding came from the government that year. And the document shows it collected $2.4 million in public funds from 2010 to 2014.
It’s unclear what public funding the nonprofit has received since then. The 2014 form is the most recent one available on several online databases. It appears that the nonprofit didn’t submit tax forms from 2015 to 2018. In fact, the Family Center lost its federal nonprofit status in 2018 due to its failure to submit the forms, though it appears that status may have since been reinstated.
Watson told The Lens that the nonprofit had submitted the forms in those years. She said they were submitted electronically and “for some reason it wasn’t there.”
But the group has also apparently failed to prepare and submit annual audits to the Louisiana Legislative Auditor, required of all public agencies and groups that receive substantial public funding in the state. The Family Center of Hope appears on the Legislative Auditor’s “Non-Compliance List.”
Public funding for the community center began in 2002 when the city gave the Family Center a $350,000 federal Community Development Block Grant to purchase the property on Washington Avenue. The nonprofit began working on the community center in 2007 once it started receiving promises of funding from the city and state.
From 2007 to 2009, the Family Center was promised nearly $2.3 million in federal funds from the U.S. Department of Housing and Urban Development. Of that, $1.8 million was routed through the city and $500,000 came through the state. Then, in 2012, the Federal Emergency Management Agency announced that it was giving $445,000 in “Katrina and Rita recovery support” to the Family Center.
Including the FEMA grant, the original grant to purchase the building and the funding to develop the community center, the total public funding pledged to the project came to $3.1 million by 2014. Beyond the $350,000 grant to purchase the property, the city confirmed in 2014 that the Watsons had received about $2.3 million of that. The original estimated budget for the project was $1.5 million.
But even that amount wasn’t enough to finish the project. In 2014, The Lens reported that based on estimates from the architect, it would cost another $1.6 million to finish construction, on top of the $1.8 million that had already been spent. Ultimately, the total to complete the project was estimated at $3.5 million.
“We had a fraudulent contractor and we had an architect who basically had faulty plans,” Watson told The Lens.
The city of New Orleans likewise pointed to “errors and omissions by the architect” in a 2014 letter.
But in 2013, Orleans Parish Civil District Court Judge Piper Griffin dismissed a lawsuit the group filed against the architectural firm, St. Martin Brown & Associates.
As for general contractor M. Slayton Construction, Griffin later awarded the company a default judgment of $413,000 in its breach of contract lawsuit against the Family Center of Hope after the group failed to file a timely response to the suit. In 2016, Judge Sidney Cates denied the group’s request for a new trial in the Slayton Construction case.