Gov. Jeff Landry’s temporary homeless shelter along the Industrial Canal is an expensive operation.
The state will pay an estimated $20 million to operate the shelter, set up before Super Bowl LIX to shelter up to 200 unhoused residents for three months.
Whether the shelter was necessary is a separate question.
Critics — including city officials, councilmembers, and advocates — have painted the facility as a major waste of resources, a flawed stopgap that undermines the city’s ongoing work providing long-term housing for people experiencing homelessness. Landry and his team argue that the shelter plays an essential role in eliminating homelessness in New Orleans, because the city’s process is too slow – and because encampments of itinerant people near the Superdome posed a danger to crowds, especially in the wake of the New Year’s morning Bourbon Street terrorist attack.
That need for increased security makes the shelter a federal obligation, officials say. Though records show that planning for the facility began well before the attack, the sudden call for increased security after New Year’s Day drove the shelter’s swift construction. The day after the attack, Landry issued an emergency order, allowing the state to hire contractors for the shelter without putting out a competitive request for proposals for the project.
Now, the contractors are hired and the warehouse by the Industrial Canal is outfitted with a temporary floor, cots, dividers, kitchen and laundry equipment. If all goes as planned – and there are still some questions up in the air – the entire bill will be paid for by the federal government.
State officials told The Lens this week that they will ask the federal Department of Homeland Security to cover the hard costs of the facility as part of a broader request for a reimbursement of security spending around the Super Bowl and Mardi Gras.
Late last year, as a committee of state officials planned the pre-Super Bowl opening of the shelter, they suggested looking to the city to cover some portion of costs, though city officials did not know about the shelter until a few days before the governor’s announcement. “State shall send city an invoice post SBLIX for homelessness services rendered,” a December memo reads. “If desired, Legislature may decrease appropriations to New Orleans commensurate with the amount of money spent by the State.”
Though state officials would not entirely rule out billing the city, that option seems to have largely faded, according to officials with the Governor’s Office of Homeland Security and Emergency Preparedness, including Director Jacques Thibodeaux, who called the December memo “a lifetime ago” and said that the Jan. 1 terrorist attack on Bourbon street “drastically changed everything.”
$1.9 million from federal pandemic-assistance money
To pay for medical and casework expenses within the shelter, the state is using nearly $2 million dollars from a different pot of federal money, the Emergency Rental Assistance Program (ERAP), according to an email to The Lens from Marvin McGraw, a spokesperson for the Division of Administration. McGraw said that in addition to the $1.9 million for shelter services, the state has another $1.3 million in ERAP funds that would be used for unspecified “homelessness-prevention” work.
The $3.2 million total is lower than what’s described in the December memo to the governor. In it, shelter planners had estimated that $8.5 million in ERAP funds were available to pay for the shelter: $5 million from the Louisiana Housing Corporation, and $3.5 million from the state’s Division of Administration.
At the shelter, ERAP funding goes toward “providing eligible households with case management and other services to assist in maintaining or obtaining housing,” McGraw said. While program guidelines from the U.S. Department of the Treasury require that the bulk – 90% – of ERAP money be used for financial assistance, up to 10% can be used for “housing stability services.”
New Orleans housing advocates see the state’s use of ERAP as contrary to its purpose. ERAP was given to the state as part of federal COVID-relief packages to help low-income households cover rental and utility payments.
For a few years, the money helped renters in New Orleans and across Louisiana avoid evictions and utility cut-offs. Then, last year, the money seemingly ran out. Some key housing advocates were under the impression that all ERAP funds had all been distributed.
“My first question is, why is there leftover rental assistance? That should not have been lying around in state coffers,” said Andreaciana Morris, director of Housing NOLA, noting that the city halted its ERAP program last year, for lack of money.
And if the state had surplus ERAP money, it should have been used to pay people’s long-term rent, not a temporary shelter that they will need help moving out of, Morris said.
“It just doesn’t make any sense,” Morris said. “You can make an investment in their lives. You could pay six months worth of rent. The ERAP program is designed to do that.”
The state of Louisiana did distribute $150 million in ERAP money to individual renters, according to the state program’s website. But applications for assistance through the program at both the state and city level have been closed for months. “The Louisiana Emergency Rental Assistance Program is now closed and all funds have been disbursed,” reads a notice on the website.
Feds will receive a bill from Louisiana for an estimated $56 million
A few weeks before the Super Bowl, the shelter was built out by Workforce Group, a private company that also staffs and operates the facility, providing basic medical care for residents, security, and behavioral-health support. As the Louisiana Illuminator reported, the company is a subsidiary of the politically connected conglomerate Lemoine Co.
Upfront money came from GOHSEP discretionary funds that are freed up when the governor declares a state of emergency, GOHSEP director Jacques Thibadeaux told The Lens. “GOHSEP is a unique agency in the fact we are the only agency that can spend without an appropriation,” he said.
So GOHSEP was ready to pay in January, when Workforce Group entered into a $17.5 million contract with the Louisiana Housing Corporation. To pay Workforce, Louisiana Housing Corporation entered into a contract with GOHSEP, which reimbursed the agency for the full amount of the Workforce contract.
After Mardi Gras, the state will submit a request to the U.S. Department of Homeland Security (DHS) to cover the costs of the homeless shelter, as part of a larger reimbursement application that includes all the security measures put in place for the Super Bowl and Mardi Gras.
“What we’re going to do is ask for the federal government to give us a reimbursement, based on the fact that we’re helping them with their mission,” Thibodeaux said. The total ask would be around $56 million, he estimated.
The request timeline and totals are still up in the air, Thibodeaux said. “We’re in the process of accounting for all of the costs statewide,” he said, noting that GOHSEP couldn’t file until next week, after Carnival was over. ”You have to get done with the entire event to know what all your costs are.”
Representatives with DHS did not respond to questions from The Lens, asking whether DHS would pay the bill in its entirety, once submitted. But state officials seem confident about the request. “GOHSEP leadership is encouraged about the discussions with DHS and the Trump administration,” said Mike Steele, a spokesperson for GOHSEP. “We are optimistic federal reimbursement will be approved,”