By Karen Gadbois – Staff writer – Three years after getting a piece of taxpayer-owned property for free, a New Orleans non-profit has yet to make improvements to the blighted site or fulfill promises made when it took the donation – and it apparently tried to sell the six-unit apartment house for $230,000 in pure profit.

The Galilee Housing Initiative and Community Development Corporation took ownership in March 2007 of 2318 Chippewa Street in the Irish Channel via a donation from the Housing Authority of New Orleans. The property was valued at $130,000.

It was among the first actions taken when HANO was looking to donate or demolish 773 of its individual or small properties across the city, referred to as scattered sites.

It’s not clear how Galilee was chosen to receive the donation.

Galilee Executive Director Carolyn Williams said the organization still plans to renovate the property. She said the house was accidentally listed for sale on the Web site Craigslist instead of another property the agency acquired privately. However, one neighbor said he spoke with the agent  several times about this particular property being for sale, leaving him with the impression that it wasn’t an accidental listing.

Galilee has been in operation since 2002. According to the mission listed on its tax forms, the organization “is operated exclusively for charitable and educational purposes to provide and restore housing to low income families.”

Because HANO is overseen by the U.S. Department of Housing and Urban Development, that agency had to give its approval for the donation to Galilee. It did so, ordering HANO to include language that would give the property back to HANO if Galilee failed to live up to its promise of providing housing for homeless and disabled people.

However, such a reversion clause is not in the donation papers. Neither the current HANO attorney, Wayne Woods, nor a HUD spokeswoman could explain why that language wasn’t included. Woods was not working at HANO when the donation was made.

HUD spokeswoman Donna White said that omission doesn’t bother her because Galilee officials have told her they will move forward with their plans as soon as they get the money.

Williams said she plans to demolish the apartment building and build two single-family homes. She said she was waiting on a $110,000 grant from the city to demolish the building.

Regarding the possible sale of the property, White said that Galilee would have to get HUD permission to sell. She said a 20-year-old agreement between HUD and HANO gives them that sign-off power.

But the act of donation says Galilee is granted “all rights, title and interest” to the property. Clearly, Galilee felt it was able to sell the property.

By e-mail, White said, “HANO is discussing with Galilee the advertisement that appeared on Craigslist.”

Developer Peter Gardner, who lives in the area, first flagged the proposed sale in an e-mail to then-HANO chief David Gilmore, and copied to three City Council members.

He wrote that he talked with the real-estate agent who was advertising the Chippewa Street property. The nearby houses range in value from $75,000 to more than $200,000.

“The property has sat vacant and abandoned since the donation and has been an eyesore and nuisance to the community for years,” Gardner wrote. “The agent is selling this apartment building for $230,000.

“It seems wrong to me that HANO would give a non-profit a property, especially since it wasn’t available to the general public for sale, and then the non-profit can go and sell the property after doing no work on it, for a profit.”

Gardner said he never got an answer to his e-mail.

Subsequent exchanges with the seller’s agent seller revealed the property was not listed in the multiple-listing-service database commonly used by Realtors, and that the seller – who the agent described as “my uncle” – was motivated and the price negotiable, Gardner said in a recent interview.

Williams read a prepared statement to The Lens Tuesday that she said was issued her Realtor, Ben Guillory, where he claimed responsibility for the Craigslist posting, and said it had been done “in error.”

She said instead that Guillory was trying to sell a property at 738 Jackson Ave., which has been listed for $430,000 by the same agent.

Guillory did not return calls for comment.

The six-unit  apartment building  sits in an unflooded part of town, boarded and unattended. The front yard serves as an ad hoc parking lot for the neighbors. One neighbor said the shopping carts lining one side of the building belonged to a homeless woman who lives in one of the units.

Williams said she calls the police when she sees the homeless woman entering the building but asked, “What can you do”?

Nearby resident Belvia Isabell complained that the neighbors had no idea the property was being sold and would have considered buying it to use for  senior housing.

Galilee was donated the Chippewa property along with another apartment building on Dryades Street. That building has been renovated, in large part through a contract with the city that provided the housing group with $650,000 in repair money through HUD.

Walking around that building, the renovation appears thorough and solid, but half of the 12 units are unoccupied. Galilee is the landlord of the property.

These two properties aren’t the only taxpayer-owned parcels to be given away to Galilee. The city of New Orleans also has donated several properties to the group, which the city took over when the owners failed to pay property taxes.

The Lens is continuing to investigate those properties and will have another report soon.

Karen Gadbois may be reached at kgadbois@TheLensNola.org