The New Orleans City Council may soon lawyer up in its growing dispute with Mayor LaToya Cantrell over a valuable, century-old land trust — the Edward Wisner Donation. 

The crux of the matter is whether Cantrell is unnecessarily ceding millions of dollars every year in revenue generated by about 50,000 acres of land — donated to the city in 1914 by philanthropist Edward Wisner — and whether she is doing so illegally and without proper City Council authorization. 

Under the terms of the trust, the city shares the revenue with several entities, with the largest chunk going to a group of roughly 50 private individuals who descended from the Edward Wisner family and its attorneys. The trust was supposed to expire in 2014, at which point the city was supposed to retain control of the land — and, some council members and trust experts say, most or all of those revenues. 

But in 2020, the Cantrell administration, without any explanation, decided to sign an agreement to extend the revenue sharing arrangement in perpetuity. 

“​​To simply give this money away, just because, makes absolutely no sense,” Councilman J.P. Morrell said at Thursday’s council meeting. “There have been plenty of news articles on this issue, and I think it’s time for us to step up and say we are here to protect the resources of the citizens of New Orleans.”

Council members have for years voiced concerns about the arrangement. But the council was spurred to action when, last month, Cantrell’s administration petitioned a judge to intervene in a lawsuit filed last year against the Wisner Donation. The plaintiffs, a group of attorneys who previously represented the trust, sued last year to recover legal fees they say they are owed and asked that the 2020 extension be nullified. 

“We’ve been extraordinarily patient about this,” Councilman Joe Giarrusso said. “As we sit here today though, litigation is moving forward, there are parties to it and we’re not at the table.”

On Thursday, the City Council directed its executive counsel, Adam Swensek, to intervene in the same lawsuit, potentially putting the council and mayor on opposite sides of a legal battle. The council also voted to release a solicitation to hire outside legal services to represent the council in the broader battle over the Wisner trust. 

‘This trust probably should not exist anymore’

In 1914, Edward Wisner, a banker and philanthropist from Michigan, put 50,000 acres of land he owned into a trust to benefit four institutions: the city of New Orleans, Tulane University, the Salvation Army and Charity hospital, now part of LSU. 

A series of legal disputes led to Wisner’s widow, her family and attorneys, being cut in for 40 percent of revenues from the trust. As of 2020, that 40 percent is split between 56 private individuals — 22 descendants of the Wisner family and 34 descendants of the lawyers who represented them.

The remaining 60 percent of revenues are split between the city of New Orleans with 34.8 percent, LSU’s Charity Hospital with 12 percent, Tulane with 12 percent and the Salvation Army with 1.2 percent. 

The land grew much more valuable over time when oil was discovered and later when Port Fourchon was built on part of it. It now brings in roughly $3 million to $9 million each year. 

Some of that money was doled out to charitable groups through the city’s Wisner Grant program, overseen by a board made up of representatives of the beneficiaries. 

The arrangement was supposed to end in 2014, 100 years after the trust was created. But a dispute over whether the city had to seek the board permission before deciding how to use its portion of the money led to a lawsuit from then-Mayor Mitch Landrieu. Ultimately, a state appeals court ruled that while he did need the board’s approval for Wisner Grants — at least while the trust was still active — the trust should have terminated in August 2014, its 100th anniversary.  

But that never happened. Instead, Landrieu signed a series of short-term extensions, keeping the revenue sharing agreement intact. Then, in 2020, as The Lens first reported, Landrieu’s successor, Cantrell, quietly signed an agreement to cement the status quo in perpetuity. 

That decision came as a head-scratcher for City Council members and other observers. The administration did not give any explanation for why the city would willingly cede millions of dollars in annual revenue. 

This week, the city provided its first public justification for the arrangement in a statement to The Times-Picayune. Cantrell spokesman Beau Tidwell said if the city hadn’t continued the revenue share, the properties would be sold and the city would only get 35 percent of the proceeds — a one-time payment that would equal much less than the city stands to gain over time in annual payments, even under the current revenue share. 

“If the council seeks to invalidate the extension, it will likely result in protracted litigation which could permanently end payments to all parties,” Tidwell told the paper.

Not all council members were convinced by that argument, however, saying that dissolving the trust should result in the city having full control over the properties to do with as it sees fit. It’s unclear why the administration believes the land would need to be sold. Councilwoman Helena Moreno told the paper that the administration’s explanation still wasn’t adding up and that “it’s almost like there’s some kind of cover-up.”

And while council members still question why the administration extended the trust agreement, they’re also questioning if it even had the legal authority to do so. 

“Our legal advisers believe this trust probably should not exist anymore and further it might not even be proper or legal for the mayor to have extended it,” Moreno said on Thursday. 

Under the city charter, the mayor can’t “modify any trust except upon approval of the Council and, when necessary, a court of proper jurisdiction.”

There are also questions about whether the perpetual extension of the trust is consistent with state law, especially when it comes to private individuals receiving revenue from tax-exempt property. 

The validity of the 2020 agreement came up again last April in the legal-fee lawsuit. While the plaintiffs’ main goal is to recover about $850,000 in legal fees they say they are owed for representing the trust in post-Deepwater Horizon spill litigation, the firms also asked the court to invalidate the 2020 trust extension.

That lawsuit, and Cantrell’s attempt to intervene as a named defendant, spurred the council to act as well. 

“Litigation now underway seeks to explore the questions of whether this trust even exists or if the millions of dollars of value locked inside are more properly owned directly by the people of New Orleans,” Moreno said on Thursday.