Update: City Council President Arnie Fielkow has asked New Orleans Inspector General Ed Quatrevaux to investigate the missing $16.7 million from the city’s Urban Development Action Grant program, he said Thursday. After a month of investigation, City Hall officials have failed to find documentation of $16.7 million loaned by previous administrations to private businesses but never repaid, Deputy Mayor of Facilities, Infrastructure, and Community Development Cedric Grant told members of the City Council.
More than $16 million in loans given to private businesses from the city’s largest economic development loan fund is missing, according to internal city documents. A summary of the city’s Urban Development Action Grant program shows that only $2.35 million out of $26 million from one particular round of loans has been repaid.
City Council President Arnie Fielkow plans to introduce an ordinance this week that would require council approval for all loans from the Urban Development Action Grant fund, increasing public oversight of a development subsidy most recently awarded to Zulu organization and the Inspire entertainment complex in the Seventh Ward. The UDAG program is a loan fund created in the 1970s by the U.S. Housing and Urban Development Department with a goal of spurring investment in poor and blighted areas.
After doling out nearly $3 million in loans for an expansion of the Zulu Social Aid and Pleasure Club headquarters and an entertainment complex on St. Bernard Avenue, the city of New Orleans has about $9 million left in its Urban Development Action Grant fund for revitalization projects in low-income neighborhoods.
Update: The Thursday City Council meeting where these loans were to be considered has been postponed. The matters likely will be taken up by the council Tuesday at 10 a.m.
The oversized check Mayor Ray Nagin handed Zulu on Lundi Gras may have sparked noisy debate, but a far less sensational loan from the same City Hall source likely will have a louder legacy.