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The Long Road Ahead 

The New Orleans Redevelopment Authority " NORA " is finally getting enough money to do its job. Is the agency ready?

Joseph Williams wants people to believe that his agency is ready, even though critics have groused for years that it isn't. When Williams took over as executive director of the New Orleans Redevelopment Authority (NORA) last January, he had a staff of only four. Since then he has increased that number to 17, and he hopes to add another five to seven more in 2008. NORA's budget has likewise increased, as has the scope of its responsibilities.

NORA was created to eliminate blight in the city " critics charge that the agency has never lived up to that task " and now it must deal with more than 15,000 derelict, vacant, tax delinquent and blighted structures that dot the city's landscape.

On top of all that, the agency is about to get 5,000 to 7,000 more homes as a result of Hurricane Katrina.

Starting next year, the City of New Orleans will begin receiving properties that the state Road Home program bought from homeowners who have opted not to return to their hurricane-damaged abodes. NORA has been designated by the city to handle the disposition of those homes, but many fear the agency is not up to this new challenge.

Williams says he wants to assure citizens and neighborhoods that the process will be neighborhood driven and based on the citywide recovery plan. With so many properties becoming available in Orleans Parish, how NORA handles their disposition will have a major effect on real estate values and, by immediate extension, the area's recovery.

How NORA wound up with all those properties is a tale unto itself.

Under the Road Home program's rules, qualifying homeowners could choose to either rebuild their properties or sell them to the state. The Louisiana Recovery Authority (LRA) projects that by the time the Road Home program concludes its work, the state will have purchased between 15,000 and 17,000 homes across south Louisiana. Adam Knapp, LRA deputy director, says more than 80 percent of those properties are in Orleans and St. Bernard parishes. 'The environment, the amount of damage and the depth of water " that all sort of adds up to the very high number of buyouts," Knapp says.

The LRA stopped accepting Road Home applications at the end of July and adopted guidelines in September setting forth how parishes should proceed with properties sold to the state. LRA initially put the properties under the control of a new entity called the Louisiana Land Trust (LLT), which will eventually release properties back to individual parishes. LRA guidelines require each parish to submit a disposition and redevelopment plan for all LLT properties within its borders. The plan should demonstrate how each parish connects to the local recovery, identify who will manage the program and address vital concerns such as creating affordable housing, economic growth and promoting a healthy environment.

Even before LRA issued the guidelines, NORA had been attempting to redefine itself in post-Katrina New Orleans. NORA was created in 1968 as a state agency with a significant degree of autonomy from City Hall. NORA board members were appointed for specific terms (nominated by the mayor and approved by the City Council) and couldn't be fired at will. City Hall does, however, hold the purse strings, and NORA has historically been severely underfunded. Consequently, the agency never reached its full potential of redeveloping blighted properties in a city that contained thousands of them.

'NORA in the past had a pretty poor track record because property tended not to move," says Janet Howard, president of the Bureau of Governmental Research, a local government watchdog group.

At-Large Councilmember Jackie Clarkson, who has worked as a realtor for 38 years, agrees with Howard and says that much of the problem was NORA's inability to clear property titles quickly.

'They just couldn't get through the process, and I had a serious problem with them," Clarkson says. 'One of the problems was they only had one attorney, which was absurd. They claim it was a lack of funding. I claim that they just didn't want to share the pie."

Before Katrina hit, NORA's annual budget was $1.3 million. The agency expropriated roughly 300 properties a year. Faced with thousands of newly flooded and wind-damaged homes after Katrina, and fresh off his own re-election, Mayor Ray Nagin won legislative approval of several changes that he hoped would strengthen NORA, and then he appointed a new board led by several influential business and community leaders. They include healthcare executive Mel Lagarde; Herschel Abbott, former president of BellSouth Louisiana; Barbara Major, social activist and former director of the St. Thomas Health Care Clinic; former City Councilman Jim Singleton; and Rob Couhig, a lawyer and businessman who ran against Nagin in 2006 but later endorsed him in the runoff election.

Couhig says the new board's charge was to bring new direction and a broader vision to NORA. 'The role would be fundamentally changed," Couhig says, 'instead of using it just as an attempt to eradicate blighted properties that had been in existence for a time. It was obviously to take much more of a development " or redevelopment " role."

The new board struggled to keep Nagin's attention, however. For a while, board members felt ignored as $1.2 million in U.S. Department of Housing and Urban Development funding was allocated by Nagin's Office of Planning and Development in late 2006 for the 2007 NORA budget, but NORA never received the money because a contract between the agency and City Hall was never signed. Without adequate funding, NORA couldn't take control of any blighted housing because it couldn't pay for insurance or property maintenance.

Desperate to do something, the NORA board tapped the agency's reserve funds and received some additional money from philanthropic organizations such as the Rockefeller Foundation. After months of wrangling, a deal was struck between Nagin and the City Council that allowed NORA to use 'quick take" expropriations to get possession of blighted properties in the 17 'target zones" that recovery czar Ed Blakely named as part of his $1.2 billion recovery plan.

Armed with faster expropriation authority and the new LRA guidelines, NORA began drafting its redevelopment and disposition plan. Williams says that because NORA already was in charge of other property pipelines " blighted, adjudicated and market acquisitions " the agency wanted to adopt a 'clustering" approach in disposing of LLT properties along with blighted and delinquent properties. Thus, instead of releasing only LLT properties and possibly creating a checkerboard redevelopment pattern, NORA chose to cluster all of its properties in a given area in order to attract potential developers to the 17 target zones.

'If you have just the LLT properties, maybe you'll have four or five properties within a four-block area," Williams says. 'Then, when you overlay that with the tax-delinquent properties and with the blighted properties, then you have something closer to 12 to 14 [properties] in a four-block area. Then you're really talking about the ability to revitalize a neighborhood."

Another LRA rule required 25 percent of all LLT properties to be redeveloped as affordable housing. NORA's plan committed to a goal of making 25 percent of the redeveloped homes available for affordable homeownership and additional properties for affordable rental units. NORA promised to work with the U.S. Department of Housing and Urban Development (HUD) to use Community Development Block Grant funds to sell some properties below fair-market value to create affordable housing. Another avenue for creating affordable housing includes so-called 'soft" second mortgages, which are government-subsidized and can be erased if a homeowner resides in the mortgaged property for a certain period of time (often 10 years).

The first draft of NORA's plan also included provisions designed to:

Prevent land speculating by requiring 'rapid redevelopment" in purchase agreements.

Carefully consider alternatives before demolishing structures.

Allow existing homeowners to purchase blighted lots adjacent to their homes through the Lot-Next-Door program.

Create community gardens and other alternative uses.

Enhance community participation in the planning process.

NORA sent out a draft of its plan for public comment, and a number of individuals and organizations responded. The agency published letters and responded to public hearing comments elicited on its Web site, www.noraworks.org, then revised its plan.

Among the chief concerns expressed by critics of the plan was neighborhood participation in the planning and disposition process. Simply put, people who have returned to some of New Orleans' hardest-hit neighborhoods are plenty worried about what's going to happen next door and across the street. In the 'Community Participation & Neighborhood" section of the newest version of the plan, NORA states that it is 'committed to consulting with neighborhoods before any decisions are reached regarding the disposition of LLT properties."

'All of this public comment was for the general macro principles having to do with disposition of properties," Williams says. 'Where the rubber meets the road, there is going to be neighborhood involvement throughout the entire process."

In a letter to NORA, the Bureau of Governmental Research noted that the agency estimates that maintenance and security of LLT properties will cost approximately $150 million over nine years. BGR asked NORA who would pay for it. NORA's plan currently calls for LLT property sales to help defray those costs, but NORA will seek additional funding as well. Williams admits the question is far from being answered, but for now, at least, NORA, LRA and LLT appear to be on the same page.

'We all agree that in order to handle this rebuilding and redeveloping of the city properly, we're going to need to go together to seek additional funds for maintenance and security from the state, federal government and other methods, such as using volunteers," Williams says.

The LRA's Knapp says the agencies are negotiating with HUD, but he adds that the feds might not want to underwrite the costs of holding properties for up to a decade. 'This is a question that will have to be answered in the next three to six months," Knapp says.

For NORA, the wheels have already hit the pavement. On December 6, the City Council approved NORA's redevelopment and disposition plan, and last Tuesday (December 11), the LRA gave its approval. Whereas the city once lagged far behind other parishes in drafting and submitting for approval its overall recovery plan, Orleans and Jefferson parishes are now the only two parishes to receive LRA approval for disposition of LLT properties.

The LLT is expected to begin releasing properties sometime in the spring. So far, 1,050 properties in New Orleans have been sold to the state. Meanwhile, according to Knapp, NORA will start implementing the plan by bundling properties, deciding which lots will become community holdings, presenting information to neighborhoods and working with the LLT to get specific properties released. One thing working in the city's and NORA's favor is the fact that Williams is a member of LLT's board.

'There's no lack of coordination with the LLT," Williams says. 'I just take off one hat and put on the other. That way we're speaking with them on an ongoing basis."

As for NORA funding, the agency agreed to three contracts with the city on December 7 " less than a week after the City Council adopted the city's 2008 budget. The first contract paid NORA the $1.2 million that should have been paid earlier for 2007 expenses. A second contract provides NORA with $2 million for assembling properties and alleviating blight in the area surrounding the city's proposed site for the new LSU-VA hospital and other biomedical facilities. The third agreement (for $5 million) is for assembling non-LLT properties in the city's 17 target zones.

Clarkson says she's confident in the new board and is impressed with Williams and his staff. She has received a verbal commitment from NORA to hire more attorneys and promises to introduce an ordinance requiring the city's portion of the NORA budget to be performance based.

'During the campaign, I was asked what I would do about NORA's funding," Clarkson says. 'I said, "If I have to, I'll abolish NORA.' And I meant it, so I got public, verbal and written commitments from the [NORA] board. And if I don't get performance there, then I'll take another tack."

click to enlarge NORA Director Joe Williams stands in front of one of the bought-out properties his agency will eventually take over from the state. - CHERYL GERBER
  • Cheryl Gerber
  • NORA Director Joe Williams stands in front of one of the bought-out properties his agency will eventually take over from the state.
click to enlarge This St. Claude Avenue home is one of the 5,000-7,000 Louisiana Land Trust properties NORA will be in charge of redeveloping. - CHERYL GERBER
  • Cheryl Gerber
  • This St. Claude Avenue home is one of the 5,000-7,000 Louisiana Land Trust properties NORA will be in charge of redeveloping.
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