The housing agency's remaining assets are being transferred to the New Orleans Redevelopment Authority
Three and a half years after it produced one of the biggest scandals of former Mayor Ray Nagin's tenure, the quasi-city housing agency known as New Orleans Affordable Homeownership is finally dissolving for good. But a different anti-blight agency, the New Orleans Redevelopment Authority, also known as NORA, isn't thrilled that it has to pick up the mess left by its sister nonprofit.
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View full sizeThe city awarded millions in federal grants to a nonprofit, Desire Community Housing Corp., to restore the blighted Bayou Apartments, but had to seize them back when they remained in disrepair. Why they were transferred to NOAH is unclear. The apartments were photographed in October 2002. NOAH was supposed to have shut down in 2008 after blogger Karen Gadbois and television reporter Lee Zurik found that it had paid $1.8 million in city money for contractors -- some of whom had ties to NOAH's then-director Stacey Jackson -- to gut and board up 870 storm-damaged homes that in many cases did not get remediated.
As the agency closed up shop, FBI agents swooped in and took out boxes of documents. The federal investigation into NOAH "is alive and well," U.S. Attorney Jim Letten said Friday.
A few weeks ago, Gadbois, now working for The Lens, and Zurik, now at WVUE-TV, found out that NOAH still had a one-person board and was still renting out a handful of properties, including one to one of the contractors tied to Jackson who was accused of collecting city money for work he never did.
After The Lens and WVUE began asking about those properties, Mayor Mitch Landrieu replaced NOAH's remaining board member, Ed Shanklin, with three city officials. The new board voted to transfer the agency's remaining assets -- nine properties and $26,000 in a bank account -- to NORA.
NORA is set to approve those actions at a board meeting Monday. At a NORA committee meeting Thursday, Assistant City Attorney Brenda Breaux said while there are code enforcement liens against three of the nine parcels and back taxes owed on one, NORA would get clear titles so it could dispose of the properties quickly. Most of the properties are in Treme or eastern New Orleans,
Some of the properties received special U.S. Housing and Urban Development grants known as HOME Funds, and Breaux said NORA will have to seek proposals from developers with experience handling those grants.
In particular, two properties on Chef Menteur Highway have a troubled past. The city awarded millions in federal grants to a nonprofit, Desire Community Housing Corp., to restore the blighted Bayou Apartments, but had to seize them back when they remained in disrepair. Why they were transferred to NOAH is unclear.
"This is a hot potato, hot potato, hot potato," said NORA board member Ellen Lee. "We've all seen the news reports."
The stickiest issue raised in the recent reports is that at least four of the NOAH housing units appeared to be occupied this year, according to city lease records, and at least two of them have ties to the NOAH contracting scandal.
City records collected by The Times-Picayune show that Sterling Doucette, a contractor who received more than $15,000 to gut NOAH properties after Hurricane Katrina, lives and operates a business out of one of the units on Gov. Nicholls Street and pays the rent for another tenant in a separate unit.
WVUE reported that Doucette listed his residence after Katrina at a house in eastern New Orleans that was owned by former NOAH director Jackson and that NOAH donated another property to Doucette.
City officials say they are looking at the records, tracking the spotty rent payments and trying to figure out what to do so they can close the book on NOAH. Breaux said city and NORA inspectors may have to evict one tenant.
"What we're doing right now is reconciling what little paperwork we do have and what rent checks we do have," mayoral spokesman Ryan Berni said. "That will be part of this reconciliation."
Berni said the city is also still trying to recover money from four of six contractors that it sued in March 2009, seeking the return of about $218,000. The suit came after an investigation conducted at the behest of Nagin, whose brother-in-law was one of NOAH's main contractors.
The city attorney's office conducted that probe and found that six firms -- including two that figure in a state ethics complaint -- had not performed the work for which they were paid, to the tune of about $218,000.
Berni said that the city was reimbursed about $3,000 by one contractor. Another had his case dismissed because of a lack of evidence. The other four cases "are still active," he said.
Two of the contractors enmeshed in the controversy, as well as Jackson, are the subject of charges filed in late 2009 by the state board of ethics. But a panel has yet to hear those charges and mete out a punishment.
NORA's executive director Joyce Wilkerson tried to calm the fears of skeptical board members like Lee, who said she was nervous about "taking one for the team" by taking on NOAH properties.
"We're not trying to get into the rental business," Wilkerson said. "That's not what we do. We're simply disposing of the properties."
Berni said NORA is the natural repository for the properties and that it would move the parcels back into commerce, just as it is tasked with doing for thousands of abandoned properties purchased by the state through the Road Home program.
David Hammer can be reached at dhammer@timespicayune.com or 504.826.3322.