3,600 New Orleans properties will be transferred to New Orleans Redevelopment Authority by June
Saying they can't wait for New Orleans officials to put Road Home buyout properties back on the market, the Louisiana Land Trust has struck a deal to transfer the 3,600 city lots it still owns to the New Orleans Redevelopment Authority by the end of June. The trust, an independent body created by the state as a holding company for Road Home buyouts, said it is quickly running out of cash and wants to dissolve by the end of the year.
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An orange Road Home tag adorns the front curb of an abandoned home in Gentilly, in August. To meet that deadline, it can't wait for NORA, which has taken a methodical approach to selling off lots.
With time running out, the agency in August threatened to put thousands of lots on the auction block, the city's careful strategy be damned.
Now, instead, plans call for the Land Trust to transfer the remaining 3,600 New Orleans properties to NORA by June.
To cover appraisals and other work that must be done before a sale, the Land Trust will send NORA about $10 million upfront from the $25 million it has made on New Orleans property sales so far.
That will give NORA the money to hire a 16-person staff dedicated to managing the properties. That means organizing auctions for lots that are in high demand, managing a subsidy program that will give incentives for redevelopment on certain properties, and maintaining parcels that aren't ready to go back into commerce.
The agreement should wipe out the tensions that have at times arisen because of the disparate aims of the agencies involved. While the Land Trust was most concerned with getting property back into private hands, NORA has sought to determine if the market is right before putting properties up for sale.
In the last few years, NORA has sold 1,500 lots for more than $30 million, with some fetching more than $150,000 in recent months.
"NORA has taken a lot of criticism for sitting on properties, but if you look at the growth in value in many neighborhoods, you can see why we wanted to be methodical," said Executive Director Joyce Wilkerson.
Land Trust Director Mike Taylor said he understands NORA's strategy, but his agency had to push for a major change because it was running out of money.
Not only were the slow pace of transfers to New Orleans and St. Bernard Parish preventing the Land Trust from dissolving in 2012 as planned, but also the agency was spending $9 million a year on maintenance for its 7,500 properties, almost all of them in New Orleans and St. Bernard Parish.
And that's after the Land Trust reduced its contract costs. In 2008, its property maintenance contractor, Task Force LLC of Baton Rouge, got more than $18 million a year for mowing, edging and sweeping up each lot 22 times a year. The service drew cheers from people living near Road Home lots, but left others scratching their heads over the frequent mowing of Lower 9th Ward lots surrounded by expanses of blight. Eventually, the trust slashed the lawn maintenance to 14 times a year.
By comparison, the city of New Orleans will spend only $3.3 million this year to maintain public parks and parkways, which cover more than twice the acreage of all the Land Trust lots.
Taylor said that's a bit of an "apples-to-oranges comparison" because, while the city can pay its own staff to cut grass and keep public areas clean, the Land Trust incurs huge managerial costs with its maintenance contract because of federal regulations attached to the disaster grant dollars it uses.
Taylor expects that a few dozen properties the Land Trust still holds in parishes other than Orleans and St. Bernard will be transferred to local authorities by the middle of April. He said he's working with the new administration in St. Bernard Parish to keep it on track for taking over its remaining lots.
"If all goes well, by the late fall or early winter, we'd cease to exist," he said.
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David Hammer can be reached at dhammer@timespicayune.com or 504.826.3322.