Landrieu Kills Plan For New City Center At Charity Hospital Site

by • June 12, 2014 • Public Development, Public Finance, Zoning and Land UseComments (1)3138

Via Nps.gov

Via Nps.gov

Mayor Mitch Landrieu has abandoned his $300 million plan to convert the old Charity Hospital building into a new City Hall and Civil District Court.

On Wednesday, Landrieu said that  a lack of state funding and a skyrocketing construction budget led him to kill the proposal.

“The plans do not pencil out to build a new Civic Complex or to relocate to a new building.  My plan is to invest FEMA and capital funding into reasonable repairs of the buildings that will make them more efficient and safe,” Landrieu said in a statement. “Simply put, we cannot afford the project at this time, given our other critical needs.”

Landrieu’s plan included a $100 million allocation from the state to help pay for renovations.  He requested the money during the 2013 legislative session and received a commitment of only $13 million in the state’s capital budget.

Word on the street is that Jindal didn’t agree with the plan, and thus cut off any chance for the state to allocate the $100 million that Landrieu wanted.

In addition to the $100 million from the state, the rest of the financing package would have included $33 million in historic tax credits, $18 million in new market tax credits, $11 million from FEMA, $30 million from recovery dollars and $78 million from city-issued revenue bonds.

Landrieu’s full statement below:

When I was elected Mayor in 2010, the City of New Orleans was still recovering from one of the worst disasters in American history. Hurricane Katrina had left us with the most blight of any city in the country. Rebuilding projects were stalled, and our city teetered on financial collapse.

After [being] flooded by Katrina, Charity Hospital was the largest piece of blight in the City, sprawling nine city blocks. City Hall and Civil District Court were housed in outdated buildings that had fallen into disrepair. For years, city officials and members of the Judiciary had talked about the need to move into new buildings.

 This was the backdrop when we began our due diligence on redeveloping Charity Hospital into a Civic Complex. In 2011, I put together a team of experts in public finance, real estate, architecture and engineering to analyze our options. They considered four scenarios:  keep City Hall and the court in their current locations, build a new complex at Duncan Plaza, relocate to an existing building at 1515 Poydras Street or repurpose Charity Hospital.

 After extensive review and analysis, the team recommended pursuing the Charity Hospital concept.  It made the most economic sense because public funding was specifically attached to the redevelopment of this building and the project was eligible for millions more in tax credits. It also served a significant public purpose. The idea was pretty simple: put a historic, blighted building in the heart of downtown back into commerce, while moving city government from inefficient buildings into an iconic space.

 While the idea was simple, we knew the execution of this project would be complex. We planned to finance the project with a mix of funding from the state, FEMA, historic tax credits, new market tax credits, recovery dollars and city issued revenue bonds and we planned to fill the facility with a mix of public tenants.

After a great deal of work, it is clear that we cannot move forward with our plans to repurpose Charity Hospital at this time.  First, although the Governor and his team have been good partners and have offered to commit tens of millions to support this project, the State has not been able to commit the $100 million we have requested.  Second, due to increases in our construction cost estimates for the project and to properly repair the building’s foundation as well as its damaged limestone façade, our estimates for the cost of the project have grown by more than $100 million – up from $270 million to $397 million or more.  Finally and most importantly, I cannot in good faith ask the people of this city to assume close to $200 million in public debt for this project, when that money could otherwise be spent on long overdue street repairs.

 With regards to City Hall and the Civil District Court, the plans do not pencil out to build a new Civic Complex or to relocate to a new building.  My plan is to invest FEMA and capital funding into reasonable repairs of the buildings that will make them more efficient and safe.

 “I made this decision with my eyes wide open, and with the best interest of the entire city at the forefront.  Simply put, we cannot afford the project at this time, given our other critical needs.”

 

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One Response to Landrieu Kills Plan For New City Center At Charity Hospital Site

  1. […] ever since.  There have been a million ideas on what to do with the building, everything from the Mayor’s idea to use it as a new City Hall to Pres Kabaoff’s idea for it to anchor a $1 billion revitalization effort of downtown New […]

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