City lied about cost of demolishing Lower Mid-City

The Lens noticed a stunning admission from last week's City Council meeting:

A new financial commitment for the proposed medical district in Mid-City will leave a $25 million hole in a revolving loan fund given to the city from the state to jump start recovery.

The appropriation was described by one of Mayor Ray Nagin’s top lieutenants, Chief Technology Officer Harrison Boyd, during a City Council budget committee hearing Thursday. It took council members by surprise and raised questions about the decision to fund new hospitals for Louisiana State University and the U.S. Department of Veterans Affairs with the $200 million revolver fund. That fund was created as a cushion to let the city start recovery projects without having to wait on FEMA payments.


Boyd said the Nagin administration chose to use the revolver “early on” knowing that the $25 million would not be reimbursed. He did not offer any clues on the logic behind the decision. He added that the decision was well within the rights of the city, even though the state made it clear that the $200 million revolver pot was meant to be steadily replenished by incoming FEMA payments so it would last until the city completed its more than 600 recovery projects

The $25 million comes on top of a previous appropriation of $75 million in disaster grants for the 70-acre hospital district.


When Boyd says that the revolver was chosen "early on," he wasn't lying. Apparently, way back in late 2007, the city and state got together and passed an amendment (see it or download it here) that Boyd says allows the city to tap the state revolver fund to pay for expenses related to the delivery of Lower Mid-City to the Department of Veterans Affairs. That means that way back in 2007, the city anticipated that the cost of acquiring and demolishing Lower Mid-City would exceed the $75 million in HUD DCDBG funds and $4 million in UDAG grants that have always been represented by officials as the entire cost of handing the VA a 'construction-ready' parcel.

During city budget hearings late last year, it became clear that the city was obligated to provide for site preparation costs related to the proposed LSU/VA that would exceed the amount that had already been appropriated in city disaster money for the project but city officials declined to enumerate the additional costs or own up to budget line items that appeared to obligate additional monies. Now, it seems that the city had always known that the site they offered to the VA would cost more to acquire and demolish than they had told the public, and perhaps, the VA itself.

With bulldozers looming over the lives of Lower Mid-City residents it is outrageous that the full cost of this project continues to be hidden from public view. At what point will our elected leaders realize that they have been conned into supporting a project that was not only inferior to proposed alternatives but far more deleterious to our ability to fund other crucial recovery and development projects throughout the city than anyone (except city officials, it appears) ever realized? At what point will our elected leaders realize that LSU is not currently capable of delivering on their half of the proposed hospital complex? At what point will our elected leaders stand up for Lower Mid-City residents and stand up against this boondoggle of a project?

On Thursday afternoon, City Council will decide whether or not it is time to arrange for the closure of streets in Lower Mid-City. It represents the first time Council has ever had a public hearing on anything related to the LSU/VA. Perhaps they will use the opportunity to determine what the full cost of this project actually is. Or perhaps they will close their eyes and leap without caring whether they're on a curb or a cliff.