The embattled leader of the East Baton Rouge Parish Redevelopment Authority, who has been under fire in recent weeks because the agency he runs is out of money, tendered his resignation Monday morning.

Walter Monsour has been the leader of the RDA since its inception in 2008. Before taking the position, he served as the chief administrative officer for Mayor-President Kip Holden and had been considered one of Holden’s closest friends and political advisers.

He’s been seen as one of Holden’s most popular and effective aides and, in recent months, was rumored to be a potential mayoral candidate after Holden leaves office — a claim Monsour has neither confirmed nor denied.

Monsour’s political reputation has been impeccable for years, but in recent months, he drew the unexpected ire of Holden after he publicly announced the Redevelopment Authority was out of money and could be closed by the end of 2015 without emergency funding. Holden said he would not provide recurring funds to the RDA, which he expected to be able to stand on its own by now. But the RDA board voted last month to ask the Metro Council to overrule Holden by reappropriating $3 million in the city-parish budget to save the agency.

Holden responded by accusing Monsour of being ineffective and of irresponsibly eating up the agency’s budget with his own $365,000 compensation package.

But on Monday, Holden said he will not be celebrating Monsour’s departure from the agency.

“Right now, it’s not a day of rejoicing for me,” Holden said. “You look at the things that have happened and have come to light over the past few weeks, and I think it took a lot of courage to come to the decision that he was going to resign.”

Monsour said in his letter of resignation Monday that he is stepping down to “extend the financial life of the RDA.”

In a past interview, Monsour acknowledged the RDA could save money by hiring a different leader with a smaller salary.

“Notwithstanding recent distractions in the news media, this letter is a continuum and a conclusion of those discussions,” he wrote. “Accordingly, I am stepping down to do just that — help extend the financial life of the RDA while it continues its search for a dedicated source, or sources, of funding.”

Monsour also has taken heat in the past few weeks after The Advocate reported his son’s law firm had received about $190,000 in contracts with firms that received public funds from the RDA.

The authority initially requested an opinion from the state Ethics Board about the propriety of the arrangement but withdrew the request before an opinion was ever issued.

Monsour’s resignation will be effective Nov. 30. The Redevelopment Authority board will be asked to formally accept his resignation at a Nov. 20 meeting, according to an RDA news release.

Board Chairman John Noland said in a prepared statement that he has “reluctantly agreed to accept Walter’s resignation.

“Everyone involved understands this is the best course to take while the RDA seeks dedicated funding solutions. We are extremely grateful to Walter for his service and the consideration and passion he has demonstrated.”

Monsour and Noland declined to be interviewed for this story.

An interim replacement eventually will be selected to serve as the new director of the agency and the present staff will stay in place during the transition, Noland said in the statement.

The Redevelopment Authority is tasked with redeveloping blighted, underserved areas of the parish. Its two most high-profile redevelopment projects are Ardendale, formerly called Smiley Heights, which envisions 850 residential units and 35,000 square feet of retail, and the conversion of the Entergy building on Government Street into a 6-acre, mixed-use development.

The RDA’s news release about Monsour’s departure credits him with helping “transform neglected and abandoned properties,” creating affordable housing opportunities and helping commercial developments across the parish. The agency touts $265 million worth of investments in parishwide projects, which have saved 3,350 jobs and created 760 housing units.

The agency still has a funding shortage to contend with. The RDA has so far relied heavily on federal tax credits for projects and to generate fees for its operating budget. But the agency was denied subsequent allocations of the federal tax credits, leaving no more money for projects or operations.

In recent months, both Noland and Monsour said their long-term budget forecast always involved asking the city-parish to step in with dedicated financing.

Several Metro Council members have expressed reluctance to reappropriate funds in Holden’s budget, which is expected to be released Wednesday. The council can make line-item changes with a supermajority vote of eight.

Noland said Monday that the agency will continue its current projects but will run out of money for general operations, which include staff salaries, within 18 to 24 months.

“We’ve begun working on a comprehensive plan and determining our existing options regarding funding,” Noland said. “The challenge before us is significant, but we believe there is adequate time and plenty of motivation to find solutions.”

Larry Bankston, executive director of the Baton Rouge Growth Coalition, which represents real estate developers, said it’s important that RDA continue under someone else’s leadership now that Monsour is leaving. But Bankston applauded Monsour’s contributions to the city.

“He’s done great things for the city,” Bankston said. “He’s always been an outstanding leader who was able to get a lot of good things done.”

Staff writer Timothy Boone contributed to this report. Follow Rebekah Allen on Twitter, @rebekahallen. For more coverage of city-parish government, follow the City Hall Buzz blog at http://theadvocate.com/news/10515216-123/baton-rouge-redevelopment-agency-tohttp://theadvocate.com/news/10552956-123/holden-monsour-unlikely-foes-onhttp://tinyurl.com/kdj7ukdhttp://theadvocate.com/news/weeklies/10612370-123/law-firm-of-rda-chiefshttp://tinyurl.com/mcmqtayhttp://theadvocate.com/sports/preps/7167850-123/ardendale-formerly-smiley-heights-unveiledhttp://theadvocate.com/news/business/7890099-123/land-donated-for-midcity-downtown">http://blogs.the advocate.com/cityhallbuzz.