The agency tasked with reviving blighted areas in East Baton Rouge Parish is in a state of emergency and has been for more than a year as its limited funding continues to dwindle.
But officials with the East Baton Rouge Redevelopment Authority say they’ve been able to extend its life for at least a few more months through deep cost cutting even as they continue to explore other possible sources of revenue to continue their work.
Last September, former RDA President Walter Monsour said the agency had just enough money to get through December 2015. Since then, Monsour has resigned and the agency has been dramatically thinned.
Interim President and CEO Gwen Hamilton said they now have extended the authority’s life through another nine or 10 months by scrubbing the budget.
For one, the agency has shed the weight of Monsour’s $365,000 compensation package, including benefits, which ate up more than one-third of the agency’s operating budget.
Hamilton earns a salary of $75,000 a year. The RDA, which at one point employed 16 people, now has three full-time employees, including Hamilton.
Operating expenses have been slashed to about $850,000 this year, down from $1.3 million last year. But they’re only surviving by dipping into reserve funds, which, at the current rate of spending, will be dried up within a year.
Hamilton said the work continues, even on a shoestring budget.
The primary role of redevelopment authorities is taking control of vacant, blighted properties and putting them back into commerce so they generate tax revenues and stop being nuisance properties.
One of the RDA’s most high-profile projects is Ardendale, initially called Smiley Heights, which will have residential, retail and academic centers for Baton Rouge Community College and the East Baton Rouge Parish School System.
The authority’s other major project is redevelopment of the old Entergy building site on Government Street, which also will be a mixed-use project.
“Although we have not added to our scope of work, we are continuing to work on ongoing projects,” Hamilton said. “As we work diligently on moving this work forward, we will continue to seek sustainable funding and adjust our work accordingly.”
The agency has been living off of nonrecurring dollars, with the hope that the city-parish eventually would step up and provide an annual allocation to the agency.
In 2009, the authority was awarded $60 million in New Market Tax Credits, which is a federal program targeting investment and real estate projects in low-income communities. The tax credits have helped fund most of the projects the agency has invested in, and it has received operating funds by collecting administrative fees from allocating the credits to other organizations.
The funds are rapidly depleting, and Mayor-President Kip Holden has rebuffed requests for dedicated funding to keep the authority afloat. He’s criticized the agency’s effectiveness in the past, particularly under Monsour.
Uncertain of its future, and with financial assistance from the Baton Rouge Area Foundation, a consulting firm was hired to write a business plan for the redevelopment authority that could identify sources of long-term revenue for the agency. What was expected to be a 90-day report has lasted almost a year.
Christel Slaughter, partner with SSA Consultants, which is writing the plan, said the issues surrounding the RDA are “much more complex than anyone realized.”
Most authorities nationwide do receive annual allocation from local government that are related to “the size and scope of what is expected by that community,” she said.
“So if there is lots of blight or many neighborhoods to be worked on simultaneously, the allocation is usually higher,” Slaughter said.
Allocations have ranged from $200,000 to several million dollars a year, she said, making up between 5 and 50 percent of the budgets of such agencies in other cities.
The allocations sometimes come from a city’s general funds, she said, but in other cases come from fines, fees, delinquent taxes and tax district proceeds.
Slaughter said some of the options require time to build up significant revenue, but the redevelopment authority will need a cash infusion in the short term.
Another possibility to consider, she said, is merging the RDA with the other organizations with similar functions such as the Office of Community Development, the East Baton Rouge Parish Housing Authority and the Capital Area Finance Authority.
“Their missions are aligned, staff and overhead can be spread or allocated across revenue streams and, theoretically, better projects can be created,” she said.
But, she added, the potential downside is that each of the individual agencies’ missions could be diluted and “in particular, the RDA would lose its focus and nimbleness.”
Hamilton said she doesn’t necessarily believe the agencies should be merged but thinks there could be some opportunities to share or reallocate the federal dollars coming into the parish, which are distributed to the various agencies.
Slaughter said part of the reason the redevelopment authority has found itself in such a vulnerable position is that community and authority leaders initially underestimated the resources necessary to deliver the results they were seeking and were perhaps overly ambitious in their goals.
In the long term, projects like the Entergy building could generate funding sources for the RDA because it could collect lease payments and management fees from the retailers and renters. But the problem is the agency didn’t have enough money to get through that hurdle to effectively set those revenue sources into motion.
“Big and bold is often expensive,” she said. “If we fund that effort modestly, we should expect modest results. Nothing wrong with that, but we need to do a better job of managing expectations with whatever path is chosen.”
The redevelopment authority is still continuing to make strides.
It received a grant from the Baton Rouge Area Foundation to hire John Fregonese, an Oregon-based planning consultant whose work is well-known in Baton Rouge, to draft and request for proposals for a project developer.
Part of the developer’s job will be to identify funding sources for the project, Hamilton said.
As for the agency’s future, Hamilton said she’s anxiously awaiting Slaughter’s report but is open to all options.
While Holden’s administration has mostly ruled out the possibility of dedicated funding, he will leave office by the end of next year — possibly sooner if he wins his bid to be the next state lieutenant governor.
“I think every option is on the table,” Hamilton said, when asked if the agency eventually would ask for city-parish funds again. “It’s important that we demonstrate our ability to earn the support of community and government to provide those services.”