The Housing Authority of New Orleans voted Monday to give up its claim to Central City property on which it had planned to build a community center, saying it can’t pay for the project in part because construction delays on a related development jeopardized the tax credits that would have been used to fund it.
The Housing Authority’s board voted 5-0 to transfer ownership of three lots near South Liberty and Thalia streets, including a vacant building that once housed the Lockett Federal Funeral Home, to the Guste Homes Resident Management Corp.
The corporation, which manages the Guste Homes public housing complex, purchased the site across the street from the Guste high-rise development for $142,000 in 2004 with plans to assist HANO in its attempt to cobble together parcels of land for more off-site housing. Seven years after the purchase, HANO decided it didn’t need the property for housing and instead would build a 14,000-square-foot community center on the site.
The management corporation donated the property to HANO in 2013, with the condition that HANO would build the community center and give the management corporation $142,000 — the purchase price — to provide support services at the facility.
The agreement, authorized by HANO’s then-federal receiver David Gilmore, specified that the property would be transferred back to the management corporation if the community facility was not built.
Gilmore left HANO last year when it was returned to local control. He was replaced by current Executive Director Gregg Fortner.
Fortner said the Housing Authority planned to use equity from Low Income Housing Tax Credits to pay for the community center’s construction. However, those funds did not materialize because construction on the third phase of housing units at the Guste site was delayed.
Parkcrest Builders LLC was supposed to complete 100 housing units by March 31. None of the units was completed by the deadline, Fortner said. The delay caused the community center to be dropped from the tax credit financing transaction, Fortner said. HANO terminated its contract with Parkcrest in April.
The community center “was something we could not commit to proceed with,” Fortner said. “We just did not have the money.”
But the president of the Guste Homes Resident Management Corp. said HANO is reneging on a promise it made to the Guste residents and the surrounding community.
“I’m angry about it, to be honest with you,” Cynthia Wiggins said. “We’ve had so many talks about having something built for this community. To just put all that aside is an insult.”
Wiggins said the management corporation still wants to use the site for a community center that would offer nearby residents access to computers, educational programs and social services. But with HANO backing out, the group is modifying its plan. Instead of demolishing the former funeral home and building a new structure, Wiggins said, she has been working to identify ways to convert the vacant building into the facility that had been planned.
“We couldn’t afford to implement the plan they had in terms of the design part of it,” Wiggins said. “But I think it makes sense for us to move forward with the project.”
In other matters Monday, HANO’s board voted to approve a $114,000 change order to have ventilation added to several buildings in the Florida housing development. The ventilation was not included in HANO’s original contract with Parkcrest Builders, but it is necessary to maintain the roof warranty.
The addition will cause the project to go $98,000 over its originally contracted cost of roughly $11.3 million.
Although HANO terminated its contracts with Parkcrest in April for work at both Florida and Guste because the contractor did not meet its deadlines, Parkcrest still is working at both sites, Fortner said.
Parkcrest is now under the control of Liberty Mutual Insurance, HANO’s bonding company.