EBR Redevelopment Authority running out of money for projects _lowres

Advocate staff photo by TRAVIS SPRADLING -- EBR Redevelopment Authority is almost out of money and could have to close unless it finds secured funding. One of its completed projects (pictured here) is the Rennaisance Gateway, at 650 N. Ardenwood Drive, which offers affordable housing.

The East Baton Rouge Redevelopment Authority, which said it is on track to run out of money by early 2016, plans to ask the Metro Council for $3 million in annual funding to keep the organization running. But Mayor-President Kip Holden charged the organization with “bullying” him and the council for money.

Officials with the RDA, a public agency responsible for reviving blighted areas in Baton Rouge, said Monday that along with seeking funds from city-parish coffers, they will look for private donations in order to stay in business. If the Metro Council follows Holden’s lead and declines to give public money for the RDA, the organization plans to pursue a dedicated tax.

“We have exhausted all of our ability to create any funding,” said Walter Monsour, RDA executive director. “Everything we have looked at shows you need a dedicated money stream to allow redevelopment authorities to continue programs.”

Holden said the city-parish doesn’t give any organization $3 million a year because there are too many obligations it has to meet, such as repairing decaying infrastructure, covering the cost of anti-poverty programs and meeting the pension obligations of police officers and firefighters.

“I can get out and hustle things for Baton Rouge,” Holden said. “Why can’t Walter Monsour get things to fill his gap? … I can give him a class on how to hustle money, but you can’t do it from behind a desk.”

Holden criticized Monsour, who served as his chief administrative officer before going over to head up the RDA, for making “more money than the president of the U.S.” Monsour has a base salary of $265,000 a year.

Since its inception in 2007, the RDA has been operating on unreliable and nonrecurring funding sources, such as New Market Tax Credits and grants from the East Baton Rouge Mortgage Finance Authority.

The plan all along, Monsour has said, was to prove the agency’s worth, then seek dedicated public funding from the city-parish. Monsour noted the successful redevelopment agencies that have been models for the RDA — like the ones in Atlanta, Cincinnati, New Orleans and Portland, Oregon — get millions in annual funding from local government.

“Developers develop to a market,” he said. “Redevelopment authorities develop the market.”

Making city-parish government the major source of funding for the RDA runs counter to the legislation that set up the organization, Holden said.

“I am not going to allow this city to go into default,” he said. “Walter is trying to paint us as bad guys, but he’s not telling the whole truth.”

Currently, the RDA is operating on an annual budget of about $1 million a year, Monsour said. The organization is seeking to boost its annual funding to $3 million, which would be split between operational and program costs.

“To increase our staff to do the work we need to do, we need $1.5 million in operational funding,” Monsour said. The money dedicated for program costs could be used as leverage to generate other funds and pay off bonds. “The rule of thumb is that if you have a million and a half, you can get somewhere around $15 million in cash to do your projects,” he said.

Monsour said after eight years, the RDA will be able to generate enough revenue from its assets to cover debt service.

John Noland, chairman of the RDA board, said the $3 million request is not “cast in stone” and covers what it will cost to “get the job started” for the RDA.

Metro Councilwoman Donna Collins-Lewis, the only council member to attend Monday’s RDA meeting, called the RDA’s work “vital” and expressed support for funding the organization.

The RDA has two valuable high-profile projects under development: the Ardendale mixed-use development, which is northeast of Baton Rouge Community College near Florida Boulevard, and the old Entergy site at 1509 Government St.

The 200 acres of Ardendale property have been valued at $12 million. The state has allocated $36.5 million for two BRCC classroom buildings that will begin construction in early 2015, and the East Baton Rouge School Board plans to build a $17 million career academy on the site.

Meanwhile, three out-of-state developers have reportedly expressed interest in the Entergy property, which is valued at $2 million.

Monsour warned if the RDA goes away, the 850 affordable-housing units in Ardendale would be jeopardized, along with 40,000 square feet of commercial space and some 100,000 square feet of retail space.

“Someone’s going to have to fill the void,” he said.

Monsour noted under its current financial situation, the RDA doesn’t have the $4 million in funding needed to install the infrastructure for the career academy.

Noland said the RDA has the authority in its enabling legislation to seek a tax, either a parishwide millage or a property tax in the Baton Rouge city limits.

“We have about a year and a half before we turn into a pumpkin,” he said. “We want to get this discussion advanced.”