When the first of the new homes began springing up in Pontchartrain Park in 2011, they filled in gaps along streets where some longtime residents had already rebuilt after Hurricane Katrina, helping to lift morale along with property values as new buyers repopulated the once-pioneering all-black subdivision, now badly damaged.
"It gave new life to our community," recalled Gretchen Bradford, who serves as president of the Pontchartrain Park Neighborhood Association.
The "affordable" homes, built by New Orleans actor Wendell Pierce's nonprofit Pontchartrain Park Community Development Corp., "showed that our community was coming back," she said.
"If it weren't for them, I don't think this neighborhood would be at the point it is," Bradford, 53, said last week.
But the effort later slowed to a crawl. Only 34 of the single-family homes have been built, the last one nearly four years ago, and only about two dozen of them were sold.
In recent months, the New Orleans Redevelopment Authority, the nonprofit's partner in the project, has sued to regain control of 39 properties that have yet to be redeveloped. It has canceled plans to turn over another 52 properties that were in line to be transferred.
NORA's lawsuit, filed in June in Orleans Parish Civil District Court, also charges that Pierce's community development corporation failed to repay nearly $290,000 in loans from the sales proceeds of more than a dozen homes. (Pierce has denied the allegation.) A separate lawsuit, filed in August, alleges that the nonprofit is in default on almost $360,000 in federal Community Development Block Grant recovery money.
City officials and other observers say Pierce's project has languished because of several factors, among them his outfit's lack of experience and the project's large scale. They also have questioned whether the style of home was right for the area, where other, bigger options are available at a similar price tag.
"There's still a robust market here, still a desire and need for affordable housing opportunities. I just think that what you've had here is a developer that lacked some of the expertise that was needed," said NORA's executive director, Brenda Breaux.
Pierce sees it differently. While he declined to discuss the specifics of the agency's lawsuits, he laid much of the blame, at least for Pontchartrain Park's recent woes, on the collapse early this year of New Orleans-based First NBC Bank, which was the project's lender and co-developer.
But by the time the bank failed in April, the project was already mired in more than $1 million of debt. Last year, it was forced to stop paying its executive director, who has continued working for free.
But now, the community development corporation's finances have been crippled in the wake of the bank's closing. It can't pay for routine maintenance work, and neighbors complain about uncut grass on vacant lots and unsold properties.
Pierce formed the nonprofit in 2008 with Troy Henry, his close childhood friend, who ran for New Orleans mayor against Mitch Landrieu in 2010 and is running again this year. The two reached a deal with NORA to build affordable housing on 125 scattered properties in Pontchartrain Park that the state had acquired after Katrina.
Work soon began on a series of modular homes, but the pace was slow initially. NORA reworked the deal in 2012 and got First NBC Community Development Corp. involved as the project's co-developer.
At that time, Pontchartrain Park's backers anticipated building as many as 150 three-bedroom, two-bath homes, averaging about 1,200 square feet apiece and designed to mitigate flood risk.
In his 2015 memoir, "The Wind in the Reeds," Pierce described his affection for Pontchartrain Park, saying it "symbolized the opening of the American dream to black folks in New Orleans" after it was constructed in the 1950s. In a time of legal segregation, it was the first suburb built for African-Americans, and many successful black families moved there.
But his hopes for a renaissance of his old neighborhood have been frustrated.
After notifying the Pontchartrain Park CDC in March 2017 that it was in default, NORA filed a breach-of-contract suit against the nonprofit in June, contending that the rebuilding effort was "wholly unsatisfactory." The suit said the project had "suffered extended delays and loss of critical funding despite extended completion schedules and accommodations" by the agency.
The lawsuit, filed in Orleans Parish Civil District Court, claimed that "all home construction in the Pontchartrain Park neighborhood by PPCDC has ceased and no further actions are underway."
What's more, NORA alleged, the nonprofit breached its obligation to manage nearly all the stages — predevelopment, financing, construction, marketing and sales — of the properties that were transferred to it but have yet to be developed.
In August, NORA filed a breach-of-loan suit against the nonprofit, its related Pontchartrain Park CDC Real Estate Holdings and First NBC Community Development Corp., claiming the authority is owed almost $360,000 on an overdue loan made possible by federal Community Development Block Grant assistance provided in Katrina's aftermath.
It's not the only litigation to face the group. A hearing is scheduled for November on a $164,000 breach-of-contract lawsuit filed by the Davillier Law Group. (Pierce has denied the claim.)
And in a twist, Henry also has sued his old friend's nonprofit, alleging last year that it breached the terms of a consulting contract he held from May 2009 to December 2010. Henry claimed he was owed $282,000. Both sides agreed to submit the claim to arbitration.
In the nonprofit's 2014 tax filings, the most recent available, it listed almost $5.8 million in assets against nearly $9.9 million in liabilities.
Pierce, the New Orleans-born actor known for his work in the HBO series “The Wire” and “Treme," said Henry did a good job in the project's early days but declined to specifically address his friend's lawsuit. The suit does not appear to have soured their relationship: Pierce is chairing Henry's campaign for mayor.
'That's not an excuse'
Beginning in 2012, Pierce found a willing partner in First NBC Bank, which became a big player in post-Katrina real estate and tax-credit investments, including those involving historic restoration and low-income housing tax credits. As part of that, in 2007, the bank formed First NBC Community Development Corp., which worked with faith-based groups and private investors to build affordable housing across the city.
Over golf at the neighborhood's course, Pierce got to know the bank's founder and CEO, Ashton Ryan Jr. Bill Aaron, a local lawyer who was on the boards of the bank and its parent company, First NBC Bank Holding Co., also served on Pontchartrain Park CDC's board.
The nonprofit's relationship with the bank worked for a while, Pierce said, producing nearly two dozen single-family homes in relatively short order. But that was nearly four years ago.
Then in April, First NBC suddenly failed in the costliest collapse of an American bank since the height of the 2008-10 financial crisis. The failed bank's best assets were acquired by Mississippi-based Hancock Holding Co., the parent company of Whitney Bank, in a deal that included $1.6 billion in deposits and $1 billion in assets, including $600 million in cash.
Pontchartrain Park's loans weren't included, a sign that Whitney found them unattractive.
"You look at any development or any business that was with First NBC — it's a transition period of what Whitney wants to do or doesn't want to do, or other private investors," Pierce said. "It's still sorting itself out in so many businesses around the city and the region."
He noted that he's hardly the only local developer affected by the bank's collapse, citing the old Holy Cross School building in the Lower 9th Ward, a $15 million mixed-use development in the works for years that he said was recently stymied by First NBC failure.
But Breaux, the NORA director, dismissed the notion that First NBC's demise doomed Pontchartrain Park CDC.
"That is not an excuse, even for them," she said. "That might be an easy excuse, but that's not an excuse. First NBC stepped up to really try to help them move some of the development forward."
Pierce disputes the suggestion that he was in over his head, noting that he's been involved in other high-profile real-estate developments.
They include a $27 million, 110-unit apartment complex in Baltimore, where he expects to cut the ribbon in December, as well as a potentially $40 million housing and retail project in the Bay Area in California, slated to provide roughly 450 units on a long-abandoned plot. He expects to break ground on it early next year.
"The fact is, I'm doing 550 units in other cities, so I feel as though we can amicably work this out to do whatever's prescribed here," he said.
Proud of his work
However, he said, working in New Orleans has its own intricacies.
In Pontchartrain Park, some would-be homebuyers were turned away because they earned more than 120 percent of the area's median income, which was roughly $64,800 for a family of three in 2015.
What's more, Pierce notes, he was working without the benefit of the deep pockets that some high-profile investors enjoyed. Actor Brad Pitt, for example, teamed with movie producer Steve Bing to build nearly 110 "green" homes in the Katrina-ravaged Lower 9th Ward.
Nonetheless, Pierce is proud of his work. With his financing in limbo, he's in talks with three private-equity groups about finishing the homes, he said.
But with New Orleans facing a citywide shortage of affordable housing, many of those who once celebrated Pierce's involvement now believe it's time for someone else to step in. City Councilman Jared Brossett, who represents the area, backs NORA's push to reclaim the properties.
NORA leaders admit that Pierce has faced market challenges that made meeting his lofty goals difficult, including that Pontchartrain Park has to compete with other areas of Gentilly where some larger homes can be found at a similar price point of about $165,000.
"We heard some feedback from potential buyers that the floor plans are a little bit less spacious than some of the other sort of starter-family homes that are available in Gentilly, and I think some of the finishes are a little bit different from some of the other homes that are available," said Seth Knudsen, NORA's director of real estate development and planning.
Sheila Greenup, executive director of the Pontchartrain Park CDC, has deep roots in the neighborhood and experience as a real-estate agent.
Greenup hasn't been paid for her work for the project in more than a year. She has trouble scraping up cash to pay someone to cut the grass or to pay for minor repairs tied to closing costs.
As a result, she had a couple of buyers recently walk away from deals, and she said other potential buyers are scared by the prospect of losing closing fees on a property they won't be able to land.
"The hole is just getting deeper and deeper," she acknowledged.
Meanwhile, Bradford, the neighborhood leader, understands the city agency's dilemma. She notes that many people still credit Pierce and blame the bank and other circumstances for the project's problems. But regardless of how the fault is sorted out, she's worried about what may come next.
"We were taking back our community," she said. "People were owning homes, buying new homes in our neighborhood, and that was a great asset for us, and now we don't have that. We don't know what's going to come up here."
Editor's note: This story was changed Sept. 25 to correct Wendell Pierce's role in Troy Henry's mayoral campaign.