City Hall has been blocked again from seizing a shopping center in Gentilly that has languished since Hurricane Katrina despite receiving public funds to restore it.
Civil District Court Judge Clare Jupiter on Thursday extended a temporary restraining order issued in May that prevents the city from taking over the Lake Terrace Shopping Center and selling it.
She did not issue a final ruling. Instead, she said the lawsuit should be moved to the docket of Judge Robin Giarrusso, who is overseeing a related case. Jupiter said the cases should be consolidated.
The property is owned by Kenneth Charity’s DMK Acquisitions. In 2009 and 2010, the city gave DMK $225,000 to rehabilitate the shopping center. DMK has not followed through with the project, and it owes the city more than $33,000 in delinquent property taxes and interest, according to city records.
The lawsuit between the city and the company revolves around technicalities: whether each side properly served the other with legal documents.
In October, a city hearing officer ruled that the property was blighted and fined the company about $6,000. The company was required to post a $160,000 bond if it appealed the ruling. DMK took the case to Giarrusso, who reduced the bond to $22,000.
The company posted that bond, which should have suspended the blight judgment while the company appealed. Instead, daily penalties have brought the total fine to $645,000, according to city records.
The city claims it was not notified within 90 days that DMK was appealing the blight ruling.
Eric Person, DMK’s lawyer, said in court Thursday that he could not say why City Hall never received the heads-up, given that he paid for the city to be served. “I worked at the City Attorney’s Office for years — I know the address,” he said.
Person also claims the city failed to notify him or his client when it initiated a lien foreclosure on the property, the first step in selling it at public auction.
The city likewise never notified First NBC Bank, which loaned DMK $2.5 million to buy the property in 2007. An attorney for the bank sat in on the hearing but did not participate.
Tammie Jackson, an attorney for the city, said the Sheriff’s Office tried to serve Person and Charity several times in April and May. Person said that effort wasn’t enough.
In failing to notify his client, Person argued, the city violated his client’s property rights.
Attorney Joyce Joseph, also representing the city, said the law only requires an owner to be notified 10 days before a property is auctioned.
As neighbors awaited the judge’s ruling, some said they hoped the city would be allowed to move forward with an auction.
Constandinos Vennis said Charity received the $225,000 in public funds in part because he said he could move quickly. Charity’s application said the project would be complete six months after getting a city grant. It’s been six years since the city wrote the first check.
“He’s holding the neighborhood hostage,” Vennis said. “The whole neighborhood has come back, except for the property that received public funds.”