HUD BROKERED AGREEMENT PUTS NEW ORLEANS HOUSING DEVELOPMENT "BACK ON TRACK"
Residents Will See Housing Sooner As a Result of Redevelopment Plan Between HANO and HRI

NEW ORLEANS - Housing and Urban Development Secretary Mel Martinez today signed an agreement with the City of New Orleans, the Housing Authority of New Orleans (HANO) and developer Historic Restoration, Inc. that will speed up the redevelopment of the St. Thomas public housing development.

The agreement adds a Fourth Amendment that is designed to toughen the October 1999 St. Thomas HOPE VI Development Agreement by establishing a performance timetable and setting clear guidelines that will drive the revitalization effort.

"This agreement puts redevelopment at St. Thomas back on the fast track," said Martinez. "Unlike in the past, this agreement guarantees accountability and ensures that much needed housing units will be built for the residents of New Orleans who have waited long enough."

Joining Martinez at the signing at Fischer Homes was Congressman William Jefferson, Mayor C. Ray Nagin and HUD Assistant Secretary Michael Liu, who oversees the HOPE VI Program.

The newly added Fourth Amendment specifically states the parties agree to:

• Build on the partnership between HANO, HRI, the City of New Orleans and the State of Louisiana for the revitalization of the St. Thomas community.
  
  
• Establish "critical milestones" in the redevelopment process by which progress can be measured and HRI can be held accountable.
  
  
• Establish conditions for conveying a six-acre retail site from HANO to HRI, completing the environmental remediation of a future Wal-Mart site by HRI, and creating a $500,000 escrow account by HRI to guarantee the closing and beginning of construction. Should HRI fail to meet the July 18, 2003 deadline for beginning redevelopment, the account will be turned over to HANO.
  
  
• Add 40 affordable housing units to the plan, bringing the total number of residential units to be built on-site to 1,238.

Today's action is the latest in a series of steps taken by HUD to remedy mismanagement at HANO. In January 2002, HUD assumed control of HANO. This unprecedented step was taken when it became clear that management problems were extensive and despite enormous funding from HUD, very little progress was being made.

HANO received a $25 million HUD HOPE VI grant in 1996 to demolish and revitalize the 60-year-old St. Thomas public housing development. The redevelopment, however, stalled and the land sat vacant because of a series of missteps by former HANO officials and others.

"The days of mismanagement and corruption in New Orleans public housing are over," Martinez said. "We are not willing to let this unacceptable stall pattern continue. The people of New Orleans who depend on public housing deserve better."

In the 15 months since assuming control of HANO, HUD has installed financial and management practices that focus on accountability and ethics. Despite the new practices, HANO will remain under HUD's guidance.

After the agreement signing, Martinez and Liu also toured the HANO's Desire and Florida housing complexes

HANO has been awarded two HOPE VI grants since 1993, the first year they were awarded. In 1994, HANO was awarded $44.3 million to demolish existing units in the Desire complex and replace them with some 373 new units. And in 1996, HANO received another $25 million in HOPE VI funding for demolition and revitalization of the St. Thomas complex.

The HOPE VI Program was created in response to a 1992 report by the National Commission on Severely Distressed Public Housing, which found nearly 100,000 public housing units in the U.S. in need of revitalization. The program, which was authorized for a period of 10 years, expired in 2002. Congress has authorized the program to continue through 2003.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet.

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