Today's groundbreaking and bond announcement are part of the overall reformation of HANO that began less than two years ago when HUD took over the housing authority. HUD's receivership team has aggressively worked with state and local leaders to get the necessary financial resources to start construction for the first phase of the St. Thomas redevelopment. This is part of a larger strategy to generate additional resources for the housing authority to modernize and construct new affordable housing in New Orleans.

HUD's approval of up to $87 million bond issuance, of which the first issuance of $56 million by the Industrial Development Board of New Orleans, will give HANO the necessary finances to construct 353 new public and affordable housing units at Florida, Fischer and Guste beginning next year. This initial bond issue is the first of future issues that will facilitate redevelopment of the city's most distressed communities.

The Quality Housing and Work Responsibility Act of 1998 gave PHAs the opportunity to act more like private sector landlords by pledging a percentage of their income to repay debt.

HANO will repay the $56 million bond by using a portion of its annual federal Capital Fund grants over the next 20 years.

HANO received a $25 million HUD HOPE VI Revitalization grant to redevelop the public housing at St. Thomas in 1996. The revitalization plan for the first phase at St. Thomas includes constructing 122 public housing units and 174 market-rate rental units for a total of 296 units.

When all seven phases of the new St. Thomas community are completed there will be a total of 1,238 units, which will include additional public housing and rental units, as well as elderly housing, single-family homes for purchase, condominiums and a continuing care retirement community at the original location. At a different location, there will be an additional 100 rental units.

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 and espanol.hud.gov.