Nov 26 2012
NOLA.com | The Times-Picayune
(Gallery by Chris Granger, NOLA.com | The Times-Picayune)
By Richard A. Webster, NOLA.com | The Times-Picayune
November 24, 2012 at 10:00 PM, updated November 26, 2012 at 3:31 PM
More than two years ago, Mayor Mitch Landrieu stood on the future site of the Veterans Affairs medical complex in Mid-City and announced an unprecedented plan; the city, with the help of the national nonprofit Builders of Hope, would move up to 100 historic houses in the hospital’s footprint to lots around the city, where they would be rehabbed and sold.
It would be the largest effort in the country to save historic properties from the wrecking ball. And preservationists, who had pressured the mayor to spare the homes, lauded the move, saying far too much of the city’s precious architecture had already been lost to Hurricane Katrina.
But now, a year after the renovations were scheduled to be complete, those same preservationists say the program — which has cost taxpayers millions — has been an utter failure.
Old New Orleans homes abandoned Old New Orleans homes abandoned Homes moved to make way for the new VA hospital in New Orleans sit abandoned in the Lafitte Greenway. Time, weather, and people have destroyed or stolen many of the historic architectural elements from these homes. Watch video
Of the 81 houses that were moved, just 28 have been fixed up. Another 21 have been demolished or are awaiting demolition after collapsing, being stripped to the studs or sitting years without roofs. The fate of the remaining properties, which are in various stages of disrepair, is uncertain.
Many of those directly involved seem shell-shocked and are still struggling for answers. Sandra Stokes, a board member with the Foundation for Historical Louisiana, led the charge to save the homes and can only look at the end result with despair.
“Every part of this project has been heartbreaking,” she said. “The fact that they destroyed this neighborhood, the fact that so many of these houses were moved and not rehabilitated, allowing them to decay, still brings me to tears. Instead of a national model for how to succeed in preservation in one of the most historic cities in the U.S., it became an example of what not to do.”
When the city announced plans to build a $2 billion medical complex on a 67-acre tract of land in Mid-City, preservationists demanded the city repair the old Charity Hospital instead. When that went nowhere, the preservationists asked the city to save as many of the historic houses as possible, leading to Landrieu’s September 2010 announcement.
To pay for the house-moving project, city officials redirected $3.2 million of $79 million in block grants set aside for land acquisition in the VA footprint. They enlisted Builders of Hope, a nonprofit based in Raleigh, N.C., that specializes in moving and rehabbing homes slated for demolition, to coordinate the moves and deliver houses to local nonprofits. The nonprofits would then renovate them and sell them to low-income homeowners. The entire project was to be completed by the end of 2011.
It was an ambitious solution to what had become a highly contentious issue.
Despite delays and unexpected structural issues with some of the homes targeted to be saved, Builders of Hope, with its sub-contractors Tim Clark Construction and Orleans Shoring, managed to move 73 houses off the VA footprint by March 2011.
The Landrieu administration at that point hailed the project as a success, with Scott Hutcheson, advisor to the major for cultural economy, declaring: “This pilot is going to be the model for future preservation efforts around the country.”
And then everything went horribly wrong.
The houses were delivered to the nonprofits without roofs, sometimes without walls, and they sat that way for months, exposed to the rain, wind and heat, rotting from the inside out.
Community leaders cursed City Hall for hand-delivering blight into the heart of their neighborhoods. In May, the body of a 49-year-old woman was found in one of the vacant homes.
As the project fell into disarray, the unified front presented from the outset devolved into a circular firing squad. Tim Clark Construction sued Builders of Hope; Builders of Hope countersued Tim Clark Construction; and Orleans Shoring placed liens on more than 20 houses to collect money it says it was owed.
In the wake of the lawsuits and liens, the city severed ties with Builders of Hope and accused the nonprofit of mismanaging federal funds in the amount of $178,000. Builders of Hope struck back, claiming the city reneged on a promise to provide millions of dollars to renovate the houses.
The project itself, meanwhile, suffered from continual delays and mismanagement.
During a recent visit to New Orleans, Randy Jones, executive vice president of Builders of Hope, drove through Hoffman Triangle, an impoverished section of Broadmoor that has struggled for years with drugs and crime. This is where nearly 20 VA houses were dumped two years ago. Instead of bringing opportunity and homeownership, these eyesores have collected garbage, squatters and discarded drug paraphernalia. Taped to several of the buildings were hand-written signs with a simple message summing up the neighborhood’s view of this once-grand project. “Builders of waste and blight.”
“It breaks my heart to see that because that’s our name,” Jones said. “I tried to talk to the neighborhood association, but they weren’t interested, and I don’t blame them. They don’t care whose problem it is. All they know is a bunch of houses got put into their neighborhood that are just sitting there empty.”
Harbingers of trouble
It wasn’t supposed to end this way, said Sister Vera Butler, who works with the Tulane Canal Neighborhood Development Corp., a nonprofit that renovates old houses for low-income families. When she heard about the Builders of Hope project, she jumped at the opportunity and took two houses that were relocated to Bienville Street in November 2010.
Problems arose from the outset. The buildings arrived without roofs and were left open to the elements for weeks. Instead of raising the streetcar’s overhead lines so the houses could cross Canal Street, Builders of Hope and the city removed the roofs to fit under the power lines. They also sawed off the backs of some houses that were believed to be too long to make the tight turns needed to weave through the neighborhoods, leaving them completely exposed from above and behind.
Builders of Hope eventually replaced the roofs on Butler’s houses, but never properly secured the windows and doors to keep out the rain. When they failed to fix the problem, Butler called the city to ask when it would begin distributing funding. “We’re getting close,” was the typical answer Butler received.
Without assistance to protect the homes or the money to renovate them, the ending was predictable.
Sometime during Hurricane Isaac, the first of Butler’s houses crumbled on top of itself, leaving nothing behind but a black roof sticking out of the ground.
In the adjacent lot, the rotting shell of the second house tried to absorb the punishing blows of the storm, but after two years of neglect, it was more than the structure could withstand. A few weeks later demolition crews ended its misery, tore it down and shipped off its remains to the landfill.
“It was frustrating,” Butler said. “I think it was just a monumental task and they weren’t ready for it.”
This is not an isolated case. Of the 73 homes moved from the VA site, five have been demolished due to weather damage, with eight more pending deconstruction. An additional eight houses that were moved in November 2011 off the future site of the state-owned University Medical Center are also slated for deconstruction. The cost to relocate each house was an estimated $38,500, so thus far, the city has spent $808,500 to move houses that it would eventually destroy.
The consensus among the nonprofits that accepted the VA houses is that the project, while well-intentioned, was rushed and ill-conceived, with the majority of the blame lying with Builders of Hope.
Home movers unprepared
Several nonprofit leaders who wished to remain anonymous said Builders of Hope was unprepared to handle the delays that come with any government-funded project. The group mismanaged its finances and fell so far behind that it couldn’t pay sub-contractors to complete vital work in a timely fashion such as restoring the roofs and securing the houses from the elements, known as “drying in.”
Providence Community Housing accepted 33 houses and every one of them sat exposed to the elements for up to six months. As a result, the group could only salvage a fraction of each structure, said Terri North, president and CEO.
“Almost all of them were taken down to the studs,” she said.
More than two years later, a handful of houses moved from the hospital footprint still lack roofs.
This makes a mockery out of the entire project, Stokes said. The goal, and the reason why the city spent more than $3 million, was to save entire historic houses from top to bottom, not just a few beams and studs.
Jones rejects the idea that somehow Builders of Hope was not prepared to handle the project, citing the speed at which the houses were successfully moved. The problem the group ran into was that the city was consistently late reimbursing them, even though the cooperative endeavor agreement required that all payments be made within 30 days after receipt of an invoice.
To bridge the gap, Builders of Hope had to borrow money, but it wasn’t enough to make up the deficit, and that resulted in delays when it came to sealing the houses from the elements, Jones said.
Though city officials insisted they paid on time, documents show numerous examples where they were late. One invoice for $32,790 submitted by Builders of Hope and received on Jan. 31, 2011 was not paid until June 22, 2011. The city took nine months to pay a $4,000 invoice received on Sept. 13, 2010.
“Were we JP Morgan, so we could front the city of New Orleans $1 million for a year? No,” Jones said. “So you’re going to blame us for that? I guess you could say we were naïve and never should have accepted such a project, but we didn’t know it was going to be like this until we were already into it.”
Despite the delays, the city eventually paid Builders of Hope a total of $3.8 million for moving and sealing the VA houses, said Brian Lawlor, the city’s director of housing policy. The real problem — the one that caused the entire project to come to a standstill — is that Builders of Hope didn’t fully pay its contractors, he said.
“Builders of Hope was submitting requisitions, saying everything was done and we need to pay them,” Lawlor said. “They signed off on the contractor’s work, said the work was done great. We send them a check, and then we find out the check isn’t delivered to the contractor and there are liens against all the properties.”
Builders of Hope houses in October of 2012
Enlarge David Grunfeld, The Times-Picayune Sitting without roofs are houses that where saved from demolition in the LSU hospital footprint area Wednesday, October 24, 2012. They were moved to St. Louis Street near North Tonti Street. (Photo by David Grunfeld, Nola.com |The Times-Picayune)
The revolving loan
In November 2011, the city was finally ready to release a $6.2 million revolving loan fund that would be used to renovate the VA houses — the money Sister Vera Butler kept calling about in hopes of saving her crumbling homes.
When the city first approached the nonprofits about the relocation project, it was with the understanding that the city would provide funding for the renovations.
Providence would never have gotten involved if it wasn’t for that promise, North said.
“Everybody was nervous about this, obviously. It was extremely ambitious and rushed because it was ‘now or never,’” she said. “‘They’re going to plow this down tomorrow, so we need you to take these houses.’”
Builders of Hope, which was also contracted to handle the renovation work, was counting on the release of this money to make up for losses it incurred moving the structures.
At that point, the project was at least a year behind schedule. The houses were supposed to be moved by Oct. 31, 2010 and renovated within nine months, but delays with relocating and sealing the houses made it impossible to hit that goal. None of the houses had been renovated and the majority had already suffered considerable damage. But it wasn’t too late, Jones said. If the renovation money was released, they could all be restored and sold as intended.
“After a year, the city paid us everything it owed for the move, but by that time our cash flow was turned upside-down and created all kinds of havoc for us,” Jones said. “What was going to turn us right-side-up again was to do the rehab work, and we hung on based on city assurances that it was coming.”
But it wasn’t meant to be.
Just as the city was finally ready to start dispensing the money, Tim Clark Construction dropped a bomb, claiming Builders of Hope owed it hundreds of thousands of dollars. That revelation would close the door on the renovation fund for another year.
“As soon as we discover someone takes money from us and doesn’t do what they are supposed to do with it, the process stops,” Lawlor said. “If you’ve taken money and can’t account for it, we’re not going to give you more money until you tell us what you did with it.”
Attempts to negotiate a settlement failed, and in January, Tim Clark filed a lawsuit against Builders of Hope seeking more than $600,000. Meanwhile, Orleans Shoring placed liens on dozens of VA houses claiming that it, too, was owed money.
Builders of Hope immediately filed a countersuit accusing Tim Clark Construction of improperly placing houses on lots in violation of city code.
Tim Clark’s attorney, Dominick Impastato, said the accusation is absurd. Builders of Hope approved all of the work completed by his client, never raised any concerns until after they were sued and are simply looking for a way to get out of paying their debt, he said.
“We got certification from Tim Clark saying this work was done properly, and our people acknowledged receipt of that,” Jones admitted in response. “But Tim Clark was responsible for the work. We can’t check every detail of everything that every contractor does. You hire them to do a job and when they certify that it’s done right, you tend to accept that.”
The city conducted a fiscal monitoring review of Builders of Hope that occupied the better part of this year. It determined that the nonprofit failed to pay Clark Construction $178,874 from federal funds given to it for that express purpose. Builders of Hope hired Minor, Anglin & Associates in Durham, N.C., to audit its books and that firm came to the same conclusion.
“Builders of Hope, Inc. should provide any relevant support as to why the contractor was not paid, provide immediate payment to the contractor, or pay back the City of New Orleans,” the auditor reported.
Jones said the $178,874 in dispute is not unaccounted for; it simply wasn’t paid to Tim Clark Construction because the firm didn’t honor its contract. In the end, the costs Builders of Hope will incur to fix Clark’s errors will likely exceed the amount they allegedly owe, Jones said.
This is not how federal funding works, Lawlor said. The city gave Builders of Hope money to be paid to its sub-contractor, and they are obligated to return that money if they didn’t use it for that purpose. Thus far, Builders of Hope has declined to return any money to the city.
“They not only refuse to pay back the $178,000 they owe, but they refuse to say where it is, so that puts them in a major default on their contracts, which poisons our relationship with them,” Lawlor said. “So the whole arrangement for rehabbing the VA homes went into disarray during early part of this year and we’re just now regrouping.”
The city said it does owe $148,595 to Builders of Hope for work associated with moving eight additional houses from the University Medical Center site, but in light of its mishandling of federal funds, it stopped payment.
The last eight houses
On a recent morning, Stokes stood on the Lafitte Greenway staring in disbelief at the eight houses that surrounded her. They were stacked on logs like junk cars on bricks. They had no roofs or back walls, and their insides had been torn apart by the weather and vandals.
“It’s shameful,” she said, fighting back tears.
These eight houses were moved from the future UMC site in November 2011, the last piece of work completed by Builders of Hope on behalf of the city. The greenway was only meant to be a temporary location while the city found permanent homes for the houses. But shortly after they were moved, the Tim Clark dispute erupted and they have sat on the greenway like decomposing carcasses ever since.
They are officially listed by the city as “pending deconstruction.”
“It seems like there is an awful lot of finger-pointing of who is to blame, but ultimately there has been no accountability,” Stokes said. “It was a noble effort that required a complex plan of execution. But ultimately the city was responsible to make sure the money was spent wisely and that the houses were restored.”
The project hasn’t been a total loss.
Providence Community Housing, which is also one of the developers working to rebuild the demolished Lafitte public housing complex in the 6th Ward, didn’t wait for the city to release the renovation money. It instead used tax credit money associated with the Lafitte project to fund construction on 27 VA houses, some of which Builders of Hope worked on. Each house cost $200,000 to rehabilitate, North said.
And in October, the city announced it was ready to move forward without Builders of Hope and was making available $1.9 million in renovation money. It received requests from nonprofits to rehabilitate 11 more houses. In the coming months, the city will release an additional $2 million in hopes of finishing the structures that are still salvageable.
After all is said and done, the final tally looks like this: 81 houses moved, 28 completed or under construction, 21 demolished or pending demolition and 11 set to receive renovation funds. The fate of the remaining 21 properties, five of which are owned by Builders of Hope and five of which have Orleans Shoring liens on them, remains murky.
Lawlor admits that some groups may be hesitant to take on any of these houses, given the chaotic history of the project. But once they see the money flow to the first round of participants, he’s optimistic they will jump at the chance.
“This was an ambitious project,” Lawlor said. “Everyone knew it was going to be difficult, and the likelihood of success, to be 100 percent perfect, was slim. It has been frustrating, but we feel good because we’re back on track.”
A happy ending to this story, however, might prove hard to come by.
Shortly after the city announced it was accepting proposals for renovation funds, Builders of Hope published a warning in The Times-Picayune to anyone thinking about taking the city up on its offer. The pending litigation gives Builders of Hope legal rights to all of the houses, according to the notice.
“Anyone proceeding to purchase, enter, or rehabilitate the structure without first notifying Builders, paying the required compensation to Builders and securing Builders’ written consent to proceed will do so at their own risk and will be subject to legal action,” the notice said.
Jones wasn’t prepared to say whether the group would actually sue nonprofits that receive renovation funds, but he wouldn’t rule it out either. As far as he is concerned, the city agreed to provide Builders of Hope with money to renovate the VA houses, and he intends to make the city keep its word.
“We expect them to talk to us about the work they said they would give us because promises were made,” Jones said. “We know they’re saying all these bad things about us which would make sense only if we were some kind of carpetbagger just in New Orleans for the short haul to make money and then we skedaddled. But we’re there trying to answer questions and to continue to do work. It’s so messed up. It’s a disaster.”
Source: The Times-Picayne/nola.com
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