This worked out better than it could have

It's almost old news now but it looks like they're all clear to go through with this deal between the city and the port over the Public Belt Railroad. Theoretically, a contiguous public space stretching the length of the riverfront from Bywater on up to Canal Street is going to be a nice thing to have.  I don't like the way the mayor calls it an "opportunity," though. 

Mayor Mitch Landrieu said Monday (June 12) a property exchange with the Port of New Orleans gives the city the final piece -- two French Quarter wharves -- to create "the largest contiguous riverfront footprint in the United States of America" connecting Crescent Park to the upriver side of the Ernest N. Morial Convention Center.

"There will be no other city in America that's got that level of opportunity on the river," Landrieu said.

"Opportunity" for whom?  For most of us, a public park along the river is a pleasant place to be, to watch the boats, to attend a festival, maybe. It's an "opportunity," though, for people with money to invest in real estate or in tourism-related businesses. And that means we're about to go through several rounds of arguments over whether zoning laws, building codes, and such should be tweaked to their advantage.  It will probably go badly. 

The good news is the Public Belt isn't going to be privatized which means the Port and the various businesses who depend on it will continue to function without having to pay an unnecessary toll to some interloping firm with a railroad monopoly.  In the long run, even that may not matter much. But, for now, it's a pretty good outcome.

"Public access"

News is starting to break this week about the future of the New Orleans Public Belt Railroad and the Port of New Orleans.  Apparently the mayor is looking to kill a bunch of lingering birds with a single stone.

New Orleans officials are trying to orchestrate an elaborate swap that would turn over the city-owned Public Belt Railroad to the Port of New Orleans, and in turn would give the city the last two working wharves along the downriver end of the French Quarter, according to sources familiar with the talks.

The deal, if achieved, would accomplish two things: It would ease concerns among port officials about the future of the railroad, which is crucial to their operations, and which Mayor Mitch Landrieu's administration has been considering privatizing.

And by giving the city control of the last bit of working riverfront between the Central Business District and Bywater, it could potentially open up uninterrupted access for the public to a two-mile stretch of the riverfront in the city's historic center.

Yeah it could open up access for the public or it could open up access to prime real estate for developers looking to drop in more hotels and/or luxry housing we do seem to enjoy building around here.  We'll see how that discussion develops if this deal goes through.

Another interesting facet of this story has the Port looking to acquire the Avondale Shipyard to make up for the loss of the wharves. There had been a rumor going around about a long term plan to relocate all port facilities away from the Orleans Parish riverfront to sites in St. Bernard Parish and at Avondale.  This development doesn't necessarily confirm that rumor but it does lend it a whiff of credibility.  At a recent Dock Board meeting, the Port's CEO did say there are "multiple scenarios" under discussion.

Anyway, remember this controversial Florida Avenue expansion project?

In addition to the project’s likely property seizures, displacement of residents and construction nuisances, Campbell said that if Florida Avenue is rebuilt, the Ninth Ward will be subject to exhaust, noise and vibrations from trucks. Hazardous cargo will be a threat.

Louisiana’s Department of Transportation and Development has big aims for the project, however, saying it can connect Florida Avenue from Elysian Fields Avenue to Paris Road in a reliable manner. The project can provide an optimal, north-south connection from Florida Avenue to St. Bernard Port. A roadway bridge would be built over the Inner Harbor Navigation Canal, adjacent to the existing Florida Avenue Bridge. Area roads would be improved and newly aligned, DOTD has said.

The big picture goal of relocating the Port of New Orleans fits there as well. Just something to keep in mind.

Totally validated

Remarkably, the city has had little difficulty identifying some companies willing to suck profits out of a public asset. 

New Orleans could stand to make as much as $55 million upfront and another $76 million over a 40-year term under one of five proposals submitted by companies interested in leasing the Public Belt Railroad.

In fact, all five firms that have expressed interest in taking over the city-owned railroad crossed an initial hurdle this week in the city's nearly two-year effort to reach a long-term deal that could net tens of millions of dollars for the city.

The Public Belt includes 26 miles of track that connect six major rail lines serving the port and industrial facilities.

The companies that responded to the city's request for qualifications include Illinois-based Anacostia Rail Holdings; New York-based MidRail; Colorado-based OmniTrax; and Watco Companies, a Kansas-based transportation firm. Another response came from a joint team of Connecticut-based Genesee & Wyoming and Oaktree Capital Management, a California global asset management firm.

That's kind of a funny lede.  One would get the impression from the opening paragraph that it's all great news.  It's much more complicated than that. AZ has been on this story for months. Do take a look at that for background, for coverage of the public meetings, and even an interview with the mayor.  There a several issues and concerns involving labor contracts, agreements with warehousing and port services companies, long term development strategies, etc. Jason sums up the fundamental question here.

Probably the biggest question mark with the RFQ is the nature of the current agreement the NOPB has with the Port of New Orleans. Right now, because the structure of the NOPB is designed to solely serve the Port (not necessarily generate a profit), the Port has a $1/year lease agreement with the railroad. If a private entity takes over the NOPB, that agreement will most likely be renegotiated...if the Port even chooses to do business with the new entity.

Whatever way you slice it, this is a proposal to turn a public asset into a profit vehicle for a private third party. So it's really no wonder the city would find at least five bidders ready to leap at the opportunity.  Ryan Berni says the mere fact of this "totally validates" the decision to privatize in the first place.

"It totally validates that there is a lot of interest from major players to invest in this asset and to give the taxpayers a greater return on their investment," said Ryan Berni, a top aide to Mayor Mitch Landrieu. Berni attends Public Belt board meetings as the mayor's representative.

LOL at that "greater return" to taxpayers.  The Landrieu Administration is stuck in the conservative ideology of the early 90s. Everything is better if it's run like, for, and preferably by a private business. The logic validates itself just like it always has.

Cone of silence

For some reason, the NOPBR privatization scheme is a great big state secret.

There was a brief question and answer session following the Powerpoint presentation but Berni informed the group that any questions could be submitted to the City's website where they will be publicly answered in an effort to maintain transparency.

He also stated a "cone of silence" has been issued for the NOPB staff and Commission through the RFQ process. I have personally tried to contact the KPMG members heading up the evaluation but I got no response via email. I am assuming they are subject to the City's cone of silence as well.

Please do not email Michael Flynn about it or the Russians might find out everything. Or, worse, some union workers might find out their labor agreement is about to be busted up.

Many of the questions posed surrounded the complicated contracts and labor agreements the NOPB holds with Class 1 railroads, the NOPB union workers and the Port of New Orleans.

In specific, the labor agreement with the Union was brought up more than once. Berni stated that the City was focused on keeping as many local jobs as possible but that doesn't seem likely if a private company takes over the management of NOPB. The labor agreement seemed to be a point of concern among the prospective buyers, it will almost certainly be on the chopping block if the lease goes through.

You can see how sensitive this is. We ask that you not break the cone of silence. Otherwise we can't be responsible the next time the black helicopters show up at your house at 1 AM.

NEW ORLEANS - What the NOPD described as U.S. Army military training operations in an area near Poland Avenue rattled some residents of the Bywater early Friday.

The NOPD said the exercises will continue through Feb. 17.

​ ​"The training involves the use of training simulations and helicopters. This is done at night to simulate environments our troops may encounter in operatons overseas," said a statement from the NOPD.

Residents called Eyewitness News and posted to our Facebook page, reporting loud bangs and sounds that seemed to be of gunfire, along with bright, flashing lights in the early morning after 1 a.m. They said they were not given notice that there would be training exercises.

​ ​The NOPD said attempts were made to contact those living nearby.

Yikes. Talk about violating a "cone of silence," right? As for those "attempts to contact" residents, well, yeah, I noticed a press release went out over email this morning. Good looking out, guys.

Looking more and more like they're selling off NOPBR

The GM resigned this week.

The general manager of the New Orleans Public Belt Railroad, a unique riverfront asset that includes 25 miles of tracks connecting the six major rail lines that service the city's port and nearby industry facilities, plans to step down next month amid ongoing public speculation over the city-owned railroad's potential sale.

Jeff Davis took the helm of the scandal-battered agency in 2013 after its previous general manager, Jim Bridger, was forced to resign amid charges of lavish spending. Bridger ultimately pleaded guilty to misappropriation of public funds and was sentenced to probation.

Davis, 44, this week submitted his resignation, effective at the end of the year, to become chief operating officer of a Dallas-based company that handles rail transportation logistics and short-line railroad operations.

The privately held company contacted him in recent months to gauge his interest in the new opportunity, apparently as it became clear in the industry that the New Orleans railroad's fate was uncertain.

Update:  Ahhh, sure, they're going with Option Number Three which is the one where you don't sell it but "partner" it out to someone because..... .Well, because there's arbitrage money to be made here and some middle man has to scoop it up. 

Instead, the city will continue to work with the consulting firm KPMG to explore entering into a public-private partnership that would allow it to retain ownership of the railroad while attracting private investment that could be used to improve the line's efficiency and safety.

The city plans to solicit proposals from potential private-sector partners. At the same time, officials will review whether potential capital investments in infrastructure and real estate development could generate revenue for the city, Berni said.

The process, which could last several months, will operate in two phases. At first, proposals will be non-binding, in order for the city to gauge initial interest. Assuming it attracts interest, the city can evaluate the responses before requesting final, binding proposals.

Already, the city has sought feedback from various companies to find out if private investment potential exists, Berni said.

Railroaded

There's a lot going on right now but notice in the meantime Mitch is moving ahead with his plan to sell off the New Orleans Public Belt Railroad. Kyle Wedberg, a key opponent of the sale, recently resigned from the NOPBR board. Also.. Veolia? Wow.

According to an off-the-record source, French based New Orleans RTA contractor Veolia Transportation has expressed interest in purchasing NOPB if the option for sale is eventually passed.

A source also suggested that the Mayor may be replacing Wedberg's Committee position with long-time Landrieu confidante, Emily Sneed Arata.  Arata has worked in some capacity with Mayor Landrieu since his tenure as Lt. Governor, including serving as Deputy Mayor of Communications under his first Mayoral term.  Sneed left her stint with the City in January of 2016 to take a job with Ochsner Health Systems.

In addition to her stint as Deputy Mayor, you might remember Arata from the time her husband was convicted of fraud in connection with one of the many many "Hollywood South" scandals to touch the politically connected classes in recent years.  But now she works for Ochsner so you can see things have gone downhill ethically. 

Obligation to the public

This is a new AZ post about the mayor's ongoing evaluation of a possible sale of the New Orleans Public Belt Railroad.  The issue came up again  last night at the District B community budget meeting but Mitch's response  (something along the lines of "we gotta think differently in the 21st century") wasn't very enlightening. Jason's story is more helpful.

One thing he tries to make clear,  for example,  is the NOPBR's function which is best understood as a regulatory agency for Port operations and not as a potential revenue generator for the city as the mayor's staff seem to suggest.

The key "stakeholders" then are shipping and warehousing concerns who have business with the port and who depend on a set, predictable cost of the publicly regulated rail facilities instead of whatever price may be set by a rent seeking private operator.

The main concern seems to be the market disruption that privatizing, or even partially privatizing, the NOPB would create.  As Jensen noted, it could give rise to a possible monopoly in the services industry surrounding the Port.  A future private owner of the NOPB could build their own warehouses along the line and undercut existing businesses like Kearney’s and Jensen’s, giving it an unfair advantage in the market.

So there's money at stake for the port businesses and potentially money to be made for whatever buyer potentially ends up running the railroad.  In other words, it's a big plum the mayor can still give away to someone before he leaves office. Predictably the commission doesn't want a sale. Just as predictably, the mayor's office wants to keep exploring the option.

Most predictably, though, and most disconcerting is the off-point public interest wording they use to describe their motivation.

Ryan Berni then stated that the City would move forward with the full evaluation, including the option for sale, in spite of any decision the Commission made to have it removed. I asked him about this after the meeting and he said the Mayor had “an obligation to the public” to assess the property’s value and consider a sale, irrespective of the Commission’s decision to exclude that option.

At the District B meeting last night, Mitch talked about the railroad in similar terms.  I'm paraphrasing here but what he told us was that he came into office immediately asking, "What does the city own?" and how much money do the things the city own make.  The railroad, he "learned," generates "zero revenue" or maybe he said, "zilch." Whatever. It was meant to impress us as a critical point. But public assets aren't held solely for either their revenue generating potential or for their sale value.

The city's "obligation to the public" here is to consider first the value of the service an public entity provides rather than simply its monetary worth in terms of recurring vs one time revenue. You'd think that public servants would understand their primary duty here. But, as Mitch told us last night, they think about these things differently in the 21st Century. And more often than not, what they're thinking is, "sell that sucker."

Always be privatizing

Nobody wants to privatize the Public Belt Railroad. 

Well... except for one party in particular.

Several board members, including board President Pro Tem David Schulingkamp and Kyle Wedberg, said that at this point, they are against moving toward selling the rail.

“I don’t know that anyone has presented in the initial valuation any logic on the sale that is compelling, and I don’t know that it’s even possible,” Wedberg said.

The board gave the study a 60-day timetable to be completed but with the potential of a sale being removed as one of the four outcomes being considered.

However, Ryan Berni, a longtime top aide to Mayor Mitch Landrieu, said after the meeting that the study would proceed with the four options. The city plans to foot the bill, which may cost up to $50,000.

Last time anyone checked in, the possible buyer was....

Questions about the railroad’s future have swirled for more than a year. Previously, Thomas Coleman, the former CEO of International Matex Tank Terminals, announced his interest in buying the Public Belt. Coleman is the father of Dathel Georges, who owns The Advocate along with her husband, John Georges.

Seems like a cunning plan

Step One: Identify a city asset that is neither drains nor produces revenue.

The Public Belt Railroad, created in 1904, was designed to put all the tracks feeding the city’s ports under a single, public entity. The railroad — unique in that it is owned by a city government — owns and is responsible for about 100 miles of track and the Huey P. Long Bridge over the Mississippi River in Jefferson Parish.

The agency does not receive any taxpayer money or pay any money to the city. It is funded by revenue from the railroads that use the tracks.

Step Two: To quote Ray Nagin, "sell that sucker" off and put it back into commerce because, according to the Gospel of Aspen, privatization is always better.

Although the letter does not cite a specific price, it says the sale would allow the railroad to have access to money needed for improvements while providing an “immediate and significant cash infusion to invest back into basic city services, as well as ongoing tax revenues on property currently untaxed.”

Step Three: Identify a buyer through the usual transparent and above-the-board public bidding process.

A sale of the railroad likely would need the approval of both the board and the City Council. It also likely would require a public bid process.

Wait.. hold up.  Buyer already identified himself back before Step One even happened. He's pretty well vetted, though. 

The proposal to sell the Public Belt was sparked by interest from Thomas Coleman, a New Orleans businessman who served for four decades as the CEO of International-Matex Tank Terminals, a company — owned by his family until last year — that runs terminals and storage facilities in Louisiana and other states and a rail line in New Jersey.

Coleman is the father of Dathel Georges, who owns The New Orleans Advocate along with her husband, John Georges.

Anyway, Step Four is Profit!

Links

Railways pitch plan to run New Orleans Public Belt Railroad

As presented, the railway company would set service rates, though that raised eyebrows with some commissioners, who called it an inherent conflict of interest.

Also under the arrangement, employees of the Class I railroads would assume responsibility for all traffic across Public Belt lines, a task that for decades has been handled by Public Belt conductors and engineers.

While the firms would offer the Public Belt's 200 employees preference for open jobs, buyouts or layoffs consistent with existing labor agreements could be in the cards, Santamaria said.

Railroad companies on board with the plan include the Burlington Northern Santa Fe Railway, CSX Transportation, the Illinois Central Railroad, the Norfolk Southern Railway and the Union Pacific Railroad.

Railroad operators get to set their own rates. A whole bunch of people get laid off. Who could possibly have a problem there?

Tenet Health Care settles out of court in the Memorial case. This just on the heels of reports yesterday that the settlement talks had broken down where we read,

"I think it is going to be very embarrassing to Tenet the corporation. I see a number of embarrassing emails and communications that are going to be released," Legal Analyst Tim Meche told WWL First News.

He says the case will come down to a pair of key claims against the former owners of the hospital.

"One, they were warned that something like this could have occurred and they failed to take adequate steps to ensure the safety of their people," Meche said. "Two, once the event happened they were derelict in failing to act to get their people our of there."

Looks like Tenet has managed to save themselves some embarrassment.

Louisiana to opt out of health-insurance exchanges in federal law

(Louisiana Health Secretary Bruce) Greenstein's decision marks the second time that Louisiana has outsourced an aspect of the new law to federal officials. Last April, the state decided against participating in high-risk pools for people with pre-existing medical conditions that leave them unable to buy insurance in the private marketplace.

On the anniversary of the enactment of the health reform law, The Rude Pundit writes about one of its successes while also acknowledging its failures.

Now, you can say what you want about the Affordable Care Act on its one-year anniversary, which happens to be today, and virtually all of your criticism from the left would be correct. It is a massive giveaway to private insurance companies. It doesn't do enough to rein in costs. It doesn't guarantee 100% of Americans will be covered. And on and on, in so very many ways a massive disappointment (and not, as the nutzoid conservatives would have you believe, a government takeover of anything or a violation of the Constitution).

But here's the deal: Dallas Wiens got a face transplant because of it, not because good, conservative, church-going folk stepped up and had cookie sales, not because the myriad organizations that have "family" in their name gave a goddamn. No, Wiens received the first full face transplant in U.S. history because of the government. The operation itself was paid for by a grant from the Defense Department, which is looking for ways to help soldiers who get horrible scars from combat. And the $1300-$2000 a month in drugs that he will need to take for the rest of his life to prevent his body from rejecting the transplant will be paid for by his father's insurance. That's because Wiens is 25. And that inhuman law mockingly called "Obamacare" raised the age that a child can stay on a parent's insurance to 26. Wiens will turn 26 in May. In June, again, because of changes in the law, he will qualify for Medicare as a disabled person.

The redistricting session of the Louisiana Legislature is every bit as horrifying as one would have expected.

Chairman Kostelka, R-Monroe, several times snapping at his colleagues, many of them African-American Democrats, who are pushing an east-west oriented north Louisiana district that would be more racially balanced than what Kostelka proposes.

At one point, he sought to quiet Sen. Karen Carter Peterson, D-New Orleans, addressing her only as "little lady."

Finally, at today's City Council meeting, Jackie Clarkson told Chief Serpas to "keep up the good work"