Danger! Exploding real estate

It looks like the on again, off again, proposal to move City Hall over to the Municpal Auditorium site is trying to be on again.

Mayor LaToya Cantrell is taking the first steps toward perhaps converting Municipal Auditorium into New Orleans’ next City Hall.

Several previous mayors have talked about moving city government out of the building on Perdido Street that it has occupied since the late 1950s. The possibility of a move was given new support last fall, when a study commissioned by the Cantrell administration found the current building was in serious disrepair and not well configured for the current and future needs of the city’s government.

And with $41 million in FEMA funds on the table for renovating Municipal Auditorium, administration officials are homing in on it as their future home.

As far as I can tell that $41 million in FEMA funds has been and continues to be the main motivation for keeping the Auditorium on the list of potential sites. By all accounts, the difficulty of renovating the building, the lack of space, and probable opposition from the surrounding neighborhood all seem to be factors working against it.  The only positive argument for it in my mind is the old line Carnival Krewes who used to stage their balls in the Auditorium still view it as a kind of holy ground. Permanently desecrating their monument with city offices does hold a certain symbolic appeal.

The other thing that's happening is they are running out of options. The long rumored Charity Hospital option favored by Mitch Landrieu came off the board late last year when we handed most of that over to Sonder.  Also I see the VA building mentioned as one alternative in that T-P article. I may be misremembering this but I believe I heard that suggested as one possible desitnation for the soon-to-be-displaced Ozanam Inn.* The defunct Naval Support Station property has also been mentioned in the past but there are multiple problems with that including the fact that it's so out of the way for most people.  Generally one would think that a City Hall should be centrally located and accessible to transit.

I say "would think" that because Jay Banks has other ideas.

Banks said his first choice would be to move City Hall — along with the Sewerage  Water Board offices and Civil District Court — to a campus in New Orleans East, where their employees could provide an economic shot in the arm for the area.

Would it "provide an economic shot in the arm," though?  How? This seems highly doubtful.  Maybe Jay can produce some research.  Or, more likely, he's just making stuff up. Worse than that, he is making stuff up from out of a brain conditioned to make decisions about public services and land use based primarily on speculative ideas about real estate values.

For example,

Then there’s the possibility the city could recoup some of its costs by selling the property that now houses City Hall and Civil District Court, taking advantage of a real estate boom in the Central Business District.

Have we not heard enough about things going "boom" downtown lately? Maybe it's time to back off of that for a while.

* Update: Well now we know where Ozanam Inn is going so that's something.  Still no word on what's supposed to happen to the building they're vacating, though.

The real problem with caring for the homeless is there's no money in it

Ozanam Inn is being kicked out of its building after 64 years. The reason is it turned out, finally, to have been bad business?

According to its tax filings, St. Vincent de Paul over the past four years has seen a sharp step-down in gross receipts, from nearly $900,000 in the year ended September 30, 2016 to below $600,000 in the year to end September, 2018, the latest tax year filed.

Expenses have consistently outstripped revenues, and in the latest year, the accounts show an unexplained $311,000 write off in the value of its assets which, together with the deficit, meant assets fell to $1.75 million from $2.1 million.

The society at one point operated a half dozen thrift shops in New Orleans, but this has contracted in recent years so that it now operates just one shop on the Westbank, on 4th Street in Marrero.

The article points a bunch of fingers at the St.VdP director. And who are we to say anything about that situtation. But the bigger question here is, was booting a homeless shelter out in favor of a "hotel and parking garage" during a housing crunch really the best solution?  Who decides these things anyway?

Maybe it's just plain old capitalism at work where all parties compete on perfectly equal footing in the fair and free market.  Right?

Demma went on to say that Ozanam Inn would have the right of first refusal to buy the Camp Street building if they could come up with $100,000 "earnest monies" and reach a deal on the final amount.

Last month, Demma told members that 843 Camp Street had been sold to an unnamed developer. Documents showed that the building was sold for a nominal $100 and that St. Vincent de Paul issued a $2.69 million mortgage note to Excel Advertising Group LLC, a company registered in Delaware, which is the official buyer.

Ozanam says their $3.5 million offer was rejected in favor of this $100 dollar up front investment. So whose money is that?  Stay tuned because it is a mystery.

Although the story does provide us with a tantalizing lead.

Excel lists Michael Boudreaux, a New Orleans property management agent, as its sole officer and he signed the sale document. Also, John Holmes of True Title in Metairie was listed as the buyer's authorized agent on the sale. Neither responded to requests for comment.

Several people who have been privately briefed and didn't want to be quoted by name said the owner is a long-time New Orleans developer who has built hundreds of condominium units, sub-divisions and commercial real estate in and around the city, including the conversion of a landmark riverside historic property into condominiums.

LOL, they obviously know who it is. Is it Sean Cummings? That sounds a lot like Sean Cummings. It could be several other people too. (I think the suggestion that it could be Marcel Wisznia is kind of elegant since it makes sense that the guy building a "co-living" development would be interested in a homeless shelter.) But why give us this many clues and not just say who it is?  I'll bet John Georges knows who it is.

John Georges, who along with his wife, Dathel, owns The Times-Picayune|The New Orleans Advocate, said the company — a direct neighbor of Ozanam Inn — is interested in jointly developing the proposed parking lot.

"We would certainly welcome the redevelopment, and I was happy to hear Ozanam Inn has opportunities for other locations that should be announced before the end of the year as part of a master plan to address the homeless situation," said Georges.

So instead of Ozanam buying the building for $3.5 million, we have this alternate transaction where it transfers (for $100!) to a mystery "long-time New Orleans developer" and John Georges is possibly cut in on it in some way.  Of course that looks real bad if it means actually booting homeless people onto the street. We're gonna need some help to keep that from happening.  Luckily the city has already stepped in to facilitate.

Ozanam Inn's plans depend on a broad agreement with homelessness agencies being negotiated with the city of New Orleans.

"We are aware of the recent sale of Ozanam Inn's building, and we're in close contact with their staff and board of directors as they determine their next steps," said a spokesperson for the City, who declined to comment on talk among homeless advocates that city land on Poydras Street near South Claiborne Avenue had been earmarked as an alternative location for Ozanam Inn and other housing.

This looks like it's been in the works for quite a while. Rich developer gets a free building. Local magnate gets a piece. The city gets to maximize the property's revenue potential. All they had to do was scoot a decades-old charitable institution out of the way. Remains to be seen what the city's homeless advocates and their clients end up with out of the deal.  We sure hope it's a "fair share."