by Bill Barrow, The Times-Picayune
Sunday November 30, 2008

BATON ROUGE — Almost two years after the federal government promised Louisiana $74.5 million to build alternative post-disaster housing units, not a single one has been built. And now two deadlines are approaching, one that could force the state to seek extensions or risk losing unspent money.

The Federal Emergency Management Agency official who oversees the four-state Alternative Housing Pilot Program insists that he has no worries about whether Louisiana can meet a key September 2009 deadline to build “Louisiana Cottages” with its share of the $400 million program.

“They are on time to meet the implementation schedule,” said Randy Kinder, the Washington, D.C.-based program manager for a project that in Louisiana has spanned almost two years, two governors and a change in the state agency with oversight responsibility.

Another deadline, carrying less potential fallout if it is not met, is even closer. The state pledged to “use its best effort” to tell the contractor by the end of the year where the state wants all of the homes built. Failing to meet that commitment carries no specific penalty for the state.

But missing either deadline would be an embarrassment for Louisiana, which complained loudly in December 2006 when the Bush administration allocated the money for the housing program, which was designed to demonstrate alternatives to FEMA trailers for future disasters.

Mississippi was awarded $280 million — more than triple Louisiana’s take, even though Louisiana suffered more extensive property damage from Hurricanes Katrina and Rita. FEMA said from the beginning that the allocation was not based on need but on an evaluation of the proposals for future disaster housing units.

Since then, Mississippi has completed the initial phases of its program, putting occupants in 2,818 units, near its initial goal of 3,000.

Kinder discouraged any comparisons among the four states involved in the program, pointing to the program’s experimental purpose and the varying approaches of Alabama, Mississippi, Louisiana and Texas.

“We would like to have seen homes sooner (in Louisiana), but we understand with a change of administration, changing the agencies,” Kinder said. “The one thing that I always caution everyone, we have to remember this is a pilot program. . . . We are very supportive of what all (states) are doing.”

Louisiana Recovery Authority Executive Director Paul Rainwater, whose agency has state oversight of the Louisiana project, struck the same tone, assuring his board of directors at its November meeting that plans were on track.

Yet the lead contractor responsible for building up to 500 cottages stops well short of any guarantees, suggesting that the burden is on LRA to expedite site selection and to clear other bureaucratic hurdles.

“We are making progress at the Jackson Barracks site,” said Ben Dupuy, a principal in Cypress Realty Partners, referring to the Louisiana National Guard headquarters where about 90 cottages are planned for people employed by the state Military Department.

Dupuy said site preparation — such as the installation of utility infrastructure, streets and curbs — should begin next month, following a scheduled meeting with the subcontractor.

As for the rest of the project, Dupuy said: “We trust all of the other sites will be secured in time to comply with FEMA’s deadline.”

The date in question is Sept. 17, 2009, two years after FEMA and the state agreed on Louisiana’s design.

According to the federal rules that FEMA published when it first solicited proposals from states: “Funding that is not obligated, e.g. under contract, to an active project will be de-obligated by FEMA” by that date.

FEMA’s September 2007 agreement with Louisiana allows for an extension, with the caveat that reprieves “will not be granted automatically and must be supported by adequate justification in order to be processed.”

At issue is how FEMA will interpret “under contract” and how it judges Louisiana’s progress. Kinder did not state definitively FEMA’s standards on either front, but repeated his forecast that Louisiana will have “completed the construction phase” by September, even if many of the units remain vacant.

The Dec. 31 deadline is softer because of the language used in the agreement between Cypress and LRA. But the goal clearly was for LRA to identify all sites and issue “notices to proceed” by that date. The notices trigger a series of construction deadlines that Cypress must meet to avoid penalties.

Besides Jackson Barracks, LRA has issued orders on a Lake Charles site and a handful of individual sites controlled by the New Orleans Redevelopment Authority, which is taking custody of lots that homeowners sold to the Road Home program. But each deal comes with a hitch.

The estimated 90-cottage community development in Lake Charles still awaits final approval by the City Council. Many NORA lots await federal environmental reviews, and it remains unclear whether the promised 100 lots will materialize.

The first NORA homes, Rainwater said, will be in the Hoffman Triangle in Central City.

Rainwater did not mention the site selection deadline in his comments at the LRA’s November board of directors meeting. He told the panel the Jackson Barracks construction would be complete in July 2009, with the Lake Charles construction complete by September 2009.

For New Orleans, he said, negotiations are ongoing with NORA, Providence Community Housing and the Housing Authority of New Orleans. He offered nothing definitive about a potential site in Baton Rouge, though the city has been assumed from the start as a location for the cottages.

In raw numbers, Louisiana’s progress ranks far behind the 2,818 units placed in Mississippi, and smaller projects in Alabama and Texas appear further along as well.

Kinder said that’s a function of the “different approaches” used in the varying states.

Mississippi, for example, ran its entire program through the state Emergency Management Agency rather than with one primary developer. The state placed smaller housing models — more durable than FEMA trailers but less substantial than “Louisiana Cottages” — on individual lots in coastal counties.

Mississippi authorities are now determining how many of their models, many of them on wheels, will be converted to permanent housing by taking off the wheels and securing the units. That process is scheduled to be complete by Mississippi’s April deadline, two years after FEMA approved that state’s plans.

Kinder conceded that Mississippi secured approval for its program much earlier than Louisiana, with the latter beset by protracted negotiations between Cypress and the Louisiana Housing Finance Agency. Then-Gov. Kathleen Blanco tapped the housing board, which typically deals only in the financing of housing developments, to oversee the state’s grant. Gov. Bobby Jindal transferred the work to the LRA.

But Kinder pointed out that Alabama beat Louisiana only by a month, while Texas trailed all others, not finalizing its deal until January of this year.

Kinder said taxpayers should resist judging the program by the speed with which it offers housing to people that Hurricanes Katrina or Rita displaced. “This was never an initiative” intended to alleviate housing shortages, he said. “It was an initiative to find alternatives for future disasters.”

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