Scandal-rocked nonprofit continues to collect rent checks, act as landlord

28th November 2011   ·   0 Comments

By Karen Gadbois
thelensnola.org

The New Orleans Affordable Homeownership program, a city-financed non-profit program that many thought was dissolved amid scandal and a federal investigation in 2008, apparently has continued to operate quietly, perhaps to the benefit of one contractor linked to the scandal.

The program was initially designed to use federal dollars to help elderly and low-income homeowners get back into their flood-damaged homes after Hurricane Katrina in 2005. The non-profit was housed alongside city housing departments, in rented space across from City Hall.

However, a series of investigative news reports revealed that contractors – some connected to then-Mayor Ray Nagin – were billing for work that wasn’t done or at addresses that didn’t exist.

The story broke as residents were increasingly frustrated at the slow pace of recovery, and the suggestion of using federal money to pay for work not being done set off a civic firestorm. Nagin responded defensively, suggesting that the news media was trying to “hurt the recovery.”

Nagin eventually came around to the opinion that “the record keeping, we’re finding, with NOAH is not that good.”

On Aug. 1, 2008, the agency went dormant. It hasn’t filed the necessary federal tax forms since, and the Secretary of State’s records show that the nonprofit has been suspended.

During its work, NOAH acquired at least nine properties, some with still-viable houses. And at least some of them appear today to be actively housing residents and at least one business.

But who’s collecting the rent? How was it negotiated? And is the nonprofit meeting its goal of helping the low-income and elderly?

The Lens set out to answer those questions by submitting public-records requests with the city for all information regarding those properties, including “all communications, contracts, rental agreements, memos and utility bills.”

It took the city more than a month to respond, and it didn’t amount to much.

NOAH had continued operating, but with no executive director and only one board member, investment banker Ed Shanklin. Because the NOAH got a large portion of its money from the city, it was required to provide several reports to the city.

One property with the most information is used as the home and business address for a contractor who the city accused of billing for work not done. The documentation, though, was spotty and all the leases have expired.

The site is at 1329 Gov. Nicholls St. in the Tremé neighborhood.

That property is the office of Doucette and Associated Con­structors, run by Sterling Doucette, one of the original NOAH contractors who may also live there. According to a document on file with the city, Doucette applied for and received in 2008 a certificate of occupancy to run his “home-based business” from that address. He paid the rent checks to NOAH, with amounts ranging from $300 to $700. The six-month lease starting in February of 2010 called for him to pay $700 a month. He also sent rent checks covering the costs of another apartment in the four-unit building.

Doucette also applied for a city-administered federal grant in 2009 using that address.

Doucette was named as one of the six contractors who had been singled out for “discrepancies discovered by the city’s field report” after investigating NOAH. Each was asked to submit proof that they did the work the city paid them for – or return the money.

Out of the six, one has returned money to the city, and another was found to have been listed in error because it did no work for the city and had no contract. The other four, including Doucette, neither provided the proof nor paid back the city.

Mayor Mitch Landrieu’s spokesman, Ryan Berni, said the city is working now with Doucette Associated Contractors’ attorney to resolve the matter.

Doucette did not return calls seeking comment for this story.

Another occupied NOAH property is in the 2400 block of North Robertson Street. It is located next door to another former NOAH property that had been transferred to Sterling Doucette without NOAH board approval back in 2007. The city provided no information regarding the NOAH property on North Robertson, in response to our records request.

Not far away, two shotguns sit side by side on North Villere St., across from the newly remodeled Craig Elementary School. Despite its tall grass and dilapidated exterior, these houses have been issued no code-violation citations, said Meg Lousteau who owns adjacent properties. Lousteau runs a French Quarter association and regularly monitors such violations and housing records.

“I am shocked that they (NOAH) still have anything to do with this property,” She said. “ I wonder why NOAH does not take care of it. The weeds are eight feet high.”

Someone paid the Sewerage & Water Board two payments of fewer than $1,000 for service at the properties, but the city had no lease or other receipts.

Another NOAH property on Foucher Street appears occupied but no lease or receipts were provided, although a payment for a little over $600 was made to the Sewerage & Water Board in August of 2010. Further, permits issued by the city show a Bridget Reed claiming to be the owner.

But Reed told our reporting partners at FOX8 that she has no idea why that is and denies ever filing the permit.

Two other NOAH properties on Chef Menteur Highway had racked up $17,000 in code-enforcement fines before the city paid to knock them down this year. And a commercial property on Mayo Road owned by the nonprofit has more than $220,000 in unpaid property tax, dating back to the 1990’s. Further, Berni, the city spokesman, said the site has health and environmental violations judgments against it, and the city would need to initiate a new inspection process to start taking action on it.

On November 9, a week after The Lens’ public records request was fulfilled, the city called a special meeting of the New Orleans Affordable Homeownership board of directors.

At that time Shanklin, the lone member of the board, stepped down and was replaced by three city employees: Brian Lawlor, director of housing policy; Anthony Faciane, a prominent fixture in the earlier investigation and who continues to work in neighborhood revitalization; and Jeff Hebert, director of blight policy and neighborhood revitalization.

Shanklin declined to comment on the changes.

Lawlor said plans for the agency include determining if there are any legal leases. “The staff is reviewing records so we can find out who lives there,” he said.

When questioned why Faciane was included on the new board, Lawlor said, “His role was the receiver of the checks, He kept track of what came in” under NOAH.

Lawlor defended Faciane’s role, saying he wasn’t responsible for the lack of proper leases or other documentation. He said Faciane, a longtime city employee, only acted as a recipient for the checks.

Lawlor said his task on the NOAH board is simple: “My job is to turn properties around.”

He said he plans to “get control of the properties” as soon as possible, then transfer them to the New Orleans Redevelopment Authority.

That agency is responsible for holding and maintaining empty properties, particularly those that were bought out by the Road Home, and working to return them to commerce. Generally, though, the redevelopment authority does not manage occupied properties.

This article was originally published in the November 28, 2011 print edition of The Louisiana Weekly newspaper