Expropriation Law Inside the Footprint

I've noted the existence of a variety of law suits relating to the over 150 expropriations in the VA and LSU sites over time.

Derrick Morrison from the Committee to Reopen Charity recently excerpted from one that I haven't highlighted in depth to date here on the blog - the suit filed by the Blood Center of Southeast Louisiana.

The Blood Center was evicted from its facilities earlier this month after expropriation (see above notice photo and move out photo below) and is now operating temporarily out of a former car dealership in New Orleans East.

What are the chief legal arguments involved in the suit against the LSU Board of Supervisors?  Well, many of them align quite closely with the more general arguments that have been raised here and elsewhere:

The attorneys for The Blood Center make some great observations:

Here's a view of the Blood Center's current home out in The East:

Ensnared

The double shotgun house at 2000-02 Cleveland Avenue is visible through a coil of concertina wire in the LSU Footprint, proposed site of the UMC hospital project which continues to lack both a business plan and adequate financing.  The house and the property it sits on are the subject of an expropriation-related lawsuit.

The structure has been prepped for ostensible relocation outside the footprint.

Kennedy on WBOK this morning

On the radio:

8:03 a.m. - He just mentioned building out a 250-bed facility in old Charity.

The question remains: what happens with all the properties in the proposed UMC Footprint?  A caller says that if the hospital is not built...it looks like a land grab.  Well, it has looked like a land grab from the outset.

Kennedy rights points out that he warned the state against taking property via expropriation without financing and a workable business plan in place.

But the Governor and LSU, etc. knew what they were doing - they can now present people with a sense of "the fix is in" - a fait accompli.  "What are we supposed to do now that we demolished everything?"  It's the height of irresponsibility.

8:06 a.m. - Kennedy says what we've known all along: the state decided to shutter Charity Hospital after the storm even though it had been cleaned up and was ready to go shortly after the storm.

8:08 a.m. - Girod is now reading off some of the over 25 co-sponsors hosting the event tonight, including Inside the Footprint.

The Outer Banks Saga Continues

The bar's former owner, Greg Guth, is not giving up.  He continues to wage a legal fight regarding the expropriation of his property in the VA Footprint and the compensation provided to him:

[Click to expand]

You'll note that the press release decries LSU.  The LSU Board of Supervisors technically made the expropriations in the VA Footprint...to obtain the property for the City of New Orleans...which was required under the 2007 MOU to provide VA with the land for the site.

Fundamental Questions about the UMC

These are such simple questions, that they've been somewhat overlooked by far too many in the ongoing fight over the UMC hospital:

Is the UMC (University Medical Center Management Corporation Board) - created by the State of Louisiana to secure funding for and operate the proposed University Medical Center (and formerly the EARL K. LONG MEDICAL FOUNDATION, INC.) - a public or private entity for purposes of determining whether a government taking involves a legitimate "public purpose"?


Upon legal challenge, would expropriation of various private properties in the LSU Footprint by the LSU Board of Supervisors be found valid under the Louisiana State Constitution?

I don't know that these questions have truly been answered.  With dozens of UMC property-related lawsuits underway, perhaps we'll slowly see answers emerge.  Or perhaps we'll learn sooner.  Feel free to opine in the comments.

Eviction Notice

Law suits filed against LSU challenging Footprint expropriations

I know of at least two suits that have been filed recently by property owners in the LSU Footprint that challenge not merely the amount of compensation for expropriated property, but other aspects of the takings as well.

For example, here's the opening of The Blood Center's attempt to impose a Temporary Restraining Order (TRO) and obtain injunctive relief:

Somewhat ironically, I know that a number of former residents of the LSU Footprint saw the Blood Center take over properties in the neighborhood...removing houses from two full squares of the neighborhood, making part of it "green space," and doing little with much of the property after Katrina.  As with just about any aspect of activities and controversies in the Footprint, things are complicated.

Additionally, a property owner on Cleveland Avenue has filed a suit that directly challenges the legality of the government taking, the expropriation by the LSU Board of Supervisors.  The City of New Orleans is also named as a defendant.

Here is a sampling:

More on Senator Vitter's Criticisms - and the "study"

Both yesterday's Times-Picayune article and the evening AP article on Senator Vitter's critique of the proposed UMC Hospital introduce an interesting new twist into the controversy.  It's the claim from the state and UMC that there's a study underway that might result in the project being scaled back:

"Jindal's Commissioner of Administration Paul Rainwater said Monday the HUD-backed financing is one of several options the state is pursuing. He said the board appointed to oversee the new medical center's development is awaiting a study that could scale back the project."

That's news to me.  As of the Thursday UMC Board Meeting, there was no discussion of a study on scaling back the project.  Correct me if I'm wrong, but there was not a peep about moving in such a direction.

Instead, Jerry Jones from the state insisted repeatedly and very overtly that the state was in no way going to build a smaller hospital complex.  I can't tell you how clear he made that point.  I remember because I was skeptical of the claim every time it was made.

If the project is going to be scaled back, it should be put in the existing Charity Hospital shell as Vitter rightly suggests.

And there's also the nagging problem of the expropriations involved in acquiring the proposed UMC site.  If the state hasn't really needed all of the 37-acres in the site...then the taking of many properties was arguably not in furtherance of a public purpose.

At any rate, these concerns and developments are all the more reason to show up at the City Planning Commission hearing today at 1:30 p.m. in City Council Chambers.  Show up and speak against the state's premature attempt to revoke all the streets in the UMC Footprint.

Here's a solid new editorial at The Lens explaining why the street revocation would be unwise.

OPSB Files Suit Against State re: McDonogh No. 11

Here, per the Times-Picayune.

And WWLTV, the source cited by the Times-Pic:

“We do not know if it is possible to move McDonough No. 11, and, if not, we hope the State will incorporate the building into the new hospital as we have long suggested.” Moran said.

Regular readers of this blog knew almost a month and a half ago that OPSB was mounting a legal challenge to the state's compensation for McDonogh No. 11.

"the money is in hand": An Open Response to Bobby Jindal's TV Appearance This Morning

No, Governor, the money is not in hand for the proposed University Medical Center in New Orleans.  It most definitely is not.

I have so many issues with the Governor's appearance on WWLTV this morning that I don't know where to begin.  And that's coming from someone who had high hopes for Bobby Jindal as a smart new kind of thinking conservative at the outset of his term as governor.

Watching the interview and Jindal's eyes-down, driving delivery ("It's absolutely going to happen."), it's almost as if he's simply trying to will the hospital into being, despite all the very real obstacles that remain.  That lines up with the state's approach on the ground for much of 2010. 

Let's run through a few of the claims made in the tv appearance:

1.  Shared services.  The whole premise of the "LSU/VA" hospital being co-located for synergy was long ago revealed as bunk.  And yet people continue to talk as if the hospitals are a joint venture.  Jindal says backroom facilities will still be shared.  What does that mean?  The host didn't push for any details.  I won't believe it until I hear concrete specifics.  The two facilities will open at such vastly different times at this rate that I don't know how either one could rely any any critical joint functions, unless the UMC is going to rely on VA services and not the other way around.

2.  A number of possible funding sources to make up the financing gap - What exactly are these mysterious sources?  In the late fall, it was very clear from consultants at a UMC Board meeting that if HUD did not approve the application from the UMC, the private bond market wouldn't touch the $400 million gap with a ten foot pole.  HUD's process is rigorous and does not guarantee funding to applicants by any means - and UMC still hasn't procured mortgage insurance from HUD.  In fact, HUD had a number of concerns about the initial UMC application - on major issues like design.  The money is not in hand.

3.  The vast majority of demolition will be done by April.  Perhaps - the state was demolishing movable, recently occupied, historic homes through the fall and winter, getting far out ahead of the financing, as noted by a UMC Board consultant.  But not all of it will be demolished by the end of April, that's for sure.  The state said it was going to move houses off the site, and that has yet to happen.  Really, it's good that the Governor corrected himself after saying that all demolition will be done by April.  There are still some major legal issues to deal with - and some big time parties, like OPSB and the Blood Center.

4.  They can start construction today - Really?  Wouldn't that jeopardize the critical HUD funding?  Aren't houses being moved off the site first?  What about the fact that streets necessary for completing the project have not yet been revoked by the city?  It's important to note that the WWLTV shots of construction that served as part of the story were shots from the VA Footprint - not the UMC Footprint, where things are on hold.

5.  They continue to buy properties - And expropriate them.  Just remember that.  Bobby Jindal has some issues when it comes to respecting property rights.  Never once did he mention that the state is using its power of eminent domain to take private property, despite the alternate sites that were and are available.  I hope he talks to the small business owners of the Canal Street Guest House, for example, who are being driven out to make way for the project.

Overall, I would have hoped for far more searching follow up questions from Mr. Paulsen.  The only positive was the Governor's mention of working with the city to save McDonogh No. 11, which would be good.  I'm genuinely glad that the state recognizes the building's importance.  But, as I've laid out here earlier, it's premature to talk of moving the building when the money is not in hand.  And when it may cost less to change the design and incorporate the building...than to move it.

Blood Center on state's UMC plan: "I guess I find it somewhat ridiculous”

This issue involving the Blood Center, one of the largest occupants of the LSU Footprint, is even fishier, as pointed out in a WWLTV piece:

In the meantime, the state says it has gotten two appraisals on the Blood Center properties and made an offer based on "the higher of the two appraisals."


But Weales said this is where the disagreement over the value of the Blood Center's properties becomes curious. He said the state refuses to show him its appraisals.


“Which I find somewhat appalling,” he said. “I guess I'm wondering what are they trying to hide from me at this point?”


We have asked spokesman Michael DiResto why the Division of Administration has refused to provide a copy of its appraisal. He said, "We do not give out copies of appraisals to any property owners..."


The Blood Center has bought a building in the 2600 block of Canal Street and the land behind it for the new Blood Center. But since the teaching hospital will be one of its biggest clients, Weales argues it makes more sense for the Blood Center to stay where it is right now.


“Being the fact that we are a biomedical company and we are the provider of blood and blood components to the Medical Center of Louisiana,” Weales said, “it makes perfect sense for us to be in the middle of the biomedical corridor.”

Mr. Weales was asking all the right questions and making all the right observations.  In fact, I'd go so far as to say that he was on fire:

And Weales says to take a look at the footprint for the new hospital. It shows the property that the Blood Center now occupies on the corner of the campus will be green space.


“So I'm really curious as to why they need this property,” Weales said.


At a time when the state has a budget crisis and when it still doesn't have hundreds of millions of dollars lined up to finance the new hospital, Weales argues it makes no sense to pay millions of dollars -- whatever the final price -- to build green space around the new hospital.


“Absolutely not,” Weales said. “Not only that they have yet to be able to completely finance this project.”

Property Acquisition Surges in LSU Footprint

The LSU Board of Supervisors continued expropriations in the LSU Footprint in February and March (records show two parcels were expropriated on March 1, 2011). 

Transfers of parcels increased in February after a long lull, due in part to the title records crisis at CDC.

The LSU Board and "Division of Administration Office of the Governor" paid the following prices for properties (it's not clear if these were expropriations or mere sales), according to a listing of transfers between Feb. 17-23:

1905-07 Cleveland Avenue - $198,260

2024 Cleveland Avenue - $164,000

2038-40 Cleveland Avenue - $120,000

1827 Palmyra Street - $138,000

1915-17 Palmyra Street - $200,000

2127 Palmyra Street - $171,800

1809 Tulane Avenue - $65,000

Notes on Dixie Brewery Expropriation

I managed to stop by Civil District Court briefly this morning, and I found the following in the clerk's office:

Dixie Brewery Co. filed suit against the LSU Board of Supervisors on February 16, 2011 seeking declaratory judgment. 

On February 25, 2011, the LSU Board of Supervisors filed for expropriation against Dixie.  Luke F. Piontek is listed as counsel for LSU in the matter, 1515 Poydras Street, Suite 2330, (225) 929-7033.

Thus, the question remains about whether the VA has determined the building to be structurally sound now that several weeks have elapsed since expropriation - and since the building remains fenced off.

Dixie Owners File for Temporary Restraining Order

The owners of the high profile building, given that expropriation of the property is anticipated, filed for a TRO today with Judge Giarrusso in Civil District Court here in New Orleans.  Burgos and Evans have been retained as counsel.

 The Dixie Brewery, constructed in 1907, is a landmark, and I hope that it can be saved.

*All photos in this post courtesy of Ms. Sandra Stokes

OPSB Fighting State on McDonogh No. 11 School

Rumblings emerged several weeks ago, but on Thursday, at a preservation event, things became a bit more clear.

The Orleans Parish School Board is currently fighting the state, legally, over the amount of compensation proposed for McDonogh No. 11 School in the LSU Footprint.

According to OPSB officials, the state is apparently offering or valuing the building at $2 million, but the state is seeking replacement cost - the cost to building another school - because it was a public facility.  OPSB says the replacment cost is $26-$30 million.  Just a slight difference.  A total of approximately $7 million was spent renovating the 1879 school building in the preceding decade - $3 million prior to the storm and $4 million after.

It does not appear that OPSB is looking to retain the school on into the future or prevent demolition; it is simply seeking what it feels is just compensation for the property in the path of the proposed hospital.  As you likely recall, the students of what was Priestley Charter School were forced out of the school over the holidays and are now attending modular units out on Almonaster Avenue.  A major New Orleans law firm has been retained by the OPSB, although the building had not technically been expropriated as of last Thursday evening.  Despite that fact, the state's contractors were onhand as Cox cut various lines going to the school building some weeks ago.

I do not claim to be an expert in the nuances of Louisiana's law regarding eminent domain by one public entity against another.  But one figure close to the story noted on Thursday that the fact that the state was expropriating a public building mean that the legal uncertainties could result in "OPSB simply expropriating it back" - which sounded pretty interesting.  I am not aware of OPSB's expropriation powers - or if it has "quick take" authority like the LSU Board of Supervisors, the entity expropriating properties in the Footprint.

I also learned that the School Board intends to give the stone marker above the door at McDonogh No. 11 to the city's firefighters - it commemorates the death of two firefighters who died in the line of duty fighting the blaze that destroyed the Madison School, an earlier building on the site.

All Alone

The one-time home of Robert Rogers stands alone on the last remnant of Palmyra Street left intact inside the VA Hospital Footprint.

Rogers fought (and seemingly continues to fight) bitterly against the pressure to force him out - especially after he found out that the person who had occupied the other half the shotgun got more compensation than he did.

To the Dance Studio

Now that Outer Banks Bar has been demolished, the Committee to Reopen Charity Hospital will be meeting in a new location in the LSU Footprint this evening:

6pm-7:30pm

1926 Canal Street

Canal Street Guest House Dance Studio

The Canal Street Guest House is being expropriated and displaced - and the comparison properties used in the assessment of the property, from what I understand, consisted of lodging facilities that are not located on the streetcar line, a crucial aspect of the business' current location.  Thus, the compensation offered by the state for the taking, at least initially, did not reflect the value of the property.

"There have been some very big concerns about the state moving ahead with the new teaching hospital after Mayor Mitch Landrieu criticized some of the specifics of the state’s plan for the proposed $1 billion design."

Right - and it's good to see the local television media questioning Governor Bobby Jindal about just how he plans to pull off the project given all of those concerns.

And there were concerns even before Mayor Mitch Landrieu questioned the UMC design for the LSU Footprint.  Many of them remain.  And they extend far beyond the design alone.  They extend beyond the conveyance computer crisis.

For one, the size of the site itself is still excessive.  The design changes may alter the chess pieces that sit on various spaces on the board, but the board size itself remains in place.  The UMC Footprint boundaries have not been altered.  Rehabilitating the existing Charity Hospital building is not back on the table - or, really, finally on the table for the first time since Katrina - from what I know.

Additionally, the question of funding remains.  The UMC Board likes to talk as if the funding will fall in place - but it will take months to determine whether HUD will be able to back the remaining financing necessary to actually build the proposed hospital.

Beyond that, the continued demolition of historic structures that contribute to a national historic district continues.  There is no concrete house moving plan for the UMC Footprint, unlike on the VA side of the project.

There are also people who continue to reside in the UMC Footprint - a fact that seems lost on Governor Jindal and others.  There are also numerous working businesses in the site, some of them multi-million dollar enterprises - a security company, a guest house on the streetcar line, a uniform shop, an electronics firm, an independent auto parts store, and auto mechanic shops.  The massive Blood Center will also have to relocate, as well as a charter school, Priestley, where students will be dislocated and moved to modular units halfway through the school year (over the holidays).

In fact, I wonder how many conservatives and Republicans across the nation know that Governor Bobby Jindal is backing an urban renewal-style government project that entails widespread use of eminent domain (expropriation here in Louisiana).  I wonder if property rights advocates know that Jindal is backing a project that is now contemplating retail - private enterprise - as a direct beneficiary of the land acquisition in the UMC Footprint. 

I bet they'd find that interesting.  I know I do.

Dixe Brewery Update

For starters, here are two idyllic renderings of the proposed VA Hospital site that show incorporation of a significant portion of the Dixie Brewery building as part of a research facility.  The images come from the VAMC Site-Specific Environmental Assessment put out in April 2010.

But what's the status of the landmark brewery building at this time?

Here's what I learned late last week from a reliable source:

"...owners of the Dixie Brewery were called in [Wednesday] to learn they have 7 days to accept the offer of $52,285 for the site. But that doesn’t matter because they were told the state will seize it on Monday and demolish it by the end of week.

The appraisal for the site was $1.89M ($1,077,000 for the land – and $813,000 for the brewery and improvements) – but they subtracted off a “remediation” amount of $1,837,715.  They wanted to offer them nothing – because they feel that the property has a “negative value.” The brewery is an icon. Certainly the land is worth more than $52K."

As LSU lines up its "quick take" eminent domain authority, it's difficult to see how $52,285 can be considered just compensation for the Dixie Brewery site.  Even if the remediation costs are close to accurate, I'd like to know what comparison properties the appraisers used to determine the value of the brewery and the land:

While the property certainly is not "needed for construction" of the VA Hospital despite the State's contention, the owners have until this Monday (7 days after they received the offer) to accept the offer or face expropriation:

In other words, the government tells you: take our lowball offer with little notice or we're going to take the property.

The owners of the brewery sent a letter to the City on October 10 of this year complaining of structural damage to the building due to heavy construction on the adjacent properties and streets, as well as crippling uncertainty for potential investors due to the hospital plans.

These additional tidbits of information from the November 2010 VA Medical Center Interim Report (under the Programmatic Agreement) should also be considered because they seem to indicate a different brewery acquisition timeline than the one that's currently playing out:

• VA is awaiting access to the Dixie Brewery to be provided by the State of Louisiana in order to assess the structural stability of the building and determine if it is feasible to retain the structure per Stipulation V.B.2.(c).ii. Access to the building is tentatively scheduled for January 2011. VA anticipates the feasibility study will be completed in 2011.

• VA will commence documentation of the Pan-American Life Insurance Company Building and Dixie Brewery when provided access to these structures. (Stipulations V.B.2.(c).iii., and V.B.4.(b).ii). It is anticipated that documentation of these structures will take three months to complete.

• VA will secure and ventilate and Dixie Brewery upon receipt of ownership per Stipulation V.B.3.b.(iv). It is not anticipated that this will take place until, at earliest, January 2011. VA will secure and ventilate these structures within six months of acquisition.

First, it seems the State of Louisiana is actually going to force access to the building as early as late November - as in, tomorrow.  Second, VA has had access to and ownership of the Pan-American Life Insurance Building for several months at this point - and VA has done work on it.  Third, again, it seems that acquisition of the brewery is being fast-tracked compared to the estimate presented - although, as this note in the City of New Orleans' Nov. 23, 2010 report points out, the City anticipates an interim stage where it will have control of the property after the State expropriates and before the VA obtains possession:

The City will secure and ventilate Dixie Brewery as per Stipulation V.B.3. (iv) and until the transfer of ownership to the VA;

This period of City ownership is key.  While I would encourage anyone concerned about preserving any portion of the Dixie Brewery to contact Mayor Landrieu and the City Council regardless, this anticipated timeline of actual City control of the building means the City has a true chokepoint where it can act to do the right thing as far as retaining as much of the landmark property as possible.

"minor win" and Major Question

The Times-Picayune was right to characterize some LSU Footprint design concessions by the State of Louisiana as a minor win.

Thanks to Mayor Mitch Landrieu for pressing the State on the concerns and commissioning Goody Clancy to study the issue.  It's good to see that the City made efforts to retain its prerogative to close the streets and permit for a staggered closing.

There also won't be nearly as many acres of surface level parking lot.

Still, even with design changes, the real problem, the size of the footprint, has not changed, from what I can tell. Nor has the expropriation of properties in the UMC Footprint stopped (unless due to the CDC computer crisis).

Really, this minor win...opens up even more questions. Why?  Because eminent domain is definitely in the mix when it comes to seizing properties for the project. And the State is talking about putting in private retail on portions of the site. Even the state is aware of the potential pitfalls of using government takings to turn over land to private entities:

Additionally, Jerry Jones, the state's property and construction chief, confirmed that both parking decks will have retail spaces on the ground level, fronting Tulane Avenue. He also said patient towers to be built along Canal Street will be pushed back from the curb to allow private retail development. That is contingent, Jones said, on getting legal clearance for such land use given that the state is cobbling together the land using eminent domain that requires a valid public purpose for the overall project.

Using takings - forcing some people out of their homes against their will in this instance - for the benefit of private development, like retail space, is what happened in one of the most widely reviled Supreme Court cases in recent decades, City of New London v. Kelo.

Will the state risk it?