NOLA

Something about how this deal is financed doesn't sit right with me. The money is almost entirely public: about $16.5 million in state funds from a federal low-income program, some unspecified city and Louisiana Housing Corporation money, a $6.5 million Convention Center loan, $4 million in publicly funded roads and sewers, and a 40-year property tax break. The land stays in public hands, with the developers just holding options to buy rather than actually owning it. By my read, this thing could be close to a 90% subsidy-driven project (if you include PILOT and tax-credit equity), with the developers risking very little of their own money. Right now only about $27 million of the $100 million is publicly itemized as coming from taxpayers.

And it doesn't pencil out on its own, which nobody really disputes. A unit that costs $455,000 and rents for $1,000 to $1,300 throws off maybe 3% before expenses, nowhere near enough to cover debt or pay back investors. The subsidies exist precisely to paper over that gap. So the question I keep coming back to isn't whether the numbers work on paper, they don't, and aren't meant to, it's whether this is actually a smart way to build affordable housing or just a pipeline for public money into private pockets.

The developer fee is what nags at me most. On LIHTC deals these run 10 to 15% of total cost, so somewhere around $10 to $15 million here, and it gets paid out of the tax-credit money, not the rent, whether or not the building ever succeeds. The tax break bothers me too, since the land is already tax-exempt, so what exactly are we exempting, and against what projected bill that nobody's shown us?

But the part that really bothers me is the setup where the Convention Center is the landowner, the lender, and the one paying for infrastructure, all for a developer that's been blowing deadlines since 2021, until a January restructuring conveniently wiped away the obligations it kept missing.

So taxpayers had better pray this thing doesn't financially crater mid-construction because that's the one scenario that Louisiana taxpayers will all end up eating the costs of this "affordable"

housing complex.

quote:
A rendering of The Rivana Aparments in the River District, a view from the corner of Euterpe Street and Convention Center Boulevard. The developer consortium is looking for the final piece of $130 million in financing to build 220 affordable units. The site plan for The Rivana Apartments in the River District, the first phase of residential planned for the huge public-private development on land owned by the Ernest N. Morial Convention Center. The complex will have 220 units, of which 165 will be set aside for lower-income renters.

City Council member Lesli Harris, whose District B includes the proposed $100 million Rivana project and the rest of the River District, said the vote was a win for the city's workers and the community overall.

The original Rivana development team — part of the larger RDNI group led by local real estate veteran Louis Lauricella — includes Brian Gibbs, Tara Hernandez, Michael Merideth, Shawn Barney, and Nicole Webre. The five partnered with Providence in February, giving the nonprofit 51% of the project.

Together, the partners have secured funding from public and private sources, including the Louisiana Housing Corporation, the City of New Orleans, and the Ernest N. Morial New Orleans Exhibition Hall Authority, which is providing $6.5 million toward the $100 million total development. The state awarded $16.5 million sourced from a federal program that supports low- and moderate-income individuals. $4 million from Convention Center for road/sewers plus open-ended infrastructure money in later stages that haven't been identified yet.

The densely built building will include 500-square-foot studio apartments along with one-bedroom units between 650 and 750 square feet and two-bedroom units topping out at around 1,000 square feet.

North said people who earn $15 an hour will qualify for one of the building's 60% AMI units and pay under $1,000 for rent, which she said is half the market rate for the area. She said workers who make $25 per hour will qualify for an 80% AMI unit and pay around $1,300 a month.