Affordable apartments planned for Federal City | Business News

Plans for a new residential development at Federal City in Algiers are taking shape, after years of failed initiatives and spotty progress.

Earlier this month, the Algiers Development District, the government agency that owns the 200-acre former military base on the Mississippi River, received the Louisiana state approval it needs to move forward with construction of a new apartment complex, with 70 one- and two-bedroom affordable income units targeting elderly residents and military veterans. Groundbreaking is scheduled for June, and construction is expected to take about 18 months.

The complex will provide affordable housing and is the first of two apartment projects underway at Federal City. The other — 86 market-rate units planned for a 1904-era building — is still in the design stage, and construction won’t begin until at least 2024.   

The Algiers Development District’s executive director, Kathy Lynn Honaker, said the recent progress is the “culmination of several years of development efforts, which were interrupted by the pandemic and further slowed by circumstances surrounding Hurricane Ida but are back on track and doing well.”

But critics of the way the agency has handled the redevelopment of Federal City over the years remain skeptical.

“Housing is needed, there is no question,” said former New Orleans City Council member Kristin Gisleson Palmer, a residential builder whose council district included  Algiers. “But based on their track record, there is a lot of skepticism. Yes, there was a pandemic and a storm. But building permits have not declined during that period in the private sector. It’s absurd it’s taken this long to get anything done.”

Troubled history

The Algiers Development District has frequently been in the crosshairs of elected officials and neighborhood groups. A taxing district created in 2004 to take over the shuttered Navy base, it received a $150 million grant from the state to kick start redevelopment. It also gets more than $500,000 a year in sales taxes generated by a nearby Walmart.

Critics say it has little to show for its efforts. True, there have been several public ventures at the site, which is still home to 2,000 Marines at the Marine Corps Forces Reserves Headquarters; they include the New Orleans Military & Maritime Academy and a satellite campus of Delgado Community College.

The New Orleans Police Department’s 4^th District also leases space at Federal City, although it will relocate later this year, and LSU took over a health and fitness center.

But those tenants are public entities and have been subsidized largely with public dollars. Attracting private investment has proven more complicated. The district’s first developer bowed out in 2014, and the second was terminated, resulting in a lawsuit that was later settled out of court.

In 2019, the district selected two new development teams: one for residential projects, the other for commercial. The residential team is a joint venture of Shreveport-based Brown-Taylor Development and New Orleans-based MSG, which is owned by embattled garbage hauler Jimmy Woods, whose Metro Services Group filed bankruptcy in 2022 after losing a New Orleans garbage contract.

The commercial developer is Florida-based Fitch Development.

Four years later, neither developer has built or brought anything to the site yet.

Turning the corner

With the new housing complex, that will change, the developers say. Earlier this month, the Algiers Development District got the green light from the Louisiana Housing Corp. to borrow $8 million via bonds to help finance the affordable housing complex, which has a $19.3 million price tag, including  $13.5 million in construction costs and almost $2.5 million in developer’s fees.

Other sources of money include federal housing loans, low-income housing tax credits and a bank loan.

Developer Edward Taylor said the bond issue, which will act like a bridge loan during the construction process, all but assures the project is a done deal.

“I feel confident barring some sort of economic major market upset we are going to get this closed and construction started this year,” he said.

When completed, the complex — a ground-up new construction project located on a vacant lot at the intersection of Guadalcanal Street and Hebert Drive — will have 56 one-bedroom units that will rent for $675 to $1,100 per month, and 14 two-bedroom units that will rent for $800 to $1,300 per month.

In 2024, the same team hopes to begin work renovating the 119-year-old Building 4, to house 86 market-rate units. The project will be developed in phases, with 52 units planned to start.

Down the line, the district hopes to build single-family homes and more apartments, although it will depend on demand, Honaker said.

Taylor said while Federal City has taken a while to get off the ground, his team hasn’t wasted any time since getting involved.

“Once you get a site, you have to do due diligence, run through entitlement, locate funding and put that altogether,” he said. “It takes a lot of time.”  

Once the residential complexes are completed, it should be easier to attract private dollars and commercial tenants, Honaker said, adding the district has 10 acres reserved for shops, restaurants and offices. 

Gisleson Palmer said she’s heard it before.

“We’re looking at 15 years and how many master plans? I think the community has a lot of questions and the public process leaves much to be desired,” she said.

The area’s current City Council member, Freddie King III, would not comment on the latest plans and projects because he said he had no information about them.