FOX 8/The Lens Investigation: Historic house move payments debate

Millions of federal dollars were used to move dozens of historic homes in the path of the new Veterans Administration hospital. After being relocated, FOX 8 has learned five houses have since been demolished and several others may not be far from that point. For dozens of others still standing, resources to rehab them have been delayed for months.

In 2010, the city spent federal dollars to lift dozens of historic homes off of their foundations and relocate them to other New Orleans neighborhoods to be preserved. The cost per house move was roughly $35,000.

Two years after the big move, many people like Steve Peavoy aren't too pleased with their new neighbors. The house placed directly across from his Gravier Street home has a new roof, but Peavoy says that's it.

It's much the same in Rene Brooks' backyard. A now-dilapidated historic home placed on Palmyra Street backs up to Brooks' home. It's been there for a year and a half, and they just started cutting the grass, explained Brooks.

Properties were supposed to be turned over to non-profit groups in 2011 to be rehabbed. In a New Orleans City Council meeting in September 2011, Housing Policy Director Brian Lawlor told members, "We have $7.2 million committed to the construction of these houses."

In that meeting, Councilwoman Kristen Gisleson Palmer asked, "What is our time frame looking for the non-profits to be able to access money from the revolver?"

Lawlor answered, "We are thinking conservatively, four to six weeks to have that process complete."

Fast forward to this year, and Sister Vera Butler with a neighborhood development corporation explained resources never reached her non-profit.

In September 2012 she told FOX 8, "We were told at the time that the money was available to redevelop them, but that really hasn't happened."

When Hurricane Isaac did a number on Southeast Louisiana, one of the historic homes moved to Bienville Street came crashing down.

Now, the city is detailing how its plan to get these houses back on the market fell apart.

"Builders of Hope has funds that the city provided them to pay these contractors that they haven't accounted for... unfortunately that has delayed the entire process," said Lawlor.

In this plan, the City of New Orleans hired Builders of Hope, a non-profit organization out of North Carolina, to oversee the house-moving project.  BOH then sub-contracted with Tim Clark Construction to physically move houses.  Clark also hired subs, including Orleans Shoring, to work with them.

Our first question: Where is the money?

"The $176,000 that we paid to Builders of Hope to pay Tim Clark... where is that money? And we just don't know," said Lawlor.

Meantime, an attorney for Tim Clark Construction says he filed a lawsuit against BOH that's now pending in federal court, and Dominick Impastato says the suit claims a lot more money is owed.

"By our records, its $691,000 that was received from the City of New Orleans... paid to BOH that BOH has not paid Tim Clark Construction... I want to know where the money is.  I want to know what they did with that $691,000," said Impastato.

Lawlor says the main sticking point has to do with where some of these houses were placed on lots when they were transplanted. He said several homes expanded or shifted during the big move, and measurements weren't precise.

Orleans Shoring, a sub-contractor of Tim Clark Construction, and Clark both were adamant that they were willing, able and ready to do whatever they needed to do to move them back to wherever it required.  "But they were concerned because they hadn't been paid by Builders of Hope, and they made a pretty straight forward request... demonstrate to us that you have the funds to pay us, and, well, go ahead and do the work.  And Builders of Hope never was able or willing to do that," said Lawlor.

Impastato stressed, BOH never raised the issue of lot placement until after they were put on notice that Tim Clark Construction planned to take them to court for unpaid work.

BOH Executive VP Randy Jones tells FOX 8, "Money the city paid us is not missing."

He says the city was late in reimbursing BOH for invoices, which caused BOH to make late payments to its sub-contractors. Jones said the stop in payments to Tim Clark Construction goes back to houses being placed too close to property lines.

While the local contractor tries to resolve the issue in court, the city says it's probably not far behind them. Lawlor said the city is on the hook with the federal government and any money that's not accounted for.

None of this really matters to the people who have had to live next door to one of these houses.

"When you drop the ball and its six, seven and eight months, then it becomes a dilapidated house, and now its an eyesore," said Peavoy.  "It costs even more... so were we doing any good?  You're actually creating a problem in our neighborhood," he said.

Lawlor says there's still time to bring many of the historic homes back to life through a new plan. He said the city has received proposals from 11 non-profits to access funding.

"We're making available up to about $1.7 million to do the full rehabilitation of those. We're looking at the plans and specs and getting more information from them," said Lawlor.

For some though, the day that these homes can be rehabbed and occupied just can't come soon enough.