City battles with wealthy banker's heirs over control of riches - FOX 8 WVUE New Orleans News, Weather, Sports

City battles with wealthy banker's heirs over control of riches

Updated:
Pelicans and gulls on the Wisner Donation property near Port Fourchon Pelicans and gulls on the Wisner Donation property near Port Fourchon

New Orleans, La. -- Mayor Mitch Landrieu has made no decision about whether to attempt to sell a lucrative piece of real estate next year, according to a top aide to the mayor.

Mike Sherman, Landrieu's representative on the Wisner Advisory Committee, said the first step should be determining what the 50,000 acres of property might fetch.

In 1914, almost a century ago, wealthy banker Edward Wisner willed the property to the city in the form of a charity trust, having no way of realizing the gold mine he was bequeathing.  

The land includes one of Louisiana's few sandy beaches and what decades later became about 40 percent of Port Fourchon -- the undisputed operations hub for oil and gas companies in the Gulf of Mexico.

In 1928, Wisner heirs sued to reclaim the land and an out-of-court settlement divided the proceeds between the heirs, the city, and three other entities.

Under the arrangement, the heirs collect 40 percent of the Wisner Donation profits, with about one-third going to the city and smaller shares to Tulane University, Charity Hospital (later LSU) and the Salvation Army.  Each of the entities has a vote on the advisory committee.

Rather than flowing into the general fund, the city's share goes to a variety of charity groups.

The donation operated in relative anonymity -- with a few scrapes over the years -- until Landrieu's election as mayor.

While the administration considers the trust a public entity, the heirs argue Wisner is private.

After sparring for months over governance issues, the committee was moving toward asking a judge to settle the issue when Landrieu filed his own motion with the court.

In a separate filing, the heirs petitioned a judge to have Landrieu removed as trustee and barred from issuing any more grants using money from the trust.  The petition also claims that Landrieu has "shown hostility" toward committee members and approved grants of over $2.4 million without the committee's approval.

Landrieu aides maintain they are not required to run those decisions by the committee and insist they are merely cleaning up an agency long in need of reform.

The entire issue could come to a head by August 2014, when the 100-year term of Wisner's initial trust runs out.

During a November meeting of the trust, Wisner descendant Mark Peneguy raised the possibility that the city might move to assume 100 percent of the interest next year.

"I've heard rumors that Charity doesn't have an interest, Tulane doesn't have an interest, Salvation Army doesn't have an interest, nor do the Wisner family (heirs) at the end of 2014."

Peneguy acknowledged he did not know for certain whether that was the city's position. "I'm saying rumors are that's where the city is coming from," he said.

Sherman said "no decision's been made about what happens in 2014," noting that the committee has already taken the first steps toward having the property appraised.

"We'll have that dialogue this year," Sherman said.

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