Mayor Mitch Landrieu has announced that plans to convert the rundown Charity Hospital into a new civic complex housing City Hall and Civil District Court will not move forward.
Landrieu cites increases in construction costs and a lack of state funding as the primary reasons for not moving forward with the ambitious project.
"First, although the Governor and his team have been good partners and have offered to commit tens of millions to support this project, the state has not been able to commit the $100 million we have requested," said Landrieu on Wednesday.
The Mayor also cites skyrocketing construction costs as a contributing factor.
"Second, due to increases in our construction cost estimates for the project and to properly repair the building's foundation as well as its damaged limestone façade, our estimates for the cost of the project have grown by more than $100 million – up from $270 million to $397 million or more.
"Finally and most importantly, I cannot in good faith ask the people of this city to assume close to $200 million in public debt for this project, when that money could otherwise be spent on long overdue street repairs."
Upon being elected Mayor in 2010, New Orleans was recovering from one of the worst disasters in American history. A flooded Charity Hospital was the largest piece of blight in the city, sprawling nine city blocks.
At the same time, City Hall and Orleans Parish City District Court were housed in outdated buildings that had fallen in disrepair.
"This was the backdrop when we began our due diligence on redeveloping Charity Hospital into a Civic Complex," stated Landrieu.
Landrieu said he pieced together a team of experts in public finance, real estate, architecture and engineering to analyze the city's options. Landrieu said that renovating Charity Hospital to house City Hall and the Civic Distinct Court made the most economic sense at the time.
"Public funding was specifically attached to the redevelopment of this building and the project was eligible for millions more in tax credits. It also served a significant public purpose," said Landrieu.
On Wednesday, Landrieu withdrew the city's plans. He states that City Hall's new plan is to invest FEMA and capital funding into reasonable repairs of the buildings that will make them more efficient and safe.
"I made this decision with my eyes wide open, and with the best interest of the entire city at the forefront. Simply put, we cannot afford the project at this time, given our other critical needs."