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Guest Commentary: The Dark Side of “Economic Development” in New Orleans

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LSU-Veterans Affairs hospitals undermine property rights and fiscal responsibility

NEW ORLEANS, La. – Amidst all of the talk of post-Katrina innovation and progress in New Orleans, it’s important to note that not all of the change is enlightened. One major undertaking, pushed by local, state, and federal governments, has been fraught with problems that many thought died with failed “urban renewal” projects of the 1950 and 1960s. The multi-billion dollar LSU/Veterans Affairs Hospitals project, seen by many as harmless economic development, has important implications for property rights and for fiscal responsibility.

Those interested in property rights, for example, should know that as of January, the state had expropriated 100 parcels (the Louisiana civil law term for eminent domain) to make way for the proposed VA Medical Center. Despite fierce opposition from residents and activists, the state also expropriated dozens of additional properties in the adjacent footprint of LSU’s proposed University Medical Center.

Scores of historic homes – many of them restored after Katrina with Road Home dollars from the federal and state governments – are already demolished in both footprints. Over 50 functioning businesses that returned after Hurricane Katrina and the subsequent flooding have been or will soon be displaced.

Federal funding flowed from the Department of Housing and Urban Development, Veterans Affairs, and FEMA to facilitate this transformation of a neighborhood into a barren moonscape.  It led to the displacement of over 500 residents who returned after Hurricane Katrina and tried to rebuild – only to face a 2007 city moratorium in the area that barred individual property owners from even making repairs to their properties.

The most egregious aspect of the expropriation and demolition stories, however, is the fact that the University Medical Center board does not actually have the financing in place to build the hospital proposed for the LSU side of the site. The board remains over $400 million short of the necessary funding.

Thus, even if the expropriation is for a public purpose, it is entirely irresponsible for the state government, aided and abetted by the federal and city governments, to seize and destroy homes when it is unclear whether the proposed justification will even materialize.

As in the Kelo case of New London, Connecticut, we may ultimately see 37-acres of vacant land (the site for both hospitals weighs in at a wasteful 67-acres) sitting in the middle of New Orleans.

Creating jobs in New Orleans remains an important task.  But public healthcare facilities could have been returned in a far less damaging and illogical way – and they likely would have provided just as many jobs in the end. Alternate plans, like renovating the now-vacant Charity Hospital building, were ignored.

The folly of government actions in Lower Mid-City in the LSU and Veterans Affairs hospitals project should stand as a lesson – a lesson in what not to do in a city seeking to recover.

Bradley J. Vogel is an Ed Majkrzak Historic Preservation Fellow in the National Trust’s New Orleans Field Office.


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