Quote:
Originally Posted by Nickapedia
Availing oneself of all of the means of financing possible is a rational course of action. The federal and state historic tax credit are publicly available programs that are available to anyone whose renovation meets the program requirements. You dont need a license or a college degree to be a developer, anyone is free to try to redevelop any property they like. That isnt socialism for the wealthy. You may not like the historic tax credits but you cannot blame the developer for using them. I would also argue that the credits have done amazing things for this city. without them, half the buildings in downtown new orleans would still be vacant. I would hope most people would see the benefit to the city for not only returning those buildings to commerce to rejoin the tax rolls, provide jobs and/or housing and a host of other benefits but also the negative impact that blight can have on a community. It is also unfair to blame developers for letting property go (or flipping as you called it). All investments (and yes whenever you have to raise $$ from other people then you have to at the very least partially view houses/apartments etc as investments) need to have an exit strategy. Owners and investors cannot be forced to stay in investments in perpetuity so yea, Wiznia was always going to get out at some point. Not to mention that Wiznia may be gone from the maritime and saratoga, but the City is left with a tax paying assets (whereas before wiznia it had two blighted liabilities) and wiznia has the capital it needs to build steven's garage and the two saints co-living apartment building (if neighbors dont block it from happening). The two saints co-living project is a market driven attempt to tackle affordable housing in New Orleans, so the city comes out even further ahead in the long run with more housing and more jobs and thus the virtuous cycle continues. Economics is not a zero sum game.
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I've participated in several HUD projects, it goes without saying it is a giveaway to the wealthy. That said, with a little know how, *anyone* can apply for HUD financing, however only those with means would possess the skills to do so. I would argue it's one of the quickest ways to build wealth and would recommend it to all.
It is logical a developer would use any legal funding available to them. My issue is with the use of HUD financing and to be honest, the program as a whole. HUD socializes the risk associated with a project and in return, the project is expected to benefit the public in several ways, some of which you've described. Wisznia promoted his projects in this manner, but the projects didn’t live up to his promises. First, Wisznia turned away prospective tenants and converted a majority of the units to STR's, an action prohibited with a federally backed mortgage. Secondly, Wisznia promised to bring residential units to downtown and even with an exit strategy, its presumed these units will remain as part of the local housing stock. Instead, the buildings are being converted to hotels. Was this the best use of the HUD program? Would HUD have invested in the project if after ten years it was aware the buildings would become hotels? Was this the highest and best use for the public and city? I don't think it is.
When projects are evaluated only on the basis that they "create jobs" or are "a tax paying asset" it DOES feel like a zero sum game. I applaud the development happening in the CBD, however I think it's fair to feel that these particular deals left the community cheated, especially considering the projects were sold as benefiting the community in more ways than simply generating taxes.
For the record, I support federal and state historic tax credits. My earlier reply was to point out to another commenter that there was more at work here than *just* the free market.
I typically avoiding sharing my thoughts on this forum to avoid conversations like this, but thank you for the response and challenging my opinion.
