One of New Orleans' biggest eyesores has a chance at new life after winning federal grant

The former U.S. Navy base in the Bywater that sat empty for years and became a haven for squatters is among a half-dozen New Orleans-area housing projects to win millions of dollars in federal funding, a financial boost that's expected to spur the notorious eyesore's rehabilitation.

The Naval Support Activity base at the intersection of Dauphine Street and Poland Avenue, which dates to 1919, had many military uses over the decades until the last Marine Corps personnel left in 2011. The city took control in 2016 and struck a deal with developers to rehabilitate the complex as mixed-income housing.

But it has languished ever since as financing proved elusive, becoming increasingly decrepit and dangerous. Two years ago, New Orleans police had to sweep the 25-acre complex to remove squatters after the site had become the focal point of crime in the area.

The $20 million of federal funds for the "NSA East Bank Apartments" project, as the project is known, was the largest single grant awarded from a pool of $230 million in federal block grants aimed at improving affordable housing in Louisiana after hurricanes Laura, Delta and Ida.

The Navy base grant was one of a half-dozen local projects to get funded. Grant money will also be used to rehabilitate the historic Touro-Shakspeare Home in Algiers, another well-known blot on the cityscape.

In total, the program has funded projects aiming to build nearly 1,000 housing units in the metro area and more than 2,300 statewide. The latest round awarded funds to 19 projects out 69 applicants, including the first housing development in the River District neighborhood.

While the money for the Bywater site does not guarantee that the $166 million project will be completed, the Louisiana Housing Corp., which administered the grant program, insists that applicants show that other sources of funds have been lined up before they decide which projects to back. Project developers then have about 10 months to finalize permitting, financing and other details before they must begin construction.

"We are in active discussions with each element of financing and are confident financing is available for this important New Orleans project," Kevin Parkins, chief operating officer of The MCC Group, said of the former Navy site.

MCC is the real estate firm owned by the late Joe Jaeger, who died last month in a car accident on the northshore. Brian Gibbs, another partner in the project, said after Jaeger's death that he hoped to lead the project through to completion as a legacy for Jaeger's family.

The developers are also expecting to raise $28 million from a low-interest federal housing loan. Other financing includes: $48 million in state low-income housing tax credits; $54 million in state and federal historic tax credits; and $8.5 million from the city.

Also retail, parking

The first phase of the project envisions converting the largest building in the dilapidated complex into a total of 294 apartments, all of which would be designated as affordable or workforce housing for people earning between 50% and 120% of the area median income. Rents would be no more than 30% of income.

The project also calls for 38,000 square feet of ground floor retail space and more than 1,000 parking spaces, according to documents filed by the developers in March.

Another rehabilitation project to win a grant was the historic Touro-Shakspeare Home on General Meyer Avenue in Algiers, which was awarded $5 million toward a total expected cost of just over $37 million.

The former "alms house" for the elderly was named for 19th-century philanthropist Judah Touro, who provided the funds, and Mayor Joseph Shakspeare, who was mayor in the 1890s when the original premises were built Uptown.

As with the Bywater Navy complex, Touro-Shakspeare has deteriorated since Hurricane Katrina and was taken over by the city in the hopes of reviving the building for its original use.

Pres Kabacoff's HRI Properties has been trying to assemble the financing for the project since it acquired the lease for the 7.7-acre site from the city three years ago.

HRI plans to convert the building into a 52-unit, affordable senior apartment community, said HRI's Josh Collen. He said the financing sources are the same mix of state and federal tax credits and city funds as the Bywater project is using.

Landis Construction is scheduled to begin stabilization work before the end of this year, with full construction starting in spring 2025, aiming to finish in summer the following year, Collen said.

Drop in bucket

Also winning funding: a senior housing project in the Marrero Commons neighborhood, the site of the former B.W. Cooper public housing development. Providence Community Housing is the developer.

The grant of $8.9 million is the final piece of funding for that $37 million project, which will result in 102 senior affordable residences.

"It's a drop in the bucket compared to the overall need for affordable housing, but this is the largest single-action funding we've seen in a long time," said Ryan Herringshaw, Providence Community's chief operating officer, referring to the overall $230 million of federal grants allocated.

The other New Orleans-area projects to get a total of nearly $30 million in funding were two new senior living projects to be built by CST Land Developers. 

Reserve at Lapalco Place is slated to include 144 units in Jefferson Parish for a total cost of just over $51 million. Reserve at Tammany is to build 110 units on the northshore at a cost of $38 million. CST Land Developers didn't respond to requests for comment.

Correction: The story was updated to correct the spelling of the former mayor of New Orleans.