Thursday, January 29, 2009

Who's Who: Unmasking the LSU/VA Team [Part II]

In 2009, the fights to reopen Charity Hospital and save Lower Mid City from demolition will come to a head. The proposed $1.2 billion plan to remake Lower Mid City into a biomedical district anchored by an LSU teaching hospital and a renovated VA hospital has been in the works for many moons.

High profile officials have infused massive amounts of political capital into realizing this project and would lose big if this project were to go down.

The Mayor, his recovery director Ed Blakely, and the New Orleans City Council worked in concert to allocate some $79 million of the 2009 budget toward acquiring land in the LSU/VA footprint.

The New Orleans business and university elite have invested considerable resources into developing the Greater New Orleans Biosciences Development District via the Downtown Development District and the New Orleans Regional Biosciences Initiative.

State leaders such as Governor Bobby Jindal and LRA Director Paul Rainwater have made obtaining full FEMA reimbursement for Charity in order to fund the new LSU hospital the state's number one priority heading into the new year and the new Obama administration's proposed infrastructure bill.

That the process for realizing these plans has been so slow in spite of the massive political firepower behind them is a testament to the salience of the arguments against put forth by housing activists, preservationists, public health advocates, and other reasonable progressives alarmed by official refusal to reopen the existing Charity Hospital and by a site selection process that favors the demolition of a residential neighborhood over more cost-effective, less destructive alternatives.

In Part I, I profiled Donald Smithburg, formerly of LSUHSD, now employed by a consultant firm contracted to contrive the $1.2 billion development plan currently on the table.


Part II: James P. McNamara

Mr. McNamara is a key player in New Orleans business and political circles and has considerable professional interest in seeing the LSU/VA project realized as currently constituted. He's got a long history. This is just a taste.

He made a big portion of his fortune in the late '80s and early '90s as President and CEO of McNamara Associates, a commercial real estate consulting firm. His company would represent commercial property holders in the CBD in their appeals against inflated property tax assessments.

In 2006, New Orleans voters voted to reform the tax assessor system into one office. However, until 2010, the city continues to operate under the old seven assessor system, which has been wrought with corruption for decades. Your tax assessor sets your property value, which determines the amount of property tax you pay. With seven assessors, personal and economic relationships have often played a role in the original property value set or one's chances at winning an appeal. Property values were generally set extremely low but were pumped up to reflect something closer to actual value upon sale, at which point one could appeal directly to the district assessor.

Mr. McNamara took advantage of this system through his close relationship with Kenneth Carter (father of Karen Carter-Peterson) via the political organization BOLD. Ken Carter was one of the city's first two African American tax assessors after being elected to represent the CBD as first assessor district in 1985.

McNamara's firm represented commercial clients who acquired property in the CBD only to see their property taxes skyrocket following reassessment. McNamara and Associates would be hired to appeal the value to Ken Carter's office and negotiate a lower property tax bill. This relationship obviously went pretty smoothly, as McNamara became closely involved with Ken Carter's 1994 mayoral campaign. Carter had to leave his assessor seat to run for Mayor and replacing him was Patricia Johnson. The Times-Picayune in 2004:

Johnson won the 1st District office in 1994 when incumbent Ken Carter, a fellow member of the BOLD political organization, ran for mayor. But she soon became unpopular, in part because of her aggressive upward valuation of downtown office properties.

Johnson had other problems as well. She feuded with BOLD, her methods were called into question and the state legislative auditor reported that her books were in shambles. But rocking the boat was certainly one cause of her 2002 defeat by Darren Mire.

McNamara and Mire were close to another BOLD stalwart in disgraced Councilman Oliver Thomas. In the late 90s, the two were caught up in an campaign ethics investigation into Thomas' '98 Council reelection involving loans made or not made to the campaign.

Mire and Kenneth Carter are still amongst the registered agents of BOLD today. And Mire remains tax assessor in District 1 through 2010.

So it's pretty clear that McNamara remains politically connected.

More recently, James McNamara parlayed the fortune and connections he made using McNamara and Associates into another venture called Exchange Equity. Rather than merely extracting consultant fees related to other people's property sales, Exchange Equity aggregates investors to purchase commercial real estate property and has mastered the 1031 exchange loophole that protects investors from paying capital gains taxes in real estate transfer deals.

Equity Exchange is listed as a partner in the New Orleans Regional Biosciences Initiative, an organization behind the LSU/VA development. According to their website:

The New Orleans Regional Biosciences Initiative (NORBI) is the action arm of GNOBEDD, a collaborative of a myriad of public and private entities all working to ensure that bioscience and healthcare sectors combined are a well-promoted and well supported pillar of the New Orleans economy.

James McNamara is the President of the GNOBEDD, though the true composition of that organization remains difficult to ascertain. He also sits as a Commissioner of the Downtown Development District and on the Board of the New Orleans Bioinnovation Center.

All of these organizations worked in concert to imagine the LSU/VA development and pass it through the relevant governmental bodies. It is easy to infer that Mr. McNamara's long standing political connections were an enormous help.

With so much at stake, personally and professionally, you'll have to excuse him if he considers the residential neighborhood facing demolition to be collateral damage:

“For us, that is enormous,” he said. That some will lose their homes as a result, he added, is “just the reality of life.”

Given that New Orleanians have just given a new zoning master place the force of law to prevent private development deals born and bronzed outside the purview of the public, it is curious that it is such a disservice to the residents of this city to ask questions about this particular insider development deal and the process that lead to it.

Very curious.


oyster said...

Very informative and clear.

Thanks for distilling this information, and making these useful connections.

Otro Vigilante said...

Part III Cesar Burgos?

Dambala said...

mmmmm...........methinks, not so much.

McNamara is a complicated man. There's so much more to the story than this, but your snapshot is illuminating.

E said...

dambala is right. this is only a snapshot. mcnamara has had a long career and has dipped his toes into many pools of water.

spycatcher said...

I wonder if this is the same guy who lead the fight to build the Contemporary Arts Center and return the streetcars to the Riverfront and to Canal Street?

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