Private dollars leading recovery of New Orleans

Billions of federal dollars have been allotted or spent in New Orleans since hurricane Katrina, so it may come as a surprise that the first public works project in the city's long-term recovery – the Rosa Keller Library in the middle-class Broadmoor neighborhood – was not paid for by American taxpayers but by the Carnegie Foundation in New York.

Government money is still trickling through the pipeline: On Monday, Louisiana recovery officials approved $117 million for the first post-Katrina community development grants. But with the long wait for cash, private foundations, wealthy individuals, and philanthropies have stepped in, playing a bigger role in the city's rebuilding than ever expected.

"The monies for rebuilding are coming first from private sources ... and that is definitely what is leading the recovery effort," says Doug Ahlers, a fellow at the Kennedy School of Government at Harvard. "Government funding is slow to arrive and is ... not playing a leadership role."

For many New Orleanians, wooing and leveraging private investments into cornerstone public works is empowering – and an example of how nearly 50 other struggling city neighborhoods can revitalize themselves. But concerns are emerging that the new model may leave behind unorganized poor neighborhoods, where 30 percent of the city's residents now live.

Charities, foundations, and private individuals have promised at least $50 million toward renovating and building schools, libraries, and senior centers in New Orleans since the hurricane, much of it in middle-class communities such as Uptown and St. Roch.

In contrast, the US has spent or allotted some $4.6 billion on activities ranging from helicopter rescues, levee repairs, housing assistance, and Superdome restoration.

But as the last scrap of Katrina debris is expected to be cleared from the city this month, the task of restoring the city's battered residential neighborhoods to normalcy still remains. With fewer than half the schools and hospitals up and running, the job is so daunting that completing it could take 20 years and $200 billion, says Ed Blakely, New Orleans' recovery czar.

As of last week, New Orleans had received "zero" federal dollars for long-term community recovery, Mr. Blakely says. But new hope arrived this week when the Louisiana Recovery Authority released the millions in funding for the first long-term rebuilding aid. The money is slated for city public works projects from Holy Cross to the Seventh Ward.

It is one piece of the city's "unified plan" for reconstruction totaling $1.1 billion. The overall plan promotes natural patterns of resettlement by spending in 17 "target zones."

Building public works in areas of heavy resettlement is not only practical but also will encourage more private investment, says Professor Ahlers, who founded the New Orleans Neighborhood Empowerment Initiative.

Onerous government red tape and demands for careful auditing of public funds have contributed to the glacial pace of federal reconstruction dollars into famously corrupt southern Louisiana, experts say, thus partly driving the city's early reliance on charity for rebuilding.

But others say it's common for government's capabilities to falter in a situation where damage is beyond comprehension and private money fills in the gaps, says Erwann Michel-Kerjan, managing director of the Risk Management and Decision Processes Center at the University of Pennsylvania's Wharton School of Business.

"There's been ... an awful lot of waiting around and an awful lot of promises that help was just over the hill," says Ahlers. "Now, a lot of neighborhood leaders have begun to understand that the cavalry [the government] is not coming."

Meanwhile, some have taken action, drawing on private money:

• Thousands of Vietnamese immigrants have resettled in New Orleans East, building everything from an urban farm to a community senior center with privately raised funds.

• Actor Brad Pitt, who recently moved to the upper-class Vieux Carre neighborhood with his partner, actress Angelina Jolie, and their children, is using his celebrity status to help Global Green, a progressive nonprofit raise money.

• This month the organization opened an energy-efficient school in the 7th Ward, one of five that will eventually be funded with donations from the Bush-Clinton Katrina Fund.

• The Baton Rouge Area Foundation raised $12 million, which was primarily used to hire professional planners to help all New Orleans neighborhoods plan for inclusion into the unified plan. Orleans parish was considered first for federal funding by Louisiana recovery officials partly because of the foundation's work.

"A lot of us were naive in the early days that it was going to be easy somehow, and that we could put this thing together fairly quickly," says John Spain, executive vice president of the foundation. "The plan took longer than people thought it should, but ... now that there's a blueprint, you're seeing a lot of philanthropic dollars."

In a city known for its strong top-down government, the ability of citizens in New Orleans to influence the recovery plan is a sign of success, some say. "[Reconstruction] has to be a collective force, and that's the beauty and challenge at the same time," says Professor Michel-Kerjan.

Still, big-ticket public works, including rebuilding the water and sewer system, will require tough decisions about which neighborhoods will receive services. It means that city officials will retain much of the final say on the look and feel of the "new" New Orleans.

The Gulf Recovery Act of 2007, which was introduced in Congress last week, also aims to bolster such rebuilding efforts, in part to provide affordable housing for the thousands of residents still living in trailers from the Federal Emergency Management Agency. With rents increasing, "us poor people are in danger of losing our city," says resident Kedrick Gibson.

While federal aid is coming in slowly, "we have known all along that [public] funding is inadequate to affect the entire recovery," says Pat Forbes, an infrastructure manager at the state's Division of Administration.

Even so, experts already note a direct correlation between private investment and the racial and economic characteristics of a neighborhood, as the lion's share of money flows to white and middle-class enclaves.

Indeed, a neighborhood's ability to organize and obtain funding affects its rate of resettlement, says Bill Morrish, an architecture professor at the University of Virginia, who has studied New Orleans' sluggish revival.

Broadmoor, meanwhile, stands out as an example of what can be done to rebuild a community using private money. "If there is a threshold of incredibly sincere work, which Broadmoor has done, can others reach it, too?" Mr. Morrish says.

Broadmoor realtor Kelli Wright says the neighborhood has become more tightly knit as residents fought first for survival and then for rebirth. Now even newcomers to the city are sniffing the local housing market, she says.

Most residents here agree that the Carnegie's $2 million rehabbing of the gutted Keller library – to be opened this fall – marks a tipping point for Broadmoor, and perhaps the entire city.

"You might say it's just a lending library," says resident Lee Isaacson. "But it's much more than that. It tells people that their neighborhood is back."