Gov. Kathleen Blanco Endorses Louisiana Recovery Corp

A recent report discusses the Governor of Louisiana endorsing the establishment of the Louisiana Recovery Corp. recently proposed by Rep. Richard Baker (previously discussed here )

Home purchase plan gets support
By staff and news services

Gov. Kathleen Blanco's hurricane recovery commission backed an idea by U.S. Rep. Richard Baker to create a public corporation to buy hurricane-damaged homes, restore the properties and then put them back into commerce.

Support from the Louisiana Recovery Authority came without objection Thursday, though some members said they were unclear how the proposal would work.

Blanco said the Louisiana Recovery Corp., a federal entity, would give homeowners another way to recover from the storms' devastation and avoid defaulting on home loans, while also helping rebuild the region.

"I think our people will best be served by a variety of options," she said.

More than 205,000 Louisiana homes were destroyed by Katrina -- three times that of any other state, according to a report by the recovery authority. Another 35,000 Louisiana homes were damaged.

The proposal by Baker, R-Baton Rouge, would create a corporation backed by U.S. Treasury bonds that could purchase the property of willing sellers and pay off their lenders. Former owners would have first right to re-purchase the lots after they've been restored.

A House committee is reviewing the bill, which is supported by New Orleans Mayor Ray Nagin and awaiting support from Sen. Mary Landrieu, D-Louisiana, and Rep. William Jefferson, D-New Orleans.

"The legislation has been endorsed by Rep. (Charlie) Melancon, Mayor Nagin, the governor and Congressman Baker," Walter Isaacson, vice chair of the recovery authority, said. "If Landrieu and Jefferson don't come aboard, it can't pass. We have a two-week window and then it's gone."

Once Congress adjourns in December, the proposal would not be taken up until 2006.

"It really is crucial for us in Washington to be able to demonstrate unified support from Louisiana," Baker's spokesman Michael DiResto said.

"If December and January roll around without Congress in session, people will have to make those tough decisions."

The recovery authority agreed with Baker's idea in principle, but added caveats. The authority wants the bill changed to give three appointments to the corporation's board of directors to Louisiana's governor, rather than having all seven members appointed by the president. And the authority wants the bill to specify that the development plans of the recovery board cannot conflict with local and regional redevelopment plans.

Baker has agreed to the changes, DiResto said.

Other concerns have also been raised about whether the property buy-outs by the recovery corporation could radically change the racial makeup of the majority-black city.

Sibal Holt, a member of Blanco's recovery authority, said she does not understand how developers who buy the property from the federal corporation could get insurance for the homes if the individual homeowners can't get insurance.

"I don't like voting on what I don't understand," she said.

DiResto said by phone that the corporation's function is precisely that -- to help make homeowners whole in a period where no one can get insurance.

"For whatever period is required for the financial markets begin to function again, at that point everybody should be able to get insurance," he said.

Without the corporation, "the current property owners could be financially destroyed before we get there," he said.

The recovery authority approved the Louisiana Recovery Corp. proposal with a voice vote without objection. Holt abstained.

"I think we should stand tall and fully support it, and pray that Congressman Baker can actually it through," Blanco said.

Late Thursday, Landrieu issued this statement: "We understand that a revised draft is now being put together. From the description of changes that we received from (Baker's) office so far, it appears that the draft is moving in a positive direction."

The authority also endorsed Blanco's proposal to sell $195 million in state bonds to fund the Louisiana Housing Trust Fund that would provide below market loans to help homeowners and owners of rental properties refinance their homes to repair hurricane damages.

The program, Blanco said, "is unique and historic."

To view the online report please click on the following link:

Gov. Kathleen Blanco Endorses Louisiana Recovery Corp


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