Building boom in New Orleans area

New Orleans CityBusiness, Aug 27, 2007 by Deon Roberts

Repairing Hurricane Katrina damages will keep construction companies busy for years. But as the storm's second anniversary approaches, some New Orleans-area construction companies are hungry for more work.

"The boom has really already started," said Freddy Yoder, president of Harahan-based Durr Heavy Construction. "We are very happy with what we've done. I think most contractors in this area are happy."

Metro area building permits show robust construction activity.

For example, the 2,109 commercial permits in Orleans Parish so far this year are up 227 percent from 644 permits in 2005 and 27 percent from 1,662 in 2006.

Orleans Parish's 3,698 residential permits this year are up 180 percent from 1,322 in all of 2005 and 43 percent from 2,582 in 2006.

It's the same story in Jefferson Parish where 3,307 residential permits this year are up 180 percent from 1,185 in 2005 and 24 percent from 2,676 in 2006.

St. Tammany Parish's 4,506 residential permits this year are up 722 percent from 548 in 2005 and 30 percent from 3,479 in 2006.

Yoder said even though construction companies are busy, they are not maxed out, he said.

"Can we handle more? Absolutely more," he said.

Louisiana officials lament the red tape still tying up billions in federal recovery dollars.

"There's at least another $20 billion to go," said Andy Kopplin, executive director of the Louisiana Recovery Authority. "A lot of what's left is permanent repairs to roads, to buildings, schools, hospitals, which are going to be multiple years."

Kopplin said the federal government OK'd about $26 billion for "bricks and sticks" projects to rebuild Louisiana. Of that, $6.7 billion, or 26 percent, has already been spent -- $2.9 billion on housing, including The Road Home program; $1.5 billion on levees; $999 million on disaster loans; $517 million on transportation, infrastructure and other projects; and $139 million on economic development.

In FEMA's Public Assistance Program alone, the federal government has approved nearly $5 billion in rebuilding funds for Louisiana. Of that, $2.6 billion has been spent, said Mark Smith, spokesman for the Governor's Office of Homeland Security and Emergency Preparedness.

FEMA Public Assistance funds can be used to rebuild damaged roads, buildings and other publicly owned property.

"That money is for long-term construction projects to rebuild the infrastructure all across south Louisiana," Smith said. "It can be used for overtime, debris, the overall rebuilding of the infrastructure."

Before funds reach communities and help construction companies, local governments must complete FEMA project worksheets. Under the Public Assistance Program, cities and parishes are reimbursed when work on projects begin, but officials say the onerous worksheets are an impediment to recovery.

"There's got to be a better way," Kopplin said.

FEMA helped communities fill out about 35,000 worksheets, said Jim Stark, director of FEMA's Louisiana Transitional Recovery Office.

Stark said some communities slow their own recovery by taking too long to complete the worksheets. In some cases, communities fail to submit worksheets until project costs are computed thoroughly, he said. He said communities could speed the recovery money by submitting worksheets with rough cost estimates. FEMA can write amendments to add more dollars are costs become more definitive, Stark said.

But no matter whose fault it is, billions in federal rebuilding dollars are stuck in the pipeline two years after the storms.

Under the LRA Long-Term Community Recovery Program, $200 million in community development block grants will be given to 23 parishes hit hardest by the hurricanes. Grants are at least $150,000 each. Orleans Parish will receive $117 million, said Pat Forbes, infrastructure manager for the Louisiana Office of Community Development's Disaster Recovery Unit.

LCRP funds must be spent on disaster-related projects, Forbes said. Parishes can use LCRP funds for expenses FEMA doesn't cover, he said.

But paperwork problems are holding back those funds, too.

The state is waiting for the U.S. Department of Housing and Urban Development to approve its spending plan for the block grants, Forbes said. The state submitted the plan to HUD in May but it had to be amended. The state gave what Forbes said he hopes is the final amended version to HUD Aug. 6.

Funds can't be spent until HUD approves the action plan.

"It shouldn't be a very long process for approval. It could be two to eight weeks," he said.

The funds will be used to reimburse communities after work begins on projects such as street repairs, he said.

Soon, New Orleans-area construction companies expect an onslaught of work.

Metro area construction companies have formed the Greater New Orleans Construction Task Force to gauge when the dollars will start flowing so expensive equipment does not sit idle, Yoder said.

"The contractors are sitting on their hands waiting for large contracts to be released," he said.