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Almost a year and a half ago, the Metro Council unanimously approved a $6 million, federally-funded housing project in Scotlandville, which Mayor-President Sharon Weston Broome touted as a boon for an economically disadvantaged area of the parish.

But the push to build 36 low-income apartment units at Sora Street and Swan Avenue is currently in limbo.

Broome's administration says the developers aren't following federal rules meant to ensure the money, which came from the massive COVID relief bill, is being spent appropriately.

“We aren’t making anything up. I don’t want this to get adversarial and the mayor doesn’t want this to be adversarial,” Dante Bidwell, Broome's chief of staff, said during a tense community meeting about the project last week. “We are working actively on trying to put something on paper to get this signed and get it executed, however we cannot put the city-parish in jeopardy and have to come back and pay this money back.”

Meanwhile, the developers and the Metro Council member who represents the area are criticizing the administration for what they see as roadblocks to much-needed investment in the area.

“We don’t want to go to war with city hall, we just want to fix this community,” said Hakeem Khaaliq, one of the developers.

The tension over the issue was evident at Thursday's meeting, which was organized by Metro Council member Chauna Banks and the developers last Thursday. Bidwell and other city officials were shouted down while answering community members’ questions. 

And the dispute has opened a major rift between Broome and Banks. 

"She’s just mad and revengeful, and there’s no reasoning now at all," Banks said.

Who has to approve what?

The dispute comes down to what kinds of agreements the developers need to sign, and what rules those agreements will impose.

When the Metro Council named KMT Holdings LLC a subrecipient of the federal money, that meant the company and parish government would need to sign a formal cooperative endeavor agreement setting rules to ensure the funds are properly spent, according to the budget supplement provided to the council at the time.

The rules require regular reporting of how money is being spent, limit construction costs per-unit and set caps on rent, among other restrictions. They are similar to those used by the U.S. Housing and Urban Development for other, more routine federal grants, Bidwell said.

The developers are expected to use the $6 million in federal funds, along with a further $5.8 million of private money, to construct the 51,000 square foot apartment complex. But the city-parish has not seen a full budget for the developer’s portion of the funding, Bidwell said.

The developers claim that the company should be considered a direct beneficiary of the federal funding — instead of a subrecipient from the parish — and the money should be released so construction can start. The developers accuse Broome’s office of putting up unnecessary roadblocks that only serve to slow down urgently needed housing.

Throughout 15 months of back and forth, both parties have sought guidance from the U.S. Treasury Department, the Parish Attorney’s Office and the city-parish’s contracted grant manager for the COVID stimulus money, CSRS.

A letter from the Parish Attorney’s provided by Broome’s office says the city-parish would be at risk of having to refund the $6 million to the federal government if all ARPA requirements are not met. The opinion leans on a CSRS document that suggests the project should be held to the same oversight standards as the city-parish’s existing HOME Investment Partnerships Program.

The developers argue opinions from the Treasury Department make it clear the HOME framework is not required because the complex is not being built on city-parish owned land.

Correspondence between the Treasury Department and Broome’s office provided by the developers does make it clear that if Housing for Heroes was authorized to receive the money as a direct beneficiary, then no city-parish oversight would be needed. But the document goes on to say that money granted to a subrecipient must follow federal guidelines for tracking the money.

The developers say they weren’t aware the council authorized the disbursement to Housing for Heroes, LLC, as a subrecipient. Khaaliq said he doesn’t blame the mayor for the mix-up but said someone in parish government must be trying to block the project.

“The mayor wants this to go through,” Khaaliq said. “Someone doesn’t want it to go through. That’s why they changed the line item.”

The dispute could be resolved by the council approving a new line item that names the developers as a beneficiary, but no legislation has been proposed. 

For its part, Broome’s office has not given up on the project and said it's still in communication with the developers about a path forward.

“Mayor Broome and City-Parish have been committed to the Housing for Heroes project,” spokesman Mark Armstrong wrote in a statement. “The affordable housing development in District 2, which uses American Rescue Plan Act funds, was first announced by Mayor Broome in October 2021. Since then, City-Parish has worked to move the project forward in a legal and ethical manner.”