BRADENTON, Fla. - A federal judge agreed with the Department of Justice and reopened its housing discrimination suit against the Louisiana State Bond Commission.
The case involves a $6.6 million low-income redevelopment housing project in New Orleans that was stalled by delays in city approvals as well as a moratorium on such projects by the Bond Commission.
The SBC refused to approve a settlement that had been recommended by the Attorney General James "Buddy" Caldwell because it required them, and other state officials, to review federal housing laws, to notify the DOJ if a moratorium on affordable housing projects is contemplated, and to follow the law.
The proposed settlement would have waived a $3 million penalty.
"We didn't do anything wrong," State Treasurer John Kennedy, chairman of the bond commission, said when rejecting the terms that attorneys negotiated under court supervision.
U.S. District Court Judge Martin Feldman had administratively closed the case pending approval of the settlement. When it was rejected, the DOJ filed a motion to reopen the suit.
Feldman granted the motion on June 26 after holding a status hearing that Kennedy was required to attend.
Kennedy was authorized to tell the judge that Bond Commission members did not think they did anything wrong with regard to the housing project in question, and invited DOJ attorneys to attend a meeting in an effort to resolve the matter. They declined.
Feldman has ordered all 14 Bond Commission members to attend a status conference on Aug. 28. He also has also set aside Oct. 20 for a jury trial to begin, according to court records.
New Orleans was a defendant in the case along with the commission, but was dismissed in April after approving its own settlement. The court accepted the city's settlement without assessing any financial penalties or legal costs.
The city's settlement requires that New Orleans fund 350 new affordable housing units, or beds, for homeless persons with disabilities over the next three years.
It also obliges city officials to undergo specialty training about the Fair Housing Act and the Americans with Disabilities Act, as well as to report certain housing issues to the DOJ.
The Department of Justice opened a housing discrimination investigation in 2010, then filed a complaint and claim for damages in August 2012 against New Orleans and the Bond Commission, alleging they violated the Fair Housing and the Americans with Disabilities acts.
The violations stemmed from delays in city zoning approvals for a controversial $6.6 million redevelopment of a former 102-bed nursing home on Esplanade Avenue in New Orleans that was shut down after Hurricane Katrina in 2005.
The project was further delayed in 2009 when the State Bond Commission placed a moratorium on approving bond financing for such projects pending a market study on low-income housing saturation in New Orleans.
After more than a five-year delay, the SBC in February approved the issuance of $3.4 million of multifamily housing revenue bonds for the Esplanade project.