A New Orleans-based non-profit housing developer is teaming up with an insurance company for a $60 million project to convert a former Brown’s Dairy lot on Oretha Castle Haley Boulevard in Central City into affordable housing for Medicare users.
The 192-unit housing complex, which is a “health and housing” pilot project for Gulf Coast Housing Partnership and Humana, will go up on the 86,000-square-foot property that covers almost the entire block bordered by Baronne, Erato and Thalia streets and the 1300 block of Oretha Castle Haley Boulevard on the lakeside.
That property was used for years as a parking lot for the adjacent Brown’s Dairy milk processing plant, a 200,000-square-foot site that was closed down in 2016, with a loss of 185 jobs. The larger dairy depot site was put up for sale in June last year for $8.5 million before the parent company, Dallas-based Dean Foods, declared bankruptcy several months later. It hasn’t yet sold, according to city records.
GCHP’s President and CEO, Kathy Laborde, said the project is in the design phase and more details will be finalized shortly, but she expects it to consist of two multi-story structures that likely will include some on-sight healthcare facilities.
The closure of Brown’s Dairy was part of the wider transformation of that part of Central City in recent decades.
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Oretha Castle Haley, formerly part of Dryades Street before it was renamed for the civil rights leader in 1989, had been a thriving commercial hub primarily serving the surrounding African-American working-class neighborhoods for more than a century. But it went through a long period of decline from the 1960s until early this century, when public and private financing helped spur a revival.
The boulevard’s tenants now include trendy eateries like Casa Borrega and the non-profit Café Reconcile, as well as cultural venues such as Ashé Cultural Center, the New Orleans Jazz Market, and the Southern Food and Beverage Museum.
However, the area has had some difficulty redefining its identity and has seen a number of restaurants and other projects fail, including the short-lived Dyrades Public Market in the Myrtle Banks Building, which closed last summer after just three years.
Jonathan Leit, New Orleans director for Alembic Community Development, the non-profit that developed the Myrtle Banks Building and Dryades Public Market, attributed the market’s failure to a lack of organic foot traffic in the area.
While the neighborhood’s rehabilitation has attracted criticism about gentrification, that has been tempered by the fact that many of the newer tenants in the area are community-oriented organizations and non-profit outfits, including GCHP and Alembic, which also is part-owner and a partner in the proposed $60 million affordable housing project.
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Laborde said GCHP has done projects similar to, but smaller than, what it plans on Oretha Castle Haley in the city, including the $5.4 million, 26-unit Delamore complex on Claiborne Avenue, which includes six units set aside for renters with special needs.
The partnership with Humana — and a similar pilot project with UnitedHealthcare in Jackson, Mississippi — follows a recent trend in healthcare where direct investment in housing is encouraged to improve health outcomes and reduce costs, Laborde said.
As research has increasingly emphasized the link between housing and health, state and federal government agencies running programs like Medicare have been providing financial incentives to insurers and managed care organizations like Humana to become directly involved in improving their clients’ housing situations.
Humana Medicaid Regional President Tony Mollica, said helping underwrite the Central City affordable housing project is part of a broader initiative the company started five years ago to work through local organizations to help reach goals set out in the New Orleans Health Department’s Community Health Improvement Plan. He said the COVID-19 pandemic has made the need even more acute.
“The COVID-19 pandemic is a crucial time to step up and create affordable housing and greater access to health care,” Mollica said.
In addition to government incentives, groups like Humana also stand to benefit financially through the tax breaks developers like GCHP can put together for such projects, such as historic preservation tax credits.
Laborde notes the difficulty that affordable housing developers have in raising funds to meet the shortfall in suitable workforce and low-income housing, which she says is estimated at about 35,000 units for the greater New Orleans area and 200,000 units for the wider the Gulf South region.
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“There simply aren’t enough resources out there to provide quality affordable housing,” Laborde says.
The public funds that available are sparse, and philanthropic fundraising is unreliable, so tapping the healthcare sector in ways that makes sense for it financially can open up a stable source of funding for affordable housing, she said.
“We are trying to create an economic reason for them to invest in housing, not a philanthropic reason,” said Laborde. “If it is economic it becomes a routine business transaction and is not only impactful in New Orleans and Jackson, where we have pilot projects, but then we can take this throughout the region.”
GCHP last week won a $2.5 million grant from Enterprise Community Partners and Wells Fargo for the New Orleans and Jackson, Miss., projects for their “innovation and scalability.” The money will go in the pot to help pay for these and other projects, Laborde said.