Port's Katrina relief jobs costly, slow to materialize

June 22, 2015
Anita Lee

The state port will have at least until the end of 2019 -- more than 14 years after Hurricane Katrina -- to create jobs promised in exchange for more than $566 million in federal hurricane-relief funds, a letter from the federal government says.

The port's federal funds from the U.S. Department of Housing and Urban Development came with the stipulation that 1,300 jobs be created -- a taxpayer cost of almost $435,500 per job. HUD director of block grants, Stanley Gimont, sent a letter in May to Manning McPhillips at the Mississippi Development Authority, which has oversight of the economic development project.

The state port has used the federal money to restore and expand its West Pier, a project that will not be completed before late 2016 or possibly early 2017, port director Jonathan Daniels said. HUD is giving the port three years after project completion, or possibly longer, to create the jobs.

Meanwhile, one of the port's three major tenants, Chiquita, has departed for the Port of New Orleans. Several new tenants have come aboard, but do not have the labor-intensive operations the port enjoyed before Hurricane Katrina, most notably poultry shipping.

The port and MDA now want to count toward job-creation goals the full-time jobs at Island View Casino Resort's new Beach Tower hotel, Daniels said. The hotel sits on port property north of the West Pier and outside the area where federal funds are being spent.

Daniels said HUD is considering the request to include Island View jobs.

The original intent of the federal funding was to create maritime jobs, HUD records show. The state port reported it had 2,100 jobs in 2004, the year before Katrina hit.

The port's last available report to HUD shows 912 full-time jobs at the port as of March 31. Of that total, 98 jobs have been created since the port expansion started in 2008, 56 of which have been filled by low- to moderate-income residents.

HUD previously said it would require the port to sign leases with tenants that outline corrective actions those tenants must take if they fail to meet job requirements. However, HUD has now decided MDA and the port can instead sign an agreement that outlines penalties the port would face.

Under a proposed agreement, MDA outlines penalties the port "may" face, including reimbursement of all or part of the federal funding. HUD said the agreement must be revised to indicate specific action MDA will take if the port fails to meet job goals.

The letter from HUD also says that "MDA is ultimately responsible and HUD may pose a range of sanctions on MDA" if job goals are not met.

Daniels said none of the port's leases have included job requirements tenants must meet. He said the port is the recipient of the federal funding, but acknowledged tenants will benefit from the improvements.