4 Investigates: French Market still not revitalized as cost balloons

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by Lee Zurik / Eyewitness News lzurik@wwltv.com

wwltv.com

Posted on July 13, 2009 at 4:15 PM

Updated Thursday, Oct 22 at 4:23 PM

NEW ORLEANS - A routine monthly board meeting turned tense recently as members of the French Market Corporation, a city agency with a board made up of mayoral appointees, heard from tenants who have been waiting to return to their space for almost three years.

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"We've been begging for help," said vendor Shawnette Sylvester-Humphrey.

In August 2006, the French Market began a revitalization project, signing a $4.9 million deal with Associated Contractors, to renovate the market in 330 days. Nearly three years later, the job is still not done.

"I think there's something fishy," said vendor Arthur Humphrey, a third generation French Market tenant. He and his wife own the company World Famous N'Awlins Cajun and Creole Spices.

"We broke, man. We broke, because of the French Market," he said.

During last month's French Quarter Festival, Humphrey's space remained under construction. He sold from three carts, struggling to cover expenses.

"I've been here now since 9:00," Humphrey told Eyewitness News one afternoon. "What it took me to make from 9 to right now at 1:00, maybe 100 and something dollars, I would have made that within a half hour if I had been down there."

While the Humphreys have been waiting, they say the contractor has been profiting.

Eyewitness News has spent almost a month combing through records which show that the original $4.9 million contract has swelled to $7.3 million. That's because of $2.3 million in change orders approved by the architect, Billes. Change orders are add-ons or changes to the project. On each change order, the contractor gets an additional 15 percent of the cost while their subcontractor earns 10 percent.

"We are over a year and a half behind schedule, several million dollars over budget on a $4.9 million contract," said French Market board member Alan Fisher.

The questions WWL-TV has been asking for a month during its investigation were brought up at the French Market board meeting last week, with the board president adamant that nothing wrong has been done.

"We have spent a tremendous amount money on additional things that haven't come before the board," said board member Alan Fisher. "I have tried and requested to get the information on all of these additions to the contract that were a tremendous amount of money," Fisher said at the meeting.

Charles Napoli, the board president, defended the board's actions.

"I feel comfortable in saying that we have nothing to hide," he said at the board meeting. "Any board member that was concerned about the way money was being spent had the opportunity at any time to address this committee. So to make a statement that you asked questions and it wasn't answered, I don't think that's a fair statement," Napoli said.

Fisher said he stands by his comments, and offered to produce an email written to French Market staff.

During the exchange, Napoli seemed to criticize Fisher as "someone who doesn't attend all of the meetings," saying he takes objection to Fisher's comments.

During the bid process, documents show the French Market told contractors about a "very tight budget" and a tight schedule, saying contractors would be fined $500 for each day exceeding the construction due date.

But in an August 2008 e-mail, French Market executive director Kenneth Ferdinand and board member Deborah Harkins agreed to refrain from pursing damages or penalties due to delays in construction completion. The French Market waived the right to penalize on one part of the project.

"In their original contract, it said that they would be penalized $500 per day," Fisher said at the board meeting. "Have we penalized them for being over 18 months late on the original scope of the contract?"

"I think probably the conditions and terms are there to do so, but the determination hasn't been made," Ferdinand responded.

That may be because some of the change orders allowed the contractor additional time to complete the work.

Last week, the contractor, Picke Construction, which took over the deal from Associated Contractors, agreed to an on-camera interview with WWL-TV. It was scheduled for Tuesday. That morning, a company representative called to cancel.

Associated Contractors and Picke Construction are owned by Home Solutions, which has profited from post-Katrina contracts. According to The Times-Picayune, the company has received $51 million in contracts since August 2005. The company's former president, Frank Fradella, said it's more like $30 million.

On Thursday, Fradella told WWL he resigned from the company in late March, but remains a major shareholder

Fradella also appeared nine times on Mayor Ray Nagin's calendar last year. The city administration tried to keep many of those meetings private until WWL-TV filed suit, and civil court Judge Rosemary Ledet ruled the information was public and should be released.

The schedule shows one of those meetings was about Picke Construction, the company now responsible for the French Market project.

Fradella also said a subcontractor being used by the company, Benetech, paid for Nagin to fly to the Saints playoff game in Chicago in 2007. The Times-Picayune reported the mayor reimbursed the company for that trip.

Late Thursday, Aaron Bennett of Benetech faxed WWL an invoice he sent Mayor Nagin for that trip in 2007. According to the invoice, it was a three-day trip to Chicago and Las Vegas. Benetech invoiced the mayor and his wife almost $1,900 for the flights, a trip a separate check sent to Eyewitness News shows Nagin paid for with city money.

"This board has been above board," Napoli said. "This administration has never put any pressure on this board to hire anyone. That is the truth. They never have."

Just this week, interim New Orleans Inspector General Leonard Odom began an investigation into the French Market revitalization project.

"Our preliminary analysis indicates the contract is not a great contract, but it's too early to tell if there's something more serious," Odom told Eyewitness News.

"I understand the tenants' frustrations, I understand the board's frustrations and I even understand my own frustrations," said Ferdinand, the French Market's executive director.

Ferdinand came on as executive director of the French Market Corporation after the project started, but says the change orders are justified and were part of the final plan. The board received $5 million from a bond that covered the initial contract. The rest of the construction is being funded with reserves.

"It's hard for people to swallow on a first blush that you spent a lot of money doing this, but when they get in and they feel it and see it and experience it, they are very pleased," said Ferdinand.

Ferdinand also said the French Market has been late in making some decisions, so construction delays can be blamed on both sides.

"We've been waiting two years to get in these two spaces right here, 784 square feet," said vendor Shawnette Humphrey.

While the Humpreys have been waiting, they've also been paying. While the French Market covered the market renovation, tenants have to pay most of the cost for their individual space.

One of the change orders shows the Humphreys' 784 square foot space will cost $157,000. It is a job the Humphreys say they could have done for $70,000.

They said the French Market forced them to use the contractor, a charge the Market's management says is not true.

The board voted at last week's meeting for their staff to have a meeting with the Humphreys to work out disagreements. So far, the Humphreys said they haven't heard from the board staff about any meeting time.

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