The leader of this city's recovery from Hurricane Katrina wants to invest $1.1 billion in revitalizing pockets of New Orleans -- from high-traffic Canal Street to the hard-hit Lower 9th Ward -- in a bid to spur private investors and shore-up public confidence 19 months after the storm.

Ed Blakely on Thursday unveiled 17, high-profile sites seen as key to localized recovery. To lure developers and private investment, the city would offer loans and other economic incentives, possibly using federal recovery dollars and bond financing.

Blakely envisions shops, new housing and other development built around hubs, such as schools.

Though the plan was hailed Thursday by city officials, developers and some activists, it was unclear how willing investors and former residents of the Lower 9th Ward, among the city's most impoverished neighborhoods before Katrina, would be to gamble on the safety of an area flooded by two major hurricanes over 40 years.

Mayor Ray Nagin called the plan, the latest in a string since Katrina, the most specific and the first phase of a recovery expected to last at least a decade. The plan was welcomed by city leaders and some activists who have fought for the right of residents to rebuild the Lower 9th Ward.

"I think it kind of reverses all the myths and questions and doubts and fears" about the neighborhood's viability, said councilwoman Cynthia Willard-Lewis, who represents the area.

Blakely foresees an aggressive timeline with construction of yet-unspecified projects -- potentially a combination of residential and commercial development -- beginning by September, the heart of hurricane season. Nagin, however, resisted being held to a timeline, saying New Orleans has had difficulty in the past seeing through big projects.

Specific planning for the targeted areas, financing plans and "orientation meetings" for developers and contractors are expected to begin next month, the recovery office said.

Besides city government approval and zoning changes, the plan also must clear financial hurdles. Money -- particularly, the flow of federal aid -- has been a frustration for the cash-strapped city.

The $1.1 billion identified in the Blakely plan, from sources such as federal grants and bonds, isn't fully secured yet.

For example, the plan proposes using $300 million in "blight bonds," under which the value of blighted property would be the collateral for the bond issue. But whether the city can secure that level of financing is unclear. Nagin and Blakely went to New York in recent months to court potential investors in the city's recovery.

Details on how the city would receive federal grant money through the Louisiana Recovery Authority, including an expected $117 million, also have yet to be worked out, said LRA spokeswoman Natalie Wyeth.

LRA wants the city to submit a prioritized recovery plan. Wyeth said LRA expects a presentation by Blakely in May and has been in contact with him as the plan has developed.

Target areas fall into three categories, for which Blakely proposes using $315.9 million: areas in need of an economic jolt; those, like Canal Street, where limited public investment would complement existing privately funded efforts; and severely damaged areas in need of total rebuilding. The Lower 9th Ward and eastern New Orleans fall into such "rebuild" zones, slower-to-repopulate areas for which Blakely proposes $145 million in initial investment.

Drawings and graphics, taken from previous rebuilding plans, show walking malls and parks in a rebuilt Lower 9th Ward.

The rest of the money, $742.4 million, would go toward citywide projects, such as parks, streets and traffic lights.

Blakely has called the $1.1 billion a starting point.

Developer Pres Kabacoff, who has worked with the city on previous redevelopment of public housing projects, said there now appears to be leadership to carry out a plan, which he said should inspire confidence among investors.

Janet Howard, president of the Bureau of Governmental Research, a local watchdog group, said she's glad there's an apparent acknowledgment of the city's financial constraints. She declined further comment saying she had not yet seen specifics of the plan.

(Copyright 2007 by The Associated Press. All Rights Reserved.)