Reply #48: New Orleans Offers $8 Bln of Aid for Rebuilding, Gets No Takers

[54anickel]

http://www.bloomberg.com/apps/news?pid=10000103&sid=a2t9fF32tfoU&refer=us

March 6 (Bloomberg) -- Almost $8 billion in tax-exempt financing awaits companies willing to invest in New Orleans, devastated by floodwaters when Hurricane Katrina hit six months ago. As of March 1, only one company had applied.

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The federal Gulf Opportunity Zone Act, signed into law Dec. 21, authorized the Go Zone bonds to help businesses recover and invest in Louisiana. The bonds offer access to credit at lower rates than regular corporate debt.

That hasn't been enough. Companies want assurances that new levees will protect their investments and that new federal maps won't put them in the middle of flood plains. None has gotten what it wants.

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By June, the levees are to be restored to their pre-Katrina strength and by September 2007 they are to meet design standards that were supposed to have been met before Katrina -- able to withstand a category 3 storm. President George W. Bush is proposing an additional $1.4 billion for natural coastal barrier restoration and enhancements to the levee system.

It would take about $15 billion to strengthen the levees enough to protect New Orleans from a category 5 storm, Demma said.

``Presumably we'll have a better system than pre-Katrina, but not a level of protection needed,'' said developer Pres Kabacoff. While he and others still plan to build on high ground called the ``sliver on the river,'' Kabacoff said he's not seeing any investment in lower sections of town.

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