Only a fraction of federal money reserved for re-construction in Hurricane Katrina-damaged areas actually went to the county with some of the most egregious damage, a Government Accountability Office report revealed.
"With some process variations, the three eligible states with GO Zones generally allocated bond authority on a first-come, first-served basis without consistently targeting the allocations to assist recovery in the most damaged areas," the report stated. Even state governments admitted knowledge of the imbalance, said the report, explaining that "Officials in Louisiana and Mississippi acknowledged that the first-come, first-served approach led to allocating bond authority to less damaged areas."
Congress approved $5 billion in tax-free bonds for the Gulf Opportunity Zone Act, commonly referred to as GO Zone incentives. Less than $200 million of that went to Hancock County, which suffered considerable damage during the 2005 storm.
Sen. David Baria, D-Bay St. Louis, said many business and homeowners are having too much difficulty slogging through local problems to take advantage of the federal construction incentives.
"It doesn't surprise me that a lot of money that should have been spent in Hancock County has not been spent in Hancock County because of our continuing problems with the lack of availability and affordability of insurance," Baria said. "In addition, the Bay St. Louis and Waveland areas are struggling to come up with reasonable flood elevation maps, so that folks will not have to build tree houses."
Insurance companies are more hesitant to cover businesses and homes after Katrina wiped clean much of the area between the Gulf and I-10. Insurance and building permit issues were clearly not a problem for the businesses in the central and northern parts of the state, which were able to take considerable advantage of the incentives while suffering negligible hurricane damage.
Developers of the Renaissance at Colony Park, in affluent (and largely undamaged) Madison County, were able to use $77.2 million in incentives, even though the project was in the early stages of development. Madison's Mississippi Baptist Health Systems netted an additional $17 million in incentives, and Lake Harbour Village, also of Madison, qualified for $9 million.
Developers in the city of Jackson were also able to use $37.7 million to jump-start the stalled re-development of the King Edward Hotel. Other projects, such as Jackson Heart Realty, LLC, of Hinds County, qualified for $6.8 million. Even Grand Alliance, LLC, of largely unaffected Rankin County, qualified for $12.7 million. The Tri-State Truck Center, also of Rankin, took $6 million.
GO Zone incentives worked as far north as Columbus, where Chrome Deposit Corp. used a $13.4 million bond to finance a new factory.