Contract for New Orleans homeless shelter went to politically connected firm

NEW ORLEANS – Gov. Jeff Landry caught city officials off guard in October when he abruptly ordered Louisiana state troopers, along with officials from the Department of Wildlife and Fisheries and other state agencies, to close homeless encampments around the city, sending unhoused residents to a newly sanctioned site on Earhart Boulevard.

The move, officials said at the time, threatened to disrupt the city’s long-term plan to get hundreds of people living on the street into permanent housing.

But Landry thought the strategy was taking too long and feared that the existing encampments — concentrated in tourism-heavy areas around the Superdome and French Quarter — would reflect poorly on the city, which was preparing to take the national spotlight as host of the Super Bowl.

So the city offered an olive branch: It could speed up the rehousing strategy — through a multi-agency initiative called Home for Good — but it needed help from the state. About a week after the state’s raids, Councilwoman Lesli Harris’ office sent a proposal to one of Landry’s aides. If the state could kick in $8 million, the city and its partners could house the 375 people currently living in eight encampments across the city.

The city’s ask was co-signed by Office of Homeless Services and Strategies director Nate Fields, New Orleans Health Department director Dr. Jenifer Avegno and New Orleans City Councilwoman Helena Moreno, who were all cc’ed on the email.

“With State coordination and true collaboration to end homelessness, everyone could be on the same page and achieve the same goal of providing improved quality of life, permanent housing, and wrap-around services,” Moreno said in a statement at the time. “I hope that the Governor gives strong consideration to my recommendations and we can work to move forward together.”

But nothing came of it. And this week, Landry again ordered New Orleans encampments cleared, including the formerly state-sanctioned site on Earhart Boulevard. On Wednesday, two days after the announcement, the state moved in. Encampment residents were sent to a new temporary shelter, located in a warehouse on France Road, near the Industrial Canal.

Gov. Jeff Landry has authorized an emergency shelter for the unhoused in New Orleans, located on France Road. He opted against approving a city plan that included permanent housing. (Jake Rosenberg/WVUE-TV Fox 8)

The 200-bed “Transitional Center,” as the state refers to it, will be open for at least two months. Landry’s administration promises it will provide three meals a day, basic medical care and support for finding housing — all of which comes at a high cost to Louisiana taxpayers. According to a draft plan submitted by the state’s contractor, The Workforce Group, 60 days of shelter operations will cost the state $11.4 million. An optional 30-day extension will bring that price tag up to $16 million, double the city’s ask.

The higher price points in The Workforce Group’s contract has placed its relationship with state leaders past and present under a microscope.

The Workforce Group is a subsidiary of the Lemoine Co., a Lafayette-based, family-owned conglomerate. Its ties to state government include a history of bipartisan contributions to elected officials and political action committees, according to state Ethics Administration campaign finance records.

Since 2019, the Lemoine Co. has given $60,000 to the Republican Party of Louisiana. While the business has supported some Democratic candidates, including former Gov. Kathleen Babineaux Blanco, it has not given directly to the state party.

Contributions from company founders and brothers Lenny and Tim Lemoine lean toward the GOP, as do donations from their nephew, Seth Lemoine, who leads the Workforce Group.

The Lemoine family’s connection to Republican power brokers in Louisiana is arguably stronger than their financial ties. Seth Lemoine is the stepson of Eddie Rispone, the Baton Rouge businessman who ran unsuccessfully for governor and was a key backer of Gov. Jeff Landry in his 2023 election win.

Seth Lemoine, who donated $10,000 to his stepfather’s campaign, did not respond to a call and email seeking information on how The Workforce Group positioned itself to receive the emergency homeless shelter contract.

On its website, The Workforce Group lists experience in disaster recovery, insurance claims, staffing and technology. Its background includes providing homeless services through a contract with the Louisiana Housing Corp.

After the August 2016 flood, The Workforce Group managed Louisiana Shelter at Home, a program that helped families stay in their homes while repairing damages. Like its current deal for the New Orleans homeless shelter, the contract went through the Governor’s Office of Homeland Security and Emergency Preparedness.

The quick procurement for the New Orleans shelter came courtesy of Landry’s Jan. 1 emergency declaration following the Bourbon Street terrorist attack. The declaration empowered the administration to quickly ink the emergency shelter contract without having to seek competitive bids for the job.

The governor’s press secretary did not respond when asked via email whether other companies were qualified to deliver the work called for in the contract.

Another Lemoine Co. subsidiary, Lemoine Disaster Recovery, was awarded a $122 million state contract in 2022 for the Restore Louisiana program, which helps residents rebuild or repair homes after the disasters in 2020-21. Its contract was set to expire on July 31 this year before a legislative committee voted Friday to extend the term for two years at no additional cost.

A relocation notice posted in front of a makeshift shelter at the Earhart encampment Monday, Jan. 13, 2025. Those living at the underpass will be transported Wednesday to the Transitional Center. (John Gray/Verite News)

The $8 million ask

On Nov. 4, a member of Councilwoman Lesli Harris’ staff sent a proposal to JT Hannan, the southeast director of Landry’s Office of Intergovernmental Affairs. The proposal was simple: It asked the state to provide $8 million to support the city’s existing and ongoing efforts to get unhoused individuals off the street and into housing so that the city could close the remaining encampments by the end of January 2025 – its original timeline.

The Nov. 4 proposal from Harris’ office touted the success of the city’s Home for Good program, which, at that point in time, had housed 166 individuals, or nearly one-third of the unhoused population living on the street, and, as a result, was able to decommission seven encampments. The proposal noted that over 90% remained in permanent housing.

However, city officials and housing advocates warned that the State Police’s October sweeps could postpone their January timeline by pushing people out of known encampments into surrounding neighborhoods, where caseworkers may struggle to connect with them.

An additional $8 million from the state would supercharge the city’s efforts to get the remaining 375 individuals living in encampments across the city into permanent housing by the end of January 2025, ahead of the Super Bowl in February, a win-win for the city and the state.

“With the expectation of reimbursement from the state, the city would have been able to dedicate the additional $8 million from the general fund,” Harris told Verite News, noting that the city had already dedicated a significant portion of its 2025 budget – including an additional $10 million to the Office of Homeless Services and Strategies – to addressing housing and homelessness issues.

Ten days later, on Nov. 14, Hannan sent a bullet point list of updates for New Orleans city officials on the state’s current efforts to address homelessness among them, the fact that the state would no longer be taking their $8 million funding request into consideration.

“The supplemental funding requests that were sent to the state were tabled after Councilmember Leslie [sic] Harris’ parish wide measure on dedicating funds to housing was passed on Nov 5, 2024,” Hannan wrote, referring to a recently-passed measure to create a Housing Trust Fund. That measure, which dedicates 2% of the city’s general fund toward affordable housing initiatives, does not take effect until 2026.

Hannan did not respond to a request for comment.

The Workforce Group’s budget for 60-90 days of shelter operations is not only millions above what the city proposed, it is also higher than the costs of operating some of the city’s existing shelters for a full year, according to sources familiar with their budgets.

The city’s 346-bed low-barrier shelter, located in the former Veterans Affairs hospital on Gravier Street and run by Odyssey House, operates on a $6.5 million annual budget. The New Orleans Mission, which provides 600 beds across multiple campuses, runs on a $10 million annual budget.

The bulk of the Transitional Center budget goes toward standing up a new shelter. There’s a $1 million line item dedicated to purchasing warehouse subflooring, $91,980 for laundry equipment and $167,115 for eight restroom trailers with six stalls each. The proposal also lists a $685,125 fee for site buildout and set up – and another $453,600 for site teardown.

However, there are also significant labor costs. The Workforce Group proposal includes more than $2.2 million in labor costs for 60 days. This includes two shift supervisors, five housing specialists, four crisis counselors, as well as a data analyst, two medical services coordinators, eight drivers and 16 staff members dedicated to security, safety and fire watch, for a total of 39 employees.

The hourly rates listed for many of these jobs are significantly higher than the rates for comparable jobs in New Orleans.

The Workforce Group proposal lists an hourly rate of $115 for shift supervisors at the facility. The equivalent at the city’s low-barrier shelter is under $30 per hour, and at the New Orleans Mission, it is closer to $15 per hour.

Similar discrepancies emerge for other labor categories: A data analyst employed through the city’s health department may earn around $30 per hour, but the Workforce proposal lists an hourly rate of $85 per hour for an equivalent position. Housing specialists tend to earn between $20 and $30 per hour in the city, while the same position is listed at about $80 per hour in the proposal. Crisis counselors employed at the low-barrier shelter or at the New Orleans Mission may earn anywhere from $20 to $40 per hour; The Workforce Group listed its crisis counselor rates as $100 per hour.

There are also discrepancies in security costs. At the New Orleans Mission, an unarmed security guard typically would be paid anywhere from $15 to $20 per hour. The Workforce Group proposal proposes hiring eight unarmed security guards at a rate of $50 per hour.

The rates increase for armed security personnel, which the proposal lists at a rate of $117 per hour. The standard (non-mounted, non-motorcycle) rates for a detailed NOPD officer range from $45 to $76 per hour.

‘Serious concerns’ about conditions at state shelter

Despite the significant money being spent on the transitional center, some worry that the center, which is located inside an industrial warehouse, does not meet minimum habitability standards.

Harris, who visited the center on Wednesday, identified a bevy of issues plaguing the center on its first day of operation.

“The shelter is in urgent need of lined cots and additional bedding to ensure warmth, as the building itself was extremely cold,” Harris said. “A sewer line issue has made the indoor bathrooms and showers unusable, forcing individuals to rely on just two outdoor portable toilets. Additionally, the recreation center with televisions was not yet set up, and there were no computers or phones available for residents to contact their caseworkers or loved ones — essential resources for those facing significant displacement.”

She also said that critical wraparound services, like mental health support and case management, were not yet operational.

“While staff on-site emphasized the quick turnaround in setting up the shelter, it raises serious concerns about why residents were moved in before the facility was ready,” Harris said.

The shelter has also irked politicians who represent the area, who say their constituents were not notified in advance. In a joint statement, state Sen. Joe Bouie and state Rep. Matthew Willard, both New Orleans Democrats, said they have concerns about the shelter’s impact on residents of Gentilly, which has France Road as its eastern boundary.

“It is our understanding that none of the neighborhood associations adjacent to the property on France Road were consulted prior to announcing this temporary transition plan for the unhoused population in New Orleans,” their statement reads. “Our primary concern is to ensure that the integrity and quality of life for those residents and their neighborhoods be maintained.”

The lawmakers said they have requested details on the shelter from the governor’s office. In a text message, Willard said he would be meeting with Landry’s staff Thursday afternoon.

The city, meanwhile, is continuing its efforts to house the street homeless population, and officials still hope to meet the end-of-January deadline.

“Despite delays caused by state-led sweeps in the fall, the program has made significant progress: 275 individuals have been housed from inner-core encampments, with eight encampment sites closed and rehousing completed at an additional six sites throughout downtown,” reads a press release from the city, sent Monday. “The City looks forward to leveraging state support to strengthen its approach and help create sustainable, permanent housing solutions.”