New Orleans Failed to Follow Section 108 Program Requirements In Theme Park Funding, OIG Finds

摘要

The city of New Orleans failed to follow program requirements in administering a $25.3 million Section 108 guaranteed community development loan for the Jazzland theme park, resulting in the ineligible and unsupported use of loans funds, according to a HUD Office of Inspector General (OIG) report. (Audit Case No. 2004-FW-1003, March 15, 2004) The Section 108 funds were used to provide a loan to the developer of Jazzland, which subsequently went" bankrupt and defaulted on the loan. The park was then purchased by Six Flags, Inc. As a result of the default, the city is obligated to repay HUD about $2.4 million a year over 10 years, with about $1.4 million to come from Six Flags lease payments.