Credit crunch puts a pinch on recovering New Orleans; tax-free ‘GO Zone’ bonds find few takers

Sale of New Orleans ‘GO-Zone’ bonds not going well

NEW ORLEANS — New Orleans got approval for more than $1 billion in tax-free bonds to help spur development after Hurricane Katrina, but it’s finding few takers nearly four years later.

Officials blame a tight credit market and lingering jitters about investing there.

Nearly $750 million remains untouched and about $480 million for projects is in jeopardy because the developers can’t find buyers for the tax-exempt bonds. They include a highly touted remodel of a Hyatt hotel near the city’s sports arenas.

After the end of this year, New Orleans’ projects will have to compete with proposals from areas of the state. The bonds were created under the Gulf Opportunity Zone, or “GO Zone” act, passed after the 2005 hurricanes that devastated the Gulf Coast.