GO Zone Giveaways
"This important bill will help the citizens of the Gulf Coast continue to put their lives back together and rebuild their communities in the wake of the devastating hurricanes that hit the region earlier this year."
That was President Bush talking last December at a signing ceremony for the Gulf Opportunity Zone Act of 2005. Hustled through Congress in a mere 10 days, the act provides billions of dollars worth of federally subsidized financing and tax breaks to stimulate reconstruction in Alabama, Mississippi and Louisiana.
"With the right tools in their tool box, New Orleanians and our neighbors ... will rebuild and recover and a brighter future will emerge," its sponsor, Rep. Jim McCrery, R-La., told the House shortly before the bill passed 415-4.
But a funny thing happened on the road to economic renaissance. A key feature of the legislation allows Alabama, Mississippi and Louisiana to issue up to almost $15 billion of tax-free "GO Zone" bonds on behalf of companies seeking to build or renovate. So far, however, many of the firms seeking to take advantage of the cheap loans are pursuing ventures at best loosely connected to the devastation wrought by Hurricanes Katrina and Rita.
In Louisiana, for example, a furor quickly erupted after the first projects to get a preliminary go-ahead included several in Baton Rouge, well upriver from New Orleans. Among them were a four-star hotel as well as a new office building and parking garage for The Shaw Group, a... READ MORE