By Nick Carey
NEW ORLEANS (Reuters) - Three years after Hurricane Katrinawrecked parts of New Orleans, all that separates the biggestsuccesses and failures in the city's revival is a short drive.
Fifteen minutes by car takes you from the elegant streetsof a French Quarter once more bustling with tourists -- albeitfewer than pre-Katrina -- to areas like New Orleans East, whereRonald Wattigny is still at work.
Wattigny's home was flooded by 4 feet (1.2 metres) of waterwhen the Katrina-lashed levees broke in August 2005, flooding80 percent of New Orleans and killing almost 1,500 people. Thecategory 3 hurricane caused $125 billion (65.9 billion pounds)in wind and flood damage along the Gulf of Mexico coast.
"It's been three years, and I need to get back in here,"Wattigny, 62, said as he worked on the structure last month,sweat pouring off him in the hot, humid air.
Prolonged exposure to water rotted all the wood inWattigny's home, from the floor to the roof. He has replacedthe roof and is working on building new walls, and aims to moveback in by the end of the summer.
Wattigny has been out of work since Katrina struck, as hefocuses on trying to get back into his home. He has receivednearly $60,000 in rebuilding aid from the state and also getshelp from volunteers at the local high school.
"This is very much a tale of two cities," said ArnieFielkow, a member of the New Orleans city council since 2006and credited by many here with pushing the city to improverecovery efforts. "The tourist areas of town have been open forbusiness for a long time," he said. "But getting people backinto hard-hit neighbourhoods is one of the challenges we stillface."
Mardi Gras tourists flocked back to the French Quarter inFebruary, bringing much needed dollars. But while the touristhot spots look like the storm never hit, lower-income areaslike New Orleans East and Holy Cross, a neighbourhood of theflooded-out Lower 9th Ward, are struggling to get people toreturn. Just 300,000 people live in New Orleans, down from500,000 before Katrina.
In Holy Cross, less than 15 percent of the buildings havebeen rebuilt and are inhabited. Old wooden houses slowly rot,still bearing on their walls the painted marks left by the U.S.military after Katrina to show whether corpses were inside.
In areas near where the levees broke, only concrete patchesremain, showing where houses were washed off their foundations.In places, vegetation grows thick and wild where homes oncestood.
"It's a chicken-and-egg situation," said Charles Allen ofthe Holy Cross Neighbourhood Association. "People won't comeback unless there are jobs for them, while companies aren'tgoing to move here unless there are people to work for them."
WASTELAND?
The Road Home, a Louisiana state program aimed at providingfederal funds to owners of homes damaged or destroyed by thestorms of 2005, has so far distributed $6.6 billion in federalfunding to some 114,615 applicants, including Wattigny's nearly$60,000. But, three years on, 42,000 applicants have still notreceived any funds.
"The worst affected are people in the lower-income bracketswho don't know how to navigate their way through the systemwhere the rules seem to change from day to day," said DavidaFinger, an attorney at Loyola University's Law Clinic, whichgives free advice to lower-income residents.
Paul Rainwater, executive director of the LouisianaRecovery Authority and head of Road Home since January 2008,said he has improved the appeals process for applications thatare rejected or seen by homeowners as too low.
"Unfortunately, this is a state program and I simply can'tget rid of all the bureaucracy," he said. "But I can streamlinethe processes and tighten deadlines to make the program runfaster."
Rainwater said he aims to have most remaining applicationshandled by the summer of 2009, when the program is due to end.Road Home has nearly $3 billion in funds left to distribute.
Mayor Ray Nagin's administration has also struggled with amammoth rebuilding task. Edward Blakely, executive director ofrecovery management in New Orleans, said the city's mostpressing need is for infrastructure: basic services such ashospitals, plus repairing city buildings and roads.
Blakely has $1.3 billion in federal funding available forthose projects. "I'd like 20 times that," he said.
As for luring back residents, Blakely said he has createdincentive programs for businesses that set up in the city. Butcommunity activists say it may be too little, too late.
"Many people have moved on and won't come back," said JamesRoss, a management consultant at non-profit NeighborWorks."This will not be a city of half a million people again for avery long time. For New Orleans, the best way forward is to letgo of the past and look to a different future."
For some in the city government, a new future would consistof trying to attract new businesses and develop the city'sport, while other groups are looking to boost small businessesto reduce the local economy's reliance on tourism.
"New Orleans has all its eggs in one basket and we need tomove away from that," said Ted Williamson, president of TheIdea Village, a volunteer group that brings entrepreneurstogether to solve problems. Williamson estimates the group hashelped create 1,200 jobs locally.
Over in the Lower 9th Ward, the Holy Cross NeighbourhoodAssociation is working on a plan to attract businesses andresidents based on sustainable development, including the useof renewable and energy efficient building practices.
The association has also started holding a weekly farmer'smarket to attract visitors to the neighbourhood.
"We have to give people a reason to come here," CharlesAllen said. "If we show them the neighbourhood is alive and weare pursuing a path of sustainable development, that is a stepin the right direction."
(Reporting by Nick Carey; Editing by Peter Bohan and EddieEvans)