January 11, 2006

By GARY RIVLIN

NEW ORLEANS, Jan. 11 - The commission devising a blueprint to reconstruct the city proposed today a complete reorganization of the troubled school system, the elimination of a 76-mile shipping channel that was a prime cause of flooding after Hurricane Katrina, and the formation of a recovery corporation that would have the power to buy and sell property for redevelopment.

At other public meetings this week, the commission also plans to call on the city to create an economic development corporation fashioned after the Lower Manhattan Development Corporation, which New York created to oversee the downtown rebuilding effort after Sept. 11, 2001.

"We believe the devastation is so great that you need a single independent organization to help coordinate with all the entities involved," Doug Ahlers, a fellow at the Kennedy School of Government at Harvard who has been working with the commission's economic development committee, said today.

The corporation, whose members would be appointed by the president, the governor and the mayor, would serve as a "one stop shop," Mr. Ahlers said, that would help businesses on any number of fronts, from negotiating the permit process to finding workers through training programs.

The commission's economic development committee will not officially release its report until next week, but has scheduled a series of public meetings leading up to the release. The sweeping seven-part report is being issued by the Bring Back New Orleans Commission, which Mayor C. Ray Nagin established in September to plan the rebuilding.

Because the state and federal governments will have large voices in the process, many proposals may run into opposition, but the plan represents the city's first comprehensive effort to put itself back together.

The most controversial proposal, reported on Sunday by The New York Times, would have allowed residents to return soon to all sections of the city but within a year would close those neighborhoods that did not achieve a critical mass of residents. A leader of the commission, Joseph C. Canizaro, said Tuesday that members had modified that proposal over the last two days and now believed that no one should be allowed back into the most damaged neighborhoods until June. City services will probably be more readily available then, Mr. Canizaro said, and the extra time will allow the city to identify who wants to return and set up planning teams for each neighborhood. "My concern," he said, "is for people who have the money and we let fix up a place and then they find themselves sitting all by themselves without any neighbors around."

That neighborhood proposal was expected to be discussed at the meeting today, which was attended by hundreds.

Under the proposed plan, by Aug. 20 the city should begin the neighborhood reconstruction and should begin acquiring property for public projects like expanding parks. Some low-lying neighborhoods may become parks or marshland if they do not attract enough housing development.

One measure of whether a neighborhood will succeed will be whether it has enough residents to justify a high school and two primary schools.

An essential element, Mr. Canizaro said, is forming the Crescent City Recovery Corporation, through which federal funds would flow. The corporation would have the power to buy and sell property for redevelopment, including the use of eminent domain, and could issue bonds. Board members of the recovery corporation, to number seven to 15 under the plan, would be appointed by the president, the governor, the mayor and the City Council.

"If we don't get a reconstruction authority in place right away, we won't have a chance with implementation," Mr. Canizaro said.

To create such an agency, however, the city needs to amend its charter, he and others said.

Among the other recommendations expected to be presented this week, several members said the commission report will also advocate building a 53-mile light-rail system crisscrossing the city, connecting neighborhoods with the airport, downtown and other commercial centers. That system would be in addition to a separate heavy-rail system that would link New Orleans with Baton Rouge and the rest of the Gulf Coast.

The light-rail system, estimated to cost $3 billion, is intended to help spark redevelopment in areas of the city that were flooded.

Toward that end, the commission's plan calls on the city to enlist developers to build at least four communities of 1,000 or more houses at stops along the proposed light-rail lines.

A new jazz district downtown will also be proposed in the old Storyville section, north of the French Quarter. The idea is being championed by the trumpeter Wynton Marsalis, a member of the commission and the co-chairman of its culture committee.

And the commission's economic development committee will also recommend that New Orleans borrow a second idea from New York: The city should ask the federal government for permission to raise tax-exempt bonds to rebuild tattered businesses just as New York was given permission to grant "Liberty Bonds," which are exempt from federal taxes, to rebuild Lower Manhattan after Sept. 11, said Bill Hines, the managing partner at Jones Walker, a leading New Orleans-based corporate law firm.

As of midday on Tuesday, members of the commission and city workers were frantically cobbling together the components of a plan remarkable for breadth and scope. The commission was created to draw up a master plan to remake a city that suffered what was widely described as the worst urban disaster in the country's history.

The floodwater that covered 80 percent of the city caused half its houses to sit in four feet or more of foul, murky water for weeks, according to a draft of the final report, and it destroyed much of the public works in the city.

The commission missed the Dec. 31 deadline that Mr. Nagin imposed. Members said releasing an overview of its plans this week should give the White House time to digest a blueprint certain to cost billions in federal dollars before President Bush delivers his State of the Union address on Jan. 20.

That assumes that Mr. Nagin formally adopts the commission's recommendations.

Some proposals, like the light-rail system, have been floated for years and are likely to be greeted with skepticism in Washington.

"We might be a little bit late, but we've tried to make this an inclusive process, and we've all been doing the best we can," the co-chairwoman of the commission, Barbara Major, said. "I'm always conscious of the fact that everybody that sits on that commission is also struggling to put their life back together."

Ms. Major has been living in temporary housing in Texas since the storm, a five-hour drive from New Orleans.

The commission early on created seven committees led by commission members with scores of volunteers as staff members. The seven areas are urban planning, education, culture, health and social services, infrastructure, government effectiveness and economic development.

Each will present the details of its plan over the next several days.

"There was a time I didn't know if this process would work, but it has," W. Anthony Patton, a member of the commission, said. "I'm feeling very good about things."

To improve a school system that has long ranked as one of the worst in the nation, the commission has endorsed a plan that breaks the district into clusters of 8 to 14 schools that will function as semiautonomous units, said Scott S. Cowen, chairman of the commission's education committee and president of Tulane University.

Before the hurricane, the district operated about 120 schools.

The networks of schools would have the freedom to determine everything from the length of school days to critical curriculum choices and teachers.

Now that public and private schools are beginning to reopen, a lack of livable housing is the main impediment to people returning. The commission will call on the city to return quickly to the market the thousands of blighted houses in a legal limbo because of tax and ownership problems.

The federal government will be asked to pay the $12 billion cost of compensating homeowners who lost their houses.

By rehabilitating abandoned houses in sections with little or no flooding or demolishing them and building anew, the commission estimates that the city could house an additional 37,000 people.

The plan calls on the authorities to close the Mississippi River-Gulf Outlet, a shortcut from the river to the coast that slices through a corner of the city. Known as Mr. Go, the byway cost $92 million to construct and was heralded as a critical economic driver when it opened to great fanfare in the 1960's.

It was also a major source of the water that flooded the eastern, predominantly black half of New Orleans when the storm surge roared up from the Gulf Coast.

Officials at the Port of New Orleans have defended the byway as a critical segment of the regional shipping industry. But local officials have reached a consensus that it should be closed. For years, it has been little used, and it serves as a conduit for destructive saltwater into freshwater wetlands.

"There are no easy decisions here," Ms. Major said. "So whatever decisions are made, I can guarantee there will be some people who are unhappy."