A new report from the New Orleans Office of the Inspector General has brought to light concerns with the Industrial Development Board for the City of New Orleans PILOT projects. The report accused the board of not having a process or procedure for selecting the projects between Jan. 1, 2020, and Dec. 31, 2023. According to the report, the lack of policies lost millions of dollars and hundreds of high-paying jobs for the city. The Industrial Development Board for the City of New Orleans is responsible for administering PILOTs for the city. PILOTs are a type of economic tax incentive used to encourage private development projects that stimulate economic growth. During the course of a PILOT agreement, developers pay only a percentage of the taxes that would ordinarily be due on the subject property.According to the report, the mission of the IDB is "to assist in the creation of new projects, the creation and retention of jobs and the revitalization of existing sites through tools like PILOTs and tax exempt bonds."Over the past few years, there have been concerns about whether PILOT agreements benefit the city and if the IDB strategically selected projects that aligned with the city's economic goals.The mayor's Office of Economic Development hired a consultant to evaluate New Orleans' economic incentive programs in 2018. The PILOT program cost the city $109 million in property taxes from 2007 to 2016, according to the OIG's report. In the evaluation conducted by the consultant, it stated the IDB did not regularly evaluate the PILOT program to assess its overall effectiveness. Even after the audit's recommendations, the inspector general states the program failed to address many of the city's priorities for economic growth. Specifically, the program did not select projects that would result in the creation of big, high-paying or long-term jobs.The initial audit noted the PILOT program failed to attract projects that resulted in the creation of high-paying jobs. According to the report, PILOTs created, on average, 175 new jobs per project with an average annual wage of $36,750. The inspector general states that there is not enough money to keep someone in the city of New Orleans.According to the inspector general's latest letter, he found the same issues. The OIG concluded that the IDB did not have well-defined written policies and procedures for approving PILOT projects. He also found the program did not standardize criteria to objectively assess projects and reduce the potential for fraud, waste, and abuse in the selection process. The lack of objective selection criteria provided opportunities for outside influences on the approval of large economic development projects. The inspector general is recommending the IDB recommendations similar to the recommendations from the 2018 consultant report. Setting clear programmatic goals and objectives for the PILOT program that align with the city's priorities for economic development. IDB should develop formal and transparent policies, procedures, and selection criteria for awarding PILOT grants. IDB should routinely evaluate the PILOT program to assess its effectiveness in helping the city meet economic development priorities and goals."Transparent policies and procedures will reduce opportunities for fraud, waste, and abuse while ensuring efficient administration of the PILOT program and good stewardship of the City's tax dollars," said Inspector General Ed Michel.The City of New Orleans issued a statement in regards to the OIG's public letter: The City of New Orleans today issues a statement regarding the New Orleans Office of Inspector General (OIG) public letter issued on August 6. The Industrial Development Board (IDB) is a strong partner of the City of New Orleans. The IDB's PILOT program is an important tool to support economic development. A 2018 study commissioned by the City to review incentives concluded that the IDB's PILOT program provided a return on investment through job creation, blight reduction, and affordable housing creation. While all processes have some room for improvement, the IDB engages in a transparent and public process for each proposal received. The City looks forward to working with the IDB and the OIG to clarify and update existing processes and to continue to improve the economy for all New Orleanians.