Should proceeds from an obscure Louisiana land trust go to New Orleans? A lawsuit aims to find out.

The trust, which consists of nearly 40,000 acres of south Louisiana land, including parts of Port Fourchon in Lafourche Parish, was donated to the city in 1914 by philanthropist Edward Wisner.

In its lawsuit, filed in Orleans Parish Civil District Court on Friday, the City Council argued that earlier court rulings that the trust had expired means that the city should be getting all of the revenue from the land, and that Cantrell's 2020 decision to keep distributing money to former beneficiaries is a donation of city assets that violates the Louisiana Constitution.

The suit is the latest legal tussle over the land and puts millions of dollars on the line for the Wisner Trust's current beneficiaries, which include the city, Wisner's heirs, the Salvation Army, Tulane University and LSU. The city currently is receiving a little more than a third of the trust's annual revenue, or roughly $2 to $3 million. If the council is successful in its suit, it could mean another $4 million to $6 million each year, totaling an amount that is roughly the budget of the Department of Safety and Permits.

"We're entitled to the whole and we only have a third, and leaving that other (two thirds) on the table is a big deal," said District A Council member Joe Giarrusso.

An unexplained decision

The council has made similar legal arguments in the past. In February, it intervened in a separate lawsuit against the trust over attorney fees related to recovering damages from the 2010 BP oil spill. But Giarrusso said that probably would not have entitled the council any relief beyond clarifying the trust's legal status.

The council's lawsuit asks the court to halt further distributions to the other beneficiaries and to force the administration to obtain the council's approval before using any proceeds from the city's portion.

The Cantrell administration declined to comment on the lawsuit. Representatives of the other beneficiaries either did not respond to calls or declined comment.

In 2014, an appeals court determined that the trust and the formula for divvying up the proceeds had expired, arguably turning over full control of the land and its proceeds to city government. But both former Mayor Mitch Landrieu and then Cantrell continued keep the status quo. Then, in 2020, Cantrell extended the trust and its distribution formula indefinitely, a move that confounded council members and other critics who argue the city became the sole beneficiary once the original trust expired, and should therefore receive all of the money it generates.

Cantrell also agreed to turn the newly refashioned trust's management committee over to a private board, replacing a previous committee that operated as a public entity.

Historically, the city granted its Wisner cut to nonprofit charities through a public application process, and it's not clear if that process is still ongoing. The administration hasn't provided a clear accounting of how it has used Wisner funds since Cantrell's extension of the trust. Though in recent months, according to public statements and documents, Cantrell has indicated that Wisner funds have been directed to causes of her choosing.

At a recent community meeting, for instance, Cantrell said she had committed some Wisner money to recruit city personnel.

"We're hiring across the board. I put forth a millions of dollars of Wisner money for recruitment efforts, simply because I could not wait – I would not wait – for private investment to come and help us, but turn to resources that I knew that I had at my disposal," Cantrell said at the July 12 meeting the Lower 9th Ward.

The administration also directed more than $720,000 to Forward Together New Orleans, a nonprofit that Cantrell created to administer city programs under the supervision of city staff, according to contracts with FTNO. Forward Together will retain a little more than $60,000 under two agreements that Cantrell executed this year, for violence prevention and workforce development programs.

These arrangements prompted the council in April to pass resolutions calling on Inspector General Ed Michel's office to investigate allocations of city money to Forward Together, along with a nonbinding resolution calling on the administration to freeze any further disbursements of Wisner money. After the resolution passed, Michel said he would not comment on potential or ongoing investigations, and it's not clear if he has followed through on the council's request.

What's next?

As arguments over the Wisner land heated up earlier this year, the administration argued that terminating the trust would force the sale of the property, with proceeds divided among the various beneficiaries according to the distribution formula. That would be far less valuable to the city than ongoing installments under the existing arrangement, officials said.

In making that argument, former Cantrell spokesperson Beau Tidwell told The Times-Picayune that the land was worth only $17 million. But that figure, based on a 2013 appraisal, only included properties that didn't generate lease or royalty revenue. The appraisal of all of the land indicated it was worth between $73 million and $114 million.

Giarrusso said the city needs a new appraisal. Once that is complete and the status of the trust is cleared up, the city can then determine what to do with the property, he said.

"How do you best maximize those assets in order to benefit the city in the best way?" Giarrusso said. "I don't think we – the collective 'we,' the council, the city, anybody – knows the answers to those questions."