(Subs paragraph 4 to add new quote from Times)

By Russell McCulley

NEW ORLEANS, April 13 (Reuters) - The recently hired New Orleans recovery czar apologized on Friday for referring to residents of the storm-ravaged city as "buffoons" and saying its racial divisions were "a bit like the Shi'ites and Sunnis."

Edward Blakely, a prominent urban planner appointed in January to direct the city's stumbling recovery from Hurricane Katrina in 2005, said at a news conference his comments, reported on Tuesday in The New York Times, had been "very inappropriate."

The newspaper reported that the California native spoke in an interview about the need to attract newcomers with new attitudes to the city he equated to "a Third World country."

"Dr. Blakely ... refers to the city's racial factions as 'a bit like the Shi'ites and Sunnis,' calls the civil elite 'insular' and says the newcomers he wants to draw here will be impatient with local 'buffoons,'" the Times wrote.

He also said that in New Orleans race "is the first thing in people's minds."

"It's a culture of domination rather than participation. So whatever group gets something they try to dominate the whole turf," Blakely, who is black, told the Times.

Blakely said on Friday his remarks, which raised eyebrows and in some cases ire in New Orleans, were were made in anger after a meeting with people he viewed as trying to undermine his rebuilding efforts.

"I don't think we have buffoons here," he said.

Blakely is known among urban planners for helping Oakland, California, recover from the 1989 earthquake and, along with his New Orleans duties, is chairman of urban and regional planning at the University of Sydney in Australia.

He recently unveiled a rebuilding plan calling for $1.1 billion in spending to spark redevelopment in New Orleans.

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