At a screening of the first episode of season three, producers David Simon and Eric Overmyer announced the news.

"We are going to be back for a season 3.5," Treme producer David Simon announced Saturday night at the Joy Theater. "HBO on viewing the 10 that we gave them and where we left it, they want to see the end of the story. There are people there who fought very hard to give us half a loaf, and we're going to take it and run.
"I'll be doing a lot of babysitting and car care for HBO execs," Simon joked. "But we're very happy to be back, and we're happy to finish the show on our own terms." All of the cast members have committed to the final season, and according to producer Eric Overmyer, members of the crew turned down other work to be a part of the final season.
They made the announcement at the Joy Theater for a cast and crew screening of the episode, which will debut Sunday night at 9 p.m. Central on HBO. Cast members Wendell Pierce, Clarke Peters, Michiel Huisman, Larry Nichols, Vernel Bagneris, Rio Hackford, Henry Griffin and Sean-Michael Bruno were on hand for the screening of the episode, which takes place in October 2007 with a depiction of the police efforts to break up an impromptu memorial second line in the Treme for Kerwin James. As depicted in the show, Pierce's Antoine Batiste is also part of the event.
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Your Spilt Milk
Yay!! So glad Simon & Co. will be able to close out the series the way they intended.
Weighed heavy on Katrina. Should have addressed it , and moved on
to real time. It's been beatened in the ground. People get tired of hearing about it over and over. There is more to NOLA than that.
I really don't see it as being about Katrina - certainly not now.
I'm also not sure "tired of hearing about it" as a response. I don't doubt that you're right - there are people who don't want to hear about it anymore & Katrina Fatigue is a real thing - but that doesn't mean anyone should ever shut up about an incident when so many of our institutions starting with our govenment and media, failed a major American city. A show that highlights the way the government allowed profitability to shape the rebuilding process is valuable.
More to NOLA - I agree, and judging by the show, I think David Simon and Eric Overmyer agree with you emphatically and try to depict that on "Treme".
Meh, the show really isn't that good. It's too obsessed with superficially referencing nola, rather than delving deeper, developing characters and insight into the city.
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