New Orleans development team, Howard Hughes Corp. among companies vying for Convention Center riverfront projectOctober 8th, 2014
A New Orleans-based team of developers, two national companies and a Miami group are competing to transform 47 acres of unused land on the Mississippi River owned by the Ernest N. Morial Convention Center into a hotel, shopping, residential and entertainment district.
Two other companies have applied to build only a hotel at the site, the main component of the Convention Center’s plans for the area upriver from the Crescent City Connection.
Earlier this year, the Convention Center issued a “request for interest” from developers in hopes of luring up as much as $1 billion in private investment to create a space that attracts more conventions along with locals.
President and CEO Bob Johnson said the convention center asked for a basic application from developers; the next step will be seeking specific proposals, including visual renderings, from each team.
The companies seeking to be the “master developer” for the project are:
- Convention District Development Associates: A New Orleans-based team that includes hotelier Joe Jaeger Jr. of MCC Group; Darryl Berger of real estate developers The Berger Co.; Manning Architects; and Eskew+Dumez+Ripple.
- Madison Marquette: A Washington, D.C.-based retail management and real estate development company. Madison Marquette’s portfolio includes more than 23 million square feet of retail, according to the company’s website.
- Howard Hughes Corp.: A Dallas-based real estate development and management company. Howard Hughes earlier this year reopened the Riverwalk as an outlet mall after an $82 million renovation.
- Hellinger Penabad Cos.: A Miami-based real estate development and management group. Its projects have included several condo towers in the Miami area, according to the company’s website.
Johnson said two companies applied to develop only the full-service hotel component, part of an effort to compete with other convention facilities around the country with a connected anchor hotel. Those groups are:
- RIDA Development Corp.: A Houston-based company undergoing an expansion of its hotel development efforts in the U.S. and around the world, according to the company’s website.
- Omni Hotels & Resorts: A Dallas-based hotel company. Omni’s properties include hotels adjacent or attached to convention centers in Dallas, Nashville, Fort Worth and San Diego.
Johnson said the teams will be ranked by staff along with board members, and the convention center will begin negotiations for a long-term lease with the top-ranked group. He said he hopes to have negotiations begun by the start of next year.
He said the companies are not responding to a specific request-for-proposals. Instead, the said, the center is looking for developers’ ideas, for a hotel, retail and other components, such as entertainment, apartments or condos.
“I’m confident that we will be able to come to terms with one of the groups that have expressed an interest,” Johnson said.
If for some reason negotiations fail with the first group, Johnson said, the center will move on to the second-ranked group.
The convention center has about $170 million — from a combination of bonds, cash reserves and state capital outlay money — to pursue its ambitious expansion goals, including planned construction along Convention Center Boulevard to make it more pedestrian friendly and infrastructure work to prepare the vacant land for development.
By Jaquetta White The Advocate
Mayor Mitch Landrieu, joined by senior aides from his administration as well as first responders and officials from Louis Armstrong International Airport and the Port of New Orleans, convened his first emergency preparedness meeting Monday morning to walk through the city’s response plan should the Ebola virus be reported locally.
The meeting, held at City Hall, lasted about an hour and a half and included representatives from the city’s health department, local hospitals and the Governor’s Office of Homeland Security and Emergency Preparedness.
The meeting comes as a hospital in Dallas is treating a man with infected with the virus. Thomas Eric Duncan, the first person diagnosed in the United States with Ebola, is in critical condition. Duncan traveled from Liberia, the epicenter of the outbreak, to Dallas last month.
The current Ebola epidemic, affecting multiple countries in West Africa, is the largest in history. About half the people who contracted Ebola in the current outbreak have died, according to the Centers for Disease Control.
No cases have been reported in Louisiana. Landrieu said the meeting was called in the “unlikely event” that that changes.
As part of the response plan, the health department will begin visiting urgent care centers and other clinics throughout the city this week to make sure that medical personnel know how to spot and respond to people who might be infected with the virus.
It has become almost a symbol of fall in Louisiana, like raw oysters and the sweet-smelling smoke from a burning cane field.
Admittedly not as romantic but just as sure a sign are harried state employees putting the finishing touches on their agency’s proposal for how to spend taxpayers’ dollars during the upcoming fiscal year. It’s the first step in a long process that ends with the governor’s signature sometime around July 1.
Lt. Gov. Jay Dardenne marks the season, as he has since taking office in 2010, with his traditional labor to change an accounting policy that strips money from tourism advertising and uses it for operating tourism-related events and attractions.
As lieutenant governor, Dardenne oversees the state’s Department of Culture, Recreation and Tourism. He’s also running for governor in 2015.
The tourism budget is funded by .003 of every penny of state sales tax collections. It raises about $23 million every year. Under the law that was passed in 1990, the money that accumulates in the Louisiana Tourism Promotion District fund can be used only to “promote tourism.”
Dardenne says the definition means the money is dedicated to running the Office of Tourism and the advertising that entices tourists. Gov. Bobby Jindal and the Louisiana Legislature counter that the money should help fund operations for events and attractions that bring in the tourists, like the Bayou Country Superfest and the occasional NFL Super Bowl.
A couple years ago, Paul Rainwater, who at the time was commissioner of administration and Jindal’s chief financial guy, said the money leverages Louisiana’s attractions and events, and therefore, the spending is consistent with tourism’s goals.
Dardenne says the drop in money for advertising caused by the policy requires him to ratchet back buys for print ads and television commercials. Last year’s version featured zydeco music over a collage of dance halls, Louisiana musicians of various genres, and ubiquitous Cajun and Creole dishes. Television spots soon will start running in the spring for the summer vacation season — probably on a reduced schedule — in markets like Memphis, Tennessee; Denver; Dallas; Houston; San Antonio; Austin, Texas; Chicago; and Atlanta.
The Louisiana Tourism Promotion District marketing fund picked up $24.2 million from the sales tax dedication. Roughly half — about $12.3 million — was scooped up to pay for operational expenses for events and attractions in the current fiscal year.
That’s this year; next fiscal year might be worse because BP payments run out. Dardenne had been using the BP money to cover the advertising hole created from diverting the sales tax money.
Dardenne argues: If these events and attractions are so important to driving business to Louisiana, then the state should pay for them directly — out of the state’s general fund, from where the money that pays regular state operations comes.
Last week, the Louisiana Tourism Promotion District, members of which are industry and government professionals charged with overseeing the tourism’s dedicated sales tax revenues, voted to do just that: fund the favored tourism venues — such as $418,500 for the Bayou de Famille attraction in Jefferson Parish and $948,112 for the Essence Festival in New Orleans — from the general fund and not from the tourism promotion fund.
When asked if the Jindal administration backs paying out of the general fund or continuing to use the tourism promotion money, Commissioner of Administration Kristy Nichols wrote Friday in an email: “Special events like the Essence Festival and Bayou Country Superfest attract thousands of tourists to our state. These are promotional opportunities that are good for Louisiana and have a positive impact on tourism and tax revenue.”
If operational expenses are not moved to the general fund, Dardenne says he will have to shave advertising overseas. Tourists from Canada and Europe — mostly France, Germany and Great Britain — stay longer and spend more. That international market is growing for Louisiana and needs nurturing, he said.
All that sounds good, but the realities are that the state, once again, expects to take in $1 billion or so less next fiscal year than the $25 billion that government services cost this fiscal year, so something has to give.
Dardenne argues that tourism is more investment than constituency. In 2013, the state drew 27.3 million visitors who spent $10.8 billion that generated $807 million in state tax revenues and employed about 210,000 Louisiana residents.
“It’s not a question of changing the law, it’s a matter of persuading the governor and the Legislature,” Dardenne said.
Mark Ballard is editor of The Advocate Capitol news bureau. His email address is email@example.com.
By: Robin Shannon, Reporter CityBusiness
After a roughly two-year buying spree that saw hotel investors paying unprecedented prices in the New Orleans area, the focus has started to shift toward new development and improvements to existing properties.
But even with the surge in activity, the local market still trails the pace of other tourist destinations in adding new hotel rooms to its inventory.
A number of new projects are either in the planning stages or under construction, while owners of existing hotels are pumping millions of dollars into improvements and additions to their properties, all in an effort to capitalize on steady increases in occupancy, room rates and operating revenue across the city.
“There really hasn’t been a better time to put capital into assets,” said Adam Lair, a consultant for the hospitality industry research company HVS. “There are a lot of brands that want to be in the market, and many property owners are seeing a chance to spruce up an existing facility to attract a more high profile brand.”
Two projects that fit that mold are the $12 million conversion of the old Cotton Exchange Hotel in the Central Business District to an AC Hotel, and the ongoing $7 million renovation at the Ambassador Hotel to attract a new operator.
For the full story visit CityBusiness.
Louis Armstrong International Airport is alerting neighbors that electrical work on the airfield will produce changes in flight frequency in October and early November. It’s part of a $12 million project that includes replacing the lighting along the runways, according to a statement from the airport.
The north-south runway will be closed until Oct. 12, the announcement said, meaning flights will use the east-west runway and neighbors east of the airport might notice an increase in air traffic.
The east-west runway will close from Oct. 20 to Nov. 2, sending all the flights to the north-south runway and leading neighbors north and south of the airport to see more planes overhead.
The airport statement described the work as a “critical airfield safety project.” It said the project is funded with Federal Aviation Administration grants, state aviation grants and the airport’s budget.
NEW ORLEANS (AP) – The St. Charles Avenue streetcar line, the oldest operating streetcar system in America, has been designated a National Historic Landmark by the U.S. Department of the Interior.
The designation recognizes sites of historic importance to the entire nation, not just a particular community.
The new recognition specifically cites the St. Charles line’s place as the oldest operational street railway in the United States and its 35 “meticulously restored” arch-roofed, steel-bodied, green Perley Thomas streetcars as reasons for its designation.
The City of New Orleans is launching another effort to bring the vacant former World Trade Center building, sitting on the city’s prime riverfront real estate, back into use.
Since the late 1990s, negotiations with developers over long-term leases for the 33-story tower have failed three times. Most recently, after a months-long selection process, the city broke off talks in April with Gatehouse Capital Corp., which had hopes of turning the building into apartments and a hotel.
Mayor Mitch Landrieu’s administration this week issued a “request for qualifications” which begins a two-step process to pick a new developer.
On Wednesday, Deputy Mayor Cedric Grant said the two-step process — a standard in the private sector — will give city leaders a chance to find developers who are serious and capable.
“I think we needed to create a much more private sector-driven process,” Grant said. “This is generally what the private sector does in development, engages in the pre-qualification process and vetting who is really there and capable and then put those people that are most likely to be good respondents to a much more rigorous response process. We’re also going to do some outside marketing.”
“This is going to track very much with what most municipalities do now in redevelopment,” Grant said. “It is going to track very close to what the marketplace and private sector people are accustomed to seeing in relation to responding to development opportunities, and we’ll have what I believe to be far superior responses.”
In the document issued this week, the city said it is looking for ideas to redevelop the office tower as “a first class commercial and/ or mixed-use project complementary to the adjacent land uses, and may include a hotel commensurate with the offerings of a four-star property, luxury residential, retail, or other professional office use, with entertainment components and other related amenities.”
The document does not mention demolishing the building as an option.
The city will evaluate development teams’ history, financial capacity and qualifications and select which companies can move on to the second round, a formal “request for proposals” phase, which would delve into the details of how the property would be used.
The deadline for the first round is Nov. 14. The city expects to select which developers can move on by Dec. 15.
The request for proposals will be released to selected developers Jan. 2. Those developers would then have until Feb. 16 to submit their specific proposals.
Before negotiations broke off over money, Gatehouse had planned to spend $190 million to renovate the tower — which sits at the foot of Canal Street — into apartments and a W Hotel. Gatehouse offered the city a $10 million upfront payment for a 99-year lease, while the city considered that far below the value of the property.
Gatehouse later agreed to pay the city 105 percent of the fair market value of the WTC building and land as determined by an independent appraisal, according to a source close to the negotiations. During negotiations, Gatehouse also increased its offer to $1 million per year in initial base rent with 10 percent escalations every five years, totaling $268 million over the 99-year lease.
The city countered with an offer that exceeded $1.5 billion in total lease payments with an upfront value over $100 million, according to the source,which essentially ended the negotiations. City officials insisted Gatehouse largely undervalued the property.
Ivan J. Miestchovich, University of New Orleans professor and director of the Institute for Economic Development & Real Estate Research, said over the years, through three mayoral administrations, the city has received several proposals for redeveloping the World Trade Center. But instead, the building has been allowed to sit vacant, generating no revenue and deteriorating.
Miestchovich said the city has shown “unrealistic expectations” in negotiations, including a large upfront payment. “That may be in their best interest, but it may not be in the best interest of the developers coming into the property who are going to be taking on all of the risk,” he said.
At this point, developers are likely questioning whether to return to the city’s selection process, considering there are other real estate opportunities across the country, he said. “We’re not the only fish in the sea here,” he said.
A two-step selection that begins with a qualification round is standard in both the public and private sectors, he said, and should help streamline the process.
Gatehouse won out over two other groups. James H. Burch LLC of Clifton, Va. proposed turning it into a mixed-used building with apartments and a Valencia Group hotel. Tricentennial Consortium, a coalition of leaders of New Orleans’ major tourism organizations, wanted to demolish the 1960s building and create a public space with an “iconic tower” of some kind, similar to the Gateway Arch in St. Louis.
“It’s really beyond the time that the city ought to be seeing something happening with that particular building,” Miestchovich said. “They need to get it done and get it done right and it does turn out to be a win-win for everybody.”
Developers will be evaluated in five key areas:
- Quality of overall application (15 percent)
- Development team’s past projects and performance (20 percent)
- Relevant development and construction experience (25 percent)
- Financial capability (35 percent)
- Commitment to goal of disadvantaged business enterprise program (5 percent)
NEW ORLEANS — Today, LED Secretary Stephen Moret and Renaissance RX founder and CEO Tarun Jolly announced the biomedical company will create at least 425 new direct jobs and make an $8 million capital investment in a new headquarters location in the Central Business District of New Orleans. Founded in 2012 with five employees at the New Orleans BioInnovation Center, Renaissance RX has experienced rapid growth. The company now employs 80 in the New Orleans area, with total employment of more than 800 across the country.
Click for the full Press Release.
The Federal Reserve Bank of Atlanta has appointed Mark Romig, president of the New Orleans Tourism Marketing Corporation, to its travel and tourism advisory council.
An announcement from the New Orleans tourism agency said the advisory council members inform the central bank about economic activity in their sectors, which in this case includes airport, convention, cruise line, entertainment, hotel and restaurant business trends.
“The council provides valuable intelligence on economic factors such as costs, prices, labor, investments, and more,” said the announcement.
The Atlanta Federal Reserve is the central bank for the region, including New Orleans.
Last year Romig, who has lead the tourism marketing group since 2011, also became a board member for the Louisiana Travel Promotion Association.