Four Seasons developers say World Trade Center project moving forward despite lawsuit

Posted on: March 29 2017

By Katherine Sayre, | The Times-Picayune

Investors in the planned Four Seasons hotel and condos at the vacant World Trade Center say the $360 million project is moving forward in April with a six-month interior demolition, despite a lingering lawsuit that has delayed the renovation since 2015.

The goal is to open the 350-room hotel and 76 condos in the riverfront building in the fall of 2019 after a two-year renovation, investors said.

Meanwhile, the New Orleans City Council was set to vote Thursday (March 23) on leasing the World Trade Center parking garage next to the Hilton Riverside to the Four Seasons development team, led by Carpenter & Co. and Woodward Interests, for $30 million. That money would be paid to the city before the group takes control of the garage.

A company that sued to block the city of New Orleans' lease of the 33-story building to Carpenter-Woodward made an appeal Friday to the Louisiana Supreme Court.

"Our lawyers are quite confident that this will be disposed of relatively quickly," said Alan Leventhal, an equity investor in the Four Seasons project and founder-CEO of Boston-based real estate investment firm Beacon Capital Partners. "Our view is the litigation is virtually over."

Two Canal Street Investors' and its leader, Stuart "Neil" Fisher of Florida, are appealing Orleans Parish Civil District Judge Tiffany Chase's decision to dismiss the case after neither Fisher nor any attorneys representing the company appeared for a Nov. 20 trial. The Fourth Circuit Court of Appeal upheld Chase's dismissal. 

Investors in the Four Seasons project also include Leventhal's wife, Sherry Leventhal, Paul Flower of Woodward Design+Build, Richard Friedman of Carpenter & Co., New Orleans entrepreneur Henry Coaxum, Cascade, an investment firm associated with Microsoft founder Bill Gates, and the Juffali family of Saudi Arabia.

"This is a group that is committed to the future of the city, and this will be an enormous stimulus to what's going to happen in the future of the city," Alan Leventhal said, adding that Fisher's lawsuit has been "a sham from the beginning" and amounts to "economic coercion."

Two Canal Street Investors, in partnership with co-developers Peter Arey and Steve Peer, pitched a $228 million Hotel Alessandra and apartments in pursuit of the city's World Trade Center lease in 2015. The city's selection committee ranked Two Canal Street Investors last among the five finalists in the competition. 

Fisher, a real estate investor, bought Two Canal Street Investors after its bid was rejected and filed the lawsuit, claiming the city's selection process was unfair and resulted in a bad deal for taxpayers. Fisher says the Two Canal Street Investors bid would have given the city the most economic benefit, which the city disputes. 

"I can tell you, I am committed, very much so, and I'm not walking away and I'm not stopping," Fisher said this week.

On the same day it submitted its writ to the Louisiana Supreme Court, Two Canal Street Investors filed for Chapter 11 bankruptcy protection in Florida. Fisher is listed as a creditor who is owed $4 million. The bankruptcy filing also lists Jim Burch of Clifton, Virginia, as being owed $1.2 million. 

Burch was an unsuccessful finalist in a previous city competition for the building in 2014 that was ultimately awarded to Gatehouse Capital. The city and Gatehouse couldn't reach a final agreement in 2014, and the lease was scrapped. Burch was highly critical of the city's process then and says the city failed in the 2015 competition, too.

"The basic fact is that Two Canal Street Investors offered $60 million more in the first year and nearly $2 billion more over the course of the lease, and they (the city) chose Four Seasons," Burch said. 

The city has insisted the Four Seasons team was picked for having the best financial capacity, past performance history and ability to meet the city's disadvantaged business enterprise requirements in addition to the biggest economic benefit potential for tax revenues and jobs. 

Other creditors listed in Two Canal Street Investors bankruptcy filing include:

  • Angela O'Byrne and Perez Architects of New Orleans for $120,000 for professional services
  • New Orleans attorney Galen Hair, who has represented Two Canal Street Investors, for $60,000
  • John Springhorn of East Patchogue, New York, for a $300,000 loan
  • Debra Massari of Clearwater, Florida for a $62,000 loan
  • JKM Marketing LLC of Locust Valley, New York, for $174,700 for professional services
  • Michal Trotta of Holtsville, New York, for a $50,000 loan

In the Florida bankruptcy filing, Two Canal Street Investors is listed at the same address as Fisher, a home in Palm Beach. 

The Four Seasons developers said they don't expect the bankruptcy case to delay their project. The interior demolition and asbestos remediation will take about six or seven months starting in April before the two-year renovation begins.