IF YOU build it... ... the developers will come, as fresh money pours into the Loyola corridor in anticipation of a new streetcar route

December 13 2010 | Latest News
Sunday, December 12, 2010
The Time-Picayune

By Rebecca Mowbray

ou Talebloo has owned the Industries Building at 234 Loyola Ave. since 2004, and he's decided that it's time to remove the 1950s facade from the elegant 1908 office building and turn it into apartments and streetside shops.

And while he's at it, in 2012, he'll turn the neighboring Rault Center, the long-vacant site of 1972 fire that killed six people, into condominiums.

As far as Talebloo is concerned, this is the time.

With well over a half-billion dollars of new investment flowing into the area, as the Hyatt Regency New Orleans reopens with a $243 million renovation, the Benson family works toward a $100 million office-sports-entertainment district alongside the Superdome, and the Regional Transit Authority builds a new streetcar line along Loyola Avenue, the area around his properties is springing to life.

"All of these combined together, they're all positive," said Talebloo, who also owns an oriental rug shop on Magazine Street. "The streetcar is awesome. It brings foot traffic. I want to see a downtown where people don't drive, they walk."

Since the Loyola Avenue streetcar project was announced in February, hotel renovations, apartments and retail projects have been springing up along the moribund 1.5-mile strip. The Saratoga Lofts will open in June, a Rouses supermarket will open in September, renovations at the Hyatt and Holiday Inn Downtown Superdome will be completed in October, and residential and retail projects are expected to begin shortly thereafter in anticipation of a growing biosciences district.

The investments could transform a corner of the city best known for surface parking lots and blighted buildings into a place where people live, work and gather without losing time and money to automobile travel.

No one is more pleased than the Regional Transit Authority, which won the $45 million American Recovery and Reinvestment Act stimulus grant that is paying for the entire Loyola streetcar project.

"When you develop streetcar routes, you hope to create economic development in the communities that you serve," said Justin T. Augustine, vice president of Veolia Transportation, which runs the Regional Transit Authority. "In urban corridors around the city, you tend to see development follow transportation routes. I expect that businesses will take a second look into this area."

Kurt Weigle, president and chief executive of the Downtown Development District, said rail projects such as streetcars can be powerful economic engines because they tend to concentrate investment. Developers that could build projects anywhere in the city decide to focus on the area around the streetcar because the foot traffic makes projects less risky. When several developers concentrate their energy on a single area, the city derives more benefit than if the projects were scattered. Meanwhile, property owners who are sitting on the fence suddenly have new incentives to develop their land.
"Transit, especially at this point in time, is one of the most important amenities and development tools that we can use downtown and throughout the city," Weigle said.

Projects incubating

Developer Marcel Wisznia, for example, decided back in 2006 to turn the 212 Loyola office building into apartments because of plans for the new public teaching and Veterans Affairs hospitals and because of a preliminary proposal for the streetcar -- in fact, Wisznia is such a streetcar fan that his other two downtown apartment projects, the Union Lofts and the Maritime, are both on streetcar lines. And when Wisznia's neighbor, Talebloo, does the Industries building, the block will be transformed.

The Holiday Inn Downtown Superdome will undergo a major renovation both to make sure it's fresh when the Hyatt opens and because the hotel believes it will have new appeal to visitors, who will be able to take the streetcar back from the French Quarter without what some would view as a scary late-night walk. And the Hyatt, which announced in July that it would reopen after being shuttered since Hurricane Katrina, plans to reorient its opening to Loyola Avenue, potentially giving the same boost to Loyola that the Ritz-Carlton did to Canal Street a decade ago by facing the city's major boulevard rather than the French Quarter.

Because of the streetcar, the Domain Cos., which built mixed-income housing along Tulane Avenue because it's a major bus route, last week announced its $185 million "transit-oriented" South Market District apartment-retail development sopping up acres of surface parking lots near Loyola Avenue. Next door, the long-troubled Plaza Tower, which was gutted and placed on the market in April for $15.5 million, is under contract and could be poised for redevelopment.

Jim Amdal, director of the Merritt C. Becker Maritime and Intermodal Transportation Center at the University of New Orleans, inventoried all of these projects during the summer as a baseline for studying how the area changes when the streetcar begins running in mid-2012.

Amdal, who helped start the Riverfront streetcar back in the 1980s, said he thinks the potential for the Loyola line is magnified because the Hyatt, the Benson family and the Superdome seem to be coordinating their planning.

The streetcar also could give a lift to the aspiring theater district at Canal Street, where developer Neal Hixon, for example, is trying to turn the Joy Theater into a live entertainment venue. As changes in the neighborhood take place, Amdal said the answer to the big question of what happens to City Hall might become more clear.

But to maximize the opportunity with the streetcar, Amdal said, the Regional Transit Authority needs to find a way to connect its lines, such as running a link between the Loyola Avenue and St. Charles lines down Howard Avenue.

Phenomenon re-energizes

It turns out that what appears to be on the cusp of happening in New Orleans is not an isolated event.

Jeff Wood, chief cartographer and new media director at Reconnecting America, a national nonprofit group that works on transportation and livability issues, said rail projects such as streetcars have been magnets for economic activity since the 19th century, when landowners in Boston would build streetcars as loss leaders to new developments on the edge of town, making their land more valuable and concentrating development along the transportation route. Development might have unfolded similarly in New Orleans along streetcar routes.

Although streetcar development is nothing new, the phenomenon was rediscovered in the early 1990s and earned its own terms of art: transit-oriented development and development-oriented transit.

Wood said the most successful transit developments have broad planning and incentives to build the area in a thoughtful way, while the city makes parallel investments in sidewalks, landscaping and other infrastructure.

In Portland, Ore., for example, with each investment a developer agreed to make at an old rail yard, the city agreed to increase the number of dwelling units permitted per acre. For example, zoning was originally for less than 87 housing units per acre, but as the developer agreed to take down a viaduct, contribute to the financing of the streetcar, and build parks and affordable housing, the city raised the density with each contribution, eventually bringing it to 131 units per acre. Since the project was announced in 1997, Wood said, about 7,000 units of housing have been built and $3 billion invested in areas around the streetcar lines.

In Seattle, Wood said, property owners helped to build the South Lake Union Line to attract development north of downtown, and with coordinated efforts, were able to lure the Amazon.com's headquarters and biotech companies to the area. Microsoft Corp. co-founder Paul Allen and others with property in the area voted to form an assessment district and tax themselves to pay for a transportation line. They generated half the money for the South Lake Union Line through their taxing district, then earned the rest by applying for state and federal grants and selling surplus city property.

"The problem comes when people think that you just put in a streetcar line and it's going to happen. You have to do other things," Wood said.