But council approves a disputed addition

Monday, October 23, 2006

By Bruce Eggler

What is it about the Audubon Building and hotels?

The eight-story, 96-year-old building at Canal and Burgundy streets was originally designed to be a hotel, but during construction the owners decided to make it an office building instead.

Work began two years ago to convert the building into a hotel, but Hurricane Katrina ended those plans, and the owners decided to turn it into a condominium building instead.

Those plans, recently approved by the New Orleans City Council, have drawn criticism from the owners of -- you guessed it -- a hotel, one of the city's poshest.

To make the condo conversion work financially, developers said, they need to add two entire floors and a penthouse to the 931 Canal St. building, which opened in 1910.

The owners of the Ritz-Carlton Hotel, at the other end of the 900 block of Canal, objected, saying the extra floors would block the views from about 100 of their rooms.

Local real estate consultant Jim McNamara told the council the owners of the former Maison Blanche department store spent $300 million converting it into the Ritz-Carlton, and it would be unfair to depreciate the value of many of its priciest upper-floor rooms.

The Ritz conversion was done "within the rules," McNamara said, in contrast to the Audubon Building , where the planned addition would violate the regulations of the city's Historic District Landmarks Commission as well as U.S. Department of Interior guidelines for renovating historic buildings, which allow adding only a one-story penthouse.

But at the urging of Councilman James Carter, whose district includes the site, the council voted 7-0 to allow the three extra floors, although Carter said he wants the Audubon owners to work with the commission to make the additions as "palatable" as possible.

When renovation of the mostly vacant office building began in 2004, the owners, a Cleveland company called Carbone Properties of Audubon LLC, were seeking to add only a penthouse. It would contain luxury suites for a planned 201-room hotel to be called the Hilton French Quarter Hotel.

The owners planned to finance the $37 million conversion in part with federal historical-renovation tax credits, which require strict adherence to Interior Department guidelines.

By the time Katrina hit, the building had been mostly gutted and interior construction was well under way.

The post-storm decision to shift the redevelopment to condos was based on an analysis of the changed downtown market, even though a condo conversion would not be eligible for the tax credits. The change also meant new plans would have to be drawn up, and a lot of the mechanical and electrical equipment already bought would have to be replaced, pushing up the project's cost considerably.

Building the 102 condo units they wanted would require adding two entire floors as well as the penthouse, the owners said.

Although some members of the Central Business District panel of the Landmarks Commission said they had no aesthetic objections to the additional floors, they voted 6-0 in May to deny the requested addition.

Commissioner Robert Williams said that even without the extra floors it "would be a no-brainer to make this work as a condo project in this market," and Dorian Bennett said the owners had presented no evidence they needed the addition.

Carbone appealed to the council, saying the condo conversion would be an economic boon to the city and would "provide much-needed inner-city residential housing."

In approving the owners' plans, Carter said he wants them to abide by several recommendations of the historical district panel's Architectural Review Committee, including slightly reducing the height of the new floors and redesigning the penthouse.

Although McNamara's comments to the council seemed to leave open the possibility of a lawsuit over the issue, Ritz-Carlton General Manager Myra deGersdorff said the hotel chain plans no further action. She said she hopes the future condo residents "will become loyal customers" of the hotel and its restaurants.