New Orleans Condo Articles

National housing slump finally being felt in N.O. area

Posted by beggler August 09, 2008 22:37PM

Click here to view map of metro area housing prices by ZIP code

New Orleans, awash in insurance and federal rebuilding grants after Hurricane Katrina, for many months seemed to resist the relentless decline in real estate prices that afflicted once incandescent markets in California, Florida and Nevada. This year, however, the national malaise has finally started to dampen the local market.

 While the average price of an unflooded or repaired house remains a plush 15 percent higher than it was before the storm, the national economic downturn has choked consumer confidence, made credit more scarce and contributed to a slow erosion of the equity many households amassed after Katrina. Local real estate experts predict a continued softening through the end of the year. 

Michael DeMocker / The Times-PicayuneIn this file photo, a home on Vendome Place in New Orleans advertises the first year's insurance included, one of the inducements being used to lure buyers in an increasingly sluggish selling environment."We're now starting to behave like the rest of the country," said Wade Ragas, a consultant and former University of New Orleans professor who surveys home price trends for the New Orleans Metropolitan Association of Realtors.

The news, if overcast, is not entirely grim. While single-family home prices fell 0.4 percent across the region compared with last year, a few neighborhoods eked out modest price gains. New Orleans outshone its satellite parishes, with notable appreciation in historic areas like the French Quarter, Bywater and Uptown, which vaulted over Old Metairie to become the priciest local market.

St. Tammany, on the other hand, posted price declines in all but one ZIP code. Ragas and others said builders overestimated demand as storm victims rushed to the north shore after Katrina, and now they are left with a large inventory of unsold, newly constructed homes even as displaced families return to New Orleans and St. Bernard.

In a typical year, when no hurricane or recession upsets the real estate market, houses in greater New Orleans appreciate about 5 percent. No parish has approached that figure in the first six months of the year. Values waxed in New Orleans by 1 percent across all ZIP codes, while waning 4.1 percent in Tammany, 3.3 percent in St. Charles and 2 percent in St. Bernard. Prices in Jefferson remained flat.

Those declines appear humble when placed in context of the national real estate slowdown. New Orleans was never the real estate hothouse that California and Florida were, but it also never went bust when homebuyers began defaulting on exotic loans. Foreclosures here are barely a blip -- 1,900 statewide in the second quarter, compared with 202,000 in California.

"I know it's no consolation when we're in a sluggish market, but we're in much better shape than most of the rest of the country," said David Abner Smith, an agent with Dorian Bennett Sotheby's. "We need to look at the big picture that it's not doom and gloom like it is in other places, particularly in our historic neighborhoods."

Tight credit, fewer buyers

Still, the turmoil on Wall Street has scorched local buyers. It has become harder and more expensive in the past year for consumers to obtain a mortgage, especially if their credit history is less than sterling. Tighter credit means fewer buyers, and fewer buyers translates to slower home sales.

Real estate agents sold 4,177 homes across the metro area in the first half of the year, and if the current pace keeps up, they should sell between 8,000 and 8,500 homes for the year, according to Ragas. That compares with 11,334 homes sold last year and 16,322 sold in 2006, when Katrina pushed the housing market into overdrive.

Those figures include only Realtor-assisted sales, not foreclosures, tax sales or properties sold to the Road Home.

"We have too many houses on the market," Ragas said. "It's not that there's suddenly a large number of sellers. It's just that there's not enough buyers, partly because of Katrina, and partly because people all over the country are nervous about economic conditions and don't want to borrow $200,000."

Ivan Miestchovich, director of the Real Estate Market Data Center at the University of New Orleans, said the diminished sales volume was almost inevitable, given the population loss that came with the storm. While unemployment is low, he said the region has not experienced growth in high-wage jobs that would spur new demand for housing.

"Housing prices don't occur in a vacuum. They occur in relationship to employment growth and wage growth," he said. "The question I have is what effect the lingering hangover of inventory is likely to have on housing prices. Will it accelerate the decline?"

Bywater, Uptown shine

While the market as a whole sagged in the first half of the year, demand remains vigorous in most of the historic neighborhoods in New Orleans. Real estate agents use a metric called "month's supply" to gauge a home's likelihood of selling based on activity in the three previous months. A higher month's supply indicates a slower pace of sales.

Arthur Sterbcow, president of Latter & Blum, said a market with a healthy balance of buyers and sellers produces about a five month's supply of homes. While Mandeville currently has an 11 month's supply of homes, the Uptown section of New Orleans has only a 7.3 month's supply. Competition is even fiercer among buyers who want a house priced below $250,000 in the Uptown area.

"We're rocking and rolling Uptown," Sterbcow said, adding that the firm had seen "very solid sales" in eastern New Orleans, the lakefront area and Mid-City.

Uptown's desirability rests partly on the fact that it never flooded. But several agents also said buyers are attracted to the ease of getting around that part of the city.

"One factor is that the streetcar is up and running," said Eleanor Farnsworth, a Prudential Gardner agent. "It makes everything so accessible with the gas prices rising. You also can walk to restaurants and to the universities. You can get around so easily."

The demand for housing Uptown cuts across all price points. The average price per square foot in the tony 70118 ZIP code climbed above $200 during the first half of the year, the most expensive in the entire region. At the same time, Sterbcow said, young people who came to New Orleans to do civic-minded work after Katrina have decided to buy in that core part of the city.

Eric Jensen and Leah Berger both arrived before the storm, he through Teach for America and she to attend Tulane's School of Public Health. The young couple bought a double on Annunciation Street in May, a location that put them in walking distance of a grocery store, restaurants and live music at Tipitina's.

"We feel very invested in the city, and that's the overriding reason we decided to buy in this neighborhood," Jensen said. "We could have continued to rent, but we felt there was no better way to support the city than by buying a house here."

The other standout in New Orleans is the 70117 ZIP code, which encompasses Bywater, Holy Cross and the 9th Ward. The average sales price per square foot in that area climbed to $132 in the first half of the year, up 76 percent from the average value before Katrina. Ragas labeled the change "nothing short of staggering."

He ascribed some of the price gain to the philanthropic bounty that alighted on the area after the storm, when nonprofit groups such as the Make It Right Foundation undertook transformative rebuilding projects.

Helen Krieger, a former president of Bywater's neighborhood association and the owner of Urban Vision Properties, said the dramatic runup is also tied to where the sales are taking place. Before the storm, homes sold in roughly equal numbers on each side of St. Claude Avenue, which separates Bywater from St. Roch. Sales have been concentrated since the storm on the pricier and less damaged Bywater side.

As prices ticked up across New Orleans, they ebbed about 4 percent on the west bank of Jefferson Parish and remained stagnant on the east bank. Sterbcow said the price appreciation many homes on the east bank enjoyed after Katrina has perversely slowed down sales, as buyers search elsewhere for deals.

"There is no real weakness turning up in East Jefferson except that the appreciation has stopped," Ragas said.

Tammany weakens

St. Tammany's market meanwhile showed considerable softening. The number of monthly sales on the north shore is roughly comparable with sales volumes in Orleans and Jefferson parishes, but agents said prices are deflating because they reached unsustainable heights after the storm, when many displaced south shore residents were willing to pay a premium for an undamaged house.

"People got so spoiled after Katrina because we had a huge influx we would not normally have seen," said Candy Modeen, a broker with RE/MAX Northlake Associates in Covington. "Everybody had the mindset those prices were going to continue. A lot of builders opened up and started building, and all of a sudden the supply overtook the demand."

As builders churned out new homes, some newcomers to St. Tammany began planning a move back to renovated houses on the south shore. Ragas said storm victims who moved across the lake experienced culture shock on multiple fronts, from the predominance of national chains after the boutique shopping of New Orleans, to the long commute across the Causeway.

Slidell faces its own challenges. Ragas said it traditionally attracted buyers who worked in eastern New Orleans, where the employment base -- from health care jobs at Methodist Hospital to maritime businesses along the Industrial Canal -- was decimated after the storm. He said one bright spot for Slidell is the recent job growth at NASA's Stennis Space Center in Mississippi, which could help revive prices.

Phoebe Whealdon, an agent at Coldwell Banker TEC in Mandeville, said it could take a while before the St. Tammany market reaches equilibrium. She expects only a small boost from Chevron's recent high-profile move to the north shore because many of its executives already live there.

"There is just an oversubscription of homes on the market," Whealdon said. "We're getting phone calls and seeing buyers, but not enough to equal out what we have on the market."

Although G.O. Zone bonds meant to boost investment after the 2005 storms have had a tough time in N.O., some deals have succeeded

Sunday, June 29, 2008

By Kate Moran

Business writer

For the most part, Gulf Opportunity Zone bonds have proven a powerful means of seeding private sector investment in the parishes ransacked by Hurricanes Katrina or Rita. They have had limited impact in only one place: New Orleans.

More than 40 developers with housing, hotel or retail projects in New Orleans have applied for a bond allocation in the past two years. Seven of those have managed to place the bonds in the private market and close their deals. That means a vast amount of borrowing capacity remains unused in the city that arguably needs it the most.

Some of the developers who let their bond allocation lapse simply decided to tap another public incentive, such as historic tax credits. Others grew fed up with some of the rules the state imposed on companies that wanted the bonds. In still other cases, developers had to forfeit their allocation because their projects did not pass muster with Wall Street investors waiting out the turbulence in the credit markets.

"There is just so much turmoil in the credit markets, that even if you have what may be a good project, a lot of investors in these types of securities are sitting on the sidelines," said Scott Willis, a local real estate and commercial finance lawyer.

Marc Robert, owner of the local grocery chain Robert's Fresh Market, is among the handful of New Orleans businessmen to have used the bonds successfully. He said the benefit was powerful -- he borrowed at lower interest rates and for a longer period of time than he could have expected from the private market -- but he said the process of securing the bonds and other public incentives was convoluted.

"Complication is one thing," Robert said. "We had four different sets of attorneys, which translates into a lot of increased costs. When people are looking at a cost-benefit analysis, they see all these layers of costs and question whether it is worth all the effort."

--- Projects in city struggle ---

Congress passed the Gulf Opportunity Zone Act to help spur private business investment across the region after the monstrous 2005 storm season. Among other benefits, the act allows companies in Louisiana to issue bonds with interest exempt from state and federal income taxes, as well as the federal alternative minimum tax.

The state has managed to allocate most of the bonding capacity Congress granted, except for a $1.2 billion pool set aside for New Orleans. The State Bond Commission estimates that $662 million of that reserve remains untapped, a figure that will likely move higher because several major projects recently had their bond allocation expire.

The state must use the borrowing capacity by 2011 or lose it, but the city faces a more imminent deadline. If it cannot allocate the remaining benefits by the end of 2009, those incentives will cycle back into the general pool where developers from across the state can compete for them.

Stephen Moret, the state's economic development secretary, said developers in New Orleans have struggled to use the GO Zone benefit because many of their projects -- hotels, apartment buildings, offices -- are pure real estate investments that have proven susceptible to the national downturn. By contrast, bond allocations in other parishes have often supported manufacturing or industrial projects.

What is more, developers in New Orleans seem to have a tougher time obtaining bond insurance for their projects. Several said the city continues to battle a perception on Wall Street that New Orleans is a risky place to invest, although three years have passed since the hurricane.

The State Bond Commission recognized that some developers might not be able to place their allotment of GO Zone benefits with a private investor, and it took several steps in April to ensure that the benefits granted by Congress did not go to waste. For one, the commission extended the time developers have to close their deals from 120 to 240 days.

At the same time, the commission did not want developers to hoard a benefit they might never be able to use. To force deals that appeared untenable, the state began requiring in April that developers put down a deposit to secure an extension of time to use their bond allocation.

"You don't want somebody with a deal that is not going forward to sit on an allocation and then have it be lost to the state. The balancing issue is that, if I've got a $250 million project, I'm not going to be able to close it in 120 days," said Gary Elkins, a local real estate lawyer. "The normal development timeline for major projects is in conflict with the state's interest in closing these transactions and funding the allocations on an accelerated basis."

--- Smaller projects succeed ---

Only a handful of developers have managed to use the bonds in New Orleans thus far, and it seems no accident that all but one of them requested an allocation of less than $10 million. Most developers requested far more than that but eventually had to withdraw their applications or let them expire.

The city's recovery office hopes to direct more of the bond allocations to small businesses in coming weeks. While developers drive the application for a GO Zone allocation themselves, they must receive a letter of support from the city before the State Bond Commission will agree to their request.

Jeff Thomas, a special assistant to Recovery Director Ed Blakely, said the city hopes to steer at least $100 million of the remaining borrowing capacity to companies seeking $12 million or less. Most developers have asked for at least $50 million, and Thomas said the city is trying to spread the benefits around. It has also noticed that smaller projects have a pattern of success.

"Bigger projects are having a harder time placing their bonds because of the perceived financial risk," he said.

Bud Wyckoff, a New Jersey developer preparing to renovate a building on Tulane Avenue, recently let his bond allocation expire. He found the state's requirement that he post a deposit excessive, and he also lost the letter of support the city gave him in the fall. He is seeking $50 million in bonds, well above the city's new threshold.

"The effort to engage all of these recovery authorities are so far out of the realm of normal business practice that we all find it frustrating to the point of resigning from the effort," Wyckoff said, adding that the renovation of 2000 Tulane Ave. was nonetheless moving forward.

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Fairmont to reopen as Roosevelt

Hilton is restoring CBD landmark

Saturday, June 07, 2008

By Jaquetta White

Business writer

When the storied Fairmont New Orleans hotel reopens next year, it will go by a familiar name: The Roosevelt.

Hilton Hotels Corporation announced this week that the hotel will open in spring 2009, bearing the name it held from 1923 to 1965. The hotel, which has been closed since Hurricane Katrina, will be operated by the Hilton company as part of its Waldorf-Astoria Hotel collection.

"For decades The Roosevelt was known as the pride of the South, and as such we intend to see that the pride of the South shall rise again complete with opulent style and the classic venues that made the hotel a favorite for generations of New Orleans residents as well as visitors to the city," said Joseph Berger, an area president for Hilton Hotels Corp., in a statement.

The hotel, still shuttered after being heavily damaged by flooding in its basement, is undergoing a more than $100 million renovation. The Roosevelt will be a 500-room hotel, slightly smaller than its predecessor, with 110 suites. Plans also call for restoring the hotel's Blue Room, which as a nightclub had hosted famous musicians.

The Central Business District hotel has undergone several name changes. It opened as The Grunewald in 1893, was renamed The Roosevelt in 1923 in honor of President Theodore Roosevelt and became the Fairmont Hotel in 1965.

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Riverfront plan meeting called success

But backers, critics differ in accounts

Tuesday, June 03, 2008

By Bruce Eggler

Staff writer

Both supporters and critics of the "Reinventing the Crescent" plan for riverfront development being pushed by the New Orleans Building Corp. and its chief executive, Sean Cummings, are hailing the results of a meeting that leaders of several neighborhoods held with two City Council members and a state representative.

Leaders of both sides claim they emerged victorious from Friday's closed-door session, but their accounts of what was decided don't entirely agree.

Some neighborhood leaders in Bywater, Faubourg Marigny and the French Quarter have long been critical of parts of the nearly $300 million plan to redevelop several miles of east bank wharves.

The plan calls for creating a park along most of the riverfront, removing many of the barriers that prevent public access to the river and creating attractions that would draw people to the water's edge. The Building Corp., a city agency, recently chose a team of architects to design the project's $157 million first phase.

City Councilwoman Jackie Clarkson, Councilman James Carter and state Rep. Juan LaFonta, D-New Orleans, met for about two hours at City Hall with Cummings, Port of New Orleans officials and neighborhood leaders.

According to several participants, all those present agreed that they favor the idea of increasing public access to the riverfront and support many specific elements of the plan, particularly linear parks with open green space. However, participants said, it was agreed that several proposals that have drawn sharp criticism, especially from Bywater and Marigny residents, will be either "tabled" or "taken off the table."

There was disagreement about just what those terms mean, however, and Cummings said he did not promise to abandon any of the proposals permanently. In fact, despite claims by his critics that the meeting rejected all of the plan's most controversial elements, Cummings said the session produced "a remarkable consensus" and an "invaluable" show of support that will allow city leaders to "lobby together with one cogent voice" for state money to help carry out the plan.

He said the only real changes to the plan involve areas that the city, through the Building Corp., does not actually control under the terms of a 2006 agreement between the city and the port spelling out how idle wharves could be put to public uses.

Although the area under the city's control consists only of the space from the floodwall to the river's edge on most of the wharves from Jackson Avenue to Poland Avenue, the planners made suggestions for several adjacent areas.

Those include the 25-acre site between Poland Avenue and the Industrial Canal that is home to the Naval Support Activity-East Bank until 2011, plus the adjoining section of Bywater riverfront and much of the Holy Cross riverfront.

As outlined by neighborhood leaders at the meeting, the agreed-upon items included:

-- There will be no further discussion of residential towers that the planners had suggested would be appropriate for the Naval Support Activity site. LaFonta said talk of them has been "scaring the hell" out of some Bywater residents.

-- A band shell or amphitheater proposed for Bywater Point, a piece of land at the foot of the Industrial Canal that the city does not control, will be dropped from the plan. That project was to be part of the third phase of the riverfront project, targeted for 2013-16, and Cummings said he does not consider the idea dead.

-- Plans to turn the Mandeville Street Wharf into a covered but open-air space suitable for concerts, art shows, fairs and other events will be put on hold pending an agreement with Marigny residents on what types of events to allow there. Marigny leaders fear that large gatherings would cause parking, noise and traffic problems.

-- The fate of a small nondenominational "sanctuary" proposed for a riverfront park at the foot of Piety Street will depend on a recommendation this week by the Bywater Neighborhood Association, a group split in recent years into pro- and anti-development factions.

-- Plans for Portage Plaza, an opening to be cut through the warehouse on the Esplanade Wharf to provide views to the river from Esplanade and Elysian Fields avenues, will be dropped because the city does not control that wharf.

Neighborhood leaders in Marigny and the Quarter said the meeting also agreed that all projects should be reviewed by the City Planning Commission and City Council.

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Riverfront Plan in Good Hands

Sunday, June 01, 2008 Editorial

Scott Hourcade

New Orleans

Re: "Storm brews for city agency chief," Money, May 28.

 As an active member of the Bywater Neighborhood Association, I read with disbelief the assertion that residents of Bywater and Marigny are against Reinventing the Crescent. This couldn't be further from the truth.

 If a poll were to be taken, I'm confident that a vast majority of us welcome this positive and necessary improvement to our riverfront. 

The article, as well as Rep. Juan LaFonta, failed to mention that the so-called opposition to the riverfront redevelopment is led by a small handful of radical extremists who like to think they speak for the majority of people in this neighborhood.  

The plans for the project are sound, the architects are well-qualified, and Sean Cummings has the experience necessary to pull it off right. All one has to do is open one's eyes to see what a wonderful addition Woldenberg Park has been to the French Quarter. Reinventing the Crescent will exist harmoniously with our 19th-century neighborhood and enhance the quality of life for all New Orleanians.  

We have allowed our city to lag behind in every category for decades. Shall we, for once, do something magnificent and positive instead of allowing a few naysayers to derail what will be a first-class a

Ruth's Chris Steak House opens its CBD location

Posted by Anna Whitlow

May 20, 2008 4:34PM

Ruth's Chris Steak House, Inc., the largest fine-dining company in the U.S., today announced the opening of its New Orleans location, bringing the total number of restaurants to 122 worldwide.

"This opening is especially important to us, and we are excited to open Ruth's Chris Steak House in this great location in the heart of the tourism and business district of New Orleans," said Pete Montecino, Ruth's Chris Steak House New Orleans General Manager. "We are thrilled to partner with Harrah's and to make this investment in the revitalization of this great city.

"The New Orleans Ruth's Chris restaurant is centrally located in downtown New Orleans adjacent to the Harrah's New Orleans hotel at 525 Fulton Street. The restaurant features seating for more than 150 guests, including two bar areas and patio seating along Fulton Street. The opening of the New Orleans restaurant has brought more than 110 new jobs to New Orleans, and Ruth's Chris has provided relocation assistance to several employees formerly based in New Orleans, giving them the opportunity to return to the city after being displaced by Hurricane Katrina.

As a celebration of its opening in New Orleans, Ruth's Chris supported St. Augustine High School's "Marching 100" and the New Orleans Hospitality Foundation through charitable pre-opening dinners held at the restaurant. Additionally, Ruth's Chris is holding an opening celebration on the Fulton Street corridor on May 16, with proceeds from admissions directly benefiting the New Orleans Hospitality Foundation.

Guests at Ruth's Chris New Orleans can enjoy New Orleans-inspired appetizers, aged USDA Prime steaks, fresh seafood, signature side dishes and homemade desserts, all complemented by an award-winning wine list and served with a Southern hospitality style service in an elegant yet comfortable atmosphere. For reservations, call 504-587-7099. The restaurant is open for breakfast Monday - Friday 7:00 a.m.-10:00 a.m., lunch Monday-Friday 11:00 a.m.-2:00 p.m. and dinner Monday -Sunday 5:00 p.m.-10:30 p.m. Additionally, this location is open for Jazz Brunch on Saturday and Sunday from 10:00 a.m. to 2:00 p.m.

Car-friendly design drives apartment project

Apartments planned at Carondelet site

Sunday, May 18, 2008

By Kate Moran

In a vacant and boarded up parking garage on Carondelet Street that has lately served as a canvas for graffiti artists, architect Marcel Wisznia sees the makings of an apartment building uniquely suited to accommodate the car.

The former Stephens garage sits on the fringes of the Warehouse District, one of the city's truly walkable neighborhoods, yet Wisznia envisions the building as providing the convenience of suburban, garden-style apartments in which residents typically can pull their cars right up to front door.

He plans to situate the apartments around the perimeter of the building, leaving an interior cavity on each floor where residents can park their cars outside the front door of their apartments. A vehicle elevator, outfitted with a flat-screen television, will carry cars up each of the five stories.

Daniel Weiner, one of the project's architects, said the unique design would allow residents to keep groceries or other items in the trunk without having to haul them by hand up an elevator or stairwell, all without the sprawling asphalt moats that typically surround a suburban apartment development.

The former Stephens garage rises four stories high, but Wisznia Associates plans to add a fifth story that will be slightly set back to preserve the building's original appearance. Built in 1951 as a Buick dealership, the garage has a mostly industrial look, but for a distinctive, scalloped canopy on the first floor.

Wisznia intends to reserve the first floor of the garage, 14,500 square feet in all, for retail, and his firm has spoken with several gourmet groceries about occupying the space. The remaining stories will each include 17 apartments and 20 parking spaces.

The apartments themselves will range in size from 750 square feet for a one-bedroom to 1,150 square feet for the largest two-bedrooms, though they are designed to feel much larger. Most of the walls inside each unit will not be walls at all, but moveable parts that can be raised, lowered or slid from side to side to create varying levels of privacy and openness.

To separate the bedroom from the living room, Weiner designed a translucent partition that rolls up and down like a garage door. A series of sliding doors can open the bathroom completely into the bedroom or seal it off for seclusion. In yet another utilitarian feature, cabinets will comprise one wall of the bedroom.

Other than the demising walls, which separate apartment from apartment, nearly every internal divider will be prefabricated and trucked onto the site. Weiner described the apartments as a "kit of parts" that would produce much less construction waste than building on site would.

"It's going to be about efficiency," Weiner said. "It's very green and very environmental. We're trying to build apartments that have a flexible future."

On the roof of the building, Wisznia plans to install solar collectors that could produce enough energy to eliminate utility bills for his tenants. While residents might have to rely on traditional energy sources in cloudy weather, on other days the building could produce more power than it needs, resulting in what Wisznia called "net zero" energy usage.

Several of the parking spaces on each floor will come with plugs for recharging electric cars.

The Stephens building, situated at 848 Carondelet, had its last life as a parking garage, but it has been closed since Hurricane Katrina. Wisznia bought it in July for $4.9 million, and he plans to begin work on it late this year. The renovation has the potential to transform a relatively quiet block, as the Stephens garage is one of its largest buildings.

Wisznia said he would pour about $36 million into the building, with offsets from historic, new market and renewable energy tax credits. The apartments will rent at market rates.

. . . . . . .

Kate Moran can be reached at kmoran@timespicayune.com or (504) 826-3491.

Ethics panel says N.O. developer can run city agency

by Jen DeGregorio

Thursday May 08, 2008, 9:16 PM

The Louisiana Board of Ethics said Thursday that Sean Cummings, a private developer who also leads a city agency called the New Orleans Building Corp., can continue to steer two public developments because he does not have a "substantial" financial interest in the projects.

Cummings owns more than a dozen properties in New Orleans, many of them near a 4.5-mile stretch of the Mississippi River he has pushed to redevelop as chief executive of the building corporation.

The Ethics Board voted unanimously Thursday to allow Cummings to continue to lead the development projects. However, the board asked Cummings to return for a review if his agency altered plans for redeveloping the riverfront or if NOBC's planned conversion of the World Trade Center into a hotel, apartments and cultural museum will affect his properties. Cummings must also return to the board if he amasses other real estate near the riverfront or the downtown high-rise.

Gary Elkins, one of Cummings' personal real estate attorneys and a contractual attorney for NOBC, defended Cummings' private development work, saying his client would not receive a "unique benefit" above other landowners near the riverfront. "There's nothing about the development of any of my properties that is contingent in my mind on this plan" to redevelop the riverfront, Cummings told the board. The board's ruling comes after three years of debate about whether Cummings' commercial real estate activities conflict with his position on the NOBC, which Mayor Ray Nagin tapped him to lead in 2003.

The Ethics Board first took a look at Cummings in 2005, after the City Planning Commission raised a question about properties he owns on Frenchmen Street, in the Warehouse District and in the 2900 and 3000 blocks of Chartres Street. Staff made recommendation The board initially ruled that Cummings' possessions did constitute a conflict.

However, the board reversed course when Cummings appealed, asking him to return for another opinion when NOBC finalized its riverfront plans. With the Reinventing the Crescent plan in hand, Cummings asked the board in February for another opinion.

The board heard his case at an April 10 meeting but deferred a decision until Thursday. A staff report for the April hearing recommended that board members bar Cummings "from participating in transactions involving the development of the Mandeville Street Wharf," a decrepit dock the NOBC plans to convert into a performance venue, and that stands just blocks from the Marigny warehouse at 501 Elysian Fields Ave. that Cummings recently purchased.

The staff report also said Cummings should recuse himself on matters involving the wharf and seek advice from the Ethics Board as the riverfront project unfolds. Staff changed the recommendation after meeting with Cummings in recent weeks and reviewing additional information, said Kathleen Allen, an attorney for the board.

Staff documents for Thursday's meeting said that Cummings' holdings did not represent a "substantial economic interest" in Reinventing the Crescent or the NOBC lease of the World Trade Center to a New York developer. Judge John Greene, vice chairman of the Ethics Board, said the board based its opinion on recommendations from the staff, which had access to information board members did not.

Another speed bump The board ruling came as good news to City Council President Arnie Fielkow, who said "it would have been a big loss" if the board asked Cummings to step down. "The riverfront project remains one of the most exciting projects this city has seen and is one which can energize an entire community for generations to come," said Fielkow, who also sits on the board of the NOBC.

If one Louisiana lawmaker gets his way, however, Cummings still may be asked to move aside. Rep. Juan LaFonta, D-New Orleans, has filed a bill that would prohibit boards and commissions in New Orleans from employing property owners whose holdings could become more valuable as a result of actions by that board or commission. LaFonta filed House Bill 82 in March in response to constituents' concerns about Reinventing the Crescent.

Although LaFonta claimed the bill did not specifically target Cummings, the developer has been virtually synonymous with the project for several years, and residents of the Bywater and other riverfront neighborhoods have expressed concern about his dual roles.

Jen DeGregorio can be reached at (504) 826-3495 or jdegregorio@timespicayune.com.

RECLAIMING THE RIVER:

An ambitious plan calls for opening the riverfront, but the port and some neighbors have other ideas

Posted by btheveno April 05, 2008 22:16PM

Just steps from New Orleans' famous open-air French Market, two working cargo docks stand between patrons and a view of the Mississippi River.

Sean Cummings, executive director of the New Orleans Building Corp., wants to tear down those barriers stretching roughly 2,000 feet near the foot of Esplanade Avenue. To Cummings, they are roadblocks to his goal of creating a riverside promenade where one can travel freely between the Jackson Avenue ferry and the Industrial Canal.

"You can imagine an extraordinary plaza .¤.¤. perhaps like Chelsea Pier in Manhattan," said Cummings, whose agency is overseeing Reinventing the Crescent, the plan to redevelop 4.5 miles of riverfront between Jackson and Poland avenues.

But Cummings is not the only one with his sights set on the French Quarter docks. The Port of New Orleans, which has agreed to sacrifice multiple other wharves to the Building Corp., has identified the property as a new headquarters for one of its most important tenants.

New Orleans Cold Storage, a poultry exporter now housed on the Industrial Canal, has had serious trouble since Hurricane Katrina. The storm blocked the main shipping channel to the canal, the Mississippi River-Gulf Outlet, forcing the firm to truck its frozen chicken to ships docked on the river.

Business shipping out?

Without the new headquarters, port officials say the company may leave New Orleans. The loss would be acutely felt in a city that has lost a crop of maritime businesses since the 2005 hurricane.

"Our primary thrust is creating jobs," said Gary P. LaGrange, the port's president and CEO.

Jobs or no jobs, the wharves stand smack in the middle of the tract of riverfront the Building Corp. seeks to transform with Reinventing the Crescent. Just a stone's throw from one of the city's most famous landmarks, they represent prime real estate Cummings thinks should be used as open space for the enjoyment of tourists and locals.

"It's the most extraordinary view in the city," Cummings said of the docks, which offer a panoramic vision of the river and downtown skyline.

The fate of the French Quarter wharves has been a sore point since the Building Corp. and city began negotiating terms of the riverfront project with the Port of New Orleans.

The issue appeared to be resolved in late 2006, when Mayor Ray Nagin signed a contract with the port that allowed the city to develop nonmaritime uses at Piety, Louisa, Press, Mandeville, Market, Orange, Celeste and St. Andrew streets. Many of those docks date to the early 20th century and have fallen into varying states of disrepair.

The port made sure to hang on to active properties or those with promise. Temporary cargo space at Poland Avenue, for example, is slated to become a new cruise terminal and will remain under port control. The docks at Pauline, Congress, Desire and Erato streets will also stay under port authority.

The wharves near the French Market, called the Esplanade and Gov. Nicholls Street wharves, were given hybrid status. While the agreement says the wharves should remain active cargo sites, it also gives the Building Corp. a chance to pay the port to move.

Lobbying Legislature

Cummings hopes to invoke that clause as the Building Corp. prepares for the riverfront redevelopment. His agency is already lobbying the Legislature for money to help pay for the project, and Cummings said he hopes lawmakers this year will provide $30 million to build a home for New Orleans Cold Storage away from the French Quarter.

"It is less than an ideal location," he said.

For starters, Cummings thinks the exporting operation could create a traffic nightmare in the historic neighborhood known for its narrow streets. New Orleans Cold Storage relies on trucks to bring in chicken, which is later blast-frozen and shipped overseas. Trucks would flow in and out of the wharf complex through an opening near Elysian Fields Avenue.

Cummings also thinks the facility could create a "biohazard." After Katrina, 50 million pounds of chicken were left festering at the exporter's Industrial Canal warehouses, requiring a hazardous materials cleanup.

Neighbors who would like to see the docks remain in active commerce are skeptical of Cummings' concern, said Nathan Chapman, president of the Vieux Carre Property Owners Residents and Associates. A commercial developer, Cummings owns multiple properties in the city and some near the waterfront.

Cummings says his motives are pure. In fact he has requested an opinion from the state Board of Ethics, which is expected to issue an opinion on the matter this month.

"We are actively working with the port to find a more optimal location for their tenant," Cummings said.

Port not giving up

Port officials say they do not plan to hand over the wharves any time soon.

"We are not giving up Gov. Nicholls Street," LaGrange said. "Give us $80 million and we'll move it somewhere else."

The port has a few facilities farther upriver that could potentially accommodate New Orleans Cold Storage. But port officials contend the French Quarter wharves are in top shape and would be far less expensive to retrofit for the exporter than the port's other holdings.

The port already has money for New Orleans Cold Storage in the bag, in addition to whatever Cummings might secure to move the company out of the Quarter. The Legislature agreed in 2006 to give the port $30.5 million to build the company a new blast-freezer and other equipment to run its business at the French Quarter wharves. The port has already hired an engineer to begin designing the facility, which it hopes to complete in about two years.

But Cummings calls those plans "unacceptable," arguing that the cold storage facility would create a hiccup in an otherwise uninterrupted riverfront path.

"There is no way to go over it, around it or otherwise," Cummings said.

Indeed, pedestrians walking downriver along the Moonwalk hit a dead end at the Gov. Nicholls Street wharf, where waterfront access abruptly gives way to active docks, then miles of decrepit industrial space, overgrown grass and trash.

The Building Corp. has plans for the other side of the wharves reserved for New Orleans Cold Storage, beginning with the conversion of the burned-out Mandeville Street wharf into an outdoor performance venue. But Cummings does not think the commercial docks should stand between the developments on either side.

It's not that Cummings does not appreciate the Port of New Orleans. In fact, he likes the "authentic" nautical vibe from the passing ships and barges.

"I think it makes for a visually interesting experience to see these ships coming in," Cummings said. "New Orleans is about this rich legacy of a port city. We want the mix."

But port officials say the ships are good for more than aesthetic value, such as thousands of jobs and millions of tax dollars. They are also modern-day manifestations of the city's history.

"The port developed, and the people came to work at the port, and the city developed," LaGrange said. "It was part of the neighborhood."

But times have changed, and LaGrange is the first to admit that strategies once helpful to the port no longer work. As technology put cargo aboard ever-larger ships, the narrow, wooden wharves near the French Quarter became obsolete. One by one, active cargo docks turned over to other uses.

During the 1984 world's fair, once-bustling facilities at the foot of Julia and Poydras streets became exhibition space and are now stomping grounds for cruise ships carrying tourists. The Riverwalk mall, another outgrowth of the fair, became a permanent fixture on the waterfront.

As the downtown wharves became obsolete, the port turned more of its attention Uptown.

Port officials spent $100 million to develop a terminal at the foot of Napoleon Avenue to process containerized cargo, the long metal boxes used to transport everything from paper to clothing. The facility opened in 2004, and officials are now attempting to triple its capacity with a two-phase, $500 million expansion.

Despite the heightened importance of the Uptown cargo facility, port officials expect the French Quarter docks to play an important role in the future.

The port's footprint shrank dramatically after Katrina, leaving fewer options for cargo operations. The storm deposited silt along the Industrial Canal, rendering it too shallow to handle many of the ships that once called at the 5.5-mile waterway.

Entering the canal from the river is also difficult, due to an antiquated lock system that is too small to fit large, modern ships. With the canal blocked at both ends, maritime businesses have trickled out of city. The port has frantically tried to stanch the loss by making room for canal tenants on the river.

Residents of the French Quarter, Faubourg Marigny and Bywater neighborhoods have formed an action group called the Riverfront Alliance to lobby for a voice in the riverside development. According to leaders of the organization, neighbors would not mind losing some waterfront access for the sake of commerce.

"We would rather see real maritime activity continue on," said Chapman, with the Vieux Carre association. "It's really great to look at the end of the street and see ships there. It reminds you that you are in a river town."

Jen DeGregorio can be reached at jdegregorio@timespicayune.com or (504) 826-3495.

NO BOOM, NO BUST

Foreclosure rates in Louisiana dwarfed by other markets

Wednesday, March 05, 2008

By Kate Moran

Louisiana never experienced the giddy highs that for a time made real estate investors rich in California, Florida and Nevada. It also never suffered the comedown that caused thousands of people in those states to lose their houses to foreclosure.

New data from a California research firm shows Louisiana had one of the lowest foreclosure rates in the country in January. Only 720 filings went on the books that month, compared to 57,150 in California, 30,170 in Florida and 14,700 in Texas, according to RealtyTrac.

Mortgage lenders and others say the numbers are a rare instance when Louisiana seems to have benefited from having a stable, even stagnant economy. While home prices in the state made steady, if unglamorous, advances of 5 percent to 8 percent a year, home values in California and other markets soared to unimaginable heights.

Some homeowners borrowed against the skyrocketing value of their houses. Now that home values are dropping, some owe the bank more money than their house is worth.

"In our state, we didn't have rapid appreciation of house prices. We never fell into the activity of pulling equity out of houses for purposes that were not sound," said Michael Nolan, chairman and president of Fifth District Savings Bank.

"Said another way, our economy here does not boom, and it rarely busts," Nolan added. "We just don't go through those economically advanced cycles, but we don't see many of the depressed cycles either."

Houses in Louisiana have generally retained their value as the national real estate market has chilled, said Sal Bernadas, president of the Louisiana Mortgage Lenders Association. That means owners have little incentive to walk away from a mortgage; they can usually just sell the house.

"In some areas houses are worth only 70 percent of what people paid for them, so they are turning in their keys and walking away. There is no reason for that in Louisiana," Bernadas said.

Others say Hurricane Katrina insulated Louisiana from the foreclosure crisis that has beset so many other states. The tide of insurance money and federal grants that poured in after the storm helped rescue owners who might have fallen behind on monthly mortgage payments.

"If there was any benefit at all to Katrina, it was the fact that the flood triggered the payment of benefits under the flood insurance policies that many people had, and that allowed them to pay off their mortgages," said Civil Sheriff Paul Valteau, who handles foreclosure sales in Orleans Parish.

Rick Sharga, vice president of marketing at RealtyTrac, said the lending industry placed a self-imposed moratorium on foreclosures in the New Orleans area for about a year after Katrina to give owners time to collect insurance money and grants.

While lenders have started to tighten the vise in recent months, Graham Arceneaux, a New Orleans attorney who works with local and national lenders, said many are still willing to work with struggling homeowners, especially if they show evidence that a Road Home grant is in the offing.

"If people apply for the Road Home, a lot of lenders put the foreclosures on hold," Arceneaux said. "If you can show them in any way, shape or form that you are making a conscious effort to resolve this, they're going to work with you. Some people just don't return any type of phone call or mailing."

The RealtyTrac data includes notices of defaults, notices of foreclosure sales and bank repossessions -- in other words, property in all stages of the foreclosure process. Not all of the 720 foreclosure filings that went on the books in January will end up as bank repossessions.

Arthur Sterbcow, president of Latter & Blum, said only 1,160 properties in Orleans, Jefferson and St. Tammany parishes were sold in foreclosures last year. Only 307 properties in those parishes were sold in foreclosures in 2006, when many banks were giving homeowners time to collect insurance money.

During the oil bust years of 1988 and 1989, there were about 5,000 foreclosure sales per year in Orleans, Jefferson and St. Tammany parishes.

"The majority of the states that had the big mortgage meltdown were overpriced, overvalued markets built on speculation," Sterbcow said.

"They came up with all these goofy loan programs to help support those artificial prices. They had no idea those loans were not supported by real users. We did not have the wild, crazy, nutty condo market or real estate market."

. . . . . . .

Kate Moran can be reached at kmoran@timespicayune.com or (504) 826-3491.

Hyatt Regency set to Undergo Renovations

Posted by kquillen February 19, 2008 20:30PM

A developer plans to renovate the Hyatt Regency, the enormous, empty downtown hotel that struggled before Katrina because of its relative distance from the French Quarter and convention center, and brand it as a venue for small conferences.

The Hyatt was supposed to be the centerpiece of a jazz district that its former owner, a Chicago firm run by Laurence Geller, proposed to great fanfare after the storm. Geller never got the commitments he sought from city and state leaders, who would have had to move City Hall and other public buildings, and he finally unloaded the hotel in late December.

One of the investors who bought the hotel, Christopher Robertson, said his partnership plans to add 50,000 square feet of exhibit space and double the amount of ballroom space at the hotel, already the fourth largest in the downtown area. He said the additions would support two conventions at the same time, each with 600 guests.

"We feel like the city is very much in need of this additional hotel space to support the existing hospitality market," Robertson said. "We think we will add capacity that the city doesn't currently have for groups and small conventions."

Robertson approached a city board on Tuesday seeking a incentive that would freeze property taxes on the hotel at their current level, $837,000 a year, for 10 years and provide a lesser abatement for 10 years after that. He also requested the issuance of $165 million in tax-exempt Gulf Opportunity Zone bonds to support the renovation.

The Industrial Development Board granted preliminary approval to both proposals, but Robertson will have to pay for a cost-benefit analysis before the board takes additional action. One member, Raley Alford III, cautioned that other hotels have taken umbrage in the past when a potential competitor sought tax breaks.

"It's not a fair proposition for you to have an advantage given by the city that other businesses also trying to make it here do not have," Alford said. "We'd like to see who your competitors are and what they're paying in taxes."

The Hyatt sustained heavy wind and rain damage during Katrina, which blew out most of the windows in the north tower. Geller's firm, Strategic Hotels & Resorts, performed significant renovations in anticipation of launching a jazz museum next to the hotel, but the project never took wing.

Geller and company sold the hotel to Robertson's group, Poydras Properties Hotel Holdings, for $32 million late last year. Robertson said the partnership already has poured an additional $5 million into the building.

Robertson also owns the two office buildings on either side of the Hyatt -- 1250 Poydras and the Entergy building at 639 Loyola Ave. He has a business address in Little Rock, Ark.

He said Poydras Properties plans to open the hotel next year with 1,184 rooms, the same number it had before Katrina. The partnership also intends to move the hotel's entrance onto Loyola Avenue, where it will be more visible and accessible to guests.

"This has the potential to significantly assist in the recovery of the Central Business District," said Darrel Saizan Jr., a member of the Industrial Development Board. "The one problem the Hyatt always had is that it was in an obscure location and did not front on a major street."

The Hyatt is not the only major project that could help transform that section of downtown. On Thursday, the Louisiana Stadium and Exposition District plans to consider a proposal to hire a design consultant for the area between the Superdome and the New Orleans Centre -- a series of Poydras Street buildings that figured in Geller's aborted concept for the jazz district.

Back in October, the district voted to put down a refundable deposit to option the New Orleans Centre, which consists of three separate structures -- a 36-story office building formerly called Dominion Tower, a shopping mall, and a 3,000-car parking garage. Its members discussed several possible uses for the buildings, including state and city office space, entertainment, parking, housing and retail.

In other matters, the Industrial Development Board granted preliminary approval on Tuesday to a developer seeking a bond issuance and tax abatement to rehabilitate the former Sewell Cadillac building at 701 and 727 Baronne St.

Developer Angela O'Byrne said she planned to open up 40,000 square feet of retail space on the first floor that she hoped to lease to a grocery store. She would also open office space on the second floor for a few tenants who used to have space in the World Trade Center and offer parking on the third and fourth floors.

The building, near the intersection with Girod Street, is not even 50 years old, but O'Byrne said she plans to seek historic rehabilitation tax credits to help finance the renovation.

In additional matters, the board agreed Tuesday to negotiate tax abatements with Brian Gibbs, a developer seeking to build an apartment building at 930 Poydras, and with the development team behind New Savoy Place, one phase of the renovation of the Desire public housing development in the Ninth Ward.

Kate Moran can be reached at kmoran@timespicayune.com or (504) 826-3491.

OPENING THE DOORS

Poydras St. office soon to start selling spots in Trump tower

Friday, January 25, 2008

By Kate Moran

Business writer

In the latest sign that the Trump International Hotel and Tower planned for downtown New Orleans may be moving forward, the son of real estate magnate Donald Trump paid a visit to New Orleans on Thursday and said his company would launch a national push for buyers in the second quarter of the year.

When it is eventually built, on top of what is now a parking lot, the 70-story tower will be the tallest building in the city and only the second residential building on Poydras Street. It will include 290 condos and 435 condominium-hotel units that owners can rent to visitors when they are out of town.

Trump announced his involvement in the project days before Hurricane Katrina, and his son, Donald Trump Jr., said during a visit to town Thursday that a sales office would open in two weeks inside the Pan American building at 601 Poydras, next door to the planned condominium tower at 555 Poydras.

Construction will begin when half the units in the building are sold.

Donald Trump Jr. said the condo-hotel units should appeal to executives from the energy sector who visit New Orleans regularly and want to keep a pied-a-terre in the city. With the dollar weak and interest rates low, Trump also expected investors from Europe and Latin America to buy inside the building.

He said well-heeled locals, especially those with grown children, might also consider moving downtown. Condos and condo-hotel units will start at $400,000 for a studio and top out at several million dollars for a penthouse.

"There is a natural cycle we have seen in the market where baby boomers no longer want a home where they have to worry about leaky pipes and mowing the lawn," Trump said. "They are migrating to condominiums in urban areas."

Cliff Mowe, one of the tower's developers, said Thursday that the building would include retail space on the ground floor, followed by 15 floors of parking and a sky lobby on the 17th floor. The condominium-hotel units will occupy the next 15 floors, followed by traditional condos on the uppermost stories.

The $400 million building will have two rooftop pools, one for all occupants and one for condominium owners only. Mowe said there will be separate entrances and elevators for hotel guests to ensure the privacy and security of full-time residents.

. . . . . . .

Kate Moran can be reached at kmoran@timespicayune.com or (504) 826-3491.

Developers begin sales at Trump tower

Posted by The Times-Picayune January 24, 2008 4:17PM

Categories: Breaking News

By Kate Moran
Business writer

The development team behind Trump International Hotel and Tower, the first high-rise planned for Poydras Street in decades, will begin selling condominiums in about two weeks before launching a national push for buyers in the second quarter of 2008.

When it is eventually built, on top of what is now a parking lot, the 70-story tower will be the tallest building in the city and only the second residential building on Poydras Street. It will include 290 condos and 435 condominium-hotel units that owners can rent to visitors when they are out of town.

Real estate magnate Donald Trump announced his involvement in the project days before Hurricane Katrina, and his son said during a visit to town Thursday that a sales office would open in two weeks inside the Pan American building at 601 Poydras, next door to the planned condominium tower at 555 Poydras.

Construction will begin once half the units in the building are sold.

Donald Trump Jr. said the condotels should appeal to executives from the energy sector who visit New Orleans regularly and want to keep a pied-a-terre in the city. With the dollar weak and interest rates low, Trump also expected investors from Europe and Latin America to buy inside the building.

He said well-heeled locals, especially those with grown children, might also consider moving downtown. Condos and condotel units will start at $400,000 for a studio and top out at several million dollars for a penthouse.

"There is a natural cycle we have seen in the market where baby boomers no longer want a home where they have to worry about leaky pipes and mowing the lawn," Trump said. "They are migrating to condominiums in urban areas."

Cliff Mowe, one of the tower's developers, said Thursday that the building would include retail space on the ground floor, followed by 15 floors of parking and a sky lobby on the 17th floor. The condominium-hotel units will occupy the next 15 floors, followed by traditional condos on the uppermost stories.

The $400 million building will have two rooftop pools, one for all occupants and one for condominium owners only. Mowe said there will be separate entrances and elevators for hotel guests to ensure the privacy and security of full-time residents.

Kate Moran can be reached at kmoran@timespicayune.com or (504) 826-3491.

PATIO MAKES A PERFECT PARTY PLACE

Saturday, January 05, 2008

JEWEL BUSH

THE HOME: A 1,500-square-foot condominium downtown in the Cotton Mill

THE OWNERS: Karen and Andy Sepko

THE SPACE: A 500-square-foot outdoor patio

WHY THEY LOVE IT: 'This outdoor space really complements the pure city lifestyle I enjoy,' Karen says.

CITY LIFE: Karen Sepko is a condo kind of gal.

She adores her digs in the Cotton Mill, which, more than 100 years ago, was the site of a real cotton mill. She and her husband, Andy Sepko, can walk to Saints games as well as Hornets games. Fabulous restaurants are nearby, and many of Karen Sepko's favorite spots are a quick bike ride or stroll away.

The ambiance of the Cotton Mill, she said, is beyond charming.  From industrial art in the courtyard to the awkward nooks and crannies that served specific functions in the manufacturing days long ago, it's as if the warehouse is telling stories of its past. The site dates to 1719, when Gov. Jean Baptiste Le Moyne Bienville owned the land. It changed hands several times, and the Maginnis family purchased it in 1881, erecting the first cotton mill a year later.

The Sepko's 1,500-square-foot residence once served as the mill office.

"There's nothing quite like this place," said Sepko, a real estate agent. "When I first saw this space, I decided I must have it. I loved the old exposed brick, high ceilings, seven original windows, old wood floors and awesome outdoor patio."

PERFECT PATIO: The 500-squarefoot patio under their condo space -- storage before the storm -- has taken on a new life post-Katrina. For the couple, who love to entertain, it's now the perfect gathering spot.

They have pre-game football bashes, Mardi Gras parade parties, crawfish boils and whatever else comes along that gives them a reason to entertain.

The impetus for turning the space into prime party real estate "all started with that window," Sepko said, pointing to the 15 1/2-foot window that faces the courtyard.

CREATIVE REUSE: Now draped in floor-to-ceiling curtains, it was an archway leading to the courtyard before Katrina. After the storm, the Sepkos inserted an old Cotton Mill window there, giving birth to the patio party space that looks out on the complex courtyard.

The concrete floors were stained brown and stenciled with fleurs-de-lis by Jon Podret.

"I originally planned to just stain the floor, but later decided to add the stenciled fleurs-de-lis to commemorate the city's rich history and to be a reminder of the resiliency of all the people who endured Katrina and stayed in New Orleans because they love the city and would not give up," said Sepko, who came to the city in 2002 by way of Ohio.

The patio also features an outdoor bar, refrigerator, microwave and a TV with outdoor stereo speakers. Rustic furniture complements Sepko's pet project.

"It's cool to live here and have so much history," she said. "It's my little piece of heaven in the middle of the city."

-- JEWEL BUSH

Condo hotel and tower on Royal to take shape

$50 million job to start in 2008

Thursday, November 08, 2007

By Jaquetta White

Construction on a $50 million project to renovate a long-vacant Royal Street hotel into a luxury condo hotel is set to begin early next year, the developers said.

Developers Angelo Farrell and Lee Laporte, doing business as Royal Cosmopolitan LLC, also announced this week that they have hired Salamander Hospitality LLC of Virginia to operate and manage the site.

The Royal Cosmopolitan will be the state's first condo hotel and, when construction begins, the first new hotel project to break ground in the city post-Katrina, said Bill Langkopp, executive vice president of the Greater New Orleans Hotel & Lodging Association.

"This is to show the rest of the country that we are coming back," Farrell said. "We're coming back at a higher level of service and quality."

 Farrell and Laporte bought the more than 100-year-old Astor Hotel building at 121-25 Royal St. in 2005 for $3.2 million. They are spending $50 million to renovate the site, which has been closed for decades except for a few retail operations on the bottom floor. The plan also calls for building a new 26-story, 259-foot tower behind it, in the middle of the block bounded by Royal, Canal, Bourbon and Iberville streets.  

The 131-room Royal Cosmopolitan will be a condominium hotel, or "condotel," which means its rooms are available for sale as condominiums but the buyers can share in the revenue from guests who stay there when they don't.

 The project first became public in 2005, when a version of it won approval from the City Planning Commission, the Central Business District panel of the Historic District Landmarks Commission, and the City Council with no opposition from French Quarter residential and preservation groups. That proposal was for a 17-story, 178-foot tower, a building only slightly taller than the Astor Crown Plaza in the same block.  

But after Katrina, the developers went back to those groups asking to increase the height of the unbuilt tower by nine floors, to 26, because they needed to increase the number of rooms and suites from 80 to 152 to cover construction costs that had risen by 35 percent to 40 percent since Katrina. The new 268-foot proposed tower would be significantly taller than the Astor Crown Plaza.

 That proposal drew objections from French Quarter preservation leaders and two City Planning Commission members, but it eventually was approved in a 6-2 vote by the planning panel and unanimously by the landmarks commission in December 2006. The project also won unanimous support from the City Council in February after the developers made a last-minute decision to reduce the structure's height from 268 feet to 259 feet.  

Previous attempts to rehabilitate the hotel failed to gain either financing or city approval.  

The condotel is scheduled to open in early 2009. It will feature 107 condominium suites and 24 guest rooms in the original building. The units range in price from $349,000 for the smallest one-bedroom unit to $879,000 for a penthouse suite.  

The property also will feature valet parking, a skytop bar and lounge, and an infinity pool.  

The hotel will employ about 600 people during the construction phase and 250 when it opens.

The property will be managed by Salamander Hospitality LLC, a Middleburg, Va., firm created by Sheila Johnson, a co-founder of Black Entertainment Television and president of the WNBA's Washington Mystics. Salamander owns and operates the Woodlands Resort & Inn near Charleston, S.C., and has plans to manage another condo hotel in Virginia. Johnson said she sees the Royal Cosmopolitan as a catalyst for continued development in New Orleans.

 "The project in New Orleans is one we are very excited about," Johnson said, adding that she plans to buy a unit. "By stepping in, we're helping in a small way but in a grand way to bring the city back." . . . . . . .

Jaquetta White can be reached at jwhite@timespicayune.com or (504) 826-3494.

Hyatt on Poydras will be sold

Jazz center plan never materialized

Wednesday, October 17, 2007

By Greg Thomas

The Hyatt Regency Hotel on Poydras Street , once the focal point of a sweeping downtown revitalization plan that would have created a National Jazz Center and park, will be sold for $32 million.

A local corporation known as Poydras Hotels Development LLC is buying the hotel, according to a statement issued Tuesday night by Strategic Hotels & Resorts, the Chicago-based company that currently owns the Hyatt.

Strategic spokesman Jim Prendergast said he could not confirm who the principals of Poydras Hotels Development are.

But according to records kept by the Louisiana Secretary of State, Poydras Hotels is controlled by Berger Management Corporation, the director of which is local developer Darryl Berger.

The 31-story hotel, the largest property in the Hyatt chain, never reopened after Hurricane Katrina. The 2005 hurricane smashed hundreds of windows in the building and flooded the area around the 1,184-room hotel.

Soon after the storm, Strategic Hotels, led by CEO Laurence Geller, initiated plans to convert the New Orleans Centre shopping mall and other nearby properties into a modern 20-acre National Jazz Center and park. The plan also called for a $700 million redesign of the Hyatt.

But the grand vision soon crumbled.

Ove