In The News › IBD hears presentations on South Market District, Jazzland Outlet Mall

IBD hears presentations on South Market District, Jazzland Outlet Mall

By Rebecca Mowbray
The Times-Picayune
March 21, 2012

The Industrial Development Board of New Orleans voted unanimously Tuesday to begin discussions with developer the Domain Cos. about possible property tax breaks for the proposed South Market District apartment and retail development near the forthcoming Loyola Avenue streetcar line. But Walter Flower, president of the IDB, which has been under pressure from the Bureau of Government Research in recent months for having criteria that are too loose and informal in granting tax abatements, cautioned that the approval was only a starting point for discussion.

“There will need to be serious study and discussion on whether there will need to be a PILOT and what that level would be, “ Flower said, referring to a payment in lieu of taxes, which allows a developer to pay less in property taxes for a site he is developing than would normally be owed. “We’re certainly enthusiastic about the project, but we have to study the details.”

South Market District is a proposal to build 559 apartments for well-heeled downtown workers and 178,213 square feet of restaurant and retail space in a sea of parking lots near the Loyola Avenue streetcar line, which is slated to open this summer.

Developer Matt Schwartz, managing principal of Domain, which will own at least 50 percent of the project, said he’s targeting home furniture and decor retailers who are not already in the market for the first phase as well as restaurants with outdoor tables that will line Girod Street. Domain plans to break ground in August or September; construction will take 18 months, and then it will take retailers two to four more months to build out their spaces, so the $69 million first phase of the project probably won’t be operational until summer 2014.

Mayor Mitch Landrieu wrote a letter of support for South Market District in April 2011, but Aimee Quirk, the mayor’s adviser on economic development, said the city needs to learn more about it before considering any sort of subsidies. “When it comes to a financial package, we have to do a lot of vetting and see that it makes sense, “ Quirk said in an interview.

Selling the outlet mall idea

While South Market District was the action-item on the agenda, the board seemed most excited about a 50-minute presentation by developers who hope to build an upscale outlet mall at the site of the former Six Flags theme park in eastern New Orleans.

A joint venture of Provident Realty Advisors and DAG Development has proposed building a 400,000-square foot outlet mall and entertainment boardwalk on the 150-acre former theme park site, which was left abandoned after Hurricane Katrina. Future phases of the plan could include a big-box retailer, amphitheater, sports field, water park and hotel.

David Garcia, principal of DAG development, said New Orleans is one of the few cities in the country — and the only one with a major tourism industry — that lacks an outlet mall. The available land, highway access and visibility of the Six Flags site make it the best location in the metro area for an upscale outlet mall, which would draw customers from throughout the region. Garcia said outlet malls outperformed other retail sectors during the recession and would be a good bet for New Orleans.

New possible Bass Pro home

The developers also said a major sporting goods retailer might be interested in joining the first phase, and that the retailer is excited about the lake situated in the Six Flags site. In answering questions from the IDB about the outdoor retailer’s other locations, it became apparent that the company in question is Bass Pro Shops.

Developers of the proposed Market Street power plant building downtown also hoped to get Bass Pro, but that effort does not appear to have gained traction. The Six Flags site might be a good location for Bass Pro, which often locates near outlet malls and tourist attractions in places with good highway visibility and proximity to outdoor activities.

DAG and Provident, which stopped by the IDB because they had meetings scheduled with the city in the afternoon, cautioned that redeveloping Six Flags is a complex effort that could take awhile. The developers hope to have an agreement with the city in 30 to 60 days with a list of benchmarks to hit on the project. Lining up retailers and doing the site planning and engineering could take 12 to 24 months, and then construction could take another 18 months, suggesting that even if the project gets off the ground, it could be three to four years before it opens.

Host of questions

Although the Six Flags site developers were not asking for anything from the IDB at this point, they declared their project would help build on the momentum started by the announcements of a Walmart Supercenter and hospital in eastern New Orleans, would help the former Lake Forest Plaza site find a new purpose, would help people shop locally and would generate tax revenue and jobs for the city. Garcia said it would help the development team if the city united behind the project and said the developers expect that they will need financial support to make the project work. “In today’s environment, we’re going to need some gap funding, “ he said.

A representative of tax assessor Erroll Williams asked for a copy of the developers’ plan.

Board members had lots of questions about potential challenges to the project and the viability of the site, where the original amusement park, Jazzland, ended up in bankruptcy reorganization less than two years after opening, then sold out to theme park operator Six Flags, which experienced lackluster results even after adding $25 million of new rides to the park. It never reopened after Hurricane Katrina.

Others, such as board member Alan Philipson, were enamored with the project. “We need this type of mall here, “ said Philipson, who said he had a lot of contact with outlet mall operators during his career. “This is the future as far as I’m concerned in retail.”
Board member Justin Augustine complimented the developers on a recent neighborhood meeting and encouraged DAG and Provident to work closely with local residents. Flower, the chairman, called it a “very exciting project.”

Fair Use Notice

This site occasionally reprints copyrighted material, the use of which has not always been specifically authorized by the copyright owner. We make such material available in our efforts to advance understanding of issues and to highlight the accomplishments of our affiliates. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is available without profit. For more information go to: US CODE: Title 17,107. Limitations on exclusive rights: Fair use. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.