In The News › Lake Forest Plaza redevelopment tax break vote expected Thursday

Lake Forest Plaza redevelopment tax break vote expected Thursday

Wednesday, September 30, 2009
By Bruce Eggler
The Times-Picayune

After hours of apparently tense closed-door negotiations, the leader of an effort to redevelop the site of the former Lake Forest Plaza mall in eastern New Orleans said late today that he expects the New Orleans City Council to vote Thursday to approve a significant tax break for the project.

Developer Cesar Burgos’ confident assessment was in sharp contrast to his position a few hours earlier, when he sent an angry e-mail message to council members warning of “an agenda to kill this project.”

Burgos sent his message after the office of Councilwoman Cynthia Willard-Lewis, whose district includes the former mall’s mostly vacant site, informed her colleagues that the ordinance she introduced last month to create a tax increment financing, or TIF, district at the site would be withdrawn Thursday.

Her top aide, Clarence Bickham, said that at the behest of Mayor Ray Nagin’s administration, “a better piece of legislation” would be introduced Thursday — a move that could delay a vote on the TIF plan for at least two weeks.

Burgos responded with an e-mail to council members declaring that “due to the undercurrents of the political agenda of the individuals that are trying to kill this project, it is becoming increasingly difficult to maintain the momentum that it will need to become a reality. They know this and they are banking on it. Please don’t let them win. If they do, in the end, it will be the community that will get hurt.”

Despite Burgos’ warning that “time kills deals,” the council delayed action on the tax proposal two weeks ago. Willard-Lewis said at the time that the city’s proposed agreement with the developers needed to be made “tighter” to ensure that the city would get all the “deliverables” it deserves.

It is unclear what changes have been made to the agreement since then.

Council President Arnie Fielkow said Wednesday that he and other council members “over the last two weeks have worked closely with the developers to make the deal more solid and better for the city.”
He said getting new, tax-generating stores at the Plaza site would be “important for New Orleans East and the entire city. At the same time, I want to ensure that the final agreement reached is in the best interest of our citizenry.”

Fielkow said he was not sure whether the changes to the originally proposed agreement would require introduction of a new ordinance Thursday. He said he was waiting for an opinion from the city attorney’s office on that point.

But he said it is possible he and other members might decide to approve the deal Thursday even if Willard-Lewis is opposed.

Willard-Lewis normally is an outspoken champion of projects in her district, and she has declared her strong support for the Plaza redevelopment and the tax break that Burgos and co-developer Ashton Ryan have said is essential for the project to move forward.

However, a split has developed in eastern New Orleans’ normally united business and residential leadership, with some members pushing for approval of the TIF and others calling for changes in the city’s agreement with the developers.

As a result, Willard-Lewis’ loyalties have been torn. She said Wednesday that the developers and eastern New Orleans leaders held a “very divisive” meeting Tuesday night.

She promised that the TIF proposal eventually would be approved, but said she wasn’t sure whether that would happen Thursday, even though a majority of council members have indicated they support the plan, at least in principle.

Late Wednesday, the New Orleans East Business Association — a group that normally helps lead the charge for new stores and developments in the East — informed council members that it opposes the Plaza TIF, though its e-mail message gave no reasons for its position. Businessman and former state Rep. Sherman Copelin is the association’s president.

Burgos and Ryan have outlined plans for a $220 million development — to be named the New Orleans East Marketplace — that would include a Wal-Mart, several other stores, restaurants, a gas station, a movie theater, a parking garage and eventually an office tower, hotel and conference center.

Under the proposed TIF, the city and the state each would give up 2 cents of their sales tax revenue for 20 years from all stores and other businesses at the site, with the money being used instead to help finance construction of the Marketplace.

Overall, the city and state would each contribute $60 million through their tax revenue, and the developers would furnish about $100 million through a mix of cash, the value of the land and commercial loans.

The Bureau of Governmental Research has criticized the TIF proposal, saying it would give up public money to help the developers pay off private debts and would not obligate the developers to follow through on the ambitious plans they have outlined.

In a letter last week to Willard-Lewis, BGR President Janet Howard listed more than a dozen “key pieces of documentation” she said the council should require before voting, including a signed letter of intent from Wal-Mart or another big-box retailer to open a store at the site and an independent market study demonstrating demand for such a large development.

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