In The News › Tenants around Lake Forest Plaza wait for signs of life

Tenants around Lake Forest Plaza wait for signs of life

Wednesday, January 26, 2011
By: Ben Myers
CityBusiness

A half-mile stretch of Lake Forest Boulevard in eastern New Orleans is corpse-like to the naked eye.

Vacant strip malls and other commercial space face roughly 5 million square feet of empty lots, where a Lowe’s occupying about one-tenth of the space is the only exception to barrenness.

Otherwise, the lots are home to nothing but years-old debris piles and the defunct Grand of the East movie theater, which once helped anchor the Lake Forest Plaza Mall.

But the lifelessness belies activity among small business and real estate owners in the immediate vicinity whose plans have never wagered on the plaza’s redevelopment, a prospect complicated by political and financial realities.

“I saw an opportunity and I took it,” Luciano Valencia said as he measured a wall in his soon-to-open restaurant near the intersection of Read and Lake Forest boulevards. “Little by little, the East is picking up.”

Valencia said his restaurant will be an American-style sports bar with a sit-down restaurant specializing in Latin cuisine. The space comfortably fits a stage and dance floor, and flags from Caribbean nations hang from a back wall. Valencia said he grew up nearby and always dreamed of opening a restaurant here, and the Plaza didn’t figure into choice of location. In any case, Valencia figures he’ll benefit from lack of competition.

“There’s not a place like this around here, like a restaurant-bar type feel, where you can go ahead and relax and have a drink and enjoy some food,” he said.

Competition or not, the history of Valencia’s space in a strip mall near the corner of Read and Lake Forest does not favor him: three restaurants have already come and gone since Hurricane Katrina, according to Valencia’s landlord, David Lester. But Lester said he believes a restaurant can succeed, and Valencia’s business acumen distinguishes him from previous tenants.

“He’s got his license, for one thing,” Lester said.

Lester’s strip mall is one of at least eight in half a square mile bounded by Bundy Road, Read and Lake Forest boulevards and Interstate 10. But it’s only one of three in the area, which the former Plaza dominates, that shows any sign of health.

Lester’s lone vacancy once was occupied by a physical rehabilitation specialist who he believes would be eager to return with the reopening of the former Methodist Hospital, which looms directly behind his property. Lester said never counted on the Plaza coming back, but he was hoping for the hospital’s return.

Lester spoke Tuesday, a few hours before Mayor Mitch Landrieu announced that Daughters of Charity Services of New Orleans will invest $2 million to redevelop and operate the hospital in partnership with the Franciscan Missionaries of Our Lady. Landrieu did not offer a specific timeline for opening, other than to say it would be one to two years after completion of a financing package.

The announcement bodes well for the Kailas Cos., which owns a mostly vacant strip mall two lots from Lester’s property. Before Katrina, the strip housed an optometrist and a blood testing center, said Praveen Kailas, adding that he and his father recently completed $2 million in renovations. The Kailases are wooing a dentist and gym operator but have only one tenant to show for their investment, he said.

Kailas expects those fortunes to change.

“Our goal was when the demand for the hospital comes back, we were going to be ready to go,” Kailas said.

Kailas said he and his father’s business is separate from that of his uncle, Gowri Kailas, who once co-owned the Plaza Mall with First NBC Bank CEO Ashton Ryan Jr. Ryan bought out Gowri Kailas in 2009, and attorney Cesar Burgos took over as the primary developer.

The City Council subsequently approved tax-increment financing, which would divert tax revenue to developers. But the council conditioned its approval on a matching agreement from the state, which remains under consideration. The controversial TIF arrangement drew opposition from the Bureau of Governmental Research and divided community and business leaders in eastern New Orleans.

But there is no disagreement concerning the Plaza’s importance to how investors perceive eastern New Orleans, given the site’s prominence along Interstate 10, even if some commercial landlords have a closer eye on the hospital.

“It has a major negative visual image,” said Barbara Johnson, New Orleans project director for Fast Forward Main Street, a national small business support organization that is active in eastern New Orleans. “We all lose when our front door in the face of this community is about vacant lots and buildings.”

Johnson complained publicly to city officials Jan. 13 about trash on the site, and she said Burgos has been cooperative since then. Burgos and Ryan did not return calls for comment.

On Jan. 20, a pair of trash piles was visible from the interstate. So was the ghastly shell of the movie theater, including its garbage-filled interior. There were no perimeter barriers, trespass warnings or boards covering the building. Thousands of tiny chards of former ticket windows covered the sidewalks, apparently the result of being bashed out. A moldering handheld transceiver labeled “NOPD” lay close by, looking like it had been burned.

That gloominess seemed a world apart from Gayle Laurence Hair Studio, a booming salon just across the street. The warmly lit salon with mango-colored walls reverberated with lively conversations between customers and stylists.

Owners Lisa Mountain and Jonette Harrison opened it in 1991 after working together at the Lake Forest Plaza Mall.

“It’s part of our history,” Harrison said.

Lynda McCray, a speech therapist and Gayle Laurence customer since 2007, said she used to get her hair done once a week at Dillard’s in the Lake Forest Plaza Mall. Those outings would inevitably turn into shopping expeditions, she said.

These days she just goes home afterward.

“I’m a shopaholic,” said McCray, who sported a gold leather jacket with matching jewelry. “I’m shopping online now.”

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