In The News › World Trade Center redevelopment appears ready to move forward
Jan 17, 2012
Source: The Times-Picayune
World Trade Center redevelopment appears ready to move forward
By Bruce Eggler, The Times-Picayune
It has taken lawyers and accountants a full year to work out all the details, but an effort to clear the way for possible redevelopment of the World Trade Center site on the New Orleans riverfront is finally moving forward.
Officials first laid out the basic plan in January 2011, but repeated delays kept postponing its implementation.
The city and the World Trade Center organization have tried since 1998 to find a way to redevelop the 33-story, 670,000-square-foot office tower, but the efforts all have come to naught.
The site at the foot of Canal and Poydras streets is considered one of the most valuable pieces of real estate in the city, but the 1960s building’s unusual X-shaped floor plan has proved a problem.
The latest plan involves the city buying out the trade-promotion organization’s lease on the building for $2.3 million. Once the city gains full authority over the site, it can make a new effort to redevelop the property, either with or without the aging, now-vacant building.
The City Council approved the plan in December.
Deputy Mayor Cedric Grant, who is overseeing the process for the Landrieu administration, said recently that lawyers were still going over the final documents but that they were almost ready to sign.
He said he expects to issue a request for proposals by midyear, asking developers for their ideas on what should be done with the site. A hotel or condominiums have been the most frequently heard suggestions, but the city is prepared to entertain all ideas.
In addition, Grant said, the public will be asked for its opinions. “There will be some engagement” with the public before the request for proposals is issued, he said.
Although the city owns the building and the land under it, the nonprofit World Trade Center organization built the tower in the 1960s with proceeds from city-issued revenue bonds. The trade-promotion organization has paid no rent for its lease in recent years, but it has been responsible for maintenance and insurance on the property. The lease runs until 2019.
The city’s deal to buy out the lease involves two city-owned public-benefit corporations, the New Orleans Building Corp., acting as the WTC building’s landlord, and the Canal Street Development Corp., which acts as landlord for the former D.H. Holmes store on Canal Street.
The Canal Street agency will provide $2 million of the $2.3 million the WTC organization will receive, with the Building Corp. furnishing the rest. The Canal Street agency will be repaid with the revenue from the WTC building’s 1,000-space garage, which is leased to the nearby Hilton Riverside Hotel. The garage and other minor revenue sources at the building generate about $750,000 a year. The Building Corp. will receive $250,000 a year from the garage’s revenue.
The latest plan was devised after several previous efforts to redevelop the WTC site failed.
The WTC organization and the city negotiated for eight years with developers Lane and Larry Sisung, who withdrew from the project in 2006. The WTC and the city then began negotiations with Full Spectrum NY, which backed out in 2008 after it could not secure financing for the deal, which would have given it a 99-year lease on the building.
The Full Spectrum lease would have required it to pay $30 million up front for rights to redevelop the building, with $24.25 million of that going to the New Orleans Building Corp. and the remainder to the WTC organization as reimbursement for gutting and renovation work it did earlier in anticipation of a deal for a hotel development. The trade group also would have received an annual payment.
After Full Spectrum pulled out, the city offered in late 2008 to lease the building to local developers Darryl Berger and Pres Kabacoff, but they said the lease terms the city offered were not acceptable.
The Bureau of Governmental Research suggested in January 2009 that instead of trying to make a deal with another developer, the city should buy out the trade organization’s lease and then sell the tower and garage outright to a private developer.
However, buyout talks between the WTC and Mayor Ray Nagin’s administration, represented by former Building Corp. head Sean Cummings, broke down, leaving the building’s future in limbo when Landrieu took office last year.
Most of the building’s few remaining tenants — including law firms, commercial offices, a few shops and foreign consulates — were told to move out in early 2009. The building’s management said the evictions were designed both to save money and to make the building more appealing to potential developers.
The trade group moved the building’s signature Plimsoll Club, a restaurant and bar with a panoramic view of the Mississippi River, to Canal Place in early 2010.
Cummings said in early 2010 that he had concluded that the land beneath the building would be more valuable and more attractive to developers if the aging tower were removed.
City Council approval of the latest plan was delayed briefly in the fall when chunks of concrete from the underside of the roof fell 400 feet to the ground. Even though the result of the latest redevelopment effort could very well be a decision to tear down the building, the WTC organization agreed to pay for $400,000 in repairs.
Jan 17, 2012
Source: The Times-Picayune
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