Next steps for $1B riverfront neighborhood
By Tommy Santora
Source: New Orleans CityBusiness
September 21, 2022
After more than a year of negotiations, the Ernest N. Morial New Orleans Exhibition Hall Authority Board has a development agreement for River District Neighborhood Investors LLC to move forward on a $1 billion mixed-use development and entertainment district on 39 acres of riverfront land adjacent to the Convention Center.
The 2.4 million square feet of mixed-use space will include 900 mixed-income housing units, with 450 of those affordable and workforce housing; 400,000 square feet of office space; and 115,000 square feet of retail development, dining options, entertainment venues and cultural attractions.
A 5,000-square foot civil rights exhibition is planned for the Convention Center’s Mosaic Room while negotiations continue for a permanent a Civil Rights Museum. The project also will include a redevelopment of the Market Street Power Plant, which was purchased in February for an undisclosed price by RDNI, comprised of Elmwood-based Lauricella Land Company, Brian Gibbs Development, Dallas-based Cypress Equities and others.
“What do you do with 40 acres of land along the New Orleans riverfront? You create a first-class, entertainment district to attract tourists and residents alike and to further evolve New Orleans into staying competitive in the national event and meeting marketplace,” said Michael Sawaya, Convention Center president.
“The hard commitment of RDNI constructing 50% affordable and workplace housing units within the mixed-income residential development was an important part of this deal and will provide a roof over the heads for our many hospitality, civil service, EMS and essential workforce industries, who are in much need of affordable housing,” he added.
Construction is expected to begin in in the third quarter of 2023. Over the last 20 years, the Convention Center has controlled the property – valued at $250 million – and will technically lease the separate ground leases on the eight different parcels to RDNI for the development efforts. A discount off of the appraised value of the property was offered for the ground leases at varying rates based on the parcel, Sawaya said. A significantly discounted rate which remains undisclosed was offered to RDNI for sites that include workforce and affordable housing, and there are no future payments to the developer, he said.
He said the only additional financial support is the Exhibition Hall Authority’s $26 million for infrastructure costs in the development area, such as roads, drainage and sewerage improvements. This investment is necessary for the Authority to realize the value from the ground leases within the development area, he said.
For the next several months, RDNI partners will continue to focus on predevelopment work, including zoning, traffic and environmental planning and approvals. The River District will put infrastructure in place for ground-up construction, including pedestrian oriented streetscapes, a variety of green spaces, retail locations, restaurants, and entertainment venues.
The project is expected to provide 9,000 construction jobs and 5,900 permanent jobs. Contractors can visit the RDNI website for ongoing opportunities.
“We will continue to work intentionally on the project’s preconstruction and master planning, so we are able to break ground in 2023,” said Louis Lauricella, co-managing member of RDNI.
In March 2021, the RDNI team was selected to develop the mixed-use community. The original RFP encouraged the involvement of SEB and minority-owned partners as part of the evaluation in the selection process.
“Equity and community impact are at the heart of our planning for this historic development, and we are committed to meet a minimum of 30% SEB/DBE participation,” Lauricella said. “There will be numerous opportunities for partnership within this new neighborhood.”
In March 2022, the Convention Center received $8 million in federal funding for infrastructure investments in roads, drainage and a sewer system for the development.
“As RDNI begins work on the area, our role is to be supportive, reactionary and monitor any processes in which they would need assistance, so we can assure groundbreaking definitely takes place in 3Q 2023,” Sawaya said.
According to an analysis by HR&A Advisors Inc., the entertainment district will mean $43 million in net new annual tax revenues, collectively to the city and the state, and $66 million in one-time tax revenue for the city and state over the 10 years of construction.
“This is a major milestone for all of us, as this partnership and project development plan will create hundreds of new jobs while providing additional business opportunities to small, emerging and disadvantaged businesses enterprises in our community,” said Jerry Reyes, Exhibition Hall Authority president.
Headquarter hotel back on table
Discussions have resumed on a headquarter hotel for the Convention Center, planned prior to the COVID-19 pandemic and shelved as a shutdown of the city began. The topic is set to be on the agenda of the Exhibition Hall Authority Board’s Wednesday meeting.
The hotel would be connected to the furthest upriver hall of the Convention Center and developed by Texas-based Matthews Southwest Hospitality and local businessman Darryl Berger. It has previously been proposed as a 1,200-room, Omni-branded hotel.
The concept has been on hold for more than two years as tourism took a dive, but now that the Convention Center is at approximately 90% of pre-pandemic levels, it’s time to revisit the plan, said Sawaya.
The Convention Center hosted 125 events a year before the pandemic. In 2021, it hosted 65 events, and in 2022, the Center reports 100 events on the calendar.
The hotel has faced financing questions due to property and sales tax exemptions and other subsidies in its financing package. In late 2019, Convention Center officials announced newly-negotiated terms.
In April 2020, the Bureau of Governmental Research released a report suggesting that the public’s financial contribution should be reduced and calling for the hotel to be postponed until tourism rebounded. BGR officials said this month they will be monitoring the updated plans.
The hotel is only one part of a massive, ongoing makeover of the Convention Center and its surrounding area.
Work continues on a $557-million Capital Improvement Plan launched in 2018 to upgrade the 40-year-old facility through new meeting rooms, restrooms, technology upgrades, exhibit hall lighting enhancements, a new roof, renovations to Convention Center Boulevard and a new 7.5-acre pedestrian park.
NANO LLC is the architect of record for Stage 1 of the improvements and has been selected as architect of record for a $180 million, Stage 2 project to replace large portions of the facility’s pre-function space with new design and amenities, a new main entrance to the Center and a large ballroom on a newly created third level overlooking the Mississippi River.
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