NOLA.com - Spurred by the future Loyola Avenue streetcar line, a local development firm plans to transform a sea of downtown parking lots into 450 apartments and 125,000 square feet of shops and restaurants that it calls the South Market District.
Spurred by the future Loyola Avenue streetcar line, a local development firm plans to transform a sea of downtown parking lots into 450 apartments and 125,000 square feet of shops and restaurants that it calls the South Market District.
Domain Companies plans to convert a parking lot-heavy section of the city near the Superdome into a mixed-use development featuring apartments and retail spaces. The project, which involves construction of four 8 and 14-story buildings along Girod between Baronne and Loyola, will be anchored by the new Rouses.
The Domain Cos., a New Orleans and New York-based firm that developed successful mixed-income housing along Tulane Avenue, has four blocks of parking lots under contract in the area between Loyola Avenue and Baronne Street, Julia Street and Lafayette Street - a largely empty area of downtown that was cleared in the mid-20th century to help increase automobile capacity downtown.
Matt Schwartz, principal of the Domain Cos., said he hopes to turn the area back into an intimate, pedestrian-friendly zone. His company began looking at the area in thinking about the need for upscale housing for the estimated 7,000 jobs that are expected to come with the biosciences district in the coming years, but Schwartz said it was the streetcar expansion that sealed the deal.
"What we felt made this site ideal was the streetcar expansion," Schwartz said. "The most exciting development opportunities are really converging on this area."
South Market District, named to reflect the businesses that were once located at the end of the now-defunct New Basin Canal and the developers' aspirations for the project to become a major shopping site, is the latest project to gain traction along Loyola Avenue because of the streetcar. Construction on the Loyola Avenue streetcar line is expected to begin in April. When it is completed in mid-2012, the new line will connect Canal Street to the Union Passenger Terminal, which will become a major depot for buses and trains and any future light rail to Armstrong International Airport or Baton Rouge.
Developer Marcel Wisznia is building 155 apartments in the Saratoga Lofts project at 212 Loyola Avenue, at Common Street; the project is expected to be completed by June 1.
The Hyatt Regency New Orleans, which will re-open in fall 2011 after a $243 million renovation with 1,193 rooms and 200,000 square feet of meeting space, is reorienting itself so that the main entrance will be on Loyola Avenue, and its ballroom will overlook Loyola with giant windows.
Meanwhile, commercial real estate agent Bobby Talbot said the former Plaza Tower skyscraper at the corner of Loyola and Howard avenues is now under contract for redevelopment. Talbot would not say who's buying it or what the purchaser plans to do with it, but previous plans to redevelop the building called for a mix of residences, offices and retail. "We do have a contract on it," Talbot said.
Domain hopes to break ground on South Market District late next year and complete the first phase of the project in 2013.
The company hopes to use a mixture of traditional debt and equity to finance the project, which is estimated to cost $185 million before the build-out of the retail spaces, and new market tax credits, a program designed to spur economic development in distressed areas. The new market tax credits portion had been somewhat of a gamble because the federal program had expired, but it was reauthorized as part of the tax deal struck Monday between President Obama and Republicans in Congress. Had the program not been renewed, Schwartz said Domain would have been able to come up with other avenues to finance the project, but it would have required greater subsidies from the city and state.
Schwartz said the development may need some sort of "public support" to round out its financing in the form of a payment in lieu of taxes, or PILOT, or possibly community development block grant funds. Domain also seeks to close a lane of traffic on Girod Street in each direction, and hopes the city can take some steps to make South Rampart Street more pedestrian-friendly. Schwartz has met with planning and economic development officials in the Landrieu administration, as well as members of the City Council, about his project. "It's a great project. It's going to have a tremendous economic impact," he said.
Girod Street will be the spine of the South Market District development, with buildings fanning out on either side. The street was originally envisioned as major transit route in and out of Superdome, so two blocks of the street between O'Keefe and Loyola have two lanes of traffic in each direction. In practice, Schwartz said, the street is seldom used for that purpose, so his company wants to see if it can take over a lane in each direction to build 20-foot-wide sidewalks that will allow for plenty of landscaping, pocket parks and outdoor cafe dining.
The development will have a 14-story building facing Loyola next to the Energy Centre garage. Other buildings inside the development will be eight or nine stories. All will have retail and restaurants on the ground floor and apartments above. Schwartz, who attended the International Council of Shopping Centers conference in New York this week in hopes of recruiting retailers to South Market District, said that he's shooting for a high-quality mix of national and local retailers that will create a destination that generates much-needed sales tax revenue for the city.
A consulting firm is working on coming up with the right combination of retailers, Schwartz said. One interesting break is that a major anchor such as a grocery store is essential to making the plan work, and the South Market District will stretch to the Sewell Cadillac building at the corner of Girod and Baronne streets, where Rouses is building a 42,000-square-foot, upscale grocery store that will open next September in time for Saints tailgating.
Donald Rouse, co-owner of the Thibodaux-based grocer, said the excitement about the neighboring development is mutual. "The additional residences as well as the additional businesses will help our store and the whole area. We're equally excited to have them begin their project," Rouse said. "What they're doing, what we're doing, it'll all spur additional development."
Kurt Weigle, president and chief executive of the Downtown Development District, said that his group's surveys show that the No. 1 amenity that people are looking for in contemplating living downtown is access to public transportation. People want to live in a neighborhood that "hangs together" architecturally, they want to be close to work, and they want to be able to hop to another neighborhood for dinner or drinks with relative ease, and the South Market District should meet those demands. A sense of location and place is important to young workers, Weigle said, and developments like this one could help New Orleans retain professionals who come to work in the biosciences district.
Meanwhile, the retail offerings of the project, Weigle said, should help stem the flow of sales tax dollars to other cities. "This city is vastly under-retailed right now," Weigle said.
Billy Fields, director of the Center for Urban and Public Affairs at University of New Orleans, said the area where South Market District is envisioned was once a thriving commercial area. Fields, who studied the Superdome and South Rampart street area for his Ph.D. dissertation in trying to understand where all the parking lots came from, said that the area was razed in the middle of the last century. When the city demolished the neighborhood where Louis Armstrong grew up to make room for City Hall and Duncan Plaza, clearing out all the people zapped the strength of the businesses that were located near the end of the New Basin Canal, where the Union Passenger Terminal is now located. Meanwhile, highway proponent Robert Moses championed projects to bring the automobile that was feeding suburban growth downtown, and the New Basin Canal was filled in the 1940s to make way for the Pontchartain Expressway, obliterating any reason for businesses to continue to exist there.
"This was a huge business corridor, "Fields said."Here we are 40, 50 years later with a bunch of surface parking. There's a ton of potential."
By Rebecca Mowbray