Howard Hughes Corp. to Pour $70M into Riverwalk Marketplace Redevelopment

NEW ORLEANS- Howard Hughes Corp. announced its intent to upgrade retail property Riverwalk Marketplace. The Dallas-based commercial real estate owner will spend approximately $70 million to convert the 200,000-square-foot property into a 250,000-square-foot upscale outlet retail center to be called Outlet Collection at Riverwalk.

Renovations will start during late 2012, with completion scheduled for 2013, before the holidays. According to Mark Bulmash, Howard Hughes Corp.'s senior vice president, development, the entire property will be shut down during the renovation. "Out of the current tenants, about 60% of them have permanent leases. The rest had temporary leases to keep the center filled in the interim," Bulmash explains. "The opportunity for us with many of these tenants is to bring them back in other capacities. Some are good retailers, and we'll bring them back for inline space."

The renovation announcement takes place close to two years after the property's former owner, General Growth Properties Inc. emerged from bankruptcy and spun off Howard Hughes Corp. to handle master-planned communities and other projects including Riverwalk Marketplace.  Bulmash says that time was spent researching the best use for the property at 500 Port of New Orleans Place. The mall fronts the Mississippi River water front and stretches from the base of Canal Street to the Convention Center. The mall is connected to the adjacent Hilton New Orleans Riverside Hotel.

"Early on, we conceived of the idea of outlets, and spent the past year and a half interacting with retailers," Bulmash explains. The response has been very positive, he goes on to say, adding that. "a lot of retailers hadn't been thinking about New Orleans since Katrina, but they've gone from 'why New Orleans'? to 'why not New Orleans?'"

The mall was built in the 1980s and had been doing well before Katrina. Riverwalk Marketplace was closed for a short time after the hurricane due to wind and looting damage, and reopened in December 2005. "It started to lose national retailers following Katrina and there was no significant investment to keep it updated," Bulmash tells GlobeSt.com.

Cres Gardner, vice president and partner at Beau Box New Orleans, a commercial real estate company, puts it somewhat more starkly. "The Riverwalk has been underutilized for years and has become pretty desolate," he comments.

Howard Hughes Corp. wants to change that, however. Bulmash comments that the metro area tends to be underserved when it comes to retail; the area had 30% les retail per capita than the U.S. average.

"There are also compelling issues concerning the number of tourists in and around the center," Bulmash goes on to say. "The city in 2011 attracted 8.75 million visitors, who spent a record $5.5 billion in the local economy." Gardner also points out there has been a significant increase in cruise ship activity at the nearby Julia Street Cruise Terminal Complexes, which serve Norwegian Cruise Line and Royal Caribbean Cruise Line, which may also have encouraged the retail center's redevelopment.

Gardner, a native of the area, says he thinks the Howard Hughes announcement is exciting and important to the city's overall development.  

"I also have to credit the (Mayor Joseph "Mitch") Landrieu administration for this development as well," Gardner says. "They've emphasized the need for more downtown retail in New Orleans and have dedicated a significant amount of time and effort to attracting major retail investment."