X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the multifamily market, click here.)

NEW ORLEANS-In a whirlwind week mixing celebration with commemoration, Louisiana leaders and a pair of developers will cut the ribbon tomorrow on the first residential product to deliver in the CBD since Hurricane Katrina. The $30-million adaptive reuse of the historic Shell Building is a harbinger of what lies ahead for the Gulf Coast reconstruction.

Up and down the coastline and CBDs in Katrina’s path are being rebuilt primarily with mixed-use projects in line with a nationwide trend bolstered by Baby Boomers’ demand for convenience-based lifestyles and waterfront views, if possible. The New Orleans landmark–925 Common–is putting 108 market-rate apartments and 11,500 sf of street-level retail into the Downtown inventory.

“We were just right in the midst of the project when the storm hit,” says Marc Blumberg of Atlanta-based Palmetto Partners Inc., who’s co-developing 925 Common with Manny Organek of Continental Realty Corp. of Boca Raton, FL. The long-time partners also are finalizing a mixed-use plan for Baton Rouge and are under contract to buy a one-acre parcel long Canal Street in New Orleans’ Medical Center.

On hand for tomorrow’s ribbon-cutting will be New Orleans Mayor C. Ray Nagin, council president Oliver Thomas, former Lt. Gov. James Fitzmorris, Downtown Development District executive director Kurt Weigle and Louisiana Landmarks Society’s James Dugan. The landmark project, right beside the famed Fairmont Hotel, is the first delivery for an $800-million pipeline of Downtown development.

Blumberg tells GlobeSt.com that the one- and two-bedroom apartments, ranging from 625 sf to 1,250 sf, are being marketed for $2 per sf to $2.30 per sf by local firm, Latter & Blum. He’s handling the retail leasing, quoting $17.50 per sf to $20 per sf, triple net. The residential rate is predicated on pre-Katrina prices, which Blumberg says was pushing $2 per sf in the CBD just one month before the Aug. 29, 2005 hurricane. As an added perk for the price, he’s in talks with the Fairmont for 925 Common’s residents to use the hotel’s amenities when its restoration is done in 2007. Blumberg, who’s keeping the retail names under wraps for now, says apartments are 10% leased to date.

Blumberg says 925 Common wasn’t eligible for Go-Zone assistance because it was started before the hurricane. But, it did get a break when the federal government hiked historic tax credits from 20% to 26%. Chevron Corp. is the developers’ tax credit partner, with $4 million invested into the plan. Pullman Bank of Chicago is the lender. The New Orleans firms of Rozas-Ward Architects designed 925 Common and Carl E. Woodward & Co. was the general contractor.

“This is coming at a very important time,” Blumberg says. “It’s in an area of an investment asset class that the city desperately needs, which is housing.”

New Orleans’ Nagin has been in the hot seat in recent days from affordable housing leaders over the direction of Downtown development, but the logic is aimed at creating a critical mass of sustainable development in the inner core–one that’s going to act as a magnet for deep-pocketed investors over the long haul. The Sunbelt’s longstanding dynamics, retiring masses of wealthier Baby Boomers and chance to build anew are seeding similar strategies in Mississippi, where post-Katrina legislation made gaming legal on the shore.

“The likely result of all this is Biloxi is going to outstrip Atlantic City in the next five years,” says Jerry Johnson, a Jackson, MS attorney for Baker, Donelson, Bearman, Caldwell and Berkowitz and counsel for the Housing Committee of Mississippi plus a member of the Governor’s Housing Recovery Council.

To mark Katrina’s one-year anniversary, Las Vegas-based MGM Mirage had fast-tracked reconstruction of the 3.2-million-sf Beau Rivage Resort & Casino, which reopens today after eight months of repairs. The seven-year-old, 32-story Beau Rivage has an 85,000-sf casino, 1,740 hotel rooms, 11 restaurants and 50,000 sf of meeting space in addition to a shopping promenade, spa, salon and full-service business center. Tishman Construction Corp., an affiliate of New York City-based Tishman Realty & Construction Co. Inc., was the owner’s representative for the project, which was reconstructed by WG Yates & Sons of Philadelphia.

In Tunica, MS, Myriad Entertainment & Resorts Inc. of Edmonton, Alberta, has started the engineering phase for a $1.9-billion, 540-acre resort, touting what is believed to be the world’s first fully enclosed, climate-controlled championship golf course. The development will feature a 1,200-room convention hotel, two 500-room casino hotels plus a casino and convention center.

Johnson says a series of charettes were held in 11 Katrina-devastated municipalities in Mississippi when recovery planning began. Across the board, mixed-use, New Urbanism developments surfaced as the preferred product, with regional architecture integrated into all plans. “Everyone knows what was there cannot come back,” he stresses. “Mixed use is going to be the key to recovery in an area larger than the recovery area.”

Denise Killebrew, a Birmingham, AL attorney for Baker, Donelson, Bearman, Caldwell and Berkowitz, says mixed-use developments, though, take at least a year to get off the drawing board. She says there are several mixed-use projects in various planning stages in her region, but right now the focus is “on immediate residential needs” and “getting it up quickly.”

Johnson explains the “lines of demarcation” for commercial development are evident. He says all land south of Interstate 10 and its parallel railroad line–in a swath four miles deep from the water’s edge–is destined to be commercial. A recent survey for one of his clients showed building permits for $401.17 million of commercial development have been issued since November 2005 in coastal municipalities. “It’s too valuable for housing unless it’s high-end, high-story development,” he says. “The problems that the Gulf Coast confronts are materially different from New Orleans. At least we’ve got a clean slate. You know what you need to do: rebuild everything.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt. Multifamily Spring 2022 (Formerly APTS)Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.