Wise allocations of public capital

Why does one city need to dedicate public money and tax privileges to two different golf arcades three miles apart from one another? Well, it's kind of an accident. Or a series of accidents. Not well-intentioned accidents, mind you. These are the kind of accidents that happen when all of your policymakers begin with the assumption that the only lever available to anyone in government is the one that gives nice things to the already wealthy. 

Xiao, a Denham Springs-based businessman whose interests include Airborne Extreme trampoline parks in Louisiana, has been working on the Five O Four project since he purchased it from developer Joe Jaeger in late 2022.

Jaeger and his partners bought the site, the former home of The Times-Picayune, in 2016 for $3.5 million. Originally, he had a deal with Topgolf to build an outlet there. In 2017, after Topgolf pulled out, he struck a deal with rival chain Drive Shack to build one of their facilities.

In 2019, a decision by the Convention Center board to quietly propose a Topgolf on the land they controlled prompted an angry response from Jaeger and questions about why the state-sponsored facility would try to compete with a private development nearby.

Then-Gov. John Bel Edwards said it didn't make sense for two such similar outlets so near together and the Topgolf project appeared to be dead. But the pandemic slowed — and eventually scuttled — Jaeger's plans at the Howard Avenue site until Xiao stepped in with Five O Fore.

Xiao has subsidy deals both from reduced local property taxes and from a deal to recoup an additional 2% sales tax to pay for part of its development costs.

The Topgolf project was revived last year by the Convention Center. Topgolf will pay for the development costs itself and will sublet the land from RDNI, which is a long-term tenant of the convention center on that plot.

Topgolf is not seeking any direct taxpayer subsidy, though it is within the River District economic development district, which means it would raise an incremental 2% sales tax that can be used for River District development costs.

The article could have also mentioned the separate $21 million tax break doled out to Shell as part of that same River District scheme.  But try not to think about that right now. 

Anyway one of the golf arcades is suing the other one now over "unfair trade practices." That's pretty rich considering how both of these businesses got here in the first place.

It's just Dracula's castle now

It's been a while since we did a round-up of our city's most "iconic" doomed redevelopment projects.  In what's now a twenty year race to see who gets "back into commerce" only one of these has made it all the way there... for better or worse. The Trade Mart building is now the Four Seasons hotel.  Boysie Bollinger will sell you his penthouse there for $19.5 million if you are interested.  As for our other favs, well let's take a look.

Plaza Tower: Please enjoy this recent NOLA.com slideshow on the history of the tower. Last month, the city put out an RFP on possible demolition.  That didn't make Joe Jaeger, the building's current owner, very happy. Both Jager and the city have made vague references to possible sale in the works.  But nobody knows who the buyer might be.

Six Flags: As of this past October, Troy Henry has a lease on the property and, apparently, the green light to begin demolition.  He does not, however, have any partners lined up to operate any of the attractions and amenities his pitches for the property have promised.  Nor does he have any financing outside of the potential public subsidy should anything materialize.

Municipal Auditorium: Thankfully this will not become the next City Hall. What it will become remains anyone's guess. There is finally a plan in place to spend the $37 million in FEMA funding to "stabilize" the structure. The years of arguing over what to do with the building almost allowed that to expire. But, even now, there's still no agreed upon vision for the building. An RFP could come soon though.

Charity Hospital: There is news today! Not very encouraging news, of course.  Remember that years-long and very pained public process of getting various entities private and public (LSU, Tulane, the state and city governments, a developer partnership called "1532 Partners") to agree on a development plan? Well that's all scrapped. Instead they're doing this new thing. 

The Domain Companies, a New York firm known in New Orleans for developing the South Market district on Loyola Avenue, has finalized a deal to take over redevelopment of the old Charity Hospital, a project that is more than three years behind schedule and has at least doubled in cost.

What will they build now?  Unclear. But as a placeholder, please enjoy a bunch of gobbledygook.

Domain CEO Matt Schwartz said he isn’t ready to unveil updated plans for the building, but he said the project’s most important component — Tulane’s presence as anchor tenant — will remain the same. Other elements, such as the specific number and configuration of apartments, labs and offices, will be adjusted to make the project more financially feasible.

“Some of it will have to be retooled to make sure the different components are speaking to each other,” Schwartz said in an interview Tuesday. “We are looking at rightsizing the different components for viability, finance ability and making sure we’re targeting the right market and right demographics for what will work.”

The project was originally estimated to cost $250 million, and was later revised to $300 million. After the pandemic, interest rate increases and inflation drove up construction costs. Sources familiar with the project said it could cost as much as $600 million now.

Thumbing back through our notes we are reminded that in 2019 the LSU board gave its final approval to the plan while meeting in Shreveport in order to get as far away as possible from any objections from the New Orleans public. Even at that moment, the emphasis was already moving away from "innovation hubs" and affordable housing and toward condos and STRs. 

Plans for the project also include renting about 150 residential units to Sonder, a short-term rental company that already has significant operations in New Orleans. That would be about 50% more units than would be allowed for the property under short-term rental rules the City Council passed earlier this year, which bar renting more than 25% of the units in commercial buildings to tourists.

And, now, what with all the "right sizing" and "market targeting" Domain is going to do, who knows what they'll end up with. 

Jaeger vs Sonder

They've been fighting for a while over Jaeger's decision to back out of leases he'd granted them on some of his hotels.  It's worse now, though, because (according to Jaeger's new lawsuit) Sonder has also ruined the Jung. Apparently even the visionaries have difficulty predicting sometimes. 

It seemed like an ideal arrangement. At the time, Sonder New Orleans’ general manager Peter Bowen referred to Jaeger as a “visionary.”

Four years later, and after dozens of scathing online reviews, the deal has soured.

In a lawsuit filed last week, Jaeger asserts that Sonder has damaged the Jung’s reputation and value, costing him untold millions of dollars in lost revenue, by failing to address critiques on the Sonder website describing dirty guest rooms, soiled linens, stained furniture and public safety issues, including gun battles on the property.

Anyway so some of the worst people in New Orleans are fighting over the scraps of the mess they've left us again. Nothing new, there. 

And since this is a story about Sonder, we should mention also that, yes, we are aware the city council is about fail once again to effectively rein in short term rentals.  So brace yourselves to watch those rip through the neighborhoods one more time. It's the only thing that can happen anymore. Capital is like water in our gilded age town. Unbounded, it finds its own level and wipes people out in the flood.  Nothing new there, either. 

On the other hand, today's story does offer us a new insight as to the effect STRs have on hotels. 

While it’s too soon to draw conclusions about the specifics in either court case, industry analysts say the disputes illustrate the challenges that can arise when hotel owners and short-term rental operators try to marry their interests amid a changing New Orleans tourism landscape.

"This points to some of the pitfalls of these arrangements and also for the need to have stricter regulations of short-term rental operators around safety codes," said Lenny Wormser, executive vice president of HREC Investment Advisors.

The problem, Wormser said, is that platforms such as Sonder do not have the on-site staff of trained employees who can tend to guests expecting an experience similar to that of a hotel.

"Short-term rental people really do not pay attention to the guest services, the guest satisfaction as much as they should," he said. "You potentially end up with a degradation of the property and after three or four years; nobody wants to stay there."

Turns out short term rentals not only make neighborhoods shittier by turning apartments into poorly maintained hotel rooms, they also make hotels shittier by turning them into poorly maintained apartments.  Neat.

Nothing sadder than a grounded PILOT

RIP Drive Shack. Latest victim of the pandemic? That's what these photos NOLA.com just published seemed to indicate.  There's no accompanying story yet but the captions read as follows.

The Drive Shack golf-entertainment project that was to have gone up on the old Times-Picayune site on Howard Avenue appears to be dead. Drive Shack said in a recent filing that it doesn’t plan to continue with the project to build a venue there and is reviewing options, including disposing of the lease with land owner Joe Jaeger.

This lot was once the Times-Picayune building on Howard Avenue. It was sold to a group led by Joe Jaeger, Arnold Kirschman, and Barry Kern who proposed to re-develop it as a golf arcade tourist attraction. The city struck a sweetheart financing deal (commonly known as a Payment In Lieu of Taxes or PILOT) with them to make it happen. 

Drive Shack customers will pay an additional 2% sales tax on money spent at the complex, part of an agreement reached between the company and the city, and approved by the New Orleans City Council in late 2018. The city will get a quarter of the new tax dollars in order to fund street improvements around the Drive Shack site. Drive Shack will get the remainder. Drive Shack also secured a 12-year freeze on its property taxes in lieu of paying the city nearly $260,000 annually.

The new tax will split 50-50 if the city is successful in connecting Howard Avenue to downtown, an improvement that would make it easier for tourists to access the site. The tax remains in place through 2039 or until Drive Shack is fully reimbursed for its construction costs.

Cantrell described the facility as a “tremendous investment” in the city, noting it would generate tax revenue in addition to bringing jobs.

“It is very important for the community to understand that we did create an economic development district right here, so that a portion of the revenue that’s generated is reinvested in this same community,” Cantrell said, adding the Broad Street corridor remains “ripe for this type of investment.”

It's important for us to understand that they did this.  Ok. Anyway it never got built.  Ultimately, the pandemic probably was the most important factor in the project's failure, but there were several complicated stops and starts along the way here.  First, the Convention Center flirted with the idea of granting a rival golf arcade company access to its open riverfront property.  That, understandably, pissed off Jaeger who responded by pulling out of a plan to develop a hotel in partnership with the Convention Center.  Things only get more tangled from there. The riverfront property is now slated to (likely... probably... maybe) become a visually unappealing but nonetheless trendy planned development called "River District." That appears to feature no golf in any form. Which means neither golf scheme made it off the drawing board. Probably for the best. 

Anyway, so there's this empty plot on Howard Avenue now... 

Update: Okay the article is up now.  It still gives the impression that the Drive Shack deal is dead. It's just not as definite about that yet.

Drive Shack declined to comment further. But Joe Jaeger, who led the consortium that bought the 3800 Howard Avenue site in 2016 for $3.5 million, said that he is scheduled to meet with Drive Shack representatives in the next few weeks to discuss possible alternatives to a Drive Shack venue.

Jaeger said the company continues to make payments on its lease but has not yet indicated what its preferred alternative might be.

Meanwhile the TopGolf project may not be as dead as we thought after all. 

Michael Sawaya, president of the Convention Center, and others in the development team have said that they remain open to a deal with Topgolf as part of the entertainment district project.

Lou Lauricella, head of one of the two companies leading the project -- known as "The River District" -- declined to comment specifically on Topgolf. He said "the River District team has been in early stage leasing negotiations with a number of companies for the planned mixed use development. There are many exciting possibilities on the table, which we look forward to announcing soon."

many exciting possibilities 

Stimulus for some

Now seems like a terrific time to place more capital into the no-doubt soon to be booming indoor golf arcade business. 

After construction delays caused by money trouble at its corporate parent, work on the Drive Shack driving-range complex at the site of the former Times-Picayune building on Howard Avenue appears to be back on track.

The "golf-entertainment" venue, which is being built on a site owned by developer Joe Jaeger and partners, has been beset by difficulties since it was announced two-and-a-half years ago, the latest being a series of lawsuits by contractors demanding payment on overdue bills that had stacked up during the coronavirus pandemic.

But on Monday, Drive Shack's New York-based owner said it had sold its Rancho San Joaquin golf course, located in Irvine, California, for $34.5 million, giving it funds to continue work on the stalled $29 million New Orleans project as well as a mini-golf venture in Dallas known as The Puttery.

Seems a bizarre decision but, then, it is their money...

Wait, what's that?  Oh sorry, no, turns out that it's also public money.   (from 2018)

The developers who want to turn the former Times-Picayune building on Howard Avenue in New Orleans into a three-story indoor golf attraction received final approval Tuesday (Aug. 14) on a plan that basically freezes their property taxes for a dozen years.

The Industrial Development Board, which must sign off on such tax incentives, agreed to lock in land and building values for Drive Shack. The 62,000-square-foot, $29 million facility will include 90 golf ball hitting bays, a restaurant, bar, arcade and conference rooms. To the rear of the building, 183,000 square feet of artificial turf will cover the driving range. Plans call for 265 parking spaces on the property and additional off-site parking under the Broad Street overpass.

Still, who are we expecting will want to spend money on this amusement?  Even after (if!) we arrive at a moment when people generally feel safe going to crowded indoor venues again, will anyone even be able to afford it?  Maybe Drew Brees?  But we read here that he is already building his own private Drive Shack so I guess he is out. 

According to the breathless TMZ report, “Drew's new pad is coming with ALL the bells and whistles … from private access to a bar/lounge to a golf simulator room."

The likely answer is, a lot fewer people will be able to afford to pay for anything. And that in turn leads to a lot more fewer people able to pay for things.  And that can get... very bad. 

But as lockdowns have been lifted in most of the country and businesses have been able to reopen, that supply shock has waned, only for a new problem to emerge: weak demand. In other words, a supply shock has been replaced by a shock to demand.

Some of the weakness in demand is because we’re on the verge of a classic recessionary cycle: Since the stimulus payments to unemployed workers ended in July, people either have less money to spend or are worried about spending it, which means businesses have less revenue, which makes them cut back on hiring and investment, which means less spending.

One very simple solution to this would be to just give people money so they can buy things.  It's what you do when you want to.. stimulate.. the economy.  Is that what we want to do? Besides, given that we've already decided to give a great big tax subsidy to Drive Shack and its developers, there should be no problem loading up their potential customers as well.  You would think it is but, the evidence of that sure is scarce.  Or at least it changes day-to-day. 

The fall of Jaegertown

Once there was a big beautiful gentrifying  and profiteering dream.  But now look.

Five years ago, Jaeger was involved in talks to develop the entire area through a partnership with Darryl Berger and the Howard Hughes Corp. And while talks never resulted in a deal, last year a new plan began gaining momentum.

After successful negotiations with Mayor LaToya Cantrell over tourism tax dollars, Convention Center officials began moving forward on a 1,200-room Omni hotel as well as a vast multi-acre development filled with restaurants, shops, residences and other amenities.

In December, Convention Center General Manager Michael Sawaya announced the selection of three development teams to submit "master plan" proposals for the entire property. With development under way, Jaeger's bet on what is still one of the largest tracts of undeveloped land near downtown New Orleans looked set to finally pay off.

Since then, the shutdowns aimed at slowing the spread of the coronavirus have sent the Convention Center into a tailspin. With events canceled for the foreseeable future, officials have said they will have to dip into reserves to cover tens of millions of dollars of expenses and upgrades to its existing buildings. In April, board members put plans to choose a master developer on hold.  

Sure COVID 19 is bad and all but consider also that Market St. power plant might just be cursed.

The old coal-fired plant, with its Victorian-era twin smokestacks, was built in 1902 by the predecessor to Entergy Corp. and supplied electricity to the city's residents for more than six decades. It has remained a feature of the New Orleans skyline even since its furnaces ceased operating when the building was sold in 1973, and there has been speculation about what its next iteration would be ever since.

Will that be enough to keep the speculators away, though?

Siegel said that the Market Street plant will likely attract the kind of long-term buyer who can wait for a possible return of plans for the entertainment district when travel and business resume.

"I would be surprised if we didn't see substantial interest from potential national and international buyers...[but] it will be someone who takes a generational view," Siegel said.

Of course, the only outcome anyone can imagine for some of the most valuable land on high ground near downtown New Orleans right now is for it to become a site for parked money from "international buyers" with a "generational view."  Things are going great, aren't they. 

Anyway, RIP Jaegertown... or at least this particular vision for it.  I wonder what the NOligarchs map will end up looking like at the end of the depression.

 

 

Nice things for rich people

The Louisiana Children's Museum is leaving the Warehouse District. This is excellent news for land speculators since the market in that area is "sizzling." 

The 45,000-square-foot property was bought at the end of 2017 by developer Joe Jaeger’s MCC Real Estate Group for $3.6 million, which at $80 per square foot now seems like an amazing deal for the sizzling Warehouse District market.

The newer developments in the area — mostly condominium complexes with some restaurants and shops on the ground floor — are being sold for anything from $350 to $1,000 per square foot for the condo units, while the retail leasing is among the priciest in the city at around $35 to $40 per square foot a year, according to real estate experts.

The condominium complex at 425 Notre Dame St. recently sold out its units at an average of about $600 per square foot, said Michael Siegel, president of Corporate Realty, a New Orleans-based commercial real estate agency.

"There are some projects getting $700 to $800 a square foot, like The Standard, or the River Place, over $1,000," said Siegel. Some of the older projects are holding up well, too, he said, ranging between $350 and $500 per square foot.

Nobody actually lives in these condos of course. It's a market driven by pied-a-terres and short term rentals, but who cares. Assets are appreciating.  Which is another reason it's funny that this article describes the property as a "gamble" for Joe Jaeger, of all people. He's well positioned to bide his time.

MCC is one of the largest developers in the city and has held onto sites for years before deciding what to do with them. It only recently decided to move ahead with a new elder care facility in the derelict Lindy Boggs Medical Center site in Mid-City which it has co-owned since 2010.

It has also sat on the property housing the old Market Street Power Plant it has owned for the past four years. Aamodt said there was some investor interest in that site at a Council of Shopping Centers conference in Las Vegas last month but no firm plans yet.

So don't worry about him. Worry more about the fact that, even in the middle of a severe housing crunch, our system allows so much property to sit vacant for as long as it takes to turn a nice profit... as more nice things for rich people.

One possible conversion for the Children's Museum site would be a condominium or apartment-and-retail renovation, judging from the projects that dominate the surrounding area.

Free milk and a Brown's cow

A full two years after the announcement of its closure, the Brown's Dairy complex is going up for sale.  Does there go the neighborhood?

For decades Central City has been an affordable neighborhood for African-American residents. The NAACP has historic roots there. Dryades Street (now Oretha Castle Haley Boulevard) was a major shopping thoroughfare with dozens of bustling stores and an open-air market. The Brown’s Dairy redevelopment will create further gentrification and change the traditional residential mix. It could also drive out some long-time renters. The Muses, a mixed-income apartment complex, currently provides the highest concentration of affordable living units in the area.

Listing agents formulated two prospectuses for the site – one that highlights mixed-use redevelopment and a second prepared for hotel investors. Without a zoning waiver, the site could accommodate a 550-room hotel. There is already a successful Quality Inn less than one block from the site. Hospitality industry real estate broker Lenny Wormser believes the site is not appropriate for a major hotel chain such as the Marriott, whose development costs are in the range of $450 per square foot including land. More affordable hotel chains such as the Comfort Inn could build out the site for $150 per square foot or even less, Wormser said. Even at $150 per square foot, development costs could reach $30 million, a previously unheard of budget for any Central City construction project. The city could approve a height variance perhaps in exchange for new affordable housing offsite.

Why go "offsite"?  Is that even a thing being talked about or is Columbus just helpfully suggesting it?  These kinds of set aside deals are insufficient tokenism in the first place even when they're applied directly to the development in question.  Moving them "offsite" just cedes the question of protecting the neighborhood altogether.

And Central City is in need of protection.  According the most recent Data Center neighborhood profile, 67.6% of renters there are "cost burdened" (defined as households that spend over 30 percent of their income on rent.) The Brown's lots are also important in that they are on relatively high ground. Every land use decision that deliberately excludes poor and working class New Orleanians from the limited range of sustainable real estate is yet another missed opportunity to create an equitable housing policy.  When Brown's closed two years ago, it meant a loss of 185 working class jobs. It looks like the plan is to replace those with more nice things for rich people and more upward pressure on rents.

On the other hand, you could probably put like five Top Golfs on that property so, you know, best highest use, right?

Speaking of Top Golf, it looks like Joe Jaeger and Melvin Rodrigue have completely broken up now. Jaeger had been on board to develop the now green-lighted Convention Center hotel. But that changed after Rodrigue appeared to cut a separate deal to build a Top Golf on vacant riverfront land controlled by the Convention Center. Jaeger was already involved in a venture to open a competing golf arcade franchise on the old Times-Picayune property. The Top Golf plot prompted him to leave the hotel deal in a huff.

Jaeger told NOLA.com | The Times-Picayune he has no intention of returning to hotel project. He said he has deep concerns about Convention Center leadership. He declined to mention any leaders by name.

Jaeger said those concerns remain after seeing the lease terms revealed in the now-quashed Topgolf deal. The situation is baffling given the millions the authority spent on consultants to develop a master plan for the acreage it owns, he added.

The Convention Center leadership includes Michael Sawaya president and general manager of Ernest N. Morial Convention Center, and Melvin Rodrigue, president of the New Orleans Exhibition Authority. The 12-member authority board has a mix of business and civic leaders.

If the leadership remains the same, “I don’t want anything to do with anything on that property,” Jaeger said. “It just doesn’t work for me.”

Now, even though the hotel has been authorized and the Top Golf deal mothballed, neither side is interested in making up. Instead they are moving ahead to develop their adjacent properties independently of one another.  Thanks to LaToya Cantrell's embarrassing "grand bargain" with the tourism oligarchs, Rodrigue now has legal authority to treat the Convention Center pretty much like his own private development company. 

House Bill 617, passed by the Senate on a 33-0 vote on Sunday, authorizes the Convention Center to build and own the $550 million, 1,200-room hotel proposed for the upriver end of the giant exhibition hall. The bill also clears the way for the Convention Center to develop other vacant land it owns next to the site

He hasn't decided what to do with it yet. But whatever it ends up being, the hard part was making sure the taxpayers would back it. That's all done now, thank you very much, Mayor Cantrell.

In his email, Rodrigue admitted the vision is still being formed, though he expects convention center leadership to turn more of its attention to the future of those lands now that plans for a headquarters hotel are progressing.

“We know the type of programming elements needed to make it a successful mixed use development and have lots of ideas of what those look like,” he said.

"Mixed use," meaning some riverfront condos and retail, maybe.  There might have to be a little "affordable" set aside somewhere in there. Or maybe that can go "offsite" too. 

Jaeger is making plans for the Market Street power plant.  Or at least he would like to.  This makes it look like there aren't many solid ideas at the moment. But there are plenty of public subsidies available should any ideas emerge.

Jaeger intends to push Market Street forward starting this summer. His team attended the International Council of Shopping Centers conference in Las Vegas in mid-May. Market Street was among the projects they looked to chat up among investors. Jaeger said he and his team plan to revisit previous redevelopment ideas, including the possibility of an entertainment use for the space.

Redeveloping the century-old property will be costly. The work will likely involve environmental remediation. But developers would be able to leverage historic tax credits, Jaeger noted. The plant also sits in an Opportunity Zone, a federal tax break program that is spurring frenzied investment in real estate. That could attract investors, he said.

“It’s difficult, but it’s got some reasons why it could happen,” Jaeger said.

So here we are again with all this public money available to throw at all this vacant land on high ground.  Nobody really cares what gets built there, specifically.  Meanwhile, this city has a serious housing crisis.  Somehow, despite all the recent rhetoric about what constitutes a "fair share," nobody can figure out how to connect these two facts.  Maybe nobody wants to.

what

Been a little too busy to keep the yellow blog updated lately. That should be changing soon. But it's impossible to resist jumping in to just ask... what

Sidney Torres is the proud new owner of the building that housed an historic New Orleans grocery.

Torres, a real estate mogul and reality TV star, bought the Circle Food Store for $1.7 million as the store was put up for auction Thursday afternoon. He said before the auction that he intended to keep the store as a grocery.

No idea what level we've sunk to at this point.  But the NOligarchs are just picking properties up out of the bargain bin now.

Speaking of which, what do we make of this mess?

A golf driving range venue is being considered for Morial New Orleans Convention Center property, potentially a complement to a proposed hotel next to the facility.

The New Orleans Exhibition Hall Authority, which oversees the state-owned convention center, was scheduled Tuesday (April 23) to ratify a letter of intent on a lease with Topgolf. The Dallas-based company operates nearly 50 similar facilities in the U.S., including one in Baton Rouge, and five international locations. The authority’s board meeting was canceled, with president Melvin Rodrigue in Baton Rouge earlier in the day to testify at a legislative committee meeting.

The Advocate story is a bit better here. It mentions Topgolf's rivalry with Drive Shack as well as the names of the local investors now enlisted on either side of it. Notice Joe Jaeger's odd position. 

Drive Shack's $29 million Howard Avenue project will occupy the site of the old Times-Picayune building, which is currently undergoing demolition.

The site was bought in 2016 by a consortium led by developer Joe Jaeger, with partners including Barry Kern of Mardi Gras World and developer Arnold Kirschman.

Jaeger is also involved in developing the Convention Center's $557.5 million Omni hotel project. A decision about that project is expected to be made this year.

The Convention Center is trying to get Jaeger to build them a hotel on land adjacent to an amusement project that will put them in competition with one he's trying to build elsewhere.  That's pretty messed up.  Maybe if the same 7 or 8 mega-millionaires didn't own all the important land in the city, this wouldn't happen. 

Update:  Aaand it looks like Jaeger's position was untenable. 

Joe Jaeger Jr., one of the owners of the property where a Drive Shack golf and entertainment complex was set for construction soon, said Thursday that the actions of the Convention Center had made it untenable for Drive Shack to move forward despite its lease for the site.

"It appears that the project is dead," said Jaeger. He said he is currently negotiating with Drive Shack about splitting the costs incurred so far and plans to let them out of their obligations.

"Holding their feet to the fire over the lease wouldn't be right. ... They've been duped by the leadership (of the Convention Center), and it's not fair, it's not right and I can't make them do something I don't believe in," Jaeger said in an interview.

Or to put it another way, it looks like the Convention Center put him in that position on purpose.  Which, again, is what happens when the city is governed according to the whims and resentments of its competing oligarchs.

Bensonville

The king is dead. Long live the queen. 

New Orleans Saints and Pelicans owner Gayle Benson is purchasing the Hyatt Regency Hotel near the Mercedes-Benz Superdome, adding another piece of marquee downtown real estate to the growing portfolio of Benson-controlled buildings in the area.

The deal, which is set to close Friday, puts the Hyatt in local hands for the first time in its 43-year history and follows a multimillion-dollar renovation of the hotel that began in 2010. The terms of the deal were not disclosed, but comparable recent hotel sales suggest the purchase price could be around $300 million.

Benson is buying the hotel along with two partners, longtime local developer Darryl Berger, whose interests via the Berger Co. include the Windsor Court, Omni Royal and Omni Riverfront hotels, and New Jersey-based hotel asset management firm Fulcrum Hospitality.

"My late husband Tom believed in reinvesting in our community, and that philosophy has made our city a better place," Benson said in a statement announcing the transaction. "Our investment in the Hyatt will continue that legacy."

She's got a point.  What better way to honor Tom's legacy than to buy something that.. for a brief time after Katrina, at least... had a big sign at the top of its tower that said, "YAT" 



Okay so technically it said, "Yatt." Don't spoil it.

Meanwhile, this must mean it's time to update the old NOligarchs map of downtown New Orleans. Let's see, Bensonville just needs to add a little notch there to acquire the Hyatt.  There we go. All better.



Actually the map needs a bit more work than that. These territories are far more overlapping than we can hope to represent in this crude rendering.  It doesn't consider figures like Darryl Berger who, in addition to partnering with Gayle on the Hyatt also is in on Jaeger's proposed convention center hotel as well as numerous properties all over the landscape.   Jaeger, meanwhile, is an investor, along with Barry Kern, in the project to demolish the vacant Times-Picayune building and replace it with a golf arcade. This venture is the cornerstone of what we have labeled Kernworld.

All of which is to say this map isn't a true tool for examining the way the major developers have carved up the city's most valuable real estate so much as it is a piece of conceptual art.  It could be more than that but I think we need to apply for a grant first.  The least we can do for now is extend Torreszonia to reflect Sidney's recent Frenchmen Street acquisitions. The rest of it will have to live as an unfinished project for now.

Anyway congratulations to Gayle. So, hey, as a person with a major interest in the Superdome and now also with the hotel/motel taxes that fund its upkeep, does she just write the check directly to herself now?

Billy and the redeemers

Nungesser told a bunch of  "tourism and cultural preservation officials" yesterday that he's going to put all the Jim Crow monuments back on public display soon.  That should go over really well.

I notice here, also, that Billy implies Mayor Cantrell is cooperating with him in this task.   That also should go over really well.  Even so he can't help but show a little ass toward her city even as the negotiations are ongoing.

“I’ve met with her several times. I really believe in my heart she wants it resolved in a way that satisfies -- as much as we can – everyone," he said. The event was hosted by the Robert E. Lee Monumental Association.

Attendees cheered Nungesser’s promise that public input will be taken on all proposals. He said he personally favors building a replica of Lee Circle in Mandeville’s Fontainebleau State Park, which his office oversees.

He says the statue of Confederate General Robert E. Lee would be back on top of his pedestal, with his back side facing New Orleans.

So... yeah... that ought to go over super well too.

Maybe somebody can follow up with the mayor on this.  When they do, I hope they would also ask her about the folks in Nungesser's cheering audience.  WWNO doesn't name any of them but describes them as "tourism and preservation officials" so you have to figure there are some prominent individuals among them.  The hosting "R.E. Lee Monumental Association" is listed on the Sec of State's website. Its president is William Mason.  His name does not appear on the organization's website. Nor does anyone else's.  It says here on the membership page that donations and members will remain anonymous.  I don't think Billy's audience was masked, though.  Mardi Gras is over and most of them have put their hoods away..... we think, anyway.

Of course the anonymous donations to the white supremacist organization are tax deductible.  That's in keeping with the standard practice for culture and tourism oriented non-profits in New Orleans.  Take plantation owner, Joe Jaeger's proposed hotel for example.  It says here, Jaeger and his partners want to configure their development as a non-profit also in order to aquire a property tax exemption.  Assessor Erroll Williams is not so keen on that at the moment.

The tourism cabal is also seeking hundreds of millions of dollars in additional rebates and subsidies beyond just the propety tax exemption.

The proposed deal calls for $41 million in upfront cash from the Convention Center, a free 50-year land lease with four optional 10-year extensions, and a 40-year break on property taxes. It also would include complete rebates of a 10 percent hotel-occupancy tax and a 4 percent sales tax on all hotel revenue from sources other than room rentals.

Besides the $330 million value identified by BGR, the proposed plan also calls for other subsidies from the Convention Center: $26 million to perform “site prep” to remediate any hazardous soil and to install utilities on the site, and $20 million to connect the hotel to the Convention Center at Henderson Street

All of this, the wealthiest developers in town insist, is absolutely necessary for them to finance their surefire money making project on some of the most desirable real estate in the city.   If they need that much help, the tourism economy in New Orleans must be in a lot worse shape than they say it is. Either that or they're just not very good businessmen.

Another possibility is that's just how business is done around here. The Advocate points out that the World War II Museum, another of our celebrated tourism and cultural non-profits, is looking to build its own tax-exempt hotel.

Williams said he also isn’t inclined to grant a property tax exemption sought by officials at the National World War II Museum for the hotel they are building across Magazine Street from the museum. The officials say the hotel would be an “educational” facility, according to Williams. No one from the museum was available for comment.

Maybe if they hadn't spent their endowment on the Bollinger Canopy Of Peace they wouldn't have to ask for stuff like this, I dunno.  Anyway, they need more public money now.  And even though Williams is leaning away from giving them more, it isn't clear he's made a final decision yet.

Which is why, as this process goes on, he, and the mayor, may wish to consider the very likely overlapping rosters of individuals involved in the Convention Center project, the World War II Museum, AND the members of Nungesser's audience who cheered when he suggested we could all kiss General Lee's ass for him yesterday.  Can't imagine that's going to win them much favor.  But one never knows. 

Privacy is important to Google

The company monetizing every bit of personal data about everybody on earth is very careful about what information it shares about itself.

Last May, officials in Midlothian, Tex., a city near Dallas, approved more than $10 million in tax breaks for a huge, mysterious new development across from a shuttered Toys R Us warehouse.

That day was the first time officials had spoken publicly about an enigmatic developer’s plans to build a sprawling data center. The developer, which incorporated with the state four months earlier, went by the name Sharka LLC. City officials declined at the time to say who was behind Sharka.

The mystery company was Google — a fact the city revealed two months later, after the project was formally approved. Larry Barnett, president of Midlothian Economic Development, one of the agencies that negotiated the data center deal, said he knew at the time the tech giant was the one seeking a decade of tax giveaways for the project, but he was prohibited from disclosing it because the company had demanded secrecy.

A very long time ago Google was more or less just a website you used to search for information.  Like if you wanted to know about who your elected representatives were about to shower favors and tax breaks upon, you might use Google to do some of that research.  You can still do that. But Google is hoping you won't find what they're up to until it's too late.

Why are they so worried? Well, it turns out that showering favors and tax breaks onto mega-corporations and international oligarchs isn't the no-brainer political winner it used to be.

The inevitability of Amazon’s arrival, however, had formed a strong common sense. Many acknowledged that it was a crummy deal – including, at times, the plan’s own architects – but urged New Yorkers to resign themselves to its eventuality. Just two days ago, the New York Times published an editorial by historian Kenneth Jackson that granted the subsidies’ absurdity, but suggested still that the city capitulate, stating: “this is how the game is played.” A few weeks earlier, Governor Cuomo, in an interview with Brian Lehrer, said that in a perfect world a company should not have states bidding against one another, but that: “We pray for the perfect, we live in the real.”

In other words, the deal may stink but our hands are tied. Mayor de Blasio acknowledged the obscenity of tax breaks for Bezos, but insisted that the deal was democratic because its key negotiators — the mayor and governor — were democratically elected. The message to New Yorkers was clear: sit down, there is no alternative.

And then, on Valentine’s Day, New Yorkers proved them all wrong. They burst the ideological bubble the establishment was floating, and showed that they will not accept the trickle-down, supply-side urban economics under the vague and misleading banner of “progressive” policy. This demonstrates that we can — and we must — do more than “play the game,” “pray for the perfect,” and follow the leaders.

God bless the kids who write this stuff for Jacobin.  They really do try like hell to convey a sense that great things are happening and victory is right around the corner and man is that ever annoying.  But that doesn't mean they're wrong about what happened. People in New York got together and said they'd had just about enough of this shit in so loudly that it ran the world's richest man right out of town.  So good job, those guys.  How's the rest of the world making out, though?  Not so good.

Making out especially not so good are we here in Louisiana where we're still very much invested in a model of governance that requires us to shower favors on the wealthy first and then hope for good things to come from that.

Maybe they can run Bezos off in New York but we can barely reserve the right to review the occasional industrial tax exemption. Not a single person in New Orleans questioned the cash payroll subsidies handed out to DXC Technology in 2017.  The Sonder STR hotel project is going to have full city council backing. 

In New York they told the world's richest man to fuck off. We can't even stand up to Torres and Motwani and Joe Jaeger. Jaeger just bought himself a dang plantation.  But all indications are we're going to subsidize his downtown hotel with money that could be better spent on shoring up our infrastructure.

What's worse is all of this stuff happens right out in the open where we can read about it in the local papers and whatnot.  What would happen if the local oligarchs started getting all huffy about their privacy when anybody tried to hold them accountable.

Lifestyle center

I don't really know what that is or how it is different from, say, a "healing center" other than to say one of those was dreamed up by Pres Kabacoff when he was gentrifying Bywater and this one is Sidney Torres on the Greenway.

A swath of undeveloped land just past Jefferson Davis Parkway offers one of the few blank slates left along the Greenway in Mid-City. It’s owner is real estate and waste management magnate Sidney Torres IV, whose property purchases along the Greenway include the land where Wrong Iron and the Edwards Communities apartments stand.

Torres has been contemplating what to do with that land. Now that Wrong Iron is open and busy, his vision for what he calls a “lifestyle center” is coming into sharper focus. In a series of recent interviews, Torres cautioned that plans for the site are extremely preliminary; he hasn’t talked to neighborhood groups about them or even vetted them to see if they conform to local zoning standards.

Also, bonus points for getting the phrase "blank slate" in there. It's not like that is freighted with all sorts of problematic implications or anything.  I don't know if Litten is deliberately trolling the readers with that or if he is just flattering Torres. It's probably the latter. Not that it matters. Either way he conveniently skips over details of the story that actually tells what Sidney is up to.

For one thing, nothing here addresses the fact that Sidney's development is subsidized in part by a $6 million PILOT agreement.

Late last year, Edwards Companies received a $6 million tax break from the Industrial Development Board in the form of a payment-in-lieu-of-tax program that reduces the company's property tax liability while construction continues. To obtain the break, the company agreed to offer 13 of its apartments at reduced rates to individuals who make about 30 percent of the area's median income.

Thirteen "affordable" (by a tricky definition) out of nearly 400 units is hardly anything to be proud of.  It certainly doesn't justify a shell game operation like PILOT which drains revenue away from public schools and services leaving poor and working class residents at a net welfare loss regardless of how "affordable" these 13 apartments might be.

What's worse, though, is Torres and his partners (Hicham Khodr and Joe Jaeger are also invested) actually had to have their arms twisted to even offer that much.  At one point they had proposed to buy their way out of the affordable set aside requirement altogether by paying into a "homeownership fund" presumably to help people buy homes far away from these apartments.  Then-councilmember Cantrell really liked this idea, in fact.

It's an important point to consider especially now that we've taken up the task of developing a citywide "inclusionary zoning" policy. One option discussed at a recent City Council meeting would be based on an "incentive" model that could end up looking very much like the scheme Torres has carved out for himself on the Greenway.  This mayor and City Council keep hoping they can combat the housing crisis by helping real estate oligarchs build nice things for rich people. Moving them away from that thought is going to be a heavy lift.

That lift is going to be all the more heavy if people like Torres don't have to answer any questions about this stuff.  Sidney is gonna be okay no matter what happens. 

The reason I’ve started looking at buying iconic bars and locations is because it’s a proven fact that when the economy goes to crap, people still go to drink. Iconic bars with iconic names, especially if you have a live music permit.

Maybe we need to start thinking about what the crap economy plan is for the rest of us.  Besides just drinking, that is. Maybe that's what the "lifestyle center" is for.

Clearly this is the only way they could finance this project

Barry Kern, Joe Jaeger, and Arnold Kirschman aren't the sort of people who can swing the credit to develop property in New Orleans.  Humble disadvantaged small time developers like that are going to need a little help. That's what public subsidies like this are for.

The building sold in 2016 for $3.5 million to local investors Joe Jaeger, Arnold Kirschman, Barry Kern and Michael White. In addition to the tax approved Thursday, Drive Shack has secured a 12-year freeze on its property taxes in lieu of paying the city nearly $260,000 annually.

Per the latest agreement, Drive Shack would receive three-fourths of tax proceeds leveled through the newly created Broad Street Sports Entertainment and Dining Economic District, which covers only the area where The Times-Picayune building sits. The city would receive one-fourth of the tax proceeds and is obligated to undertake up to $450,000 in street improvements around the site. If, however, the city is able to reconnect Howard Avenue with the Central Business District, the city and Drive Shack would then split tax proceeds 50-50.

Yes, but do the elevators work?

If so, I hope they don't run on diesel fuel.

In early August, hundreds of gallons of diesel leaked from storage tanks located at the abandoned Naval base in the Bywater neighborhood into nearby waterways, documents from the Louisiana Department of Environmental Quality show. The fuel spilled from an above ground container onto the soil below, seeped into the drainage system and traveled approximately two miles to the Florida Avenue Canal. After discharging into the canal, the diesel flowed another half mile into the reservoir of a Sewerage and Water Board drainage pump station.

I don't mean to hit you with too many spoilers from this story. But the tl;dr is this. When the Naval base closed, the city took over the property with a plan to redevelop it. Then Cedric Grant diverted all of the FEMA money for that into Sewerage and Water Board. The WWLTV story linked in the article says it went to drainage projects that haven't moved past the design phase. Maybe Cedric just bought a couch with it. Anyway, the diversion of the funds left the city and the developer in limbo over who was responsible for security and hazard mitigation. And so nobody did any of that. And now we have diesel fuel leaking into the surrounding waterways.

But despite all of this, some version of the original deal may still be on.  At least that's what the city seems to want.  The developer, who happens to be Joe Jaeger, by the way, is a bit more hesitant.  I will highlight the reason why for you in this quote.

Cantrell’s office is currently working to broker a new agreement with EMDRC, Dyer said. The city will not dedicate funds to the project, he explained, because the developer will be fully responsible for financing construction costs according to the revised contract, which the city plans to execute by the end of the year.  “When we came into office the project was behind about two years. But as of December 31, it will be completely caught up,” he said.

Without going into specifics, Dyer said redevelopment plans have been adjusted to account for current realities. “We now have more information on the condition of the buildings and what can be done, allowing the developer and the city to negotiate a more precise lease.”

Last month, Jaeger told The Lens he was unsure if he will move forward with the deal. “I just work on the construction side of things, and I’m getting to the end of my rope waiting for the city to do its part,” he said.

There is still one way the city could agree to put some money into it, though.  It's a long shot but it appears, at least from this report in September, to have been on the table recently.

Interest in the potential for moving City Hall was kicked off Tuesday morning when Cantrell, answering a question about the future of Municipal Auditorium in Armstrong Park during a breakfast appearance before the Bureau of Governmental Research, suggested the currently vacant building would make for a good site for a new City Hall.

But Montaño said a few hours later that no decisions have been made and the auditorium is just one of several options being considered.

At this point, he said, all city-owned buildings are on the table, including some that would be logistically difficult or are already spoken for.

A brief list of potential sites Montaño went through included Municipal Auditorium but also the former Veterans Affairs building where officials cut the ribbon Tuesday on a "low-barrier" homeless shelter and the former Naval Support Activity property, a long-abandoned site at the edge of the Industrial Canal.

I thought it was odd to see the Naval base mentioned as a City Hall site. It still seems like an extremely remote possibility. But at least now we can see why the thought even came up.  They're just trying to match problem properties with rationales for putting money into them.

Oh look we have a border clash

I know the old NOLigarchs map is due for some updates.  For a while there I thought I might have to extend Kabacoff's territory to Tulane Avenue. But that's now been occupied by the Israelis so we can forget about that.  Also there are other minor fiefdoms we can add when we get the time. But this is all our cartography budget can handle for now so this is what we have to go with.



We do need to point out also that the regions loosely defined on this map are not very strong on border security.  One Noligarch may in fact hold substantial amounts of valuable territory within the titular boundaries of another's domain. For example, look at all this stuff Joe Jaeger runs even though it isn't in what we've marked on our map as "Jaegerton"

As one might expect, in the world of international capital, borders are not always what they may seem.  Anyway, our map is not very nuanced.  One thing it does get right, however is the overlap and "disputed" designation of areas claimed by Motwani and by Torres.  Tensions there do continue to flare up, it seems.

Developer Sidney Torres IV has become embroiled in a legal battle with French Quarter real estate owners Kishore “Mike” and Aaron Motwani over Torres' purchase of 500 Frenchmen St., a key location in the Marigny’s busy nightclub district. In court filings, Torres claims a tenant of the building, the nightclub Vaso, is being used as a proxy through a lawsuit to win the Motwanis control of the building.

Now that Frenchmen is pretty firmly established as the new Bourbon Street as opposed to the sort of hipster anti-Bourbon Street it had been for a while, all of a sudden there is a land rush. Just a few weeks ago we learned that the Motwanis have taken ownership of the Praline Connection Restaurant which they have moved off of Frenchmen saying "“Locals couldn’t really get down here anymore." They are moving it to... get this... upper Decatur Street in the Quarter because... that would be.. less touristy?  Who knows. It's not clear to me who owns that building now so we need more information. But the Motwanis have a claim on what happens in multiple Frenchmen Street locations right now. That's interesting.

There's a lot of interesting stuff going on in this story, in fact.  To begin with we have what Torres wants us to believe is a threat, although his word is hardly to be taken at face value. Here's what he says happened anyway, which is pretty funny to think about. Note that Motwani doesn't deny he's being quoted pretty accurately whatever he may have meant.

Torres cited a voicemail he said was left on his agent’s phone, as well as a phone call that, according to a court filing by Torres, had Aaron Motwani saying that if Torres didn’t comply with demands, “It will get bloody.” Torres' attorneys, in the court filing, cited what they described as a call log Torres' agent wrote shortly after the call, as well as a recording of the voicemail.

“I want to ask nicely for you to call us back," Motwani says on the voicemail cited in court. "But if you want to handle it the other way, we can handle it the other way, too.”

Aaron Motwani said his voicemail was taken out of context and did not reference a threat of physical harm. He declined to be interviewed but sent a text message in response to questions about the calls.

So keep an eye on this. It could change the face of the map which, as we said, needs some revision anyway. Technically all of this is taking place in "Cummingsville"  according to our drawings.  Let's hope no other belligerents get drawn into the dispute.

Effortless living

Pretty much the definition of nice things for rich people. 

The short-term rental company Sonder -- now the largest single operator of vacation rentals in the city -- has master leased 111 apartments in the renovated Jung Hotel building. The deal with hotel developer Joe Jaeger's MCC Group, the terms of which were not disclosed, closed in early September.

Jaeger retains control of the hotel's operations, and Sonder is handling the advertising and operations of the 110 high-end luxury units, which were listed on Apartments.com at one point for between $3,900 and $5,900 per month. None of those units were ever leased, so Sonder approached MCC Group with a bid to master lease the units and rent them out on short-term rental platforms.

Jaeger "is a visionary and he had this forward-thinking idea to have effortless living -- you could lease an apartment and have access to housekeeping, they'd stock your fridge," said Peter Bowen, general manager of Sonder New Orleans. "They just couldn't lease any of them up."

Sonder is talking about this arrangement as though it were something completely new. But timeshare/hotel developments have been around for a long long time.  It's not something anybody needs to celebrate, though, unless they're Joe Jaeger or Mike Motwani or whichever of the permanent New Orleans Oligarchy happens to be making a new bundle of money from it.

It does call into further question our chances of clamping down on commercial short term rentals, though.  

The New Orleans City Council is moving toward restricting short-term rentals to commercially zoned areas after about 18 months of allowing "temporary" licenses in residential zones. Sonder doesn't object to those regulations, but it's staunchly opposed to a proposal that would limit short-term rentals in commercial multifamily buildings to 25 percent.

"Each deal is unique, and a 25 percent cap can hamper and slow developers," Bowen said.

Hey look at that, we guessed right about this last week.  Anyway, here we are yet again looking at a situation where the same old developers and landlords conspire with the same old useless politicians (Jason Williams) to continue driving poor people out of New Orleans.  It's almost effortless the way that happens.

You are not New Orleans

Sorry, guys. I know you went down to the Convention Center board meeting and got very mad online in person at them for trying to take all of your money and give it to Joe Jaeger. But Dottie Belletto regrets to inform you that you are fake news.

Gavrielle Gemma, representing the People's Assembly of New Orleans, called the tax arrangement a bad deal, saying that when it was passed, "They didn't realize it would be robbing the city budget of extremely important things."

"You all think you can take the money levied -- take it to actually build a hotel which will not pay any taxes back to the city?" Gemma said. "You do this because you think the people of this city are asleep. ... Maybe it's not today and it's not tomorrow but there's going to be an eruption in the city. One that you're going to regret."

Commissioners appeared unmoved by the activists, however, and Commissioner Dottie Belletto claimed the activists were not representative of the rest of the city.

"I apologize for what you saw in this room today. That's not New Orleans," Belletto said. "I think the community just doesn't understand, so we just need to do a better job to understand these processes."

The board was there that day to listen to a consultant they had hired specifically to tell them about how good the hotel would be for the "business and hospitality leaders" who we all know constitute real New Orleans.

The project has drawn support from many of the city’s business and hospitality leaders, who are eager to add another high-rise hotel to the New Orleans skyline, especially one that’s big enough and with the facilities necessary to serve as the headquarters for major conventions.

These "hospitality leaders" will spend all day and then some touting their value to the community if you let them. Often it sounds like they just enjoy flattering themselves but there's actually a purpose.  They need to produce enough bullshit copy to justify the hundreds of millions of dollars worth of public subsidies and tax credits that go into financing their pet projects.

To help cover the project’s cost, the developers are seeking $41 million in up-front cash from the Convention Center, which is funded by a variety of taxes. They also want a complete rebate to the hotel of a 10 percent hotel occupancy tax and a 4 percent sales tax on all hotel revenue from sources other than room rentals, which would last for roughly 40 years.

The developers further have requested a free 50-year land lease from the Convention Center with four optional 10-year extensions, which BGR values at $28.9 million, and a 40-year break on property taxes, which the group pegs at $43.7 million.

Altogether, BGR estimates that the requested tax breaks and incentives are worth roughly $329.5 million in today’s dollars.

In this case they are proposing to manage that generous package through a brand new "non-profit" entity created to operate the hotel... at least until the public money pays off all of its debts. This is an unusual arrangement, according to the consultant, although not entirely unique. Unfortunately whatever information about how it works elsewhere is classified.

HVR says there are very few other hotels being proposed using this 'non-profit' method--though a couple are 'confidential and he can't talk about them'

— MaCCNO (@musicculture504) August 22, 2018

Okay, well, whatever is going on in the black box there, Joe Jaeger told us a few months ago that it all ends well in 40 years when ownership of the hotel reverts to the Convention Center (and therefore, theoretically, to the public although there are all sorts of caveats attached to that we won't get into.) "In reality, this is a Convention Center hotel that will ultimately be owned by the Convention Center,” said Jaeger at the time.  Last week, though, the reality looked a little less certain.

HVR admits that there is a chance there is chance that the hotel could under perform and ownership would never revert to ownership to public (Convention Center) ownership

— MaCCNO (@musicculture504) August 22, 2018

In the long run we're all going to be under the ocean anyway so maybe nobody cares who owns that particular plot of submarine real estate in 2060.  But in the meantime the NOLA non-profit industrial complex are used to stealing money for one another via a specific type of organizational format and so here we are. For example, this is exactly how the Convention Center handed Ti Martin and  John Besh several million dollars so they could build a "non-profit" restaurant school (tuition and fees $14,775) to train their subsistence wage workforce.   Many will recall also the $40 million they gave Mitch Landrieu so he could put a bunch of surveillance cameras and bollards all over the French Quarter.

The Convention Center is sitting on piles and piles of money it has no idea what to do with. And since the city itself is broke, this strikes some people as unfair. Like the mayor, for one.

In the opening salvo in what could become a lengthy negotiation over whether the Ernest N. Morial Convention Center moves forward with its plans to build a high-rise hotel, Mayor LaToya Cantrell has expressed “grave concerns” about the large public subsidies being sought by the developers.

In a letter last week, Cantrell said she had “grave concerns about the amount of subsidy this project will receive and the future implications of this project on tax revenue in New Orleans.”

Which is why the "hospitality leaders" are never shy about telling you this is all their money in the first place.

Much of the opposition is rooted in a long-standing structure that Cantrell herself has criticized. The city and school system receive only about one-quarter of hotel taxes generated in the city; the Convention Center and the Louisiana Stadium and Exposition District keep the majority of the revenue.

That arrangement has long been sold as a good deal for the city because the Convention Center doesn't depend on taxes paid by residents. But Cantrell has been critical of the arrangement, saying that more tourism dollars should be supporting the city's general fund.

The city, the school system, RTA, the Sewerage and Water Board, the levee boards, the libraries, etc. all of them are expected to be grateful for what little dollars the hospitality leaders allow them to keep.  They're all broke but they're getting a "good deal."  Not nearly as good a deal as what Ti Martin and Melvin Rodigue and their friends get, of course. But as Belletto explained, they're what constitutes the real New Orleans so they're entitled.

Eventually it all works out. The New New Orleans these guys have built continues under its own momentum to spawn new growth in timeshares and short term rentals and other tourist facing uses for real estate that becomes more and more expensive even as it becomes less and less insurable.  The trick is nobody needs well funded schools, roads, buses and flood protection if nobody actually lives here.

I met with Melon at his shotgun home right around the corner from where he grew up. His house is next to a busy seafood spot and one block from one of the most central locations for second lines. The highway overpass there at Claiborne and St. Bernard avenues acts as a concrete echo chamber. It's where brass bands make sure to play their best songs.

When I told Melon he lived in a prime location for his work, he said, “Yeah, but I won’t be here for too long. This isn’t a neighborhood anymore. This is a goddamn hotel district.” Melon said his landlord is kicking him out to turn his apartment into an Airbnb. His neighborhood is one of the black neighborhoods most threatened by short term rentals. Most of that money goes to speculators instead of entrepreneurial home owners.

In a city that's already becoming just a bunch of "goddamn hotel districts," what's one more hotel, right? Complain all you want, but the fact of the matter is what you want doesn't really matter anymore. You aren't New Orleans. It's been a very long time since you could say you were.

When do we get to see the bids?

Matthews Southwest dropped out of the Charity Hospital redevelopment sweepstakes today.

Officials said the firm Matthews Southwest did not submit plans by the state-imposed deadline of 10 a.m. Monday "due to the unexpected passing of a principal team member last week."

Well that sounds like sad news. There isn't any more information about it, though. We don't know if maybe Matthews could have asked for an extension. Probably not, given the seriousness with which we take deadlines and meetings around here.  Also it is worth asking how or if this affects Matthews's involvement in the Convention Center hotel deal. It may be that they're souring on that as well, considering the circumstances.

In the opening salvo in what could become a lengthy negotiation over whether the Ernest N. Morial Convention Center moves forward with its plans to build a high-rise hotel, Mayor LaToya Cantrell has expressed “grave concerns” about the large public subsidies being sought by the developers.

In a letter last week, Cantrell said she had “grave concerns about the amount of subsidy this project will receive and the future implications of this project on tax revenue in New Orleans.”

That was an interesting turn from Cantrell last week, by the way. It's curious to see her suddenly serious about the problem of public subsidies for private developers in this one specific case. It could just be she has a friend or two at BGR.  I wondered if maybe she was just mad at Joe Jaeger over the job he did submarining the Harrah's hotel earlier this year.  But that's probably not it since at the very same time Cantrell's letter was published, the IDB was signing off on a smaller but similarly flawed package for Jaeger's and Barry Kern's indoor golf house. Not a word from LaToya about that one. Nor do we expect there to be much objection from her over the ongoing "Spirit Of Charity" process which will inevitably lead to more TIF or PILOT giveaways to several of the usual suspects. For now, at least, it's a mystery.

As for Charity Hospital itself, well that's all up to the state and LSU to decide.  And so we are given to understand the mayor doesn't officially have a lot of say in who gets that deal. Although, in reality, she probably does have considerable input.  In any case, nobody is telling us much about it yet.

LSU’s Real Estate and Facilities Foundation, which is overseeing the selection process, did not release the two proposals Monday. But the foundation said it would make them public before Oct. 4, when LSU's Board of Supervisors could select a winner.

How far in advance will we see those bids?  There's only a little over a month left.  The two finalists were also the finalists the last time we tried to get this done so you can probably get a decent idea of what's in play by looking at what they proposed then.

The "spirit" but not necessarily substance of public input

They're making a big to-do over the GNOF-led public meetings about their proposed TIF district but the actual decision about what happens to Charity is up to these guys.

The LSU Real Estate and Facilities Foundation has selected three developers — the same groups that were picked in an earlier attempt to redevelop Charity — as finalists and asked them to submit proposals by Aug. 20. Those will be evaluated by a committee made up of state Commissioner of Administration Jay Dardenne and officials from LSU, its foundations and medical schools.

On Thursday, the foundation released portions of the submissions from the three firms that landed them on the finalist list. Three other firms also applied, though their names and submissions were not released.

The documents released are essentially resumés for the development firms. They only hint in general terms at what their final proposals will look like, offering no details about what mix of uses might eventually fill the former hospital building.

It doesn't matter if they say what they want to do, anyway. Each proposal is likely to resemble the next with the decision coming down to who has the most pull with the committee.

On Thursday, the LSU Foundation responded to concerns voiced at the meeting about transparency and released the initial responses from developers in the state's selection process. The state used those developer letters earlier this year to pick the three finalists from a total of six. The development groups are New Orleans-based HRI Properties, Matthews Southwest and a partnership between El Ad US Holdings and CCNO Development.

Those letters contained a variety of information about the firms and their commitment to redeveloping the hospital, but they were spare in detail on what they'd ultimately propose in terms of possible tenants or the ultimate use of the building.

If I were guessing I would say they're going with HRI. But the only reason I say that is because it would make a more elegant addition to the boundaries of Kabacoffia (shown on the NOligarchs map in pink below) than it would to Jaegerton (shown in purple) should it go to the Matthews group.

 

It could be they just pick something at random.  We would never know. Instead the public is being asked to focus its attentions on helping Andy Kopplin get his TIF, although the reason for doing that is also highly dubious.

Ultimately, the aim of the effort being led by Kopplin is twofold: to create a master plan for the mainly rundown blocks surrounding the former hospital and to serve as a vehicle for tax-increment financing that could redirect tax revenues back into the district, for the redevelopment of Charity or other purposes.

Maybe the developers get some of it. Maybe it's for "other purposes." Who knows?  They do get to say they held some meetings and got some "public input," though. That automatically makes this a very legitimate process, right?