Tuesday, October 13, 2015

It's an iconic "shadow," though

This is over a week old but I didn't want it to go un-flagged.  
NEW ORLEANS – A shadowy developer whose previous New Orleans projects have crumbled amid corruption and bankruptcy is now threatening to derail the Four Seasons project at the city-owned World Trade Center.

A development group named Two Canal Street Investors Inc. sued the city and the quasi-governmental New Orleans Building Corp. in April, alleging its proposed Hotel Alessandra project should have been selected over the Four Seasons proposal because it offered the highest rent payments to the city – up to $65 million immediately at closing and more than $3 billion over the 99-year lease.

Instead, NOBC's selection committee used a broader scoring process and picked the Four Seasons project by developers Carpenter and Co. of Massachusetts and Woodward Group of New Orleans. They propose to spend $360 million redeveloping the iconic X-shaped building at the foot of Canal Street, but only offered the city $5 million at closing and $773 million in rent over the life of the lease.
Back during the bid process, I had a little trouble sorting out all the players. I also handicapped the results badly.

One especially difficult thing to keep up with was there were competing bids from a group called "2 Canal Redevelopment LLC"  and another one called "Two Canal Street Investors." Neither ended up the winner.  But I thought one of them had the inside track. This was "2 Canal Redevelopment." I liked their odds because they were led by some of our favorite NOligarchs including Darryl Berger and Joe Jaeger.  Their chances seemed especially good since they offered to bribe power players donate $1 million to Xavier University and another $250,000 to the mayor's NOLA4Life initiative.

The latter group, "Two Canal Street Investors" is the subject of Hammer's story.  Their biggest public splash involved the bizarre Gondola-To-Nowhere ride that showed up in one of their proposals. They also had an operator, of sorts, on their side.
The key person left off TCSI's disclosures during the bidding process was Stuart "Neil" Fisher. He's best known locally for a 2010 email he wrote when he was involved in trying to redevelop the old Entergy smokestack building off Tchoupitoulas, the Market Street Power Plant. Urging his partners to stay with the project owned by his wife, T.J. Fisher, and Florida developer Michael Samuel, Neil Fisher wrote that former Mayor Ray Nagin would "get a piece" of the deal.

Later, federal prosecutors proved that Nagin got $100,000 in bribes from Samuel for his support of the Market Street project, which ended up going bankrupt. Nagin is serving the second year of a 10-year prison sentence.

Before that, Fisher made news in Baltimore for his role in a scuttled Ritz-Carlton project and in New Orleans for collecting millions of dollars in Hurricane Katrina insurance proceeds for the Plaza Tower without telling one of his partners, former Baltimore Ravens linebacker Michael McCrary. McCrary sued and was awarded $19 million in damages.

Meanwhile, the Plaza Tower, an iconic part of the New Orleans skyline, remains vacant more than eight years after Fisher sold his stake.
Fisher is now the sole owner of what's left of Two Canal Street Investors. He bought the company for $10 before filing suit.  So it could turn out to be a pretty good investment for him.  Likely he'll end up with some kind of buyout or settlement before the thing is over.  Because, really, every developer is "shadowy" and they all know how to play the game. 

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