Thursday, June 07, 2018

Spirit of Charity

Who will win the Charity redevelopment derby? We are down to three contestants already
LSU has selected three development teams it says are qualified to bid for the right to redevelop Charity Hospital, the downtown New Orleans facility that was abandoned after Hurricane Katrina.

The three selections were made after a process announced in April that opened up what's long been seen as a prime redevelopment opportunity to competitive bidders. LSU officials said last month that they would select developers that "have the vision, experience and financial capability" to complete a project.
Let's see who is in here. Well there's Pres Kabacoff which is not going to surprise anybody. There's also this guy who is sort of the Kabacoff of Dallas but with a larger, international portfolio. But this group is the true curiosity.
1452 Tulane Partners: This is an ownership group that includes New Orleans-based CCNO Development LLC and El Ad US Holdings, part of the Tshuva Group, a commercial real estate conglomerate based in Israel. El Ad's holdings are in Israel, Europe, Asia and North America. They include the Plaza Hotel in New York, and more than 10,000 rental units in 10 U.S. states. CCNO projects include the adaptive reuse of the former McDonogh 16 school building and a few multi-unit residential developments. Joseph Stebbins, a former Housing Authority of New Orleans official, architect Michael Lee Mattax and contractor Richard Mithun are the principals in CCNO.
Hey, it's a good thing the City Council made sure to reject the BDS movement, right?  Otherwise these guys would be out of the running for this big pot of money and that's the real injustice, right?

We're not yet to the stage of this where we get to see the actual proposals but if we're wondering what they will look like, all we have to do is check out what these same developers proposed the last time this was tried
Previous competitive bids outlined a vision for Charity Hospital in 2015 that included a bid from New Orleans developer Joseph Stebbin that proposed a 600-unit apartment building, an extended-stay motel and housing for medical students. The company formed to bid on the property offered $30 million for the 1 million-square-foot building; overall development costs at the time were pegged at $275 million.

Also bidding on the property was New Orleans-based HRI Properties, which proposed a $194 million renovation that included apartments and a medical research tower.
So, basically, they're going to do fancy apartments glommed on to whatever window dressing best flatters the public fashion and/or nostalgia.  Here is Andy Kopplin back in April illustrating that with some empty slogan salad.  I highlighted my favs.
"After more than a dozen long years, this effort to adaptively repurpose the iconic Charity Hospital building presents an exciting opportunity to bring back a place that is sacred to many New Orleanians," Kopplin said in a statement. "Even more exciting to us here at the Foundation is the potential for using this initiative to kick-start long-standing efforts to develop the neighborhood surrounding Charity into a vibrant, job creating, inclusive and equitable innovation district that celebrates the spirit of charity and that everyone in our region can claim with pride."
In recent years, the marketing strategy for these kinds of developers has also picked up the phrase "affordable housing" because they've learned that is something people worry about.  The Advocate quotes Stebbins hitting that note in this story.
“It’ll be a modern, vertically integrated development no matter who does it. You’re going to have residential pieces, and you’re going to have an affordable (housing) piece,”
Although, as we've seen, the developments themselves rarely contribute much in the way of actually addressing the housing crisis. Token set asides (the "affordable piece") are in there to mollify the growing public concern on the one hand and to qualify for various public subisdies and land use exemptions on the other.  The more juice housing gains as a political issue, the better our politicians and developers who fund them are learning to rebrand their schemes in ways that co-opt the language of activism without actually changing the course of public policy.

In a particualry strange episode of this kabuki last week, John Bel vetoed a bill that would have banned  local "inclusionary zoning" requirements.  That's fine. That bill, like most state-level attempts at preempting local political authority, should have been vetoed.   The Governor's  veto statement, though, was almost as nonsensical as the bill itself saying, basically, that local governments will have to use it or lose it. 
“If local governments in Louisiana do not actively pursue these policies over the course of the next year, I will conclude that it is not their will to utilize these strategies and I will be inclined to sign a similar piece of legislation in the 2019 regular session,” Edwards stated in his veto.
If cities aren't implementing this policy in the first place, why ban it?  I don't know.

Anyway, from the looks of things, our new mayor is something of a branding enthusiast herself.  And, as such, she is as on board as anyone with applying the new language of faux affordability and "vibrant, job creating, inclusive and equitable innovation" or whatever toward the same old program of  handing out money and favors... oh I'm sorry..  "incentives" to the real estate mavens who elected her.
Mason Harrison, a spokesman for Cantrell, said stimulating development activity and business growth are priorities of the new mayor.

"A great deal of opportunity exists in returning vacant buildings to commerce, generating tax revenue," he said. "Businesses, however, must be offered the kinds of incentives that will make that possible, and the mayor-elect believes that we are losing to other parishes on that front."

Luckily, she has friends in Baton Rouge willing to help.  Cantrell has chosen State Rep Neil Abramson to serve as her point person in the legislature.  Last week, he introduced her (and New Orleans Saints mascot Gumbo) to the House so she could greet members with a brief speech about how much fun she had at D.C. Mardi Gras and congratulate them on the fine work they've done this year.  (This is really what she told them. I am not making that up.)

In addition to this service, Neil (on the days the House was not considering anything involving abortion) also managed to pass some legislation on the city's behalf.

For example here is HB 684 passed during the regular session.  What this does, basically, is remove a cap on the size of the tax break the city can give private entities who have entered into cooperative endeavor agreements with them. Previously, if a "private partner" were to donate "cash, equipment, goods, or services" to a city infrastructure project, then they could collect a tax break equal to one half the value of the donation or $500,000 whichever is less.

Say, for example, the management company running the St. Roch Market were to install a new sidewalk or something.  They could then recoup half of their investment in tax subsidies. Now, under Neil's version of the law, the "incentive" payment has no limit. So, in theory, a thousand dollar "donation" could merit a million dollar "incentive."

You go out and buy some new signage.. ooh.. or maybe some cameras...  and the city can more or less guarantee you're going to come out ahead.  That ought to get the ol' spirit of charity up and running. Especially if it applies to whatever deal governs the Charity development which I think it probably will.  But you can see the possibilities extend well beyond that too. 

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