Tuesday, October 02, 2018

Shorter LSU panel: HRI sucks

They picked the "1532 Tulane Partners" group to redevelop Charity. What's especially fun about that is why.
The committee released a one-page rationale for why it chose 1532 Tulane Partners. Although it did not list any merits from the winning proposal, it said HRI Properties' plan to create a four-block retail-oriented development across the street from the hospital was too risky because relied on tax-increment financing. Such an arrangement would require local governing bodies to forego tax revenue so that money can be put into the redevelopment.

The HRI Properties financing plan also contained "uncertainty as to the magnitude of state historic tax credits" and "reliance on an anchor tenant to prepay rent," according to the LSU statement.

The anchor tenant HRI Properties identified was New Orleans City Hall, but the company said in its proposal that it had a backup plan if the city chose not to move its offices into Charity. LSU also found fault with the "optionality" of City Hall as a tenant, saying the timeline HRI identified in its proposal to phase-in housing "presents risks to timeliness of occupancy and operations."
They didn't like that HRI wanted to cannibalize local tax revenue via the TIF. They didn't think their tax credit financing was very solid.  And, of course, the City Hall gambit didn't seem likely to materialize... especially after the mayor, kind of free styled some alternative ideas for that at a BGR breakfast a few weeks ago. 

The Tulane Partners group has its own quirks we're suspicious of. For example, they want to open a charter school in the building. Mostly they've just stitched the piles of free money together into a slightly different frankenproject.  HRI's was a bit more obviously stupid, though. At least, that's what this statement says.

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