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 

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.

Kern World Amusement District

So now we know that, in addition to the bouncy house, they also want to put in a golf ride of some sort. 

NEW ORLEANS – A few months after a group of local investors bought the former Times-Picayune building, neighbors are learning what is planned for the site.

According to a letter mailed to nearby businesses and residences, Dallas-based Topgolf has plans to build its latest location on the property at 3800 Howard Ave., along Interstate 10.

Topgolf if a driving range that caters to families.

But instead of just sending balls soaring, Topgolf is a game in which players aim for 11 giant dartboard-like targets on a 215-yard-long field. Microchipped balls provide instant feedback to players who tee off from climate-controlled hitting bays.

A restaurant and bar would be included on the site, according to the letter sent to neighbors.

Where your newspaper once lived, let's build an adult Chuck-E-Cheese. Sure, why not? At this point, that makes more sense than anything.  At least we're getting a clearer idea of what the vision for Kern World was.

It really will be Kern World

"Major amusements" are expected to emanate from the Times-Picayune building.  And, no, we don't mean Jeff Duncan's column.

The former Times-Picayune building on Howard Avenue is under consideration for redevelopment as a “major amusement facility,” and its new owners received the first step of approval Tuesday from New Orleans city officials toward the rezoning that would allow such a project.


The group that bought the 9-acre site — comprised of some of the top developers in New Orleans — has requested “mixed use” zoning instead of the current “business industrial park” designation, though they revealed few details about what they plan for the location. The city planning staff initially objected to the zoning change — on the grounds that the street network couldn’t bear the traffic a mixed-use development would bring, that the uses allowed wouldn’t fit with the surroundings, and because it would encroach on a dwindling amount of industrial land near the city center — prompting a new round of meetings between developers and city officials.

That communication did not sway the city planning staff, but it did lead to the disclosure that the intended redevelopment of the site is for a “major indoor and outdoor amusement facility” — not a residential development, according to a Jan. 23 letter from the developers.

“It’s no secret. There’s a specific tenant we are working with,” said attorney Mike Sherman in Tuesday’s hearing before the City Planning Commission. “We hope it works out. We don’t know.”

If "it's no secret," then why don't they tell us who the "specific tenant" is?  Is it just that Kern is moving the planned "indoor trampoline facility" up the block a little bit? If so, that hardly qualifies as  a "major amusement." What else could this be?

Kern World news

Lots of Noligarchs in the news today.  There's some from the con-profit sector which we'll get to later. This one is from the speculative land use sector, though.  The dream of Kernworld (a dependency of Jaegerton) grew one step closer to reality today at the CPC meeting.

The new owners of the former Times-Picayune building got City Planning Commission approval Tuesday (Feb. 7) for a zoning change that opens the nine-acre industrial site to entertainment, residential and other mixed-use developments.

The building at 3800 Howard Ave. in a mostly industrial area along Interstate 10 has been vacant for about one year. An ownership group that includes local developers Joe Jaeger, Arnold Kirschman, Barry Kern and Michael White wants to revive the property beyond its newspaper industry legacy, although specific plans for the property haven't been submitted to the city.

Peter Aamodt, representing Jaeger's company MCC Real Estate, said the property is one of the last swaths of underutilized land in the heart of the city, in an area with the potential to become a lively, mixed-use corridor. "A lot of people do see it as the next potential Warehouse District," Aamodt said after the vote.

If "a lot of people" turn out to be right about that, this would mean Jaeger has a substantial interest in both the old Warehouse District and the new one... as you can see on the map above.  Anyway it's nice to be able to make these kinds of investments in the full knowledge that friends and admirers on the CPC and City Council will be helpful when you need them.  Privilege has its privileges.

Also... 

Aamodt said after purchasing the property, the owners got dozens of calls for interest in the property, none of which involved industrial uses.

A residential use isn't currently being considered, he said. The new zoning would allow for about 486 residential units, he said, which would be about half the number of people the Times-Picayune once employed at the site.

Zing!

Also too. Odds have to be good that it will, in fact, be residential. 

Barry Kern's Bouncy House

What an unusual location for such a thing.  Also, is this even a thing people will want badly enough to seek it out in that location? 

A new indoor amusement center centered on trampolines planned by Barry Kern for a warehouse on Earhart Boulevard near the Superdome will be able to move forward after the City Council cleared the way for it last week.


Kern is planning “an indoor trampoline facility” inside a 51,000-square-foot warehouse at 3035 Earhart Boulevard, just off South Claiborne Avenue, according to the application he filed with the city.

“This facility would be the first of its kind in the city of New Orleans, and would represent a great addition to the family friendly entertainment options the city has to offer,” Kern wrote. “This request would not greatly alter the fabric of the zoning district, but, if granted, it would expand the options for families looking for a safe, supervised place for their children to play.”

Should note, also, that Kern was part of a group who recently bought the old Times-Picayune building which isn't too far from there. The group didn't have any plans for that building at the time but here is what they said. 

Jaeger's group, 3800 Howard Investors LLC, closed on the $3.5 million deal Sept. 2, according to Orleans Parish Civil District Court records, which list the site at 8.9 acres.

Peter Aamodt, senior development manager of Jaeger's firm, MCC Real Estate, said Tuesday that the group has "no immediate plans" for the property.

"It was a good investment at the right time and the right place," he said.

Jaeger's group also includes float builder Barry Kern, president of Mardi Gras World, developer Arnold Kirschman, whose family operated furniture stores in the metro area for nearly a century, and Michael White, a businessman.

"They have no specific plans or projected uses," Aamodt said. "They just want to participate in the growing New Orleans economy, and feel like the neighborhoods surrounding that location continue to get better."

See, they were just gobbling up properties to sit on while they wait for the neighborhood to... um... bounce back.