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 

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?

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.

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.

Spirit of Charity District

This public input process for redeveloping Charity is curious. Tonight's public forum hasn't been publicized very well. Also, it's not really even about the building itself.  We don't know what the proposals are for that yet. 

A meeting being organized by the Greater New Orleans Foundation, which is leading the public engagement effort for the "Spirit of Charity Innovation District," will hold a community workshop to help residents envision what the district will look like. Design Jones LLC is assisting GNOF with a strategic plan for the district, and is helping gather public input for what it will look like.

But there will be a big piece missing from Wednesday's meeting, which will be held at the Delgado Charity School of Nursing's seventh-floor gymnasium starting at 6 p.m. at 450 S. Claiborne Ave. Although planning for the district surrounding the 1.2 million-square-foot hospital has largely been kept in public view, the plans for the building are still under development and are being overseen by the LSU Foundation (the school owns the building, a legacy of the hospital's status as a teaching institution).

The three developers -- HRI Properties, Matthews Southwest and a partnership between El Ad US Holdings and CCNO Development -- were supposed to turn in proposals five days after Wednesday's meeting, but LSU officials said on Tuesday that the date had been pushed back to Aug. 20.

A month or so ago, when we noticed the finalists had been selected, we tried to guess a little bit about what they might be up to by looking at what was on the table  during a previous round of bids that ended up being scuttled. Note that HRI was a finalist then as now. Also Matthews Southwest is in the mix. They're also a partner in the Berger/Jaeger Convention Center hotel project.  BGR put out a report this week criticizing the use of public subsidies in that endeavor. It is worth paying attention to how they are used at Charity as well.

As the T-P article linked above says, the meeting tonight is really about this "Spirit of Charity Innovation District" thingy. Here's more about that from earlier this month.

With the Spirit of Charity district, Kopplin said that city officials will be able to use a key incentive to ensure the eventual developer complies with goals set for disadvantaged business enterprise participation, as well as pursuing a mix of training and job opportunities. The tool is known as tax-increment financing, or TIFs, which is typically used for building infrastructure, using the projected future tax growth from the investments.

"There's no reason a TIF couldn't support all of those things including potentially spur economic activity around biomedical research," Kopplin said. It will require coordination between officials at the state and city levels to create a path to governance within the TIF district.

"The state and city partnership is vitally important," Kopplin said. "The city administration and the state administration seem to share a view of creating a district around (Charity Hospital) as critically important."

That is some extremely vague language explaining what the TIF would be used for but it is "critically important" that the money be put into a pile for some purpose. Partially because that's what the team of "experts" who spent five days in New Orleans  back in November said. One of them also said New Orleans is a state capital, though, so maybe not the most reliable information there.  It's also what this consultant the Landrieu people hired told them to do more of so, it must be worth something.  Look here they're trying to make one happen to help Barry Kern pay for turning the Times Picayune building into some kind of indoor golf playground. That seems legit. Anyway, TIF first and ask questions later is the order of the day.

So even though tonight's meeting won't give us any information about the plans for Charity, we can assume there are opportunities to ask them what they want to do with this TIF. Attendees could ask what exactly does it fund? They can't just say "infrastructure improvements" or "incentives" without saying specifically who benefits from them. Who gets the money? Who manages it? Who pays the taxes that fund it? What would that revenue would otherwise fund?

Most importantly, what's in it for us, if anything? Spirit? Innovation? The kids these days seem to be interested in affordable housing. Maybe someone should explain how this is supposed to help with that.

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. 

Welcome to Kern World

Last week, Cousin Pat wrapped up a series of informative posts diving deep into the murky waters of zoning and land use. (Part 1 Part 2 Part 3)  If you're interested in knowing why this stuff is so important, here's what he has to say about that.

Now, if you ask me about this process, I would tell you there’s a difference between the letter of the law and the spirit of the law. My biggest problem isn’t in a “corrupt” system, it is in an obscure system where citizens and voters and taxpayers never really know what is going on in their community until it is too late to say anything about it. I personally find that incredibly undemocratic, and I believe processes like that tear at the fabric of strong communities. While that sort of thing is all technically above board, it breaks the public trust through omission and obfuscation, and citizens throw up their hands and take a fatalistic, disengaged attitude toward their own city government. Sound like any place you know?

I only differ with him here in that I'm fine with calling something "corrupt" if this is what it looks like. Deliberately obscure systems that steer policy choices toward the benefit of an exclusive circle of insiders meets that threshold for me. In any case, the only remedy is finding ways to facilitate greater transparency and participation.  That isn't easy, of course.  Mostly what happens is developers and oligarchs get whatever favors they ask for.

We're just now finding out what Barry Kern and Joe Jaeger are asking for with regard to their recent investments.  Imagine, for example, the Times-Picayune building as the new American Can Company.  It's beginning to look like Kern might.

The group of local investors who bought the former Times-Picayune building last year are requesting mixed-use zoning from the New Orleans City Council — suggesting yet another major redevelopment in the works along the Pontchartrain Expressway.

The 9-acre property at 3800 Howard Avenue housed The Times-Picayune from the late 1960s until printing moved out of state in 2016. It was sold in September to a development group called 3800 Howard Investors LLC, which included developer Joe Jaeger, Barry Kern of Mardi Gras World, and Arnold Kirschman who recently redeveloped the 4500 block of Freret Street, according to a report in the New Orleans Advocate at the time.

The group does not specify its intentions for the property in its application, but says that mixed-use zoning will help pave the way for the future project.

“This site is currently zoned BIP Business Industrial Park District, though it is unlikely that offices or a business will be the new use here,” according to a letter submitted with the application. “The owner has therefore proposed changing the property’s zoning to MU-2 High Intensity Mixed-Use District, which would allow for the site’s full redevelopment.”

According to Uptown Messenger, the CPC staff is recommending against this change saying, among other things, that the requested designation is  “too intense for this physically isolated site, given the limited surrounding infrastructure, and the fact that the site is not easily accessible for vehicles or pedestrians.” That seems reasonable enough.  But when Kern's group bought the building, they clearly understood that those circumstances could change.

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."

They're so high on the location, in fact, that they've also purchased a warehouse not too very far from there. (Although getting from one building to the other is a bit convoluted because... well... CPC is correct about the area, basically.)  Anyway, they want to make that into an "indoor trampoline facility" which is apparently a thing you can have.

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.”

Anyway, Kern's group obviously has plans for the area. And Kern and Jaeger being who they are probably means that whatever plans they have are probably going to be permitted with or without CPC's approval. Because that is how this works in case you haven't been paying attention.

This also means we get to add KernWorld to our ever-expanding NOLigarchs map.  It isn't fully developed yet. And it's also probably a lesser dependency of Jaegerton for now. But, well, we know where it is, rougly.

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. 

Kern goggles

I don't know what they think they're looking at.. or where they're looking. Because, from my point of view.. and I've been all over.. the crowds have seemed surprisingly light so far. But, OK, Barry Kern says differently.

Float builder Barry Kern says so far, the crowds have been larger than he's ever seen.

“I think Saturday, Sunday and into Mardi Gras day are going to be a blockbuster,” said Kern, president of Kern Studios.

New Orleans police are indeed expecting record crowds, and want to make sure everyone is safe. With the number of officers at a historic low, they have brought in more state troopers than ever to help.

I haven't been, you know, counting every person every night so I'm not privy to the sensitive statistical information housed in the Kern Command Center.  But I have seen enough Carnival crowds to know when one is too thick for its own good and these have not been like that at all.

I just flipped through my photos this year to see if I could offer you some visual evidence of the easygoing manageable parade crowds I've stood with but it turns out I have taken very few deliberate crowd shots this season.  One big reason for that is the crowds haven't been anything to write home about.

I don't know what explains that. For a while I thought the weather was holding things back a bit.  This was probably the case on Wednesday, in fact, when everybody thought it was going to rain as well as freeze and many just didn't bother risking it.  But it didn't rain which left anyone willing to stand out in the cold a great view of Druids as well as what is easily the best Nyx parade thus far.

Nyx wasn't a spectacular parade. They used floats we'd already seen in Pontchartrain.  Their theme was generic; one of several food-based themes this year. But they were a very solid parade which looked good, carried a lot of riders, and threw generous amounts of specialized and/or hand-made throws.

And since the crowd was so light, there were plenty of those throws to go around. Here's a typical scene from Nyx's ride.



When you're that visible to so many enthusiastic riders, you're gonna catch a lot of neat stuff.








The point is, folks did well out there that night because there weren't too many folks out there. But it was Wednesday and the threat of shitty weather was lingering over the evening.

Friday night should have been different.  It was the first night of the long weekend.  The weather was perfect. There were three parades on the schedule, two of those being among the year's most anticipated.  And, yeah, people turned out but not in the numbers.. or at least the density.. we've come to expect for that night.

Like I said, my pictures are more of the action than they are of the crowds but, take my word for it, usually I can't get this close up to Hermes without having to duck and slide through a bank of ladders and chairs before elbowing several angry Uptown Ladies out of the way.



Which leads us to the new carnival ordinances.  Are the (not really) new rules having an impact? We've always theorized that better adherence city ordinances and just general politeness could make a large crowd seem less oppressive to the people trying to get along among it. Maybe this is what's happening.

It's certainly true that a lot of people are making an effort to comply with the rules this year.  Here are some ladders placed the required six feet away from the curb Saturday morning.  These are not the exceptions that they once were. Most people are doing this right.



Sure there are still some tents and structures and things that clearly aren't allowed out there. But there are fewer of these and, in most cases, they are being deployed with some consideration for the surrounding participants. 

Still, I don't think that's what explains my perceived difference in the size of this year's parade crowds.  They seem a bit smaller to me.  Now maybe that's about to change tomorrow morning.  We'll find out.  I'll get a good look at everybody from the parade's point of view.