Carpenter/Woodward Team Advance to Next Round of WTC Redevelopment
15 December 2014
The proposal by Carpenter & Co. and Woodward Interests to convert the World Trade Center building into a Four Seasons hotel and apartments has advanced to the next round in the City of New Orleans’ selection process.
Five Proposals for Former World Trade Center Picked for Next Round
NOLA.com | The Times-Picayune
15 December 2014
By Katherine Sayre, NOLA.com | The Times-Picayune
Five proposals for renovating the city-owned former World Trade Center tower were picked by a selection committee for further consideration on Monday.
The selected proposals all offer to convert the long-vacant building to house a hotel and apartments. Developers will now get a chance to make more detailed presentations of their plans early next year.
Mayor Mitch Landrieu’s administration is making another attempt at leasing out the 33-story tower to revive a key area of the city’s riverfront at the foot of Canal Street.
The city received a total of 11 proposals as a first step in a selection process launched in the fall.
The committee, appointed by the Landrieu administration, cut that list down to five during a meeting at City Hall on Monday. The five selected proposals, ranked from highest to lowest by scores from the committee, are:
Carpenter & Co. of Cambridge, Mass. and Woodward Interests LLC of New Orleans: These firms propose a 350-room Four Seasons hotel and 40 apartments on four top floors, which would be serviced by the hotel. The New Orleans investors group in the effort includes Paul Flower, of Woodward Design+Build; Lee Jackson of Jackson Offshore Operators; Sherry Marcus Leventhal, Tulane University board vice chair; Bob Merrick, Latter & Blum chairman and CEO; and Earl Robinson, president of PowerMoves.NOLA and partner in RLMcCall Capital.
Two Canal Street Investors: The entity is made up of Houston-based Valencia Group, Dallas-based Woodbine Development Corp. and New-York based Monday Properties. They want to develop an estimated $200 million project with a 318-room Hotel Alessandra and 240 apartments, financed by $75 million in tax credits, $150 million in construction loans and $20 million in equity. The group say it will offer the city a $20 million upfront fee and a 99-year lease paying out $1.5 million annually.
Oxford Capital Group LLC of Chicago: The group proposes a 516-room Godfrey Hotel, one of Oxford’s own brands that is being developed across the country, including Chicago and Boston. The hotel would use the first 18 floors at the World Trade Center. About 166 apartments, including 12 penthouse units, would take up the remaining floors. The group also wants to construct an adjacent retail-entertainment building, according to its 127-page proposal. The project would cost an estimated $254 million. The company points to its history of financing projects through its own capital, a base group of investors and bank loans.
HRI Properties of New Orleans: The real estate development company wants to create a 252-room Andaz hotel by Hyatt and 295 luxury apartments, in addition to meeting and commercial space. In its 59-page response, the company points to six hotel-apartment buildings it has developed in New Orleans, Houston, Jackson, Miss. and Richmond, Va. HRI would operate the hotel, manage the apartments and design the renovation. It would finance the project through its existing equity investor relationships and historic and new markets tax credits.
2 Canal Redevelopment LLC: The firm, a partnership of New Orleans hoteliers and commercial developers Darryl Berger, Joe Jaeger and Roger Ogden, proposes a Hilton Worldwide-brand Conrad Hotel & Residences with 300 hotel rooms on 11 floors. They would include some one-, two- and three-bedroom suites. The upper floors would house about 225 residential units. The group says it would finance the project through a lease mortgage, cash equity from the developers and historic tax credits.
Since the late 1990s, negotiations with developers over long-term leases for the 1960s building have failed three times. Most recently, after a months-long selection process, the city broke off talks in April with Gatehouse Capital Corp., which had hopes of turning the building into apartments and a hotel.
On Monday, the committee examined the 11 proposals’ ideas, viability in today’s market, financing plans and commitment to the city’s disadvantaged business enterprise program for ensuring minority-owned and women-owned firms have access to public contracts.
The selecting committee included Cindy Connick, executive director of the Canal Street Development Corp.; Andy Kopplin, the city’s chief administrative officer; Bill Gilchrist, Landrieu’s director of place-based planning; Bob Rivers, executive director of the City Planning Commission; and Ashleigh Gardere, director of Landrieu’s workforce initiative.
The panel disqualified one proposal. Samuel Burfict turned in a four-page proposal asking for the city to donate or sell the building for $1 to the family to create a “miniature United Nations.” The committee’s advisers said the slim proposal did not meet all of the city’s requirements.
Gatehouse Capital Corp. and Provident Realty — the group that won the selection process last year and submitted essentially the same proposal — didn’t make the cut this time around. Gatehouse’s lease negotiations with the city fell apart earlier this year over the building’s value and rent, and the city decided to start the process over again.
For the five finalists, the city will issue a request for proposals by Jan. 2, laying out a detailed framework for what developers must submit. Developers will have until Feb. 16 to turn over their plans.
Commercial real estate management firm Jones Lang LaSalle was hired to help the city market the property and be an adviser during the selection process. Greg Hartmann, managing director of the firms hotels and hospitality group, told the committee on Monday that the city got replies from “10 really outstanding respondents.”
He said as the economy has improved, the market for luxury hotel units and customers willing to pay top rates has also bounced back — but a key element in making these projects work financially is combining a hotel with a residential component.
Picking five groups, he said, will be more manageable than moving forward with all 10 while still keeping enough proposals at play in the event any group drops their bid.