New Jazz park planned near Super Dome
You Okies can't even begin to compare to this. We're getting our Hornets back after next season and keeping them for good. I wish you the best, but quit trying to steal our team. $715 million PRIVATE investment into our city. You guys can't even compete.
New city hall, jazz park planned near Superdome
Hyatt owner commits financing, leadership
Wednesday, May 31, 2006
By Rebecca Mowbray
Under a sweeping downtown revitalization plan unveiled Tuesday, the defunct New Orleans Shopping Centre and a nearby aging government office complex would be converted into a modern 20-acre multiuse National Jazz Center and park buttressed by public office buildings.
The $715 million project, spearheaded by Strategic Hotels & Resorts, the Chicago-based owner of the Hyatt Regency New Orleans Hotel, is the first major redevelopment project announced since Hurricane Katrina.
If it comes to fruition, the project could revitalize the upper end of Poydras Street and refashion New Orleans by encouraging additional residential construction downtown. It would also give a boost to the adjacent medical corridor and to long-discussed notions of creating an entertainment district on South Rampart Street and redeveloping the nearby Union Passenger Terminal.
"We're here to celebrate big steps on the road to recovery in New Orleans," Gov. Kathleen Blanco said in a morning news conference on the concourse outside the Superdome overlooking the Hyatt. "The mayor and I are a team, and we're working to rebuild this city."
"Nine months later . . . we are beginning to put together a new New Orleans," said Mayor Ray Nagin, who called the 20-acre proposal "breathtaking" and described it as "the state's biggest capital project ever." He called it "cost-effective" and a "big-bucks deal."
"We will push to make this thing a reality," Nagin said.
Developers say the project would generate construction jobs, taxes and tourism and change the face of the city the way that Millennium Park has transformed Chicago, the Inner Harbor has revitalized Baltimore and the Guggenheim Museum has put Bilbao, Spain, on the international map.
The project has evolved under the leadership of a coalition of business people, planners and musicians. It would create an estimated 6,500 permanent jobs, and have a $6 billion economic impact over the next 20 years. Developers hope to work out the details of the project and its financing in the next 12 months, and they say construction will take three years.
"I thought there was a chance to do something bigger," said Laurence Geller, president and chief executive officer of Strategic Hotels, which initiated the development effort after some soul-searching about how to reposition the Hyatt.
Hyatt has already invested nearly $3 million on planning the project so far, and executives with the hotel company say they have about $400 million in financing lined up. About 53 percent of the project's financing would be private. Developers now need to work with public agencies, explore tax credit projects, approach foundations and seek additional investors to put together the rest.
City Hall moving
Under the plan, 1 million square feet of public buildings, including City Hall, Orleans Parish Civil District Court, the old Supreme Court building and the old state office building would be demolished, along with the City Hall garage, the New Orleans Centre and parts of the Hyatt to make way for a park anchored by the 25,000-square-foot National Jazz Center.
City Hall would move to the 26-story Dominion Tower office building, which has been vacant since Hurricane Katrina, and where dozens of storm-broken windows still are sealed with plywood. State offices would be rebuilt at the Civil District Court site, and the entrance of the Hyatt would move to Loyola Avenue.
The multilevel six-block park would include a 20,000-square-foot jazz performance center with seating for 1,000 people, a black-box theater with seating for 300 people, a 70,000-square-foot amphitheater with lawn seating, a 60,000-square-foot education center for children, rehearsal studios and an archive for jazz research.
A bridge would connect the Superdome to the park, which would feature statues, fountains and interactive displays. Poydras Street traffic would travel through a tunnel beneath a grassy art park that would double as a tailgating area for the Arena and Superdome.
Beneath the park would be two levels of underground parking and a 280,000-square-foot two-level retail center with a multiscreen theater, restaurants and shops selling things that people need for daily living, such as a major national grocery store, pet supplies shop and a bookstore.
The Canal Street streetcar would be extended down Loyola Avenue, connecting the park, sports facilities and public office complexes with the French Quarter and Convention Center. A bus transportation center would be located at the Hyatt, linking downtown New Orleans to the western suburbs.
The result will be a swath of green space leading from Tulane Avenue to the sports complexes of the Superdome and New Orleans Arena surrounded by modern buildings designed by 2005 Pritzker Architecture Prize winner Thom Mayne in association with local architect Ray Manning. Developers on a panel convened by Hyatt and working with other stakeholders from New Orleans envision an internationally known destination for the arts and tourism that will be used day and night.
The New Orleans Jazz Orchestra would be based there, which would also be a destination for national touring jazz acts. Ron Markham, president of the New Orleans Jazz Orchestra, said the site, near the birthplace of Louis Armstrong, would be branded as the international home for jazz. Wynton Marsalis led the design of the $120 million National Jazz Center.
"There's really no venue where the major artists on the touring network can play in New Orleans," Markham said. "We want other art forms to come and celebrate the influence of jazz on their music."
Irvin Mayfield, artistic director of the National Jazz Center, said the jazz hall will enable daytime concerts for locals and tourists alike.
"The home of jazz is New Orleans," the trumpeter said.
'I have no choice'
After Hurricane Katrina smashed hundreds of windows at the Hyatt Regency New Orleans and the levee breaches flooded the area around the 1,184-room hotel, Geller said his company convened a panel to figure out how to rehabilitate and reposition the property.
Such an overhaul had been needed for years. The Hyatt had been built next to the Superdome with the idea that a convention center would soon be established nearby. Instead, the Ernest N. Morial Convention Center was built along the Mississippi River.
Over the years Hyatt, the city's third-largest hotel, had looked with concern as new hotels and tourism became concentrated around the Convention Center, downtown and French Quarter, stranding the Hyatt as an island by the Superdome and New Orleans Arena.
As of last summer, the Hyatt had been working on a plan to become a family urban resort destination, even entertaining ideas as wild as putting a water park on the roof.
"I had been increasingly concerned about the neighborhood, the state of the Superdome, the depressed retailing and the way the developed area around the Convention Center had increased," Geller said.
After Katrina, Geller said his company would do fine off of insurance money, but his company realized the storm presented an opportunity to do a larger redevelopment of the area to reinvigorate its business. "Altruism didn't move me to do it," Geller said. "I have no choice but to get this done. I have a $200 million investment doing nothing on my balance sheet."
In the fall, Geller convened a panel of Hyatt officials; Mayne, who won the 2005 Pritzker Prize for architecture, a prestigious prize awarded by the family that owns the Global Hyatt Corp.; Keith Hobbs, a London-based hospitality designer who is developing the $3 billion Las Ramblas hotel, casino and condominium project in Las Vegas with actor George Clooney and nightclub entrepreneur Rande Gerber; Manning, whose architectural firm designs many hospitality properties and worked on concepts of redesigning city hall; Marsalis, who is artistic director of Jazz at Lincoln Center; Mayfield; Tulane University emeritus economics professor William Oakland; and local real estate consultant Wade Ragas.
Nagin said it wasn't more than two weeks after the storm that Hyatt Strategic Hotels approached him about the jazz district concept.
"They said they were going to make this happen. I said, 'Go ahead.' Guess what? They're doing it," Nagin told a sweaty crowd Tuesday on one of the decks of the Superdome overlooking the Hyatt.
Right now, Strategic has committed $430 million toward the project, Geller said, about $130 million of which comes from insurance. Because Strategic is a public company, Geller said that his firm won't be able to receive federal money related to the Gulf Opportunity Recovery Act, but that shareholders and partners were bullish on the packaged deal.
Strategic will spend $210 million of the $430 million to redevelop the Hyatt. The 1,184-room hotel will lose about 30 rooms in the redevelopment, but it will retain just about all of its 130,000 square feet of meeting space. It will lose its rooftop restaurant and lounge and its grand ballroom.
Complex transactions
The project would help city and state government become more efficient and scale their operations appropriately to post-Katrina New Orleans, but many questions remain about how the deal will come together.
"The most important aspect of (it) is that we get a new city hall in a new downtown," said Manning, who designed the city's Woldenberg Park and who served on the Hyatt Jazz District advisory board.
To make way for the project, numerous buildings must be bought, traded for and/or demolished. Hyatt plans to buy the Dominion office tower building and 450,000-square-foot New Orleans Shopping Centre from the suburban Los Angeles-based Hertz Investment Group for about $70 million.
Though no timeline was laid out for relocating city offices, participants said Tuesday the project would have two financing streams. First, the city would trade its Perdido Street tract for leased space or a condominium share of the Dominion Tower, and the current City Hall building would be demolished to make way for the 20-acre park.
"Would it be a direct swap or a land swap and rent payout? It isn't known yet," said Michael Siegel, executive vice president and leasing director of Corporate Realty, who is advising the redevelopment project. "But the intent, from the city's standpoint, is to make this revenue-neutral."
Second, the city, or another guarantor, would sell municipal revenue bonds supported by the projected savings of running the government out of the more space- and energy-efficient Dominion Tower, said Ragas, president of a Metairie real estate consulting firm. The income would go to improve public access to the tower.
Ragas said a pair of issues are still lingering with regard to city property. More easily answered is the unknown cost of insuring a new city hall, if New Orleans were to buy Dominion or a portion of it, and to insure the city's moveable property.
"There has been no analysis in cost of premiums, and that does need to happen," he said. "But we would expect (that) there's no reason that the insurance cost would be higher for their contents in a new building versus their contents in an old building that is more prone to damage."
Also unanswered is the question at the crux of the City Hall proposal: How much space does the city's post-Katrina government, stripped of 2,400 employees since the Aug. 29 storm, really require?
Also included in the Hyatt Jazz District is a project New Orleans judges have been plotting in concept for at least six years: a massive renovation or relocation of the city's civil courthouse at Loyola Avenue and Poydras Street. The project has been estimated at $90 million, Civil District Judge Michael Bagneris said.
Bagneris said the judges had an ally in state Sen. John Hainkel, who before his death last year had pushed for state capital outlay money for a new civil courthouse to replace their cramped, 1950s-era structure.
But a financing package never coalesced, and then Katrina swamped the facility's basement. Judges returned to less-damaged sections of the building in January, but the courthouse remains inadequate in terms of space and technology, he said.
Finally, creation of the Hyatt Jazz District calls for a pair of state office buildings to meet the wrecking ball.
The nearly vacant former Supreme Court building at 301 Loyola Ave. and an office building at 325 Loyola Ave. would be leveled and converted to park space, while the offices housed in both facilities and in other leased spaces in the city would relocate somewhere on the park campus.
'We know how'
Though New Orleans has seen plenty of pie-in-the-sky real estate projects that ultimately fell flat, Geller said his project won't be among them.
Unlike many other projects, which depend on other people for money, Geller notes that Hyatt has taken the leap with its own money for seed capital. In contrast to deals where all pieces must fall into place for the deal to work, Hyatt plans to go forward with its $210 million piece regardless of what happens with the rest.
"Do I think it will get done? Absolutely," Geller said. "If this is pie in the sky, I wouldn't be here. I wouldn't put my New York Stock Exchange reputation on the line."
Geller notes that Strategic Hotels and Global Hyatt Corp. have lots of experience in public-private partnerships. The New Orleans Hyatt began as a public-private partnership in the 1970s, and Strategic Hotels currently has public private partnerships in the works in Phoenix and in Burbank, Calif.
"We know how to do this," Geller said. "This is a project of a scale that we haven't approached, but this is nothing more than a complex deal."
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