670 KSF Former World Trade Center Set for $364M Redevelopment
- Mar 29, 2015
By Eliza Theiss, Associate Editor
The city selection committee for the redevelopment of 2 Canal St. has named the Carpenter/Woodward partnership as preferred developer for the iconic building, the New Orleans Mayor’s Office announced. The partnership formed by Carpenter & Co. and Woodward Interests was selected from five finalists competing to secure the right to redevelop the 670,000-square-foot trophy office building at the foot of Canal Street in New Orleans’ CBD. The committee’s recommendation is subject to the New Orleans Building Corp.’s approval. If NOBC also approves the project, it will enter into negotiations with Carpenter/Woodward for a long-term lease agreement for 2 Canal St. The final approval will be given by the New Orleans City Council.
Cambridge, Mass.-based Carpenter and New Orleans-based Woodward’s proposal consists of a 350-key Four Seasons hotel and a 76-room hotel-serviced condo component at an estimated value of $364 million, The Times Picayune reported. According to the report, the development team is proposing to pay a rent of $3.3 million per year for the first decade, followed by a $3.8 million yearly rent for the next decade, after which rent would increase by inflation. While this rate is the fourth lowest of the five bidding projects, the selection committee decided that the Four Seasons proposal would have the most advantageous economic impact for the city. According to The Times-Picayune, this breaks down to $58.4 million in fixed rent, $400 million in fixed rent and city tax revenue benefits, 450 permanent new jobs and 1,621 construction jobs. The developers also committed to the city-set goal of 35 percent participation of women- and minority-owned businesses.
According to The Times-Picayune, in its entirety, the project entails a 350-key Four Seasons Hotel on floors seven through 19; a 76-room hotel-serviced condo component on floors 21 through 30; an interactive cultural observation deck on floors 31 to 33 focusing on the jazz, food and Mardi Gras culture, the history of slavery, migration and the global economy, and the landscape of oceans, swamps and rivers; a new building featuring meeting space; a ballroom; a restaurant; a new 225-car parking facility; two public courtyards; and a new urban park.
Set to open in December 2017, the $364 million project will be funded by $86 million in investor equity, $40 million in private capital and $238 million in debt, according to The Times-Picayune, of which $200 million could be provided by TCI Real Estate Partners Ltd., as per a letter of interest issued by the company.
The 33-story former World Trade Center was slated to be redeveloped into a $190 million 410-key W Hotel and 280 luxury apartments by Dallas-based Gatehouse Capital Corp. However, negotiations between the city and developer fell through and the property hit the development block again in late 2014.
Click here for further New Orleans market data.
Image courtesy of Infrogmation via Wikimedia Commons