Jun 27 2006
Falstaff Brewery complex sold for $1.1 million
Developers plan to build 150 apartments with the help of tax credits, housing grants
Friday, June 23, 2006
By Greg Thomas
Developer Theodore “Tad” Mondale, nephew of former U.S. Vice President Walter Mondale, closed with a business partner on the purchase of the old Falstaff Brewery building last week for $1.1 million and plans to build 150 affordable apartments in the complex.
It was the second time Mondale has tried to buy the seven-story building on South Broad Street near Tulane Avenue.
He offered $2 million to its previous owners who were doing business as Falstaff LLC. But Falstaff LLC fell apart when one partner — Lawrence Hamm — died and the state Department of Environmental Quality levied $350,000 in regulatory fines against it for asbestos violations involving the surviving partner, Roger “Mickey” Boes.
Mondale struck a deal with Boes, but only after negotiating the DEQ fines down to $76,000 and agreeing to foot the 7-acre property’s $200,000 property tax bill.
“The story here is that we finally pried the property away” from Falstaff LLC, clearing several hurdles blocking development there, said Mondale’s partner, David Miller.
Closed since 1978, the Falstaff building itself is no prize in its current state. Its stairs are crumbling, its floors are scattered with the debris of decades of decay and vagrants, and its windows are broken.
But it was the building’s iconic sign that kept Mondale at the project, he said Friday after a sweaty climb to the seventh-floor roof that serves as the base of the Falstaff sign’s tower. The vertical Falstaff sign is topped with an illuminated weather ball 250 feet in the air that Mondale plans to restore.
What Mondale and Miller need now is money. Next week they will learn whether they will receive low-income housing tax credits and federal historic renovation tax credits, and they also are exploring all Gulf Opportunity Zone Act incentives. In addition, the city has told the partners that it expects to grant the project $1 million from the city’s HOME funds, which is grant money administered by the city’s housing agency.
Mondale hopes to close on construction financing in the next 12 to 18 months. During that time the partners will clean the site environmentally and work on interior demolition.
The seven-story tower portion of the complex most likely will hold the bulk of the apartments. There actually is an atticlike eight floor, but the building is normally considered seven stories for residential purposes.
The conversion’s price tag is about $20 million in hard construction costs and $5 million in acquisition and other costs, Mondale said.
The partnership may seek assistance from the Environmental Protection Agency’s Brownfields Program, which dispenses federal aid to clean up former industrial sites suffering from toxic contamination so that they can be redeveloped.
Mondale said he hopes to break ground on the project by the end of 2006 or early 2007.
Even if the project falls apart, one thing is sure, Mondale said: He will have added value to the site by clearing the property of asbestos, completing an interior demolition, and eliminating the cumbersome title claims and liens on the property from the DEQ.
“We have to clean it up regardless, and we’re removing all the liens, cleaning up (the property and entanglements) completely,” he said.
Though parts of the building date back more than a century, most of it was added on in the 1930s. It was originally the National Brewing Co. of New Orleans, but Falstaff bought the brewery in 1936 for $543,700.
Mondale is doing business as T. Mondale Construction, and Miller is doing so as Renaissance Property Group.
Filed under: Rebuilding New Orleans
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