News Roundup

Giant Mid-City Retail Project Planned: Company seeks to bring national chains to area

Times-Picayune
Saturday, March 31, 2007
By Greg Thomas

A Georgia development company has been quietly working to assemble a vast swath of Mid-City, including the Lindy Boggs Medical Center, to create a nearly contiguous 20-acre site for 1.2 million square feet of retail space for national chains that until now have been unable to find a home inside the city.

The site being assembled by Victory Real Estate Investments LLC is huge, covering more than half a square mile from Jefferson Davis Parkway to Carrollton Avenue and from Toulouse to Bienville streets.

A second phase being discussed would involve an additional 9 acres on the lake side of North Carrollton, across the street from Sav-A-Center. Victory owns the Sav-A-Center and the former Winn-Dixie store that was converted into a small Home Depot last year.

The project has been well below the radar, with few city officials aware of it aside from Councilwoman Shelley Midura. Midura has been briefed on the project and is working closely with the Mid-City Neighborhood Organization, which has been playing a behind-the-scenes watchdog role on the development.

“We don’t want a suburban-style development plopped in the middle of an urban area,” association member Janet Ward Pease said.

Several landlords and business owners said they were negotiating with Victory for their warehouses. Most of the properties in the main retail area, between Toulouse and Conti streets, are large 20th-century metal buildings. Landlords and tenants confirmed talking to Victory but wouldn’t discuss the project, citing confidentiality agreements or concerns over spoiling negotiations.

There has been no verification that any property, except for Lindy Boggs Medical Center, is under contract.

Neighborhood meeting

Midura said Victory will have to appease the needs and concerns of the neighborhood to gain the slew of approvals that will be necessary, including closing numerous roads between Bienville and Toulouse streets. The area is zoned light industrial, and retail would be considered a better permitted usage under city zoning laws.

Alex Morgan, chief of staff for Midura, said the councilwoman has made it clear that there will be no development unless the concerns of the neighbors are addressed.

At a March 9 presentation by Victory that was open to all association members and neighbors, the company shared its plans, Pease said.

Pease said a Victory representative talked of nearly 900,000 square feet of small and large anchor stores, including an unidentified department store. There would also be an additional 137,000 square feet of smaller retail shops, nearly 50,000 square feet in restaurants and 2,500 surface parking spaces.

The plan also calls for much of the area to include residential units.

Pease said the representative, an attorney for Victory, mentioned possible tenants but said no commitments had been made. But he gave examples including a 190,000-square-foot Target, an 80,000-square-foot Dick’s Sporting Goods, an 80,0000-square-foot Bed Bath & Beyond, a 50,000-square-foot bookstore and a 27,000-square-foot junior anchor.

Working to shape plans

Jennifer Weishaupt, chairwoman of the association’s newly formed economic development committee, said the association became aware of a potential Home Depot or Wal-Mart Supercenter proposed for the Bohn Ford vicinity in November 2005. In January 2006, it discovered the developer was Victory and expressed concerns over the project. It began meeting with Victory President Alton Darby and Vice President Kent Cost about their plans.

She said the association was blunt in telling the executives this go-round that if they “even mention Wal-Mart,” the group wasn’t going to meet with them about the plans for the 20-acre parcel. The company then showed association members its plans and asked the association to keep the information confidential.

Victory has asked the association to develop a list of what neighbors must have in the development and other things they’d like to see, Weishaupt said. The group met Thursday to begin working on the list.

Victory is also looking at developing the mostly vacant 9 acres across from the Home Depot that includes the former Bohn Ford, three buildings at Toulouse and Carrollton and a small strip center across from Bohn, though Weishaupt has been told that will be considered a second phase of the project.

Bobby Bohn, regional manager for Group 1 , which owns the Bohn franchises, did not return several phone calls.

Deal on medical center

Tenet Healthcare Corp. spokesman Stephen Campanini said Tenet is under contract with Victory to sell the medical center, a vast site that stretches between Conti and Bienville streets fronting Jefferson Davis. Weishaupt and other association members say they were told in their meetings with Victory officials that the hospital will be demolished.

Campanini said the deal is expected to close soon, but because it is a pending real estate matter and Tenet is a public company, he couldn’t comment on Victory’s plans.

He said Cost has confirmed Victory is hoping to wrap up assembling the land in early April.

For several weeks, Darby and Cost have not returned numerous phone calls.

Victory is a national company that owns more than 4.l million square feet of retail and other commercial space. It buys, develops and manages its properties, and focuses on redevelopment and revitalization of retail areas.

It typically upgrades properties and owns them for a long time rather than selling them after redevelopment.

Victory was involved in the purchase of Belle Promenade mall in Marrero, which it replaced with a Wal-Mart Supercenter in the 1990s.

Victory also owns the Wal-Mart at 8843 Veterans Memorial Blvd. and has purchased a shopping center on Veterans to build a 180,000-square-foot Wal-Mart Supercenter and 30,000 square feet of other retail space. The older Wal-Mart would then close.

Not everyone selling

Property owners who were willing to talk about the Mid-City deal have decided not to sell their properties to Victory.

Ernest Verges, the semi-retired founder of Ernest E. Verges II Architects next to Sav-A-Center, said he was approached early about selling his building, the Mid-City Center.

His firm, now led by his son, will benefit from the project only if it’s done right, he said. He’s adamant that the character of the small Carrollton shops be maintained.

That’s the same philosophy of Joseph “Jay” Fertitta, who bought a 28,000-square-foot building in the 500 block of North Carrollton right after Hurricane Katrina and whose family has lived in Mid-City for a century.

He said he thinks the development will draw stronger tenants to his building — now empty — and that it’s critical to keep a mix of national and local retailers on Carrollton. “I think it (the development) is going to be a plus,” Fertitta said. “But at the same time we can’t allow the nationals to take over. We need someone to keep the neighborhood culture.”

Its familiarity with the area has given Victory a head start among national retail developers in making heavy commercial investments in New Orleans, said Richard Stone, vice president and director of marketing and commercial real estate for NAI/Latter & Blum Inc. Realtors.

He added that the odds of attracting top national tenants is increased because of Victory’s track record in the area and its vast portfolio.

Storm erases hurdles

Stone said Victory couldn’t have picked a better spot, and Katrina is responsible for removing many barriers to entry by national tenants who want to expand from the suburbs into the urban core.

“New Orleans has been on the radar (of national retailers) for a long time,” he said, and the storm has made land available.

“Many of these retailers have wanted in, but now will have to weigh the opportunity to get into the market along with the post-Katrina uncertainties. I think some of these nationals will jump” to participate in Victory’s plans, Stone said.

“Some recognize there is a window of opportunity to stake out some of the more desirable sites that never would have been available were it not for the storm.”