News Roundup

Katrina Gives Retailers Rare Window: One Would Bring In Others, Official Says

The Times-Picayune
By Greg Thomas, Real Estate Writer
October 17, 2007

Hurricane Katrina’s destruction, which opened up swaths of inner-city land that developers never had access to before, could give national retail chains a rare opportunity to move in closer to the heart of the city.

Retailers historically have battled land scarcity, civic organizations bent on preservation and worried about traffic congestion, and the city’s anti-business reputation when attempting to move into Orleans parish. But Katrina changed all that, said Michael Kercheval, president and chief administrative officer of the International Council of Shopping Centers.

Speaking Tuesday at the group’s fall conference in New Orleans, Kercheval said all it will take is one major new retailer willing to lead the way in making a commitment to New Orleans.

Once such a retailer announces plans to open a big site in New Orleans, the other retail chains will say, “Hey, we better get someone on the ground out there and check things out,” Kercheval said.

In fact, several new retail centers are in the process of being developed. Victory Real Estate Investments LLC of Columbus Ga., has confirmed that it plans to convert a 20-acre parcel stretching from Jefferson Davis Parkway across Carrollton Avenue to the old Bohn Ford site into a retail complex. Plans also are moving forward to redevelop Lake Forest Plaza into an open-air shopping complex anchored by a Lowe’s home improvement store.

There also are damaged buildings in the area that could be reconfigured to accommodate retail space, Kercheval said.

One chain that recently committed to moving into the city is Borders books. Two weeks ago, the chain said it planned to convert the Bultman Funeral Home on St. Charles Avenue into a bookstore. In making the move, Borders will become the only national book retailer in the city.

That’s a start, Kercheval said.

“Barnes & Noble has to be asking itself, ‘What does Borders know that we don’t know?’ ” Kercheval said. “Retailers want to go in herds.”

Kercheval said he expects representatives of many chains to leave this week’s conference with an interest in looking more closely at New Orleans for opportunities. A speech by Mayor Ray Nagin to the group Monday went a long way toward impressing attendees, he said.

“Nagin in front of that group was very important to those guys. He was saying, ‘I’m with you guys.’ That’s a strong positive impression ( on attendees) for New Orleans,” he said.

Newly elected ICSC Chairman Rene Tremblay of Ivanhoe Cambridge Inc. in Montreal said his views of New Orleans have more to do with spirit than bricks and mortar.

“What the city of New Orleans has gone through in the past few years is amazing, but you still feel the love locals and visitors still have for New Orleans. It’s a great pulse, a battery that isn’t dying, because the residents of this city won’t ever let it die,” he said.

Tremblay also said that communities — and more importantly, the developers who are proposing projects — are steering from the dwindling concept of the enclosed mall to more urban, pedestrian and traffic-friendly centers.

“They must understand the vital role the (new) shopping center plays in enhancing life and uplifting communities for tomorrow,” he said.

Gerald Celente, president and chief executive officer of Trends Research Institute, said that the centers of today are called lifestyle centers for a reason: They are becoming the new town centers.

“People are looking for the real hometown experience. Go home, work close to home, shop close to home, and they want a community experience (as opposed to an enclosed box),” he said.

He said he was tired of the jargon of “mixed use,” which developers use to define projects that include retail, residential, office and other sectors of real estate.

To Celente, the term means creating “neighborhood and communities,” not just a shopping center or mall. And the industry will continue to gravitate toward neighborhood-fostering projects, he said.