Tower could power N.O. revival

The 70-story Trump International Hotel & Tower, unveiled just days before Hurricane Katrina slammed into New Orleans, could move forward in a matter of months -- not years -- if incentives supported by city and state economic development leaders are applied.The acceleration of such a project, which had been expected to be delayed by at least 24 months because of the storm, could send a powerful signal that New Orleans is open for business. "The message to the world is that a major project reflects confidence and security for investment," said Michael Olivier, secretary of Louisiana's Department of Economic Development.

Developers, lawyers and economic leaders such as Olivier and Don Hutchinson, director of the New Orleans Department of Economic Development, are lobbying Congress to include in the Hurricane Katrina Disaster Relief and Economic Recovery Act two incentives designed to spur area development.

"The way I see it, what Congress did for New York is good enough for New Orleans. For this (the Trump tower) to start in six months would send a critical message. It will tell other investors to take a second look," Hutchinson said.

The first incentive, and perhaps the most important, would encourage sales of the condominiums in the tower by offering tax benefits to buyers. More specifically, it would allow buyers to deduct half of the unit purchase price from their federal income taxes.

The pending federal legislation does not now include this provision. But Stephen Dwyer, the local attorney representing Poydras Street LLC, the development team behind the project, is lobbying Congress for it.

The second incentive would allow public interest-free bonds to be sold to help the developers cover increasing material and labor costs resulting from Katrina. New York businesses and developers enjoyed a similar incentive after the Sept. 11, 2001, terrorist attacks. In the wake of that disaster, Congress passed a bill that called for the issuance of up to $8 billion in so-called Liberty bonds for development and business restoration in the area devastated by the collapse of the twin towers. Under normal circumstances, bonds like these can be used only to finance public, or in some cases public-private, projects.

Olivier said that the terrorist attacks affected a 16-acre tract in New York. "Here, we're talking about 23,000 square miles" of affected areas when combining the land mass affected by the one-two punch of Hurricanes Katrina and Rita.

"We need to have help . . ," he said. "They extended help to New York, why can't we expect a similar investment to the Gulf region?"

The $200 million Trump tower would be one of the first new high-rises constructed in the city in more than 25 years. It also would become the tallest building in the Big Easy. As planned, it would house condominiums, a hotel, a five-star restaurant and retail space.

The Florida developers behind Poydras LLC have said they're committed to moving forward with the project, especially if the incentive package comes together.

"Start adding all these things together . . . and I'll get onto a backhoe and start moving dirt around myself" in a matter of months, said Allen Levin, one of the developers.

Real estate magnate Donald Trump, who will brand the project, also supports moving forward.

"The Trump organization stands behind the people of New Orleans as they rebuild their great city. We have no doubt that the city of New Orleans will come back stronger than ever, and the Trump organization is proud to be a part of this redevelopment process as New Orleans gets back on its feet."

"Our decision to enter the New Orleans market has only been reinforced by the dynamic nature and resilient strength of the people of New Orleans," Trump said.
The Poydras LLC developers -- Clifford Mowe, brothers Allen and Frederick Levin, and Robert Rinke -- are not pursuing conventional financing until they fully understand what incentives are available to them.
"The storm has changed the economy drastically and nobody knows the market," said Dwyer, their attorney. "But everybody I talk to, it's just very sanguine. Everyone is going on very optimistically about the ability of New Orleans to rebuild and to rebuild better."

Outside investors are scouring the area, Dwyer said. Federal incentives would both move the Trump project forward and encourage additional outside investment.

"It's going to take incentives, particularly in this (the Trump) project, to get these developments on a quicker pace," Dwyer said.

. . . . . . .

Greg Thomas can be reached at gthomas@timespicayune.com or (504) 826-3399

 

Developers, lawyers and economic leaders such as Olivier and Don Hutchinson, director of the New Orleans Department of Economic Development, are lobbying Congress to include in the Hurricane Katrina Disaster Relief and Economic Recovery Act two incentives designed to spur area development.

"The way I see it, what Congress did for New York is good enough for New Orleans. For this (the Trump tower) to start in six months would send a critical message. It will tell other investors to take a second look," Hutchinson said.

The first incentive, and perhaps the most important, would encourage sales of the condominiums in the tower by offering tax benefits to buyers. More specifically, it would allow buyers to deduct half of the unit purchase price from their federal income taxes.

The pending federal legislation does not now include this provision. But Stephen Dwyer, the local attorney representing Poydras Street LLC, the development team behind the project, is lobbying Congress for it.

The second incentive would allow public interest-free bonds to be sold to help the developers cover increasing material and labor costs resulting from Katrina. New York businesses and developers enjoyed a similar incentive after the Sept. 11, 2001, terrorist attacks. In the wake of that disaster, Congress passed a bill that called for the issuance of up to $8 billion in so-called Liberty bonds for development and business restoration in the area devastated by the collapse of the twin towers. Under normal circumstances, bonds like these can be used only to finance public, or in some cases public-private, projects.

Olivier said that the terrorist attacks affected a 16-acre tract in New York. "Here, we're talking about 23,000 square miles" of affected areas when combining the land mass affected by the one-two punch of Hurricanes Katrina and Rita.

"We need to have help . . ," he said. "They extended help to New York, why can't we expect a similar investment to the Gulf region?"

The $200 million Trump tower would be one of the first new high-rises constructed in the city in more than 25 years. It also would become the tallest building in the Big Easy. As planned, it would house condominiums, a hotel, a five-star restaurant and retail space.

The Florida developers behind Poydras LLC have said they're committed to moving forward with the project, especially if the incentive package comes together.

"Start adding all these things together . . . and I'll get onto a backhoe and start moving dirt around myself" in a matter of months, said Allen Levin, one of the developers.

Real estate magnate Donald Trump, who will brand the project, also supports moving forward.

"The Trump organization stands behind the people of New Orleans as they rebuild their great city. We have no doubt that the city of New Orleans will come back stronger than ever, and the Trump organization is proud to be a part of this redevelopment process as New Orleans gets back on its feet."

"Our decision to enter the New Orleans market has only been reinforced by the dynamic nature and resilient strength of the people of New Orleans," Trump said.

The Poydras LLC developers -- Clifford Mowe, brothers Allen and Frederick Levin, and Robert Rinke -- are not pursuing conventional financing until they fully understand what incentives are available to them.

"The storm has changed the economy drastically and nobody knows the market," said Dwyer, their attorney. "But everybody I talk to, it's just very sanguine. Everyone is going on very optimistically about the ability of New Orleans to rebuild and to rebuild better."

Outside investors are scouring the area, Dwyer said. Federal incentives would both move the Trump project forward and encourage additional outside investment.

"It's going to take incentives, particularly in this (the Trump) project, to get these developments on a quicker pace," Dwyer said.

. . . . . . .

Greg Thomas can be reached at gthomas@timespicayune.com or (504) 826-3399.