H/T Reader David
I love it when things like this happen. With so much focus on NYC and Houston (oil) it is as if the rest of HHC no longer matters and is at a standstill. Nothing could be further from the truth. Check out what is happening in New Orleans
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Without question there will be doubters. But, if we look at the Riverwalk Collection that HHC just did, they took a small mall that produced ~500k of NOI annually and turned it into one of the premier shopping venues in the area that will produce ~$7.8M of NOI in 2015-’16. That is no small feat and don’t think for a second when New Orleans officials are looking at the potential development team for this project that little factoid will go unnoticed.
Certainly we need more details here as we look at this to begin to put a “what does this mean for us” value on it. At first blush it seems to be hard to imagine them not doing well. Retail, condos (undoubtedly high end) a casino etc etc….sound familiar? This is the same blueprint for their other efforts in NYC, Houston, Vegas and Hawaii. Partner with a local developer for the condo tower that pays for a significant portion of the retail development which then provides and hugely un-leavered perpetual NOI back to the company.
The interesting part here is the casino. It looks as though $MGM is the operator looking at the space. What makes this interesting is the fact HHC owns 80% of the air rights over $GGP ‘s Fashion Show Mall on the Vegas strip (simply means that if they go higher on the mall, HHC owns that space). If you’ve been to Vegas you know that space is next to Treasure Island and across the street from the Wynn and Palazzo/Venetian. It is also probably the last place on the strip a developer could go verticle without acquiring property at either far end of the strip. In short it is prime space. There have been whispers about HHC having a desire to put something up there but to this point they have only been whispers. Perhaps a partnership with $MGM in New Orleans leads to something greater in Vegas? Pure speculation on my part but HHC does have a history of doing business with people they know……
NEW ORLEANS — A new neighborhood is being dreamed up along the New Orleans riverfront. A group of developers are calling it the “Trade District,” and if all goes well, the massive undertaking will transform vacant land upriver from the Ernest N. Morial Convention Center.
It is hard to imagine now, but there are big plans for the land upriver from the convention center between the Pontchartrain Expressway and the old Market Street power plant.
“When you have this amount of land, you don’t want it done quickly. You want someone to take time their time and think about what they’re going to do,” said real estate broker Cassandra Sharpe.
The Howard Hughes Corporation, which owns the Outlet Collection at Riverwalk, and a group of local developers are proposing building a massive project. It will include an MGM Grand Hotel and more than 1,400 condos, townhouses and apartments. Plus, the icing on the cake will be a towering needle-like sculpture overlooking the mighty Mississippi River.
Sharpe is selling 3,400 square feet of mixed-use land next to what is now being proposed. She has held onto the property for several years and said it is now under contract.
“I’ve seen things happen in my lifetime that I didn’t think would happen. The development that we’re having in the Downtown Development District, and it’s very exciting what this could bring,” Sharpe said of the Trade District plans.
However for the project to officially move forward the Convention Center, which owns the land, needs to formally choose a development team. It is already moving ahead with plans of its own to upgrade existing buildings and infrastructure to compliment any outside future development plans.
The Convention Center’s Governing Board recently approved $65-million in upgrades to improve traffic flow in the Warehouse District and build a Linear Park along Convention Center Boulevard. Convention Center officials are hoping those upgrades will help open the door to the larger Trade District development upriver.
“It’s exciting. It’s transformational. It’s an under-utilized part of the city. We’re obviously looking for a competitive advantage,” said Kristian Sonnier with the New Orleans Convention and Visitors Bureau.
He said the proposal will help do two things — boost tourism and add to the lives of New Orleanians.
“We’re always looking for an edge to attract more convention business, but it’s also a quality of life issue for the citizens of New Orleans. It’s going to add more retail, more access to the river — things that don’t exist down there right now,” added Sonnier.
The Howard Hughes Corporation/MCC Real Estate and The Berger Company development team was conditionally selected for the project in March 2015.
The Convention Center Authority will formally choose a development team in July.
Design upgrades to the current Convention Center will be submitted to the city of New Orleans by June 1. That construction is slated to begin in January 2016 and will last about 18 months.