The Lake Forest Plaza Mall is finally meeting the wrecking ball. After being closed for the past year and a half and empty (except for a couple of stores) for several years prior, developers are now finding use for the existing site.
The Plaza's owners have closed their deal with Lowe's, and demolition of the entire mall -- with the exception of the closed 12-screen Grand Theatre -- is already under way. The Lowe's store is slated to open by the end of 2007, perhaps even by the fall, Lowe's Regional Vice President Debbie Hobbs-Singletary said. She also confirmed that the Lowe's on Elysian Fields Avenue has become the best-performing site in the 1,375-store chain.
Doing business as Lake Forest Plaza LLC, mall owners Ashton Ryan and Gowri Kailas said they are using a loan to pay for the demolition of the 1.1 million-square-foot damaged and vacant mall, but said they weren't allowed to identify the lender.
A Lowe's corporate spokeswoman Monday declined to discuss financing for the project, as did a regional manager Tuesday.
Lowe's has committed to building its $18.5 million store, and discussions are ongoing with other unidentified retailers that could occupy sites in the new complex, including an electronics chain, a discount retailer, and an unidentified department store. The plan sets aside 225,000 square feet for a discount retailer and 100,000 square feet for a department store.
In addition, about 600,000 square feet of retail or office space will be distributed among nearly two dozen buildings on the site. One parking garage will even have townhouses atop it. A second phase eventually would add even more retail outlets in front of the department store and wrap retail space around two other parking garages.
But this promises to be more than just your average strip mall.
Kailas said plans for the new complex are based on concepts of noted "new urbanist" architect Andres Duany, who has been active in neighborhood planning in the post-Hurricane Katrina recovery.Whatever the final result is, I think it bodes well that corporations are investing capital in this part of the city.
However, don't be surprised if this deal falls into the pothole.
But a controversial financing mechanism called tax-increment financing, or TIF, might complicate the deal. Under the TIF, part of the future sales taxes generated at Lowe's and the other stores in the new complex would be used to cover the costs of developing much of the planned retail space. Legislation passed in 2003 created a special financing district to help pay for the site's redevelopment by drawing 4 cents of the sales tax for economic development purposes. Kailas said the TIF money is needed for infrastructure improvements and to build 600,000 square feet of retail, office and other construction that will round out the development.
Nagin said the TIF is an option, but he was noncommittal to its use other than to say that "right now this is a self-sustaining project" with all private financing.
TIFs have been highly controversial, and unless they are structured according to legal precedent established by the Louisiana Supreme Court, they also can be difficult to accomplish.