A leader of the Six Flags project defers to Riverwalk project
Plans for an upscale outlet mall at the site of the former Six Flags amusement park in eastern New Orleans appeared to evaporate Tuesday when one of the would-be developers told a city board that the New Orleans market can support only one such venture, and the planned outlet mall at the Riverwalk is so much further along that his project can't compete.
One member of the Industrial Development Board called the announcement "a bombshell." The board holds the title to the Six Flags property on behalf of the city.
At an outlet mall, manufacturers sell products directly to the public through their own stores, or major retailers operate stores selling returned goods and discontinued products, often at sharply reduced prices.
The Landrieu administration selected Provident Realty Advisors and DAG Development a year ago to plan the redevelopment of the former Six Flags site. The joint venture proposed building a 400,000-square-foot upscale outlet mall and entertainment boardwalk on the 150-acre site, which was abandoned after Hurricane Katrina. Future phases of the plan envisioned a big-box retailer, amphitheater, sports field, water park and hotel.
The developers were expected to spend 12 to 24 months determining whether they had a financially viable project that could begin construction. However, four months later, in July, another company announced plans for a $70 million renovation of the Riverwalk Marketplace that would add 50,000 square feet to the shopping complex and turn it into an outlet mall.
The Riverwalk plans were announced by Dallas-based Howard Hughes Corp., which took over ownership of the riverfront mall in the fall of 2011 after the previous owners, General Growth Properties, filed for Chapter 11 bankruptcy. The announcement said the Riverwalk would be closed during renovations but would reopen as the Outlet Collection at Riverwalk before the 2013 holiday shopping season.
David Garcia, the principal of DAG Development, told the Industrial Development Board on Tuesday that market realities dictate there can be only one upscale outlet mall in the metropolitan area and the Riverwalk project is far ahead in signing up major tenants. He said major retailers have made clear they would not be interested in having two stores in the area, even if the Six Flags project offered them free space.
Garcia said he and Provident had contacted Howard Hughes Corp. to discuss possible ways of collaborating on a mall at the Six Flags site but had not received an answer. However, Mark Bulmash, senior vice president for development at Hughes, wasted no time in rejecting the idea of possible cooperation with the rival venture.
In an interview Tuesday afternoon, Bulmash said Hughes is fully committed to the Riverwalk project and is not interested in talking with Provident or DAG about the Six Flags site. "The project is moving full steam ahead," he said. "We now have tenant commitments from top national and local retailers for nearly 80 percent of the center. We will be sharing specifics about this exciting news in the near future, including a firm timeline and some of our new retailers."
Alan Philipson, a member of the Industrial Development Board, said he thinks the Six Flags site is better suited for an outlet mall than the Riverwalk because it is much larger and has far more parking for local shoppers and those driving in from surrounding areas. Such shoppers often spend an entire day at such a mall, he said. Philipson said he doubts that an outlet mall in the CBD will prove successful, although he said the Riverwalk could be a good site for some high-end stores.
Bulmash said, however, that he is confident the Riverwalk mall will prove successful. In fact, he said, the Riverwalk "is an ideal location ... within walking distance of virtually every downtown and French Quarter hotel and attraction" and adjacent to the Ernest N. Morial Convention Center and the Port of New Orleans' Julia and Erato Street cruise ship terminals.
"According to the New Orleans Convention and Visitors Bureau, some 54 percent of tourists frequent the Riverwalk," Bulmash said, "and today we learned that in 2012 more than 9 million visitors came to New Orleans and spent a record-setting $6 billion." He said the site has enough parking to accommodate local customers.
Garcia had said earlier that if it became clear that Hughes would not collaborate on a project at the Six Flags site, he and Provident would consider other possibilities for the site such as an entirely entertainment-focused development.
Aimee Quirk, Mayor Mitch Landrieu's top adviser on economic development, told the IDB that the administration remains "committed to getting a positive project at the Six Flags site" and will work on a new development strategy for it. She said the city "can't pick sides" in a contest between two outlet mall projects.
Quirk had told the IDB last summer that the Hughes Corp.'s plans would not affect the Six Flags project because there's plenty of opportunity in New Orleans for retailers and the two projects would draw different types of customers. "The city is very under-retailed, " she said at the time.