Starwood Hotels has invested millions in the New Orleans market through its Sheraton and W Hotel brands, and as a member of one of the three groups vying to redevelop the World Trade Center site it is looking to invest even more. But civic leaders have grown increasingly frustrated that the international hotel conglomerate has allowed one of the...
Starwood Hotels has invested millions in the New Orleans market through its Sheraton and W Hotel brands, and as a member of one of the three groups vying to redevelop the World Trade Center site it is looking to invest even more.
But civic leaders have grown increasingly frustrated that the international hotel conglomerate has allowed one of the most valuable properties on Canal Street to sit vacant for decades with no discernible plan for the future.
During Gatehouse Capital's presentation Tuesday on the redevelopment of the World Trade Center, Sid Narang with Starwood Hotels touted his company's dedication to the New Orleans market and its plan to develop a 245-room W hotel in the city-owned site at the foot of Canal Street.
"Starwood and New Orleans have had a partnership since 1982, when we first (opened) the Sheraton," Narang said. "We've been very bullish on this marketplace, with over $40 million invested in the renovation of the Sheraton and $20 million in the renovation of the W Hotel in the French Quarter."
But just a few blocks away from the World Trade Center sits another Starwood property. Known locally as the Katz Building, the five-story structure at 500 Canal St. has sat vacant for at least 30 years. The Starwood-owned Sheraton Hotel sits adjacent to the property.
At the Downtown Development District's executive committee meeting Monday, DDD President and CEO Kurt Weigle expressed concern that the district has had little success convincing Starwood and co-owner MetLife to sell the property and put it back into commerce. He said he has reached out to Aimee Quirk, Mayor Mitch Landrieu's economic development adviser, in hopes of recruiting the mayor to join the push for redevelopment.
"The building is just sitting there, and it's one of the most prominent locations on all of Canal Street," Weigle said. "Retailers love the location. It's an 'A' location, but so far we haven't been able to get Starwood and MetLife to move forward with development."
When asked later about the status of the building, Narang said, "We are exploring a few options. There are a few ideas in mind but nothing concrete. We recognize it's a key corner on Canal. We recognize it has a bunch of uses, some of which can be quite productive. We just have to get comfortable with what numbers make the best sense for us."
Zella May, the listing agent for the building, said she has at least 20 offers on the table to purchase the property and more than 100 to lease it, but progress has been slowed by a variety of factors.
At one point Starwood was considering redeveloping the site into an "aloft" hotel, one of its boutique brands, but that plan was later abandoned, May said. Potential purchasers also have to agree to put the entire building back into commerce and not just the ground floor, and that has eliminated several proposals.
The building was listed at $4 million, but May said she has received offers as high as $4.4 million.
The co-ownership of the building by two national companies has also slowed progress, May said. "If there is one owner, decisions are made faster. But here you're talking about two major companies, and they don't have meetings together very often."
National retailers like to have a clear timeline on when they can get a project off the ground, and if there is uncertainty as to whether the owners want to sell a property, it will scare off potential investors, May said.
It happens, however, that representatives of Starwood and MetLife are meeting this week to discuss the property's future, said May, who hopes this will put the project on the fast track.
"At the end of the day this is the perfect piece of property. Rarely does a nice building like this on Canal Street become available in the perfect location," she said. "There are great offers on the table that would certainly contribute to Canal Street and to the visitors of the Sheraton property."