New owners of Market Street Power Plant plan hotel, offices, entertainment venue | Business News

The new owners of the Market Street Power Plant, where Victorian-style twin smokestacks have loomed over the New Orleans riverfront for 120 years, plan to convert the decaying structure into a complex that will include a hotel, offices, shops and some kind of entertainment venue.

Local developers Louis Lauricella and Brian Gibbs, together with Dallas-based real estate investment firm Cypress Equities, said they closed on the property Wednesday, taking it over from hotelier and developer Joe Jaeger, who had owned it since 2015.

Adjacent to the power plant, Lauricella, Gibbs and Cypress also are lead partners in the consortium that is set to develop the new entertainment-focused district on 39 acres owned by the Ernest N. Morial Convention Center.

Part of the pitch to win that master developer contract was their announcement last year that they had agreed to buy the power plant. At the time, they said it would be the upriver anchor of the new neighborhood, which they’ve dubbed The River District.

The old coal-fired plant was built in 1902 by the predecessor to Entergy Corp., and supplied electricity to New Orleans for more than six decades. But it has taken almost 50 years since smoke last bellowed from its chimneys for its next iteration to be determined.

Jaeger, who bought the property for around $8.7 million, had hoped to turn it into a Live Nation music venue, to dovetail with the entertainment district project. However, he put the plant and surrounding seven acres up for sale for $16.9 million in the summer of 2020 as part of a wider downsizing of his property empire, when his hotel group was hit hard by the coronavirus pandemic.

He will continue to be involved in development of the site, the partners said, although they didn’t specify in what capacity. Jaeger is partners with Barry Kern in the nearby Mardi Gras World and owns adjacent property. He has previously said he wants to move Mardi Gras World and develop it into a fully-fledged tourist attraction.

The 160,000-square-foot power plant will be “transformed into a unique, new-to-market concept with entertainment, retail, hotel and creative office space as well as food and beverage experiences,” the partners said Wednesday, calling it “an experiential hub” for locals and tourists.

“The Market Street Power Plant site is an important piece of our overall vision for the riverfront,” Lauricella said. “This site holds the potential to be a transformative project for our community.”

The developers didn’t estimate when the project would be completed, or offer specifics on the number of hotel rooms or apartments. It’s also not clear how big the entertainment venue might be or how many square feet of office space are being considered.

The consortium is still hammering out with the Convention Center the land lease terms and detailed plans for the broader project, which envisions spending more than $1 billion on housing, retail, entertainment and office development on the largely barren acres it controls.

Separately, the Convention Center still has hopes to put a “headquarters hotel” on nine adjacent upriver acres that are not part of the River District plans. The pandemic stalled an initial proposal to build a 1,200-room hotel and parking lot, but tentative plans for a scaled-down hotel were revived last August.

The consortium’s winning bid said their project would begin by building 600 apartments, half of which would be priced so as to be affordable for lower-income residents. The district will also include New Orleans’ first civil rights museum.

The River District won the development competition partly because of its emphasis on housing, which proposed a total of 1,100 new units. A rival bid from a consortium led by developer Paul Flower had proposed building an entertainment-focused venue first.

Lauricella’s group may now start with housing on the River District acres, while also building the entertainment venue on its privately owned Market Street Power Plant property.