It’s been seven years since Hurricane Katrina brought New Orleans to its knees and a month since Isaac threatened to push the city down again.
But the region’s new $14 billion levee system held back the tide, and within hours of Isaac’s departure, the city sprang back to life to host Labor Day visitors.
A deeper sign of the city’s resilience can be found in the national developers and retailers now coming to town as first-time investors.
Among them is Howard Hughes Corp., which is based in Dallas and plans a $70 million renovation and expansion of Riverwalk, a struggling riverfront shopping and entertainment complex. In July, the Fresh Market, an upscale food chain based in North Carolina, opened a 24,800-square-foot grocery store in a historic building on St. Charles Avenue. And at the opposite end of the retail spectrum, Costco,the national warehouse chain, has committed to open its first store in Louisiana in another part of New Orleans.
Taken together, these completely different retail projects demonstrate a new confidence by outside developers and retailers in New Orleans’s post-Katrina economic strength.
It also underscores the city’s ability to successfully woo badly needed retail businesses. The newcomers say they have been drawn to the city’s economic and cultural vitality, its considerable need for retail at all levels and a more welcoming atmosphere in which to do business.
Mark Bulmash, senior vice president for development at Hughes, said the company experienced opportunity not only in the city’s robust travel industry but also in the thriving downtown where residents live, work and play.
The city has seen a surge in the annual number of visitors since Katrina, rising to 8.7 million last year, up significantly from 3.7 million in 2006, the first year after the storm, according to the New Orleans Convention and Visitors Bureau. Moreover, in 2011, travelers spent $5.47 billion, arecord amount. “The volume is so compelling,” Bulmash said. The Riverwalk mall’s location near the French Quarter and the city’s walkable downtown also figured in the decision to invest in the mall’s makeover, he said.
Even before Katrina wiped out a lot of neighborhood stores, New Orleans was ripe for retail investment.
The Business Alliance, a partnership between the business community and city government, was established about two years ago to attract business, generate jobs and smooth the way for businesses looking to invest in the city. Miller said the shortage of stores not only deprived residents of the convenience of shopping close to home, but robbed the city of an estimated $400 million a year in sales.
That loss of revenue was among the reasons the city’s economic development team and the Business Alliance put on a full-court press to bring Costco to town. Officials at Costco would not discuss the New Orleans project, but Aimee Quirk, economic development adviser to Mayor Mitch Landrieu, confirmed details of the $45 million development as well as the financial assistance package that made the investment feasible.
The city will put up about $2 million in street and infrastructure improvements and will forgo up to $3.3 million in sales taxes during the store’s first five years of operation.
“It made a lot of sense,” Quirk said. “We knew the site was in need of street improvements and Costco was facing some extraordinary costs for site elevation to meet FEMA requirements.”
Despite the success of several retail initiatives, including commitments from Wal-Mart and Winn Dixie to increase their number of stores in the city, most investments so far have been in the most populated and prosperous parts of town. To help correct the retail imbalance, this year the city embarked on a loan and grant program designed to encourage the reopening or development of grocery stores in neighborhoods where shopping opportunities are sparse.
Business, Pages 61 on 09/30/2012