A tract of riverfront property that was earmarked for a $50 million condominium project on the west bank will be sold next month after a bankruptcy court judge ordered it to be auctioned off to settle debts.
The three undeveloped plots covering about 3.3 acres were owned by River Street Ventures LLC, which declared bankruptcy in June after a Miami-based developer’s plans to build hundreds of condominiums and retail outlets on the site were blocked by City Hall.
The developer, Philip Spiegelman, had fought a long-running battle for the project, which is located at 1321 Brooklyn Ave. in Algiers Point, before his main financial backer, Lion Financial, foreclosed on the property and forced it to seek Chapter 11 bankruptcy protection last summer.
Now, he is looking to reacquire the site and will be a “stalking horse” bidder at the auction in April through a company called RSV Delaware, which will seek to set the first bid somewhere above the required minimum bid of $4,436,000.
A (shrinking) riverfront development
The original vision proposed more than four years ago was to build four eight-story buildings with three large retail spaces on the ground floors. There were to be more than 350 residential units on the upper floors, with about 10% of them set aside for people of lower-than-average incomes.
The project, which is bounded by Brooklyn Avenue and Socrates and De Armas streets, and the Mississippi River Trail on the riverside, also would have seen part of Lamarque Street, which terminates in the middle of the property, converted into a pedestrian walkway.
After facing opposition from several neighborhood interests, including the Algiers Riverview Association and the Algiers Point Association, a scaled-back version of the development eventually won City Council approval in spring 2018. That version proposed 187 residential units and 15,000 square feet of retail space, with 19 of the units earmarked for people with below-average incomes.
After a new City Council took office in 2018, with Kristin Gisleson Palmer replacing Nadine Ramsey as member for District C, which incorporates Algiers Point, the council rescinded its approval for the project.
Spiegelman sued and won an initial decision in the New Orleans District Court, arguing that the city had overstepped its authority when it reversed its earlier approval. However, that lower court decision was reversed by the 4th Circuit Court of Appeals in late 2019. Spiegelman’s attempt to have the case heard by the Louisiana Supreme Court was unsuccessful.
He subsequently filed for approval for an even smaller version of the project, before the firm went into bankruptcy.
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“After I won in my civil suit and had it reversed on appeal, I submitted an ‘of right’ plan for 167 units,” Spiegelman said. “That was before Councilwoman Palmer moved to further reduce zoning,” he said without offering more detail. “That is all I am willing to say at this time while matters are pending.”
King over the district
This year, Freddie King III replaced Palmer as City Council member for District C. King ran on the slogan “For too long politics has gotten in the way of progress,” while also advocating for more affordable housing. He and his staff didn’t immediately respond to requests for comment about a potential project at the River Street site.
Some of River Street Ventures’ unsecured creditors objected to the terms of the auction. Several members of the Goitia family from Argentina who provided about $400,000 in unsecured loans for the project objected to the terms under which Spiegelman is trying to buy back the property.
In a court filing in February, the Goitia family’s local attorney, Rudy Cerone, lodged several objections to way the bidding was being handled, saying it was unfairly tilted in favor of Spiegelman’s stalking horse bid.
The court has now ordered that all bidders, including Spiegelman, must put up a $100,000 deposit and submit their bids by April 12, with the auction taking place on April 19. The McEnery Group is the broker.
“Our role in this is clear: Our job is to market the hell out of this property,” said Parke McEnery, who rejected claims by the Goitia family that the commission structure favored Spiegelman’s stalking horse bid.
“If any buyer is willing to pay in excess of what the stalking horse bidder is willing to pay, fantastic,” he said, noting that the commission is a percentage of the final offer and incentivizes finding the highest bid from whatever source.
The “deal room” at McEnery is open to any local or national bidder who wants to peruse details of the real estate that is for sale, as well as any of the architectural, engineering and other work that was done for Spiegelman’s proposals, McEnery said.
The broker’s offering document says the “highest and best use” of the property is to construct three, four-story buildings that would contain about 167 residential units. It also makes clear that despite any previous approvals, any successful bidder would have to navigate the approvals process of the City of New Orleans.