Apr 7, 2014 19:13 Six months of talks on WTC building have produced no agreement Six months of talks on WTC building have produced no agreement Rendering provided by Gate House Capital Corp. -- An artists' renering shows a rehabilitated World Trade Center used as a W Hotel, with a riverfront ferris wheel. Negotiations continue with Gatehouse BY JAQUETTA WHITE| email@example.com April 07, 2014 Comments A plan to redevelop the long-vacant former World Trade Center building on the riverfront remains in limbo six months after the city began negotiating a lease agreement with a team that wants to turn the building into a hotel and apartment complex. The New Orleans Building Corp., a public-benefit corporation in charge of developing various pieces of city-owned real estate, began negotiating terms of an agreement with Gatehouse Capital Corp. in the fall. Deputy Mayor Cedric Grant, who acts as chief executive of the NOBC, said then that he expected the deal to be completed by the end of 2013. Grant issued a statement this past week saying negotiations are “continuing to move forward,” but he provided no details about why the timeline has slipped or what is holding up the process. “Both parties are working diligently on a deal that will allow the developer to proceed with the redevelopment and revitalize this iconic building,” Grant said in the statement. Gatehouse CEO Marty Collins did not return a phone call seeking comment. David Garcia, president of DAG Development, Gatehouse’s local partner on the project, declined to comment. The parties went into the negotiations knowing they had several issues to iron out. The city was expected to push Gatehouse to increase its proposed lease payment to the city and to make a stronger commitment to meet the city’s disadvantaged business enterprise requirement. In its original proposal, Dallas-based Gatehouse offered to make a single upfront payment of $10 million to the city in return for a 99-year lease on the building. But an attorney for the NOBC said that would amount to an annual present-value lease payment of only $391,000, which he said was “significantly lower” than the building’s fair market value. The city-owned property is widely considered to be one of the most valuable pieces of land in New Orleans. Gatehouse later revised its offer to 105 percent of the building’s fair market value, as determined by a third-party appraiser. The NOBC has not publicly responded to that offer, but it was expected to order an appraisal of the building by the end of last year. The other sticking point going into negotiations was Gatehouse’s commitment to the city’s disadvantaged business enterprise rules. Although it promised it would abide by the city’s requirement that at least 35 percent of its contract go to DBEs, the developer did not identify the specific disadvantaged businesses with which it would partner. Despite those shortcomings, a committee appointed by Mayor Mitch Landrieu picked Gatehouse in August over two other groups seeking the right to redevelop the site. The NOBC board gave Grant permission to begin negotiating a lease Sept. 30. But the board has not met since that date, and neither board members nor the public have been updated on the progress of negotiations. In the meantime, Grant is expected to soon leave his post with the city to take over the top job at the Sewerage & Water Board of New Orleans. Gatehouse has proposed turning the 33-story building at the foot of Canal and Poydras streets into a 245-room W Hotel, with rental apartments on the upper floors. The five-member committee weighed three proposals for the site. A plan from James H. Burch LLC that also called for turning the building into a hotel and apartments came in second. The Tricentennial Consortium, a group of tourism leaders, proposed demolishing the building and replacing it with a public park. That idea was ranked third by the committee.