Whole Foods Market. P.F. Chang’s. Fleming’s Prime Steakhouse. They’re three of the most alluring and respected names for Louisiana food devotees and developers alike. Steve Keller snagged ’em all — and then some — for Baton Rouge, and now he hopes to repeat that success in Lafayette.
To accomplish that goal, he’s hooked up with some of the biggest names in local real estate for one of the boldest and most aggressive real estate projects ever undertaken in the parish — carving 125 acres of Boustany family land at the corner of Ambassador Caffery Parkway and Kaliste Saloom Road into an ultra high-density traditional neighborhood development. It’s half the size River Ranch was about a decade ago when it began to transform the way thousands of Lafayette residents live, work, dine and shop. But if this estimated $400 million to $450 million construction project comes to fruition, it will be the state’s best example of “New Urbanism,” a movement that coalesced in the 1990s as a way to combat sprawl. The new mind-set of progressive architects, planners, and developers, New Urbanism is based on principles of planning and architecture that work together to create walkable, mixed-use communities.
The lead man on the deal is River Ranch’s Robert Daigle, who is again teaming up with Rodney Savoy of Lafayette and Robert Gagnard of San Diego, the two low-profile money men behind River Ranch who made much of their fortunes in the blood plasma business. Architect Steve Oubre, the renowned planner of River Ranch, is the town planner/architect and also has a financial stake in the development.
While Oubre’s River Ranch design introduced TNDs to Louisiana and made him one of the most-sought-after TND planners in the South, the prominent architect plans to incorporate the kind of higher residential density and tenant mix that may not have been well-received at River Ranch because it was so novel — foreign in fact — to most people.
That won’t be the case this time around for this still-unnamed project on a rectangular tract of land located behind the Walgreens and McDonald’s at the corner of Ambassador Caffery and Kaliste Saloom Road. It is bordered on its northeast side by the Republic Avenue commercial strip center; southeast of the tract is the 45 acres of property Our Lady of Lourdes purchased between Verot School Road and Bluebird Lane, where it will build a new hospital complex.
The development has the benefit of following River Ranch’s initial trials, which included a gargantuan number of variances required from city officials. Late in 2007, Lafayette City-Parish Government adopted a TND code that should streamline the process for New Urbanism projects like this one, and on Friday of last week, city officials got their first glimpse at what’s being planned in an introductory meeting that included Planning, Zoning and Codes Director Eleanor Bouy.
Bouy had heard rumors of the project for the past couple of months. “I guess the best news for us is it will be local people we’ve worked with and we know can do this — they have TND experience,” she says.
Most of the property is classified general business and will have to be rezoned for a TND, which should not face much opposition because it is a highly concentrated commercial area with little adjacent residential development. If River Ranch is any indication of what adjacent property owners can expect, the new TND is likely to face minimal opposition. “People on Steiner Road were so afraid of [River Ranch] devaluing their property, which is so funny now,” Bouy says.
Bouy says Daigle and his partners appear to be on a fast-track to get this up and running. “It’s for real,” she says. “They’re ready to roll out the charrette. They’ve got a schedule; within three weeks they’re supposed to give us a concept plan.” That master plan, which will be completed after the seven-day design charrette that begins Jan. 21, will be reviewed by Bouy’s staff to ensure it meets the basic requirements of the TND code, among which are open spaces, density and street layouts.
Daigle and company, who have signed a purchase agreement, plan to close on the property early this fall. They’re paying the Boustanys (Geraldine Boustany Ramsay and a limited liability corporation formed by her sister, Doris Boustany Reggie) $40 million, or $7.50 a square foot, slightly more than what Lourdes paid for an adjacent property early last year. This arrangement is structured differently than Daigle’s existing TNDs, River Ranch and Sugar Mill Pond. At Sugar Mill Pond, the property owner is a partner in the deal and is being paid 69 cents per square foot as parcels are sold, and the Dugas family — which owned the River Ranch property — was paid $1.10 per square foot when property was sold. The arrangement called for the Dugas family to receive full payment within 10 years, a debt that has been retired.
The day the deal closes on the Boustany property, Daigle says $20 million worth of infrastructure work will commence. “We’re putting in all of the infrastructure at one time,” he says. It will be a massive six- to eight-month undertaking that includes the engineering and construction of all streets, subsurface storm drainage, and underground electrical, gas and water mains.
Daigle believes the property per square foot is more valuable than Lourdes’ tract because it’s situated at this prime intersection, with 3,000 feet of frontage on Ambassador Caffery and 900 square feet of frontage on Kaliste Saloom Road. He’s already in talks with a hotel developer and will consider selling off some parcels if the tenant fits the master plan. The biggest drawback is the fact that three parcels with prime frontage, including the corner lot, were sold to Walgreens, McDonald’s and Sonic, not the typical kind of retailers for this type of development. Daigle would have liked to have owned those parcels, but says planning around them will not be a problem.
He’s much more focused on the added value of what’s already there, along with the immeasurable benefit of the ongoing Ambassador Caffery South extension to U.S. Hwy. 90. Ambassador Caffery South will bring thousands of acres of raw, rural land into commerce. Additionally, it will enhance access for the growing region south of Lafayette Parish, attracting scores of shoppers looking for destination spots with national and regional players like the ones this new development hopes to land.
Big pluses to the site are the existing Grand Theatre, which will likely be incorporated into the master plan as a primary entertainment feature, and its proximity to St. Thomas More High School and Lourdes and Women’s & Children’s hospitals. “That’s one of the things we love — you’ve got two hospitals and an entertainment anchor,” Daigle says.
Unlike River Ranch, which had to wait for its retail tenants to come while the Camellia Boulevard Bridge was being built, this location is ready to go with existing roads on three sides. The lifestyle center component of the Boustany property development, which is what will bring traffic and vitality to the center, will be the initial phase. Daigle says the first businesses will be up and running by 2010.
The entertainment element and proximity to the hospitals have helped define the development’s target market: young professionals and empty-nesters. “The people who reside in this community, to some extent, will be different than the people that reside in River Ranch,” Daigle says. “This is not a family-with-kids type development. And you sort of eliminate that market segment because of the product you put out. There are no large houses on large lots, which a lot of families want.”
Daigle is also in preliminary talks with Lourdes about possible joint-venture opportunities for senior housing or assisted living facilities, which would be staffed and run by the hospital.
|Women’s & Children’s medical complex is across Ambassador Caffery Parkway from a new TND planned by a partnership that includes developers Rodney Savoy and Robert Daigle and architect Steve Oubre.
The retail component of this new TND is squarely in the hands of Keller and Keller’s partner, Houston-based Creekstone Companies, a real estate investment, management and development company that also has an office in Baton Rouge. (It will also soon begin work on an Oubre-planned, 480-acre mixed use project in Livingston Parish called Juban Crossing.) “Steve Keller will be charged with developing the lifestyle concept [of the Boustany project],” Daigle says. “I’m not going to be in those meetings; he’s got full autonomy.”
After living in Houston for about two decades, where he did construction and development work in 17 states, Keller returned to his native Baton Rouge eight years ago and within a few years was turning dirt at the corner of Corporate Boulevard and Jefferson Highway into Towne Center at Cedar Lodge, an outdoor shopping or “lifestyle center.”
Many of these shopping destinations are becoming the choice of big-name national and regional retailers because their pedestrian-friendly design, common areas and leisure amenities tend to draw more affluent shoppers. The soaring popularity of outdoor malls in recent years has them displacing regional malls throughout the country.
Architect Oubre hasn’t been impressed by most lifestyle centers he’s seen, calling many of them glorified malls that often aren’t pedestrian friendly. “You’ve heard a lot about lifestyle centers,” he says, “but we’re going to create a lifestyle center with soul.” The largest space will likely be 50,000 square feet for a single user like a grocer or bookstore, with smaller shadow tenants such as upscale boutiques and other high-end retailers. The closest outdoor shopping center that mirrors what’s planned here is Baton Rouge developer Tommy Spinosa’s Perkins Rowe, located at Perkins Road and Bluebonnet Boulevard, which has J. Crew, BCBG and Anthropologie stores, along with Texas De Brazil, La Madeleine and Kona Grill. Unlike Towne Center, Perkins Rowe has a residential element that is connected to the development.
Oubre points to two out-of-state projects that will be most like what he envisions for the Boustany property — Mizner Park in Boca Raton, Fla., and CityPlace in West Palm Beach, the latter credited with the city’s urban renaissance and boasting an Imax theater and stores like Banana Republic, Pottery Barn and Williams-Sonoma.
Much like what’s offered at Mizner Park and CityPlace, Oubre will incorporate a living element into portions of the Boustany property’s lifestyle center — similar to the apartments above retail spaces at River Ranch’s Main Street. Additionally, there will be pedestrian connectivity from the lifestyle center’s shops to the new development’s other residential and entertainment amenities.
As this new TND launches, the retail outfit with the most to lose could be the Mall of Acadiana, whose owners several years ago hinted at their hopes to try a lifestyle center on its periphery, though nothing has come of the project. Traditional mall outfits like Ann Taylor Loft, for example, are trending toward outdoor centers like River Ranch’s The Market, which now houses a Loft store, Jos. A. Bank, Bonefish Grill and Fresh Market. Keller’s Towne Center also has a Gap, Banana Republic, Coldwater Creek, Chico’s, Talbots and American Eagle store, all of which currently have locations in the Mall of Acadiana. In a smaller market the size of Lafayette, second stores for these national companies may not be in the cards — but that won’t stop Keller from going after them. “We are going to speak with everyone in Towne Center,” says Keller, who declined to say who he has met with so far. “A lot of these guys like the secondary markets that are growing. I would not be surprised if we could attract restaurants [that are] the quality of restaurants in Towne Center. I’m confident.”
He has reason to be optimistic. For starters, Bonefish Grill and Carrabba’s Italian Grill, two Towne Center tenants, saw enough growth in Lafayette to set up shop in River Ranch in recent years. These restaurants have been well-received (both were jam-packed last Friday night), which will go a long way toward convincing others to follow suit. Additionally, several real estate sources say Whole Foods committed to the Boustany site several years ago when Weingarten Realty (developer of the neighboring Super Target Center on Ambassador Caffery) made a serious play for the property. Should Whole Foods still be interested, it will be in a position to dictate a number of co-tenants it wants in the development.
Keller, in fact, hints that he may have news in the not-so-distant future. “I’m negotiating as we speak,” he says.
The new development will have a look that’s very different from River Ranch, which reflects traditional architectural influences from cities like New Orleans. In order to achieve a more urban feel, its buildings will be taller and have more modern — contemporary even — architecture. “The last thing I want to do is re-create River Ranch from an architectural perspective,” Daigle says. The primary difference between this development and River Ranch, however, is the density. Whereas River Ranch averages approximately eight living units per acre , this project will have 12 to 25 residential units per acre for sale or lease.
In its hopes to appeal to young, single professionals, it will have loft apartments and condos with exposed duct work and exposed concrete structure. An entry-level one-bedroom loft will be marketed for just under $200,000.
“Now that people understand, have been disarmed by River Ranch, we think we can push it to more mixed use, higher density, internalized parking,” Oubre says.
Empty nesters, however, will likely live in small cottages with “very, very low maintenance, lots of masonry,” Daigle says.
For almost a year now, speculation has been rampant in the real estate community about the Boustany deal. “I always considered it somewhat of a long-shot for us to acquire the property,” says Daigle. “But I also know that you can hold onto property for too long and the world can pass you by.” Daigle believes the owners of the 11 acres at the corner of Johnston Street and Ridge Road now on the market for $7.6 million — $15.86 per square foot — may have missed their prime opportunity. “In my opinion, the family held that property too long,” he says. Once the hottest corridor in town, Johnston Street at Ambassador Caffery Parkway may soon be displaced by the activity and traffic counts now at Ambassador Caffery and Kaliste Saloom Road. “Quite frankly, I think [the Boustanys] picked the perfect time to sell,” Daigle says.
In an effort to determine the best way to develop the property from a marketing perspective, the Boustanys retained Oubre to do a master plan. An international consulting firm, Economics Research Associates, was called in to value it for its highest and best use, which was determined in a January 2007 report to be an urban TND. Initially, the family hoped to joint venture the project, selecting five or six potential partners. It’s unclear how many groups responded to the inquiry — Boustany family members did not return calls for comment by press time — but the list of potential bidders was narrowed to two, Daigle and The Bayer Group out of Birmingham, Ala. D.B.H. “Black” Chaffe, the Boustanys’ New Orleans attorney who had been handling much of the negotiations, then asked the two groups for a more detailed plan for the site. That’s when Daigle called in his planner, Oubre, but not before first getting an assurance from Chaffe that Oubre had no conflict of interest from the family’s perspective.
In the months that followed, the family decided to bow out as a potential co-developer and signed the purchase agreement with Daigle’s group just before the end of the year.
While there can be anxiety with any new development of this scale — River Ranch has its share of critics who assail its elitist posture and real estate prices out of reach to many middle-class residents — what’s undeniable is the economic impact such TNDs can have on a parish’s tax coffers. Last year the Boustany sisters, who sat on the property for years after inheriting it from their father, the late Frem Boustany Sr., paid about $360 per year in city and parish property taxes for 125 acres of what’s still assessed as agricultural property. “Ag land is not reclassified to commercial simply because the land around it has been converted to commercial,” says Lafayette Parish Tax Assessor Conrad Comeaux. “As long as the property continues to be used for agricultural purposes [hay bailing, in this case], it keeps the ag classification.” If the property itself had been classified as commercial, it would have generated approximately $230,000 in parish taxes and $48,000 in city taxes in 2007.
Once fully developed, the urban TND will send millions annually in property taxes to the parish. River Ranch generated $2.2 million in property taxes in 2006, Comeaux says, and once commercial additions like Main Street and Fresh Market are assessed, that number should increase considerably.
According to Daigle’s calculations, the new TND’s 350,000 square feet of retail space are expected to generate annual sales of about $350 a square foot; that’s about $122 million in sales of goods that will be boosting tax collections that fund services throughout the parish.
Ten years ago, Daigle, now 57, said if River Ranch were successful he’d retire. Now the lawyer-turned-developer says he just didn’t know how much he’d enjoy the work — and the challenges he encounters every day. Faced with running out of land for future development of River Ranch, he turned his attention to Youngsville a few years ago and is about to take another gamble. Before the first penny is generated on the Boustany property, he and his partners will have invested $60 million at a 125-acre site that’s roughly a half mile from the development that made Robert Daigle and Steve Oubre the most recognized names in the TND movement throughout the South.
Daigle no longer has any plans for retirement.
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