Wednesday, May 19, 2010
Written by Nathan Stubbs
Dating back to 1856, Mills Addition — which runs between North University and the railroad tracks, north of downtown all the way to Cameron Street — is Lafayette’s oldest subdivision. As the place right outside the town of Vermilionville where residents would go to settle disputes, it also became known as Fightingville — a name that took on new meaning as crime, drugs and poverty took hold in the area throughout the latter half of the last century.
|Acadiana Outreach's proposed Joie de Vivre development is a
$25 million, nine-building, mixed-use complex situated at the
intersections of Congress, West Second and South Pierce streets.
As Lafayette’s city planning director in the 1970s and 80s, Sonnier was a proponent of plans, just then starting to germinate, calling for the city to re-invest in downtown as a central arts, culture and business district . Sonnier’s daughter, Giselle Menard, often accompanied her father to the Madison Street house whenever he went to mow the grass, or clean out one of three apartments he set up there.
“I remember him telling me,” Menard says, “that there are these ideas about fountains and about ‘really making downtown the center again and that’s why I want this property. I want to have a place for the young, up and coming artists and musicians, people who make this city thrive. I want to have a place for them.’ That was his dream.”
“Unfortunately,” Menard laments, “[the neighborhood] started going down instead. He never saw his vision realized.” Albert Sonnier died in 1997.
In part because of her late father’s vision, Menard, who inherited her family’s Madison Street rent house in 2000, is now one of the enthusiastic supporters behind a proposed urban housing development sponsored by the Acadiana Outreach Center, a nonprofit organization that provides critical services to Acadiana’s addicted and homeless populations. The new development promises to be a magnet to young professionals looking for affordable housing near downtown and hopes to incite re-development throughout the area.
At a meeting last week of Le Centre Coterie — the Mills Addition neighborhood group formed at the beginning of the year by the city planning department — Menard joined several other members in voting to endorse the project.
Acadiana Outreach has zeroed in on about four blocks in Mills Addition, adjacent to its campus, an area many feel is ripe for redevelopment. The area is centered at the South Pierce intersection where Congress Street turns into West Second Street, directly across from downtown’s IberiaBank tower. Electrical services company Magnon Electric Inc. now occupies the bulk of the proposed development’s site. In addition, the site includes two adjudicated properties, about a half dozen privately owned homes, and five parcels already owned by Acadiana Outreach, two of which are currently serving as halfway houses. Acadiana Outreach is now in final negotiations to buy all the remaining properties.
|Henry and Sonya Boudreaux|
Plans call for a $25 million, nine-building, mixed use development with modern loft-style apartments above ground-floor retail space fronting Congress, West Second and South Pierce streets (planners aim to attract a grocery store, day care center and coffee shop). The project, still in the pre-development phase, is based on an Acadiana Outreach initiative to combat Lafayette’s shortage of affordable housing. Its sponsors hope to fund the development almost entirely through a combination of public sources: state and federal grant allocations, only some of which has been secured thus far, as well as some $20 million in federal tax credits it plans to apply for in August. If granted, the tax credits would then be sold to private investors for up-front capital (see Funding chart, Page 10). If all goes well, the development could break ground by early 2011 and open for business sometime in mid-2012.
Its proponents say it could be nothing short of transformative for the area — that it will be held up as a national model for publicly supported smart growth revitalization. Says Greg Gachassin, president and founder of The Cartesian Company, a real estate development and public finance company serving as the lead consultant on the project: “It’s never been done like this in a community of 200,000 people, not [one] that will make this kind of impact and use all of these different sources leveraged together. Not to this degree.”
The planned 118-unit complex — dubbed Joie de Vivre — will rent one, two and three bedroom apartments exclusively to low-income workers making no more than 60 percent of Lafayette’s annual Area Median Income (a requirement of the federal aid).
Based on Lafayette’s current AMI of $57,500, rent for the lofts will range from approximately $550 to $765 a month.
UL architecture professor Hector LaSala, a member of Acadiana Outreach’s board of directors and one of the visionaries behind the project, says the project will effectively extend downtown into the Mills Addition neighborhood — bringing young residents and active commerce with it. City leaders have long stressed the need for more housing downtown as the last piece in completing its rebirth as a vibrant community center.
More residents will create demand for a variety of retail businesses, the argument goes, and push back against downtown’s crime, litter and other nuisances.
The private sector has been slow to answer the call, LaSala says, because of the complications associated with developments in a dense urban area like downtown compared to the relative ease and low cost of building in the suburbs. “For us, we see this project as being capable of really changing our downtown and taking it to the next phase,” LaSala says. “Because once you do one [housing development] and it’s successful, I think the private sector will come and start developing. So we’re going to set a standard.”
|Joie de Vivre's lofts will sport a contemporary, open layout.|
Joie de Vivre was designed by a team that included architect Glenn Angelle and engineer Andre Montagnet working alongside representatives of the UL School of Architecture: professors LaSala and Corey Saft and graduate student Tim Dumatrait. Architectural renderings depict a sleek, modernist-style building with lateral windows and inset balconies. The apartment interiors sport a contemporary, open layout, with sliding walls and stainless steel kitchen appliances. The designers also hope to have Joie de Vivre become one of the first Leadership in Energy and Environmental Design certified developments in the state, an energy efficiency designation that will mean a substantial savings in utility costs for renters.
“Young people, buppies and yuppies are gonna fill up that place,” says Sylvia Cluse, referring to the abbreviations for black urban professionals and young urban professionals. Cluse, one of the co-chairs of Le Centre Coterie who owns an out-of-operation business on Simcoe Street she is currently trying to restore, says the development could go a long way in helping area businesses thrive. “I think people love the downtown area, there’s no doubt about it. They’re gonna make this thing overflow. I think it’s going to be beautiful.”
Not everyone in the neighborhood is gushing over the plans. In fact, several residents have serious doubts about the development’s success, expressing their sincere distaste for its hackneyed name — Joie de Vivre — and a soulless international style aesthetic they say would fit better in Stalinist-era Russia.
“We don’t want it,” exclaims Ty Hanes, who admits he has not seen the plans for the project. Hanes says he has little faith in a publicly funded project sponsored by Acadiana Outreach, especially one that will consist solely of rental units. “If there’s no ownership, there’s no pride,” he insists.
Hanes has been at the forefront of an organic revitalization of Mills Subdivision. Last year, he and his partner, Kenneth Delavergne, bought two mid-century brick warehouses on Simcoe Street, and converted them into two new businesses: Hanes’ used and antique furniture store called retromodern and The Alamo, a work studio co-op for artists. This was their vote of confidence in the neighborhood, after five years of living in a restored Craftsman-style house on South Pierce and Simcoe. Just last week, Hanes and Delavergne signed papers to purchase the old St. Joseph Diner building at the corner of Simcoe and Madison streets. They’re planning their own development with the building — tentatively named Madison Square — that will consist of a two-story townhouse alongside three loft apartments and a restaurant.
Most of his apprehensions are rooted in a lack of faith in Acadiana Outreach, which he and other residents feel has only served to hold back progress in the neighborhood. Several point to arrest reports from the five “sober living” halfway houses that Acadiana Outreach now operates in the neighborhood, and the public relations nightmare that occurred last year when it was noted that alleged Baton Rouge serial killer Jeffery Lee Guillory had, on prior arrest, listed 124 Buchanan St., the location of Acadiana Outreach Center’s main campus, as his address.
“They are basically telling everyone here,” Hanes says, “that has worked to turn this neighborhood around over the last four years not to bother. All [this development] is going to do is turn [our progress] back around.”
Sonya LaComb-Boudreaux has a similar point of view. She and her husband Henry, an architect, live in the historic Brandt House, an Acadian-style home turned New Orleans town house by William Brandt, one of Lafayette’s first clerks of court, that lies one block over from the proposed site of Joie de Vivre. The Boudreaux home dates back to the 1820s, and the couple, who have spent the last 12 years renovating it, have identified it as the third oldest structure in Lafayette. Sonya and Henry fear how the impending development may impact the historic integrity of the neighborhood.
“I kind of feel like the Wetlands right now,” says Sonya, a museum consultant with expertise in antique interiors. “We’re in this kind of fragile ecosystem, and here comes this, not an oil spill, but here comes this development that threatens a lot we’ve been working toward.”
“We’re not afraid of this development,” Henry contends. “We’re not afraid of progress in our neighborhood. We’re a little afraid of what this could turn into. … And we’re a little afraid of the architecture.”
Ken and Andrea Veron, who own a restored Colonial Foursquare house on South Pierce that dates back to 1910, say they are cautiously optimistic about the development. “If they do exactly what they say they’re going to do, it can only be good for the neighborhood,” says Ken, who works as a real estate agent. However, as co-chair of Le Centre Coterie, he has been pushing for a little more assurance: he wants Acadiana Outreach and its partners to sign a Community Benefits Agreement that will bind them to certain obligations regarding security and maintenance of the development. “I’m just very leery about a bait and switch,” he says, noting that apartment complexes have a tendency to age quickly. “There’s concern that the business plan will change and that the neighborhood will be adversely impacted.”
Consultant Gachassin, who is packaging the financing for Joie de Vivre, says that both he and Acadiana Outreach are open to the idea of a Community Benefits Agreement, but that any contract would have to be reviewed and approved by all affected parties, including that of private investors.
In response to security concerns, Gachassin has stressed Joie de Vivre will be run by an experienced outside property management firm that will screen all tenants with a credit and criminal background check, hire professional on-site security, and enforce a strict rental agreement policy with zero tolerance for drugs and other criminal activity.
Joie de Vivre has its roots in another proposed development from the Acadiana Outreach Center. In 2007, the center, under the direction of then-CEO Valerie Keller, announced plans for The Lofts at Olivier. The center envisioned converting a brick warehouse it was leasing at 114 Olivier St. into a 30-unit development that would blend subsidized apartments, including space for the center’s clients, with market-rate lofts and shared artist work spaces.
In an e-mail to The Independent Weekly, Keller writes that the plan reflected the center’s expanding mission to address more than just the immediate needs of people living on the street. “We realized we needed to move further upstream,” she writes, “to focus on the root causes of why people weren’t self-sufficient — one of those is simply a lack of housing that’s affordable and near transportation and employment. And wanted to transition from charity more to a ‘social enterprise’ — providing market-based solutions to social problems.”
U.S. Sen. Mary Landrieu pledged her support for the project after visiting Acadiana Outreach’s campus and the surrounding neighborhood, citing the project’s aim to renew an area that had already been designated as a “qualified census tract” and “HUBzone qualified” neighborhood in need of revitalization, by the federal government.
To date, Landrieu has helped secure $992,500 in federal funds through the Transportation Housing & Urban Development’s Economic Development Initiative fund. In addition, the state Legislature (supporters include Sen. Mike Michot and Rep. Page Cortez) has thus far committed $265,000 in seed money to the project.
Gachassin says that to date, Acadiana Outreach has put approximately $125,000 of the funds toward acquisitions, while the rest of the money is still in the bank. Once an environmental clearance passes — Acadiana Outreach is still waiting on the Louisiana State Historic Preservation Office to complete its review — it will be cleared to begin using the rest of the funds to complete acquisitions. All professional fees tied to pre-development on the project are being covered by a $180,000 loan taken out by Acadiana Outreach.
This year, the center is requesting another $2 million from both the state and federal government for Joie de Vivre.
That request reflects the broadening scope of the project. Keller says that last year, after consulting with national development firm McCormack Baron Salazar, the center realized its plans were not financially sustainable and therefore shifted focus.
Enter Gachassin and The Cartesian Company. With his years of experience in both public financing and affordable housing developments (Gachassin is the prior chairman of both the Louisiana Housing Finance Agency and the Lafayette Public Trust Financing Authority), Gachassin formed The Cartesian Company at the start of this year to help foster developments looking to leverage a variety of public and private finance options. To make the center’s project viable, Gachassin recommended expanding the scope, moving retail space to front visible thoroughfares like Congress Street, and subsidizing the development up front through the sale of tax credits to private investors.
Here’s how the new business model will work:
This August, Acadiana Outreach will apply for a total of $20 million in federal tax credits, to be taken in $2 million increments over 10 years, from the Louisiana Housing Finance Agency. If successful, the center can then sell the credits for approximately $15 million in up front capital to finance Joie de Vivre. Upon the sale of the credits, the buyer, known as an investor or limited partner — generally a major bank or other Fortune 500 company like Capital One or Dow Chemical — will then own 99.9 percent of the housing development. The limited partner maintains majority ownership through a mandated 15-year period. (It takes 10 years for the company to recoup its investment in the tax credits). As the project sponsor, or general partner, Acadiana Outreach will keep a .1 percent ownership interest. After that initial 15-year period is up, the limited partner typically donates or sells the property back to the general partner. Because the project will be seeking an extended use option with its tax credits, the development will still have to keep rent at fixed rates and abide by other federal compliance regulations for an additional 15 years.
Acadiana Outreach can still make money off the deal. Federal and state mandates do, however, limit profits for almost all parties involved. General contractors are limited to a 6 percent profit. On the overall development, a maximum 15 percent “development fee” can be shared between the sponsor, Acadiana Outreach, and any partners or consultants upon completion of the project (in this case, a total of $3 million).
In addition, based on an agreement hammered out with a limited partner upon sale of the tax credits, Acadiana Outreach also will likely receive a portion of monthly revenue profits. This profit is capped at 25 percent of total obligations for debt service and all overhead costs, to be split between the two partners.
“From a banking standard, it’s an extremely thin margin at the end of the day,” Gachassin says. “But in these situations, you’re able to be thin because there’s such a great demand, and you don’t have as much risk as you would in a more market rate environment.” As a 501c3 nonprofit, any money Acadiana Outreach collects through the development goes toward supporting the organization and its other initiatives.
Already, Joie de Vivre has garnered letters of support from a who’s who list of influential Lafayette organizations, including the Community Foundation of Acadiana, the Lafayette Land Revitalization Authority, the Stuller Family Foundation and the Lafayette Economic Development Authority.
Cathy Webre, executive director of Downtown Development Authority, says the issue has not been presented before her board of directors yet, but that she has sat down with both project developers and concerned residents.
“The devil’s always in the details,” she says. “There are some concerns from residents about security and how this will fit in a very historic neighborhood, but it’s hard not to like the concept and see that this has at least the potential to be something really great for both the neighborhood and for downtown.”
Current Acadiana Outreach CEO Rick Newton, who took over from Keller at the beginning of the year (Keller still works for AOC as a contract consultant) says that the center is encouraging concerned residents to work with the organization. Due to concerns expressed about a perceived lack of communication from the center, Newton has touted having an open door policy.
“January is when we really went into pre-development,” he says. “That’s pre-development, and we’re having our formal presentation to the Coterie, the first public presentation, here at the beginning of May. That’s a relatively short period of time.
“I understand folks’ concerns, I really do,” he continues. “I’m aware of the history. All I can tell you is that I’m committed to being an active part of this community. We’re looking for ways to involve the community. I’m committed to going and being an active part of the Coterie, being a regular participant and looking for ways to increase the dialogue. I would just hope folks would give us a chance.”
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