After a 16-year-old mortgage comes due, the Lafayette Neighborhood Economic Development Corporation appears poised to regain ownership of the Evangeline hotel downtown. By Nathan Stubbs
As Nathan Thornton describes it, when the city of Lafayette helped work out a deal in 1993 for the state to donate the old Evangeline Hotel to the nonprofit Lafayette Neighborhood Economic Development Corporation and have it redeveloped as low income housing for the elderly, there was little short term gain for LNEDC. “You have to wait 15 years,” says Thornton, a counselor at UL’s Small Business Development Center, “but at some point you’re going to have an asset with value with no debt.”
Dating back to 1928, the Evangeline Hotel downtown is one of the oldest extant buildings downtown. Legend has it that Elvis stayed there while passing through Lafayette in the 1950s before he became a big name act. But by 1993, it was an Asbestos-ridden, dilapidated building abandoned by its most recent tenant, the state Department of Motor Vehicles. Viewing it as a liability, the state contacted the city, and then-Mayor Kenny Bowen helped to broker a deal that included LNEDC, a nonprofit that helps local small businesses secure loans, and prominent New Orleans developer Pres Kabacoff, head of HRI Properties. (Back then former state Rep. Dickie Breaux of Jeanerette was also involved as a partner with HRI.)
At the time an LNEDC board member and its loan fund manager, Thornton has been involved with the deal from the beginning. “The incentive in these type projects was to give to basically a fledgling organization,” Thornton adds, referring to the local economic development corporation.
After 16 years, LNEDC appears poised to regain ownership of the building. The group recently filed for foreclosure against 302 Jefferson Street LLC, the HRI subsidiary set up by Kabacoff and company to manage the property. In September, the court ordered the property be sequestered and that the economic development entity be appointed keeper of the mortgaged property with full power to collect revenues and rentals.
LNEDC attorney Wayne Shullaw says his client is asking for a judgment against 302 Jefferson Street LLC, after which point, the property can move to a sheriff’s sale. Shullaw estimates that could take up to six months. At the same time, however, LNEDC is in ongoing negotiations with 302 Jefferson over ownership and management of the property, which could preempt any foreclosure and public sale.
“We are trying to negotiate an amicable resolution with 302 Jefferson,” Shullaw says, declining to give any specifics on what is being discussed. He did say the matter shouldn’t affect occupants of the Evangeline Apartments. “There will be no interruption in occupancy,” he says. The attached Cite des Arts portion of the building is owned separately and won’t be impacted by any deal on the old hotel.
David Abbenante, president of HRI Management, says his company hopes to be able to keep the historic downtown Lafayette landmark in its extensive property portfolio. “We were interested in purchasing the note at some type of discount,” Abbenante writes in an email, “and or working with LNEDC on that particular property and perhaps other properties in Lafayette. Time will tell if that will work out.”
Currently, 302 Jefferson Street LLC owes the local economic development corporation more than $2.3 million on the property. In June of 1993, the state Division of Administration donated the property, at the corner of Jefferson and Vine streets, to LNEDC. In the Act of Donation, dated June 1993, the value of the property is listed as $45,900. Six months later, in December, 302 Jefferson Street LLC signed a $1.2 million deferred mortgage agreement with LNEDC on the property. Essentially, LNEDC turned the property over to HRI to redevelop as low income apartments. HRI was able to obtain and sell approximately $5 million worth of tax credits through the Louisiana Housing Finance Agency to fund the renovation expenses. (The tax credits were purchased by Premier Bank, which is now Chase.) It qualified for the tax credits by addressing both downtown historic restoration and affordable housing needs.
The mortgage stipulated that HRI would manage the property and pocket all revenue from the apartments for a 15-year period — later amended to 16 years — at which point HRI, or 302 Jefferson Street LLC, would have the option of purchasing the property. Because the purchase price agreed to now totals approximately $2.36 million — a $1.2 million mortgage balance and $1.16 in additional interest accrued at 6 percent a year (HRI also paid a $50,000 sum up front) — most expected the property would eventually revert to LNEDC. The note matured March 1 of this year.
LNEDC Board President Joe Dennis says his organization is interested in taking over the property and also in moving management of the building away from HRI and over to C.S. Management Inc., a local firm that is already handling LNEDC’s other property, Sterling Grove Apartments. Dennis added that any profit generated from the apartments would help fund LNEDC’s small business loans.
Abbenante, meanwhile, is still optimistic HRI will keep some stake in the property.
“We love the property,” Abbenante says. “We love the residents and what’s happened down there. Fifteen years ago, that was kind of a barren end of town, and look how vibrant it’s become now. And our residents I think are part of that. We’re happy to have been a part of it for 15 years and hope we get the opportunity to stay with it.”
MAY 21 Gambit columnist Clancy DuBos writes about the Mother's Day shooting, and how the stages of shock and blame and healing mirror those traveled by the same city following Hurricane Katrina. The city will recover, just as it did following the storm, by reaching out to help the people injured most seriously by the event, DuBos writes. It's how we heal, he says.
MAY 21 Here's a post on the Advocate (but buried on a subpage, not on the front) that reports something Louisiana Voice reported some time ago: a top DOE official lives in Los Angeles and "commutes" to Baton Rouge. The positioning of the story caused a stir on Facebook Monday, with several posters asking if the Advocate was covering someone's hiney. Sentell's stories on DOE are notoriously soft, and this one is no different: don't expect any hard questions in here.
MAY 21 Here's another post from blogger Tom Aswell about the "course choice" program. He's already reported on kids being signed up without their consent or knowledge, and has more here: For example, he tells of a six-year-old who was signed up for high school Latin. He also digs a little deeper into the sister companies of the main one operating in Louisiana; all of them seem to have complaints against them. Stinky.
MAY 21 Given the 80 percent cut in higher ed funding since he's been in office, it's clear Gov. Jindal would rather give tax cuts to out of state companies than have a functioning system, blogger Dayne Sherman argues in this post. The cuts have been such a disaster, Sherman says, that it will take 30 years to fix what's been broken. He says he believes the aim is to shut down most of the schools before Jindal leaves in 2016.
MAY 21 Blogger CB Forgotston says there are too many elections in Louisiana, and they're costing us too much money. The proof is in the pudding: turnout for most of these nonsensical pollings gets worse and worse, CB opines, even as millions of dollars that could be spent on health care or higher ed go down the tubes. The legislature must take action to stem the tide of pointless elections, he says.
MAY 21 Here's an interesting investigative piece by WVUE on the retirement benefits of some Jefferson Parish public employees. According to the story, the taxpayers are paying 100 percent of the retirement contributions of employees who started work prior to a certain date in April 1986 -- and have done for more than 30 years. It costs the parish millions annually, and might not be legal, the story reports.
MAY 21 This post on Bayou Buzz provides insight from Louisiana's intrepid pollster, Bernie Pinsonat, on the winners and losers from this year's legislative session. But to hear Bernie tell it, there's almost nuttin but losers: Jindal, the Republican party, the Fiscal Hawks all get big goose eggs in his win column.
MAY 20 This post on The Lens takes a look at a huge (either $500K or $250K) bill that one NOLA charter now has for school lunches. The RSD says the charter group didn't fill out the proper paperwork for federal reimbursement, but the story details how the RSD didn't ensure the people running the charter had the proper training, despite requests from hapless charter employees trying to fill out forms. Either way, somebody's asleep at the wheel.
David Calhoun and Elizabeth “EB” Brooks are the first two employees of Lafayette Central Park Inc., the nonprofit charged with turning Lafayette Consolidated Government’s 100-acre Johnston Street Horse Farm property into a passive public park. Calhoun was named executive director, and Brooks is director of planning and design.
There will soon be a whole lot of shakin’ going on at Benny’s Sportshack Supplement Depot, a new concept by Opelousas native Benny Nele. Located at 2002 Johnston St., the supplement shop, smoothie bar and café, featuring hot off the press paninis and wraps, plans to open in late May.