South Market District proposal will appear before Industrial Development Board Tuesday

South Market District, the proposed apartment and retail project near the future Loyola Avenue streetcar line, will appear before the Industrial Development Board Tuesday to ask for a property tax abatement to help the project get off the ground. The project is coming together a little more slowly than expected, but it has grown in scope since it was announced in December 2010.

The developer, the New York- and New Orleans-based Domain Cos., had originally hoped to build 450 apartments with 125,000 square feet of retail space in a sea of parking lots downtown. But Domain was able to acquire additional land in the area, so it now plans to develop 559 apartments and 178,213 square feet of retail space that it hopes will provide more traction to a burgeoning area of downtown.

Matt Schwartz, a principal in the Domain Cos., said that Domain hopes to close the financing and begin construction this summer on the first phase of the $69.1 million South Market District project. Schwartz hopes to announce the first-phase retailers early in the summer.

The timing for later phases of the project will depend on how solid a response the retailers get. "The demand is certainly there on the multi-family side. I think the demand is there on the retail side. Project timing will really be determined by the pace at which we get retailers to commit to the leases," Schwartz said.

Today's Industrial Development Board meeting is the opening shot for discussion about possible incentives from the city on the project, and evaluating the impact of the project -- and any tax breaks -- on the city's finances.

According to a project summary provided by the IDB, Domain has asked the city to make a payment in lieu of property taxes, or "PILOT," of $114,000 a year for 15 years, for a total of payment of $1,710,000 to the city. The $114,000 per year is slightly higher than the property taxes that are paid on the undeveloped land.

Schwartz said that Domain's actual proposal calls for annual increases in the PILOT of 3 percent or the change in the consumer price index, whichever is greater. That means the amount that Domain is proposing to pay the city is higher than what the summary sheet depicts.

The first phase of the project will be funded with about $8.4 million in equity contributions from the owners, about $55 million in loans, $4.9 million in equity investments from the federal new markets tax credits program, and $806,626 in Louisiana Enterprise Zone rebates.

Domain has also applied to the state for money that could help cover the costs of widening sidewalks along Girod Street to create a more pedestrian-friendly environment. Domain got permission from the city to close a lane of traffic along Girod and make other streetscape changes in the area.

South Market District LLC is 32 percent owned by CKL Associates LLC, which is wholly owned by business man Paul Flower, whose company, Woodward Design Build, will be the general contractor on the project.

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South Market District proposal will appear before Industrial Development Board Tuesday