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Joy Theater

By Crescent Growth Capital, LLC on October 31, 2011

1200 Canal Street; New Orleans, LA

The Joy Theater, the newest of New Orleans’ downtown movie palaces, was for decades a beacon illuminating the intersection of Canal Street and Elk Place. From 1946 moviegoers enjoyed the latest Hollywood offerings, projected onto a huge single screen, from either ground-level or balcony seating. The Joy’s bold Moderne design, which made extravagant use of neon and floodlighting, exemplified the hopeful spirit of post-World War II New Orleans.

The Joy’s heyday would last a brief fifteen years. The decades following the theater’s completion witnessed a sea-change in moviegoing habits, both in New Orleans and around the country. Sustained disinvestment in urban downtowns was accompanied by the development of suburban multiplex theaters, television grew to dominate the entertainment landscape, and the single-screen movie palace became as obsolete as vaudeville. Despite these trying circumstances, the Joy Theater nonetheless persevered until finally closing in 2004, its Moderne-style beauty remaining essentially intact.

Though project sponsors concluded that the Joy was no longer viable as a movie theater, they perceived unmet market demand in New Orleans for a cutting-edge, versatile, medium-sized entertainment venue. As an architecturally-arresting mecca for live music and special events – akin to the House of Blues but possessing superior amenities, increased programming flexibility and vastly greater levels of visitor comfort – a restored Joy would dramatically punctuate the reviving downtown theater district, complementing the touring show focus of the soon-to-reopen Saenger Theatre across Canal Street.

Crescent Growth Capital was retained to model and close an intricate $5.0 million New Markets Tax Credit financing that leveraged state and federal historic tax credit equity, state Live Performance Infrastructure tax credit equity and state workforce credit proceeds to generate over $5 million in net subsidy to help realize this $12 million project. CGC and its consultants also successfully applied to the Louisiana Office of Community Development and secured $3 million of D-CDBG funds to close the project’s final financing gap.

Posted in Past Projects | Tagged Adaptive Re-use, Cultural Economy, Federal Historic Tax Credits, Historic Preservation, Historic Rehabilitation, Live Performance Tax Credits, New Markets Tax Credits, New Orleans, Post-Katrina Recovery, Public-Private Partnerships, State Historic Tax Credits

TCI continues expansion at Port of New Orleans

By Crescent Growth Capital, LLC on September 23, 2011

New Orleans CityBusiness, September 23, 2011

The Port of New Orleans has entered into a 15-year lease agreement with Transportation Consultants Inc. for a lease at the Governor Nicholls Street Wharf. The new deal will lead to a $20.5 million investment from the locally based shipping logistics company to expand along the Industrial Canal.

TCI has already built a new headquarters and packaging facility on France Road Parkway. Founder and CEO Jack Jensen said the agreement with the port is the culmination of a plan started four years ago to expand the value-added industry along the Industrial Canal. Its initial investment will have created 60 jobs by the end of the year, Jensen said, and the planned expansion will add 20 more positions for freight-forwarders, stevedores, rail operators and vessel crews.

The TCI expansion is also expected to triple the volume of 20-foot equivalent units (TEUs) handled along the Industrial Canal. According to a release from the company, the container count along the canal is expected to increase more than 30,000 by 2013 once France Road Parkway Properties builds a 150,000-square-foot warehouse that TCI plans to lease.

In addition to the new warehouse, Jensen said TCI plans to lease and develop the Governor Nicholls Wharf as an overflow export facility to handle resin packaging, expand an imported granite distribution facility and explore additional port property on Alvar Street.

Posted in News Articles | Tagged Logistics/Warehousing/Transport, New Markets Tax Credits, New Orleans

St. Margaret’s Daughters Home

By Crescent Growth Capital on September 8, 2011

301 N. Jefferson Davis Pkwy; New Orleans, LA

Mercy Hospital New Orleans was founded in 1924 and relocated to the Mid-City neighborhood in 1953 (pictured above is the original main facade of the 1953 hospital building). For over fifty years this facility was a principal institutional actor and employment center within both the Museum-City Park Cultural District and the Mid-City National Register Historic District.

Subsequent to the Katrina-induced levee failures in 2005, Tenet Healthcare – which had been operating the facility as Lindy Boggs Medical Center – opted not to reopen it.

In 2007, a demolition permit was secured by the hospital’s new owners; however, their plans for a mixed-use town center stalled. Three years later, in May of 2010, Crescent Growth Capital arranged an NMTC financing on behalf of St. Margaret’s Daughters Home to purchase the entire blighted, abandoned facility.

The redevelopment of the former Mercy Hospital/Lindy Boggs Medical Center in New Orleans by St. Margaret’s Daughters Home is a multi-phase project whose first manifestation will be the adaptive re-use of the hospital’s medical office buildings to accommodate a new permanent nursing home facility for St. Margaret’s.

Crescent Growth Capital structured and closed a $21.3 million New Markets Tax Credit qualified equity investment to fund both St. Margaret’s acquisition of the entire former hospital and a portion of the construction cost of its new nursing home within the facility. Subsequent phases will rehabilitate the remainder of the former Mercy facility for medical uses.

In addition to structuring the initial financial closing in 2010, Crescent Growth Capital, in conjunction with its consultants, secured Louisiana State Historic Tax Credit eligibility for the entire former Mercy/Lindy Boggs complex, garnering millions in historic tax credit equity for the project. The first state historic tax credit financing for the project was accomplished in September of 2011, generating $4 million for St. Margaret’s and enabling the definitive start of construction on Phase I.

CGC, in conjunction with its consultants, also secured for St. Margaret’s $3 million in CDBG funding, in the wake of a successful application to the State of Louisiana’s Project-Based Recovery Opportunity Program (“PROP”). Financial closing on these funds was achieved in July of 2011.

Posted in Past Projects | Tagged Adaptive Re-use, Healthcare/Wellness, Historic Preservation, Historic Rehabilitation, New Markets Tax Credits, New Orleans, Non-profits, Public-Private Partnerships, State Historic Tax Credits

Downtown New Orleans’ Joy Theatre to be restored

By Crescent Growth Capital, LLC on July 16, 2011

The Times-Picayune, July 15, 2011

The Joy Theatre, one of four historic theaters in downtown New Orleans, will reopen as a live music and entertainment venue early next year after a $5 million renovation by NOLA Theatre District LLC, the development company announced Friday.

NOLA Theatre District purchased the Canal Street theater, closed since 2003, from ESE Enterprises, a family trust with more than a dozen members, for $1.5 million after negotiating for more than two years, said Neal Hixon, a developer and partner in the development company.

“We’ve spent a long time working on this project,” said Hixon, who was a lead developer in the effort to transform the Arabella Bus Barn on Magazine Street into a Whole Foods Market. “We think it’s going to be a great addition to Canal Street.”

The Joy Theatre closed more than eight years ago, finally succumbing to the competition from megaplexes with stadium-style seating and a dozen or more screens.

When it reopens next year, it will no longer be competing with those theaters, Hixon said. The Joy will be reborn as a live music venue. The theater also will host comedy tours and be available for private functions and corporate events, Hixon said.

Current renovation plans call for keeping the theater’s exterior intact, restoring it to the way it looked on opening day in 1947, Hixon said. But the inside of the theater will be completely remodeled.

“It’s a complete gut and redo. It’s been neglected,” Hixon said. “We’re going to take it down to its bare walls.”

NOLA Theatre District LLC, a team comprising developers, Hixon and Joe Jaeger, and business owners, Allan McDonnel and Todd Trosclair, plan to use a variety of tax incentives, including state and federal historic tax credits and the Louisiana Live Performance tax credit, to complete the renovation.

McDonnel’s company, The McDonnel Group, will act as general contractor on the project. AllStar Electric, which Trosclair owns, will oversee electrical repairs. Jaeger’s The MCC Group will oversee the design and installation of the mechanical systems.

The Joy Theatre opened in 1947 at the corner of Elk Place and Canal Street and was hailed then as “New Orleans’ newest and most modern film temple.” The 1,250-seat, three-screen theater at one time contained a soundproof, glass-enclosed “crying room” for parents with babies. The theater showed first-run movies every decade since it opened, culminating with “Drumline” in 2003.

The redevelopment of the Joy will continue a recent spate of improvements to that section of Canal Street, which has spent years in decline, said Kurt Weigle, president and chief executive officer of the Downtown Development District. Weigle pointed to the 1201 Canal condominiums, directly across the street from the Joy, the recently opened New Orleans BioInnovation Center, about two blocks away and the in-repair Saenger Theatre, positioned diagonally from the Joy, as signs of improvement.

“This is part of a clear trend of revitalization,” Weigle said.

The purchase of the Joy, along with construction at the Saenger, also means two of the four historic theaters in downtown New Orleans are on the road to restoration. Efforts to renovate and reopen the other two, the Orpheum Theater and the Loews State Palace Theater, have stalled.

“We don’t expect that all four of the historic theaters along Canal Street will be brought back just as they were in their heyday,” Weigle said. “But the important thing is that they will be brought back in a way that’s going to contribute to Canal Street.”

Weigle said the Downtown Development District is working to have all four theaters reopen, each with a distinct and different purpose so they don’t cannibalize one another.

Posted in News Articles | Tagged Adaptive Re-use, Cultural Economy, Federal Historic Tax Credits, Historic Preservation, Historic Rehabilitation, New Markets Tax Credits, New Orleans, Post-Katrina Recovery, Public-Private Partnerships | Leave a response

Jindal signs four-year extension of Louisiana Historic Tax Credit program

By Crescent Growth Capital, LLC on July 7, 2011

The Times-Picayune, July 7, 2011

Standing in the art deco entryway of the iconic Saenger Theatre, Gov. Bobby Jindal on Thursday signed a pair of bills that extend tax credits for the restoration of certain historic structures, including the Canal Street performance venue.

“These historic tax credits will help us to revitalize and save this heritage of historic buildings for our children and the future,” said Jindal, who was flanked by New Orleans Mayor Mitch Landrieu, state lawmakers and members of the New Orleans City Council.

Completing a massive reconstruction of the Saenger, which opened in 1927 as a vaudeville playhouse before morphing into New Orleans’ preeminent movie palace, hinged largely on the authorization of Senate Bill 63 by Sen. Ed Murray, D-New Orleans.

“Had that piece of legislation not passed, this project probably would have shut down,” Landrieu said.

The measure extends through 2016 a program that provides income and franchise tax credits worth 25 percent of the cost of restoration projects in downtown development and “cultural products districts.”

Developers in March halted work on the $45.8 million Saenger project after investors expressed concern that the tax credit program, which had been slated to expire Dec. 31, would not be renewed. Builders are counting on about $8 million in historic credits to restore the theater, which has been shuttered since it flooded after Hurricane Katrina. City Hall has earmarked another $13 million in block grants for the job, with investors chipping in the balance.

In light of the uncertainty, private lenders requested that all transactions related to the project be halted until the tax credit issue was resolved.

Confident that Jindal and state lawmakers would support the extension, the city agency overseeing the renovation agreed in mid-March to advance the Saenger team $1.1 million to ensure the swift resumption of work. Landrieu publicly backed the move by the board of the Canal Street Development Corp.

Developers anticipate closing on the entire financing package by October, with the theater expected to open in late 2012, mayoral spokesman Ryan Berni said. Officials expect the advance payment from the development corporation to be repaid, he said.

Fifty-five projects worth an estimated $291 million — and carrying $73 million in associated tax credits — are pending under the tax credit program, state documents show. Since it began in 2002, 124 projects have been awarded more than $135 million in tax credits.

Those projects have generated more than $650 million in investment statewide and created 11,000 construction jobs and 5,700 permanent jobs, Jindal said.

“Analysts tell us that for every $1 we invest in this program, we generate $3.22 in economic activity and revenue,” he said.

Jindal on Thursday also signed House Bill 348 by Rep. Walt Leger III, D-New Orleans, which extends to 2016 a similar tax credit program for owner-occupied residential properties. The measure lowers from $20,000 to $10,000 the minimum qualifying rehabilitation cost and increases the credit rate to 25 percent for most projects and 50 percent to the restoration of blighted properties that date back at least a half-century.

Jindal cast the bill as a blight-fighting tool, and Brad Vogel of the local office of the National Trust for Historic Preservation called the residential tax credit “crucial” to continuing rebuilding efforts.

“As different neighborhoods pick up steam, it will help to make renovation a more viable option,” he said.

Posted in News Articles | Tagged Adaptive Re-use, Cultural Economy, Historic Preservation, Historic Rehabilitation, Louisiana Cultural Districts, Post-Katrina Recovery, State Historic Tax Credits | Leave a response

Former Belleville School to become apartments for the elderly

By Crescent Growth Capital, LLC on June 6, 2011

The Times-Picayune, June 6, 2011

A historic and dilapidated former Algiers school is getting new life with plans to convert the long vacant building into apartments for senior citizens and the disabled.

The former Belleville School, portions of which have been in disrepair for decades, is set to undergo a $13 million renovation to create 52 assisted-living apartments. Construction could be complete by February, said Sean Arrillaga, a vice president for St. Luke’s Living Center in Algiers, one of the partners in the renovation deal.

Most apartments will be about 550 square feet, which Arrillaga said is larger than the current market average.

The group closed on the school site at 813 Pelican Ave in May, and demolition of the interior has begun, he said. Arrillaga declined to identify the other investors in the project, but said the project will qualify for state and federal historic tax credits, along with new markets tax credits.

The group decided to renovate the Belleville School because of the surrounding neighborhood, Arrillaga said. He called Algiers Point a “quaint, historic neighborhood.”

Cecelia Hemelt, who will be the administrator of the 56,000-square-foot property, said the neighborhood is a good fit.

“We really liked the location and the community of Algiers Point,” she said.

Hemelt said the apartments will be geared toward residents 55 and older or high-functioning disabled people. There will be a director of nursing on duty during the day and several aides there around the clock. All rooms will have handrails and other amenities to provide easier access.

Belleville School’s current makeover as an assisted-living facility is just the latest twist in its saga, which includes several failed redevelopments in the past two decades. The school has been vacant since 1987, and through the years developers have envisioned it as condominiums, a hotel and spa, and, in 1989, apartments for senior citizens and the disabled. The main structure of the school — a three-story, red-brick building — was completed in 1898, and wooden annexes were built in 1907 and 1925.

Skip Gallagher, the president of the Algiers Point Association, said the group is excited to finally see some action occurring at the school site after years of watching the building deteriorate. He said an assisted-living facility is one of the best uses for the building, and he doubts it will be a large drain on parking in the surrounding neighborhood, which was a concern of some residents. Gallagher said it would have been far worse if the abandoned building continued to be a blight on the Point.

“For the most part, we’re encouraged by it,” said Gallagher, adding that it’s great to see a historic building salvaged instead of demolished by neglect. “The biggest concern we had was that it wouldn’t happen. That would be criminal.”

Posted in News Articles | Tagged Adaptive Re-use, Federal Historic Tax Credits, Healthcare/Wellness, Historic Preservation, Historic Rehabilitation, New Markets Tax Credits, New Orleans, Post-Katrina Recovery, State Historic Tax Credits | Leave a response

The Keith Corporation Shopping Centers

By Crescent Growth Capital, LLC on May 30, 2011

Claypool Hill, VA; Wilkesboro, NC

In years past, the fate of many a small town was tied to the factory where seemingly all the town’s inhabitants had worked for generations. When the steel mill closed, or the auto plant, or the tire factory, that town changed overnight from a stable, viable place of opportunity to a depressed also-ran.

Nowadays, it is often the shuttered big box chain store that can single-handedly imperil a town’s fortunes, as the tax revenue and jobs the store supported disappears, leaving behind a festering symbol of disinvestment. These dark big boxes, invariably championed prior to their construction as the guarantors of a community’s future, now resist re-use and end up decaying for years after their closure.

Located in the foothills of the Blue Ridge Mountains, the small towns of Claypool Hill, VA (Pop. 1,719) and Wilkesboro, NC (Pop. 3,159) have struggled in recent decades. Rural in character and located at the western fringes of their states, both towns have suffered the loss of major industrial employers to foreign countries. These reversals were compounded by the later abandonment, in each town, of a big box store that had previously provided badly needed employment, tax revenues and essential retail services to these tiny hamlets.

The Claypool Hill Lowe’s Home Improvement and the Wilkesboro Wal-Mart shut their doors years ago; subsequently, town leaders were frustrated time and again as numerous redevelopment efforts fell flat. Finally, the Charlotte, NC-based Keith Corporation stepped into the breach, initially spending over $6 million to acquire the buildings and convert them into badly-needed community retail. The Keith Corporation attracted numerous tenants to the revitalized, formerly single-tenant big boxes, including a grocery store, pet supply and hardware stores, providing badly-needed employment, tax revenues and retail services for their communities. However, two years later the Claypool Hill building is struggling with 55% occupancy, and the Wilkesboro project cannot secure permanent financing. These two structures, both located within “highly-distressed” rural census tracts, are in need of an NMTC subsidy to gain a sustainable footing and realize their full potential.

The Keith Corporation’s commitment to returning the closed stores to commerce constituted rare good news for these regions, as is always true of a $6 million investment made in two highly-distressed, rural locations. The 225-plus construction jobs and 150 permanent positions resulting from the investment signaled better times to come, it seemed.

Nonetheless, the projects had stalled, unable to secure permanent financing. A $10 million NMTC Qualified Equity Investment was structured and closed by Crescent Growth Capital, generating a meaningful subsidy for the two rural shopping centers that will lower total project debt to sustainable levels and establish a solid foundation for continued operations and future expansion.

Posted in Past Projects | Tagged New Markets Tax Credits, North Carolina, Virginia

Belleville Assisted Living Facility

By Crescent Growth Capital, LLC on May 18, 2011

813 Pelican Avenue; New Orleans, LA

Restoring job growth to the nation’s economy is the primary objective of policymakers today, and most economists believe that the most significant opportunities for new employment will be found within the healthcare industry. The boomer generation is aging, and the percentage of the nation’s population that is over age 65 is anticipated to increase appreciably in the coming 50 years, generating steady growth in demand for healthcare. Furthermore, ever-increasing longevity on the part of the nation’s elderly, coupled with the geographical fragmentation of the extended family has meant that demand for assisted living services is growing at an even faster rate than demand for healthcare overall.

Like the nation as a whole, New Orleans is in need of additional assisted living capacity, and, in the wake of Katrina, there is an insufficient supply of entry-level job opportunities available to disadvantaged individuals. Crescent Growth Capital was able to help address both challenges by structuring and closing the financing to fund the construction of the new Belleville Assisted Living Facility. The Belleville ALF will provide 53 badly-needed assisted living units in a 55,000 square-foot facility, while simultaneously creating nearly 50 jobs and returning to commerce a historic but blighted school building in New Orleans’ Algiers Point National Register Historic District.

The Belleville ALF is located on New Orleans’ West Bank, across the Mississippi River from the city’s historic core. Extensive development on the West Bank did not begin until the late 1950s, with the completion of the Greater New Orleans Bridge linking downtown to Algiers. For the next thirty years, the West Bank offered middle-income families new, affordable housing, extensive employment opportunities, and plentiful shopping. Conditions began to sour, however, in the wake of the mid-1980s Oil Bust. In a matter of months, the West Bank suffered tens of thousands of job losses; in the succeeding twenty years, poverty, crime and disinvestment increasingly characterized what had been a stereotypically prosperous American suburb.

Belleville ALF constitutes a significant and visible investment on the West Bank. A former elementary school that had lain dormant for over thirty years will be rehabilitated and restored to commerce. The historic fabric extant on the property will be adaptively re-used, embodying the highest aspirations of the green building movement – as there is no greener building than a re-used building. The region’s shortage of assisted living capacity, acutely felt on the West Bank, will be meaningfully eased by Belleville’s 53-unit facility. Most significantly, nearly fifty new jobs will be created, over half of which will be entry-level positions ideal for the West Bank’s disadvantaged low-income population.

Despite demonstrable demand for additional assisted living units, the New Orleans West Bank is considered a challenging location for market rate investment; conventional lenders had been unwilling to underwrite the entire cost of the Belleville facility. In response, Crescent Growth Capital and the principals of the Belleville ALF project devised a capital stack that took advantage of the location’s existing historic fabric as well as the highly-distressed character of the contemplated investment to integrate federal and state historic tax credit equity with the New Markets Tax Credit financing structure.

The tax credit equity generated by this structure lowered the project’s borrowing requirements and enabled the successful underwriting of a smaller conventional loan. Without the use of tax credit equity, it would have been impossible to secure funding sufficient to complete the project.

Posted in Past Projects | Tagged Adaptive Re-use, Federal Historic Tax Credits, Healthcare/Wellness, Historic Preservation, Historic Rehabilitation, New Markets Tax Credits, New Orleans, Post-Katrina Recovery, State Historic Tax Credits | Leave a response

Central Louisiana Surgical Hospital

By Crescent Growth Capital, LLC on May 12, 2011

651 N. Bolton Avenue; Alexandria, LA

Alexandria, LA is sited on the banks of the Red River, at the geographic midpoint of Louisiana, where numerous north-south highways and rail lines converge and radiate outward in a classic hub-and-spoke array. Despite its central location, this small city of 50,000 – founded in 1818 – has struggled in recent decades to reposition its economy, as its river commerce dwindled, forestry-sector activities declined and England AFB became a casualty of the federal government’s Base Realignment and Closure process. Most recently, this already medically-underserved region braced itself for further hardships, given the planned closure of the state-run Huey P. Long Charity Hospital for the indigent.

In this context, the recently-completed Central Louisiana Surgical Hospital found itself financially stranded, as Alexandria’s struggling economy seriously challenged this new enterprise. CLASH represented a multi-million dollar investment within a severely disadvantaged census tract buckling under a 50.6% poverty rate. Crescent Growth Capital was enlisted to structure an $18 million NMTC financing to save over 150 badly-needed jobs and, by stabilizing the facility’s operations, lay the groundwork for future growth in services and employment levels. The NMTC subsidy permitted the purchase of the state-of-the-art equipment CLASH had been leasing at great cost, significantly lowering operating expenses and ensuring the future of this important facility. The subsidy also provided permanent takeout financing of CLASH’s short-term construction loan.

The NMTC transaction executed by CGC on behalf of CLASH also decisively advanced a key economic development goal of the city: furthering Alexandria’s emergence as a regional medical hub. However, with Louisiana phasing out its longstanding system of state-run charity hospitals for the poor, Alexandria’s medical sector ambitions are at risk. CLASH’s shuttering would have marked a crippling setback, compounding the after-effects of the Long Hospital closure and further eroding already-slumping business confidence. Conversely, the operational stabilization of CLASH will help counteract failing local business confidence, reinforce regional economic development efforts, and save numerous jobs. On the eve of the NMTC financing, 157 jobs were sited at the CLASH facility, including over 100 physicians. With the facility’s employment profile including both high-paying physician jobs and more entry-level support staff, the mixture afforded real employment opportunity to the surrounding low-income community and generated – by supporting the spending within the Alexandria market of dozens of well-paid medical specialists – a good slice of total aggregate demand for the area, catalyzing appreciable indirect job creation.

The impact of stabilizing the new CLASH facility is not only limited to guaranteeing the continued operation of one of Alexandria’s largest employment centers. From its inception, CLASH has taken particular pride in providing high-quality care to patients from the low-income community in which the facility is located, as well as to the surrounding rural communities in which many of the physicians and staff were raised. Already nearly 1 in 5 of CLASH’s patients were impoverished Medicaid recipients – a remarkable statistic for a specialty surgical hospital – and the provision of world-class surgical care to all of largely-rural central Louisiana continues to be a principal objective of the new facility. Desirous of fulfilling both the spirit and the letter of the NMTC program – and with the Long Charity Hospital threatened – CLASH also committed to using the NMTC funding to support a program of subsidized care for the indigent.