The River District has hit two milestones that developers say are key for progress on the $1 billion project, which envisions a new entertainment-focused neighborhood built on land owned by the Ernest N. Morial Convention Center.
Louis Lauricella, who leads the River District Neighborhood Investors consortium, said that the group has finally secured the financial backers for the Shell Oil office tower that now looks likely to be the first part of the project to be completed.
The convention center’s oversight board also approved new lease terms that clear the way for the Louisiana Music and Heritage Experience to occupy the plot at the downriver end of the 47-acre site earmarked for the museum.
An exterior rendering of the proposed $160 million, 120,000 square foot Louisiana Music and Heritage Experience museum in the River District in New Orleans.
The cost of the 147,000-square-foot Shell building, which is expected to be more than $130 million, will be covered by debt financing from Southern Realty Trust Inc. of West Palm Beach, Florida and equity from Capro Capital of Las Vegas, Lauricella told the convention center board on Thursday.
“It was a long, arduous process, but we got there,” he said. “We’re really getting some traction and building some momentum.”
Lauricella’s group was picked to lead the project in March 2021 and has been going through a lengthy negotiation with the convention center over the terms of the deal, getting state and local legislative approval for infrastructure improvements and tax breaks and finding suitable tenants.
Shell Oil was the first River District deal put in place almost 18 months ago, though it went through a controversial approval process with the City Council over a $21.6 million tax break and the council’s oversight of the development more broadly.
Dallas-based Cypress Equities, the other River District consortium lead investor, said in a news release on Tuesday that Gensler would be the architect and has designed a “glass curtain wall building” to reflect New Orleans’ history and culture.
“The architecture incorporates elements inspired by the Mississippi River’s shipping industry, featuring faceted metal panels and a dynamic palette of bronze, metal, glass, and concrete,” Cypress said.
Some shrinkage
The Cypress news release said the eight-story building would cover just under 124,000 square feet, which would be significantly smaller that the original 147,000 square feet envisioned.
Cypress also said the first floor of the building would be occupied by 6,407 square feet of restaurant space. Shell originally said it would occupy 120,000 square feet for its employees, who numbered about 400 at the time of the announcement in late 2023. That would have meant it would be leasing less than half the 308,000 square feet it currently occupies in the Hancock Whitney building.
River District spokespeople were not immediately available for further comment.
The music museum still has some way to go before it secures its financing, said Chris Beary, chairman of the group leading that project.
The museum will cost an estimated $165 million to complete and will require approval of about $40 million by the Louisiana Legislature when it is next in session this spring, he said. The capital outlay request has the backing of 23 legislators, including state senator Royce Duplessis and representative Mandie Landry, both of whom represent New Orleans districts.
The museum will require the issuance of $80 million in revenue bonds and private donations to make up the balance of financing, Beary said.