For Sale 931 Canal Street New Orleans, Louisiana 70130 131,000sf on 8 Floors $7,850,000 Richard Juge, CCIM, SIOR Robert L. Hand, MBA RE/MAX Commercial Brokers Inc. 3331 Severn Avenue-Suite 200 Metairie, LA 70002 Office: 504-838-0001
Executive Summary 931 Canal Street 931 Canal Street is a 131,891sf eight-story masonry building constructed in 1909 and has been completely gutted in anticipation of use as a 204-room Hilton hotel which did not materialize, resulting in foreclosure in 2009. The property is within the Biosciences District, and strategically located in the French Quarter. Favorable financing options still exist, including 26% Federal Historic Tax Credits, 25% State Historic Tax Credits, Façade Donation Deduction and Gulf Opportunity Zone Bonds. The structure is steel, reinforced concrete frame with concrete floors and a terracotta and brick facade. The building was occupied as offices until early 2004 when the interior demolition commenced, and has full floors on levels one through three, with a first floor height of 23 feet with a mezzanine, and is C-shaped from the fourth floor up around a light court facing south. A Phase-1 was completed in 2003, advising no further study was needed. Interior demolition work is mostly complete, with reconstruction expenditures as of July 2005 exceeding $2,000,000 which was estimated at 14% of the entire work for the hotel project. Following Hurricane Katrina in 2005, $205,000 was spent in electrical upgrades for a new 550 volt three phase transformer. Work ceased in 2007. Since foreclosure, the exterior elevator has been removed and there is currently no access above the first floor. Zoned CBD-3, the property could be used as a multifamily, assisted living, senior housing, hotel, apartment hotel, condominiums, bank, or hospital. Appraised and for sale at $7,850,000. 2
931 Canal Street Is Located At the Corner of Canal Street and Burgundy Street, Adjacent to the Ritz-Carlton Hotel 3
Canal Street View 4
Burgundy Street View 5
Location 931 Canal Street is Strategically Located Between the Downtown Business Area and the French Quarter 6
Location 931 Canal Street The property is only six blocks to the south of Interstate 10 and located on Canal Street, a six-lane boulevard type street running from the Mississippi River through the Central Business District, on the edge the French Quarter. 7
Location Adjacent to the Ritz-Carlton Hotel 8
Improvements By Previous Owner Since 2004 At the exterior, washing of brick and terra cotta masonry is approximately 75% complete at the Canal Street side and approximately 60% complete at the Burgundy Street side. The subcontractor has cut out loose mortar joints and terra cotta material at approximately 90% of the Canal Street and Burgundy Street sides. The first floor facade along Canal Street has been removed and is presently shuttered with plywood. At the interior, demolition is mostly complete. At the basement level, underground drain tile is installed and plumbing is approximately 80% complete with the two lift stations remaining. At the first floor, structural steel clips have started for the new second floor framing. Installation of second floor framing remains. Reinforcement of the first floor structural beams has started at the north side. At upper floors, work is progressing typically from the top downward, In the attic areas, duct and drain piping rough-in has started. At the eighth and ninth floors, gypcrete has been installed. Fire protection has started at the ninth floor but not yet at the eighth floor. Rainwater piping is being installed from the roof downward. At the seventh floor, gypcrete is complete. Mechanical and electrical rough-in has not yet started. The roof cover is a probable composite system over a lightweight concrete deck. Upper floor windows are original with double heavy wood frames with fixed glazing. In the basement area, $137,839 was required for clean-up post Katrina. The new electrical in the basement comprises a 200 amp box, two 400 amp boxes, and a 225 amp box. 9
First Floor 10
Basement 11
First Floor Composite Photograph 12
Basement Composite Photograph 13
Permitted Uses Zoned CBD-3 Permitted CBD-3 Uses: Residential Planned Communityover 41 units requires 400sf/unit Apartment Hotels Art Gallery Museum Bank Bar Business or Professional School Health Club Hospital Nursing Home Offices Parking Garage Restaurant Retail 14
Nearby Businesses 15
Favorable Financing For Developments The Gulf Opportunity Zone Act of 2005 (GO Zone) provides federal and state tax incentives for business development in parishes most affected by hurricanes Katrina and Rita. 50 Percent Bonus Depreciation Qualified property in the Louisiana GO Zone is eligible for an additional one-time, up-front 50% bonus depreciation. http://led.louisiana.gov Tax Exempt Bonds In lieu of using bonus depreciation on investments, most developments in the Louisiana GO Zone qualify for tax exempt bond finance (subject to availability of bond capacity). http://www.crt.state.la.us/hp/gozone.aspx New Market Tax Credit Investors in qualified projects can obtain a federal income tax credit of 5% to 6% of the amount invested for each of the years the investment is held, for up to seven years of the credit period. http://led.louisiana.gov/come-to-louisiana/business-incentives/federal-business-incentives/newmarkets-tax-credit.aspx Zero Percent Capital Gains Rate A business that holds an asset for at least five years does not have to pay taxes on the profit of its sale. Low Income Housing Credit Ten-year credit for owners of newly constructed or renovated rental housing who set aside a number of units for lower income residents for a minimum of 15 years. The state must allocate a portion of its annual cap. 16
State Commercial Historic Tax Credits To be eligible for the 25% State Tax Credit: 1. The building must be a contributing element to a Downtown Development District (DDD) or a Cultural District. 2. The building must be used for an income-producing purpose. 3. Eligible expenses must exceed $10,000 4. No taxpayer or entity affiliated with that taxpayer may receive more than $5 million in credits for rehabilitation work within a particular DDD. 5. Rehabilitation must meet the Secretary of the Interior s Standards for Rehabilitation. 6. Any unused credit may be carried forward for up to five years. 7. The credit may be sold to a third party under certain circumstances. Applicants are advised to consult their tax professional in this case. Source: http://www.crt.state.la.us/hp/statecommercial09.aspx 17
5 Year Property Tax Abatement 5 Year Property Tax Abatement On Improvements To Structures: When renovation has not yet begun, five-year property tax abatement on improvements to structures is available, with a five-year option for renewal. Existing structures in downtown, historic, or economic development districts are eligible. Spanish Town and Beauregard Town are included. Approval must be obtained from the State Board of Commerce and Industry and the East Baton Rouge Metropolitan Council. For additional information on rules and regulations contact John Jernigan, 342-5402. Development Impact Fee Waivers: Traffic and sewer impact fees can be waived for eligible downtown development projects. Some restrictions apply. Contact the Downtown Development District at 225.389.5520. 18
Federal Historic Rehabilitation Tax Credit The federal program just increased the tax credit from 20% to 26% for rehabilitation expenditures to a certified historic structure in disaster areas. The building must be depreciable property rental or commercial. Restoration must be substantial exceeding the adjusted basis of the property (purchase price less value of the land) or a minimum expenditure of $5,000 (if the property has been depreciated). Rehabilitation expenditures that qualify include items directly related to the repair of the structure (architectural fees, engineering fees, paint, wiring, plumbing, roof repair, etc). Tax credit can be carried back three years and forward 15 years. If a building is not located within an historic district and was constructed prior to 1936, it may qualify for a 10% tax credit if restoration is substantial exceeding the adjusted basis of the property (purchase price less the value of the land). Source: http://www.nps.gov/hps/tps/tax/download/intro_main_street.pdf Contact National Park Service, Department of Interior: (202) 513-7270 19
Site Plan 931 Canal Street 931 Canal Ritz Carlton Hotel 20
Nearby Apartment, Hotel & Condo Developments. Address Detail Info Price 1600 Canal For sale; 121,000sf, needs renovation $4,500,000 1501 Canal Street-Texaco Building 108 hotel rooms $22,000,000 1201 Canal Street-Krauss Building 111 apartments & 122 condos $58,000,000 800 Common 112 apartments $24,000,000 1441 Canal Bioinnovation Center $38,000,000 Saenger Theater-Rampart at Canal $38,000,000 1031 Canal 300 apartments 210 Baronne 244 apartments 225 Baronne 393 apartments $150,000,000 Source: Downtown Development District 21
Nearby Property Sales Address Sale date Square Footage Sale Price Price/SF 203 Carondelet-Latter & Blum Building August 1998 135,000 $5,715,000 $42 200 Carondelet-Bank One Headquarters July 1998 209,000 $4,000,000 $19 610 Poydras-Wyndham Hotel October 1999 55,000 $2,450,000 $44 333 St. Charles-Hotel Monaco 221 Carondelet-Security Homestead Building June 2000 225,000 $4,575,000 $20 May 2000 36,000 $1,300,000 $36 22
Survey Description 931 Canal Street Property Description: Beginning at the corner of Canal and Burgundy Streets; thence measure along Canal Street one hundred eight feet, one inch and three lines (108'1"3"'); thence on a line towards Iberville Street and parallel with Burgundy Street one hundred forty-four feet and two inches (144 '2"); thence on a line towards Burgundy Street and parallel with Canal Street seventeen feet eight inches (17'8"); thence on a line towards Iberville Street and parallel with Burgundy Street seven feet (7'); thence on a line towards Burgundy Street and parallel with Canal Street twelve feet (12); thence on a line towards Iberville Street and parallel with Burgundy Street eight feet (8'); thence on a line towards Burgundy Street and parallel with Canal Street seventy-eight feet, five inches and three lines (78'5"3"'); thence along Burgundy Street one hundred fifty-nine feet, one inch, one line (159'1"1"'), to the point of Beginning. According to a plan of survey by J. J. Krebs & Sons, C.E.&S., dated November 6, 1964, the said above described property is shown to have the same location and the same measurements as above set forth. According to survey made by Richmond W. Krebs, PLS, dated March 19, 19.99, revised March 30, 1999, said portion of Square 94 has the same measurements and location as above set forth. All as more fully shown on survey made by Richmond W. Krebs, PLS, dated February 15,2000. Site dimension 108.086' x 159.84' x various dimensions Site area 17,200 square feet Building area 131,891 square feet Flood Zone A-I Property taxes in 2007 were $87,477. 23
Contacts Offered exclusively by: Richard Juge, CCIM, SIOR Office: 504-838-0001 Robert L. Hand, MBA Cell: 504-289-8172 roberthand@cox.net RE/MAX Commercial Brokers, Inc. 3331 Severn-Suite 200 Metairie, LA 70002 Office: 504-838-0001 24