A state appeals court on Wednesday denied a request to halt the World Trade Center redevelopment in New Orleans, reaffirming a lower court’s decision to let the project move forward while the case plays out.
One of the losing applicants after the city requested proposals for redeveloping the former World Trade Center building at the foot of Canal Street filed suit in Orleans Parish Civil District Court in April 2015, shortly after it was passed over for the $364 million project.
That firm, Two Canal Street Investors Inc., had proposed turning the vacant building into a Hotel Alessandra, but its bid was ranked the lowest of the five proposals submitted to the New Orleans Building Corp., the public-benefit corporation that acts as landlord for the city-owned site.
The winning applicants, the team of Carpenter and Co. and Woodward Design + Build, plan to turn the site into a Four Seasons Hotel and condominiums.
Two Canal Street claims that its offer would have produced more rent money for the city and that city officials violated a state public lease law that requires selecting the highest bidder.
In a separate lawsuit, the company also accuses the consultants who advised a city selection committee and the NOBC board of providing an inaccurate and biased analysis.
The NOBC maintains that it is exempt from the portion of public lease law at issue.
Although Two Canal Street sought to stop Carpenter and Woodward’s redevelopment from proceeding while its case against the city plays out, Civil District Court Judge Tiffany Chase denied the company’s request for an injunction in June, saying that the city did not act improperly, arbitrarily or capriciously.
The company’s separate lawsuit against the city’s consultants — filed last month — seeks monetary damages, not an injunction.
A panel of 4th Circuit Court of Appeal judges — Roland Belsome, Edwin Lombard and Paul Bonin — upheld Chase’s ruling Wednesday.
“The record is rife with evidence that the NOBC through the selection committee reasonably assessed the submissions based on the criteria set forth in the (request for proposals)” and in accordance with legal exceptions, the appellate panel said.
That was a win for Carpenter and Woodward, which intervened as defendants on the original suit and filed a suit of their own against Two Canal Street in October.
“We believe this ruling sends a clear signal that (Two Canal Street’s) suit should be dismissed entirely so that this vitally important and transformative development project can move ahead as planned,” said Greg Beuerman, a spokesman for Carpenter and Woodward.
It also was a win for Mayor Mitch Landrieu, who is working with Sen. Conrad Appel, R-Metairie, to pass a state law that would make it far more financially risky for Two Canal Street to continue its litigation. The Senate passed Appel’s bill 36-1 on Wednesday; it now heads to the House.
“Today’s unanimous ruling by the Louisiana 4th Circuit Court of Appeal represents a clear and unequivocal endorsement of the city’s efforts to transform the iconic property at 2 Canal Street into a Four Seasons Hotel,” Landrieu said. “It recognizes that the lease to Carpenter/Woodward will promote the best interests of the city and that delaying the lease would result in an enormous disservice to the public.”
The 4th Circuit rejected Two Canal Street’s argument that the NOBC can’t claim the legal exemption written into public lease law for public-benefit corporations because City Hall is really the entity leasing out the property. The court said the lease issued for Carpenter and Woodward expressly defines the NOBC as the landlord.
Nor did the judges see any problem with the fact that city employees made up the selection committee that advised the NOBC on its choice, saying the law doesn’t call for a specific process by which public-benefit corporations must solicit or evaluate bids.
Finally, as the project’s backers have noted, “uncertainty created by an injunction at this stage could result in hesitation among the project’s lenders and investors, which, in turn, could materially alter the economics of the project as a whole,” the three judges said. “A potential delay in this development continues to allow an enormous public asset to lie dormant and not generate any revenue for the city.”
Charline Gipson, an attorney for Two Canal Street, said getting an injunction is not critical to her client’s case.
Their “litigation is concerned with the loss of revenues to the taxpayers of New Orleans in the amount of $60 million in the first year of the lease and $2.4 billion over the (99-year) lease term,” Gipson said.
“The courts are capable of determining whether the existing law has been violated at trial,” she added.
The case is scheduled for trial in October.
Follow Jessica Williams on Twitter, @jwilliamsNOLA.