The city’s legal spat with a losing bidder on the World Trade Center redevelopment project is expected to come to a head Wednesday as state lawmakers consider the final draft of a bill originally designed to foil a lawsuit over the project.
Separately, an Orleans Parish Civil District Court judge will consider whether to dismiss a losing bidder’s suit entirely.
The lawsuit has been holding up progress on a more than $350 million project.
The proposed state law, which Mayor Mitch Landrieu backed, initially sought to make lawsuits over public redevelopment projects more financially risky to those filing them and to give city officials wide latitude in choosing preferred developers.
But in a blow to Landrieu’s office, a House committee last week limited that proposed latitude and softened language that would have required big upfront payments from firms that challenge city decisions in court.
The legislative bill and the motion for dismissal are both aimed at Two Canal Street Investors Inc., a firm that bid and lost on the World Trade Center revamp last year, then challenged the city’s selection process in court.
Two Canal’s plan to turn the vacant 33-floor World Trade Center building at the foot of Canal Street into a Hotel Alessandra was ranked the lowest of five proposals submitted to the New Orleans Building Corp., the public-benefit corporation that acts as a landlord for the city-owned site.
The winning bidders, Carpenter and Co. and Woodward Design + Build, proposed to turn the building into a Four Seasons Hotel and condominiums.
Two Canal claims its offer would have netted the city more rent money and that officials violated a state public lease law that requires selecting the highest bidder.
In a separate lawsuit, Two Canal also accused the consultants who advised the city’s selection committee and the Building Corp. board of providing them an inaccurate and biased analysis.
The city maintains that the Building Corp. is exempt from the portion of the public lease law at issue.
Meanwhile, Carpenter and Woodward’s attorneys claim that Two Canal is a sham operation and that its owner, Stuart Fisher, is a con man simply out to collect a check. Fisher bought Two Canal for $10 last year, days after its proposal was rejected, just so he could file a suit, attorney Russ Herman said.
In a motion that will be taken up by Civil District Court Judge Tiffany Chase on Wednesday, Herman argues that Fisher’s suit should be dismissed.
Two Canal’s attorneys counter that Carpenter and Woodward have tried and failed previously to get the suit tossed out using similar reasoning. Nothing has changed since then, attorney Charline Gipson said: Two Canal is still a legal corporation that has the right to sue and be sued.
Gipson said the Landrieu-backed bill, which passed the Senate last month and is up for consideration in the House on Wednesday, is an attempt to change a law that the city already has broken.
Senate Bill 447, filed by Sen. Conrad Appel, R-Metairie, originally would have required those seeking to challenge such projects to put up a hefty amount of cash before their suits could proceed. But the House’s Civil Law and Procedure Committee revised it significantly last week.
Rather than requiring legal challengers to put up an amount equal to or greater than the rent the city would have received over the first few years of the contested lease, as Landrieu and Appel proposed, the bill now does not specify a minimum.
However, it would speed up the timeline for the resolution of such lawsuits, mandating that cases go to trial within two months of their filing and that judgments come within 20 days after the trial has ended. Any appeals must also be processed quickly, the bill states.
The city and Carpenter and Woodward have accused Two Canal of purposefully dragging out the lawsuit in order to delay the project.
“Clearly, members of the (House) committee understand what’s at stake both with the Four Seasons project and with other projects that may soon be on the horizon,” Carpenter-Woodward spokesman Greg Beuerman said after the committee’s vote.
In another win for Two Canal, the bill now would require public benefit corporations tasked with choosing property developers to consider the proposals that generate the “highest return of revenue and benefits” to the city.
The committee also deleted language Landrieu wanted that would have allowed quasi-city agencies to use their “discretion and business judgment” when choosing developers.
Removing that language “is a critical standard to protect the public fisc,” Two Canal attorney Daniel Davillier told committee members.
If the full House passes the bill Wednesday, it would become law upon the governor’s signature.
Follow Jessica Williams on Twitter, @jwilliamsNOLA.