The Bureau of Governmental Research again is urging the city to abandon its efforts to find a developer to lease the former World Trade Center building at the foot of Canal Street and instead to sell the long-vacant property.
In a report released Tuesday, the nonpartisan agency said that with three attempts to lease the 1960s building having failed since the late 1990s, “it is time for the city ... to consider taking a different approach: an outright sale of the building.”
The riverfront property is widely considered to be one of the most valuable sites in New Orleans.
The BGR recommendation comes a few months after the last development plan for the building collapsed and as the city prepares to issue another request for proposals for development of the site.
Negotiations between the city and Gatehouse Capital, which had proposed transforming the 33-story building into a W Hotel and apartments, broke down in April after the two sides couldn’t come to an agreement on the building’s value.
That deal, like two before it, involved negotiating a 99-year lease on the building, which the city owns through the New Orleans Building Corp.
BGR said the city should instead set a minimum price — of about fair market value — for the building and then sell it to the highest bidder that accepts, as part of the deal, a redevelopment timeline with penalties to keep redevelopment on track.
The group made a similar recommendation in 2009, shortly after the developer the city had chosen at that time withdrew his interest.
BGR said a sale, through an open bid process, would be more transparent than the RFP process and would remove the possibility of political influence in deciding who wins a lease. It also would “address the credibility problem that has arisen from the previous failed development attempts,” BGR said in the report.
Other advantages to a sale would be that the building would be placed on the tax rolls and the city would be paid for the building up-front. The city’s last appraisal pegged the building’s value at $23.5 million.
The BGR report said there are some possible drawbacks to a sale.
“First, some might argue that the city and NOBC would surrender control over the redevelopment of a key downtown site,” the report said. “By awarding the building to the highest bidder, they might miss out on a more catalytic or desirable project.”
A sale also would seem to take away the option of receiving the recurring revenue that a lease arrangement would generate.
But BGR said past lease failures should propel the city to move in a new direction. It also said that by investing its sale proceeds, the city could bring in annual revenue comparable to what a lease would generate.
A sale “offers the best chance to receive full value for the property, reduce long-term risk and place the property on the tax roll,” BGR said.