The historic Circle Food Store, a landmark at St. Bernard and North Claiborne avenues, was purchased by businessman Sidney Torres IV in an Orleans Parish sheriff’s auction Thursday.
Torres, who gained local prominence as a trash company owner before becoming an increasingly prominent player in New Orleans’ real estate scene and the host of a CNBC reality show about investment property, bought the building along with a partner, Fouad El-Jaouhari, who owns Magnolia Discount stores throughout the New Orleans area, for $1.7 million at the foreclosure auction.
The pair aim to keep the site in the grocery business, but with a model more akin to the individual stalls and vendors of the St. Roch Market than a traditional store.
They said they plan to reopen the store, which has been shuttered since last year, by the end of 2019.
But Torres said he understands the importance of the store to the neighborhood and to the city’s African-American community as a whole and that he wants input before committing to a plan for the iconic store.
“I know it is sensitive and it is something I want to preserve, and my hope is that the community feels that with every decision I make I do it in a way that respects that history,” Torres said.
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The store for many years was a hub for the nearby 7th Ward community and one of the oldest African-American-owned businesses in the city. But after a much-heralded return five years ago following extensive renovations to repair damage from Hurricane Katrina, it folded last year amid financial problems, huge debts, the costs of recovering from renewed flooding and lawsuits between members of the family that owned it.
In the end, the store ended up unable to pay off about $8 million in loans that owner Dwayne Boudreaux Jr. took out to buy and renovate the property. The loans, many of them originally issued by the now-failed First NBC Bank, ended up in the hands of another financial firm which foreclosed on the property earlier this year, setting the stage for Thursday’s auction.
Torres was the only outside buyer in the auction, though he won only after a brief few rounds with the financial firm that now holds much of the debt owed by the store. That bidding added $200,000 to the purchase price, which started at $1.5 million.
Bidding by the financial firm that filed for foreclosure is fairly common in such auctions, said Mike Sherman, a real estate attorney who was not involved in Thursday’s sale. Debt holders often put in their own bids to make sure they will get the money they want out of the auction, reasoning that if they end up purchasing the property they can turn around and sell it again, Sherman said.
Noting the size of the building and the extensive renovations it went through before reopening in 2014, Torres said the price he paid was a good deal.
“For the price we got it at, we couldn’t even build half of it,” he said.
Torres specifically mentioned seeking produce vendors and butchers to fill the historic building and said he’ll encourage businesses he already has a relationship with to set up shop there as well. That could include the mother-son team that owns Morrow’s, a restaurant in a building he owns on St. Claude Avenue, and the Element Beverage Co., which makes fruit-lemonade drinks.
Torres said his role would be to handle the real estate, while El-Jaouhari would handle the store's operations. He said he'd like the store's name to remain the same, if possible.
Torres said he had been in talks to purchase the store from the debtholder outright but chose not to go that route. In part, he said, that’s because he didn’t want to be the one to finally foreclose on Boudreaux’s business and also because of the various lawsuits related to the property, the Circle Food Store company and its debt. By purchasing the store through the foreclosure process, the legal entanglements on the property itself are cleared away.
The partnership with El-Jaouhari came after the pair realized they were both interested in the property and decided to team up rather than bid against one another, Torres said.
“We’re going to put it back the way it was,” El-Jaouhari said. “The proper way, the old-school way it was meant to be.”
The history of the store was key to catching Torres’ interest. The new plan for the store will take into account its place in the neighborhood, both as a grocery and as a pillar of what had once been a thriving black business district along North Claiborne Avenue, Torres said.
Torres acknowledged his concept for Circle Food is a bit more high-end than the stores El-Jaouhari now runs, but he said his partner has a keen sense of what kinds of products will sell in various neighborhoods.
“You want to make sure that you’re working within the confines of what the neighborhood wants and what they need, but you want it to go beyond the neighborhood and bring in people from beyond the neighborhood,” he said.
Before reopening, Torres said, he wants to discuss the area's drainage issues with Mayor LaToya Cantrell's office. The store gained a spot in the national memory during Hurricane Katrina when an image circulated widely showing floodwaters reaching several feet up its signature arches.
The purchase comes as the traditionally black Claiborne corridor and 7th Ward are rapidly gentrifying. Torres is white, and his purchase of Circle Food Store could become another flashpoint in the debates over race, income and displacement in the city’s neighborhoods.
Asked about those controversies, Torres acknowledged that he will have to work to gain acceptance in the community. He hopes to do that through discussions with residents over the coming months, he said.
“I know I’m going to have to work and earn the trust of neighbors and everyone else because it is a historic and iconic property. I know that’s going to be very important,” he said.
For generations, thousands of New Orleans families went to Circle Food Store for their everyday needs, from groceries to school uniforms.
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