Spurred by rising demand for luxury digs and a flood protection agency's need for cash, real estate developers are turning to the New Orleans lakefront as a new target for upscale residential construction.
At least four condominium buildings are among projects proposed or in early planning stages for sites near both the Orleans Marina at West End and South Shore Harbor Marina in eastern New Orleans.
If the projects come to fruition, they will be the first substantial condo developments built on the New Orleans lakefront since Hurricane Katrina in 2005.
"We haven't done much in the way of new supply in a long time," said local real estate analyst Wade Ragas. "Perhaps the time has come for another round of construction."
For decades, two high-rises along Lake Marina Avenue near the western edge of Orleans Parish dominated luxury condominium choices in the lakefront area.
Most floors of the 18-story Lake Marina Tower, built in 1982, and the neighboring 14-story Marseilles condominiums, dating to 1973, have sight lines above the flood protection levee, allowing views of the Orleans Marina and Lake Pontchartrain.
Several low-rise complexes in the area also feature water views from their upper floors, including the Lighthouse Harbor Condominiums that were built in 1985 and stretch along Lakeshore Drive at the eastern edge of the New Basin Canal.
Now, developers have proposed two condo projects and a restaurant for the western side of the New Basin Canal, while yet another developer plans a seven-story condo building just south of the Orleans Marina.
The New Basin Canal sites are all part of the "non-flood-protection assets" owned by the Orleans Levee District, which has signed agreements with the developers allowing them to seek city approvals for these projects:
• The owners of Brisbi's Lakefront Restaurant & Bar, which opened on Lakeshore Drive in 2013, plan to build 16 condos in four two-story buildings, on a currently vacant tract just behind the Sailboat Bay Apartments.
• Slightly to the north, Crescent City Marine Group Inc. plans to convert the Schubert's Marine fuel dock and store into a restaurant.
• Steps away from Schubert's Marine, Oceana USA LLC, led by businessman Richard Sackett, plans what Sackett describes as "a substantial residential project" on what has long been a boat mooring site. He said details of the condominium project will be available soon.
Meanwhile, just south of the marina, developer Samuel Markovich aims to begin construction in the spring on a seven-story, 11-unit luxury condo building on a narrow tract of land that stretches from Robert E. Lee Boulevard to Lake Marina Drive. Markovich said pre-sales will begin in January for the glass, steel and concrete condos that will stand just west of Lake Marina Tower.
The lakefront condo craze does not end there. Several miles to the east, another developer plans a luxury residential project a stone's throw from South Shore Harbor Marina. Stewart Juneau, the developer of the Ritz-Carlton New Orleans hotel and numerous Gulf Coast condo projects, said he is working with administrators at nearby Lakefront Airport "to determine what we can actually build" on a 14-acre strip known as the North Peninsula.
The Orleans Levee District, which owns the property, has given Juneau permission to explore development options for the site. And while he said it is too soon to discuss details, other condo projects he has spearheaded along the coast may hold clues to his plans.
Juneau's Harbourview Village at Historic St. Andrews, in Panama City, Florida, for instance, features 116 condos in an eight-story waterfront building that is among the most upscale residences in the area.
Quest for cash
The current surge in lakefront development proposals stems largely from the cash-strapped condition of the authority that manages the Orleans Levee District-owned properties that are not dedicated to flood protection.
That agency has increasingly found itself scratching for money as post-Katrina flood protection improvements continue to gobble up the district's budget.
Wilma Heaton, who chairs the Non-Flood Protection Asset Management Authority, has led a charge to find new sources of revenue for the agency, and that has resulted in numerous requests for proposals to redevelop Levee District real estate. One such request produced the largest commercial construction project currently underway on the district's lakefront property.
Lakeshore Landing is a multiple-use entertainment project that encompasses the site of the former Bally's Casino, adjacent to South Shore Harbor. There, Roland and Mary von Kurnatowski, who own Tipitina's music club and the Orpheum Theater, are renovating the former casino and its outlying areas into a pavilion and concert area for live music and entertainment events, with food service and outdoor decks overlooking the marina.
The von Kurnatowskis are also building a fuel dock and shore shop to serve tenants of the marina. And they built a large, covered boat slip to house a restored World War II PT boat, whose owners began offering rides to the public this year.
The von Kurnatowskis are investing upward of $13 million into Lakeshore Landing, which they hope to complete by next fall.
Roland von Kurnatowski said they pursued the project for some of the same reasons that they took on the renovation of the Orpheum Theater after it was devastated in the Katrina flood.
"It's a chance to reclaim some local assets that need to be brought back," he said.
Von Kurnatowski also has renovated a former hangar at neighboring Lakefront Airport into offices for his Tipitina's Foundation.
Heaton said the push to redevelop available Levee District properties for commercial use is long overdue. "Our lakefront is terribly underutilized, and we have opportunities to do some good projects here," she said.
Lakeshore Landing followed on the heels of a $19 million restoration of the Katrina-damaged Lakefront Airport as the Levee District turned to the South Shore Harbor Marina and Orleans Marina areas for new opportunities.
Seeking more proposals
Heaton said the recent demolition of nine boathouses near the Orleans Marina has opened the way for more development at West End, and she expects that Lakeshore Landing and other projects will draw new attention to South Shore Harbor Marina, which is now 65 percent occupied.
The Levee District also sought proposals for lakefront sites that lie in the six-mile stretch between the two marinas, she said. That produced, among other things, the opening of the Bird's Nest Cafe in the Lake Vista Community Center.
In addition, Heaton said, the district will seek proposals for the site of the former Naval Reserve facility next to the Seabrook Bridge along Lakeshore Drive. Condos or restaurants are possibilities for the nine-acre site, she said.
While some Lakefront projects are in early planning stages and may face financing and regulatory hurdles, the condominium proposals could be well-timed. Condo development is exploding in the local area, driven in part by demand from investors who plan to put their units to work housing visitors.
Investor demand for Airbnb rentals rose sharply in some parts of New Orleans after the city tightened enforcement of a ban on such rentals in the French Quarter.
The opportunity to own an income-producing property in a prime area not only prompted a rash of new luxury condo construction in the Central Business District, Garden District and Marigny/Bywater neighborhoods, but it has pushed prices on the condos as high as $750 a square foot.
Real estate analyst Ragas noted that building on the New Orleans lakefront may be more expensive than in the downtown area because of the need for special storm-resistance features, including elevating bottom floors high enough to escape a potential storm surge. Such higher-risk properties also may face challenges in getting insurance.
But Ragas pointed out that, around the country, residences with "water views" are in demand, and if developers begin to enlarge the inventory of condos on the local lakefront, investors may be enthusiastic.
"I believe that over time you'll see much higher prices on the lakefront," he said.