The $1 billion River District project being built adjacent to the Ernest N. Morial Convention Center has won a key federal grant that developers said would bring them closer to starting construction on promised subsidized housing.
The River District said Monday that it was among the 19 successful Louisiana applicants to secure money from a $230 million Community Development Block Grant Disaster Recovery program aimed at supporting affordable housing development in the wake of hurricanes Laura, Delta and Ida.
The grants are administered by the Louisiana Housing Corporation, which chose the winners after taking into account factors like proximity to urban centers, the number of subsidized units and the energy efficiency of the proposed construction.
A key grant
The River District housing project — called The Batture Apartments — was awarded almost $15.5 million for its proposed development of 220 residential units, half of which are promised to qualify as "workforce" or "affordable." The development consortium, which is led by local builder Louis Lauricella, said the apartment complex will cost about $95 million and will require other public subsidies to be completed.
“The CDBG funds awarded by LHC represent one critical component of the capital stack, moving our team closer to beginning residential construction at the River District," said Michael Meredith, CEO of VPG Enterprise, an affordable housing construction firm that is part of the River District consortium, via an emailed statement.
The River District project, which envisions an entire new neighborhood rising on more than 50 acres of public and private land over the next decade or so, has broad support from city and state officials.
The consortium won the competitive bid to be master developer of the project three years ago, largely on a promise to emphasize housing over other aspects of the neighborhood, such as office space or entertainment events. The initial promise was to build 1,100 residential units, half of which would be designated as affordable or workforce housing.
Shell's Colette Hirstius laughs with Louis Lauricella, of Lauricella Land Company, LLC. during a press conference at the Ernest N. Morial Convention Center in New Orleans, Thursday, Sept. 14, 2023. Shell announced they will move from Poydras Street to new offices in a future mid-rise building in the planned River District neighborhood upriver from the Convention Center. (Photo by Sophia Germer, The Times-Picayune)
The project has run into some controversy after City Council officials questioned developers' transparency and level of commitment to delivering public good in return for public subsidies, which include hundreds of millions of dollars in sales tax rebates, below market land leases and direct grants.
The development so far includes plans for a 142,000-square-foot office building that will be Shell Oil's new New Orleans headquarters and a Topgolf entertainment complex. Nearby is the planned 1,000-room Omni hotel, which like the other projects will have varying levels of private investment and public subsidies.
A deal was reached in April between the city and developers that included a commitment by the River District consortium to build at least 300 housing units within four years.
City Council member Lesli Harris, whose district includes River District, said the initial housing project would be a good start toward the developers' goal of 900 total housing units.
"I am thrilled that (the River District consortium) will be one step closer to completing this affordable housing milestone," she said via email. "Projects like this assist with improving the quality of life in our city by supporting our efforts to decrease our unhoused population and providing our residents with safe, affordable housing."
More money needed
“The River District's residential component has always been and remains at the forefront of our commitment to develop a neighborhood for all," Meredith said, who added that he looked forward to breaking ground on the project next spring.
However, a spokesperson for River District made it clear that there is still some way to go to fully finance the residential project, which would be located next to the Shell Oil office building on a block bounded by Henderson, Tchoupitoulas and Race Streets.
The rest of the funding will come from the sale of Low-Income Housing Tax Credits, a state program, debt and direct investment by the development group, according to a spokesperson for the River District. She could not provide any further breakdown on the funding mix.