Karen Kidd Apr. 3, 2016, 8:35pm


NEW ORLEANS – “Frivolous” and “desperate” is how the New Orleans mayor’s press secretary sums up Two Canal Street Investors’ latest lawsuit over losing its bid to develop the World Trade Center.

However, an attorney for Two Canal Street Investors (TCSI) told the Louisiana Record the new litigation is necessary because the nature of the claims and the difference in defendants.

The lawsuit Two Canal Street Investors filed last week in Orleans Civil District Court condemns the selection process by which New Orleans awarded the development to Four Seasons New Orleans. The latest lawsuit also names as defendants members of the real estate consulting team who advised the city in that process. They are the Stone Pigman law firm, attorneys Scott Whittaker and Angela Crowder, consulting firm Jones Lang Lasalle and consultants Greg Hartmann and Judd Stensrud.

“The lawsuit filed last week appears to be a frivolous and desperate attempt to further disrupt the redevelopment of the former World Trade Center site," Hayne Rainey, Mayor Mitchell J. Landrieu's press secretary, said in an email to the Louisiana Record.

Rainey repeated the city's position that the process was open and competitive and that the developer selected, Four Seasons New Orleans, has an impressive past performance history and will help the city meet Disadvantaged Business Enterprise participation requirements.

"The Carpenter/Woodward (Four Seasons) proposal maximizes the NOBC’s return on investment by creating good-paying jobs - including more than 1,600 temporary construction jobs and 450 permanent jobs - and will be a demand generator that attracts further investment across our city," Rainey said.

Charline K. Gipson, an attorney with the New Orleans Davillier Law Group that represents Two Canal Street Investors, countered that her client had little choice in the matter.

"The most recent lawsuit was necessary because the nature of the claims and the defendants are different," Gipson said in her own email to the Louisiana Record.

The new lawsuit deals with tort claims of negligent misrepresentation and intentional misrepresentation, which makes it different from an earlier Two Canal Street Investors lawsuit, Gipson said. In the first matter, defendants in the latest lawsuit were supposed to provide the city's selection committee and other decision makers with complete and correct information, Gipson said.

"However, Stone Pigman and JLL breached that duty, and their breach caused substantial damages to TCSI," Gipson said. "Accordingly, defendants are liable to TCSI for the damages TCSI has sustained as a result of their material misrepresentations, whether negligent or intentional, including, but not limited to, loss of business profits excess of $1.5 Billion over 99-year lease, costs incurred and other tort damages."

By contrast, Two Canal Street Investors' lawsuit filed last spring and set to go to trial in October deals with violations of public lease law resulting from "the unlawful public lease procurement process with respect to the former World Trade Center property," Gipson said.

Two Canal Street Investors isn't contemplating any addition lawsuits but may amend the two it already is pursuing, Gipson said.

The development of New Orleans' 33-story World Trade Center, located on the riverfront, was leased last year to the development team led by Carpenter & Co. of Massachusetts and Woodward Interests of New Orleans. Two Canal Street Investors, having lost its bid to develop the property, filed its first lawsuit against the city and New Orleans Building Corp.

Last week's lawsuit against the real estate consulting team who analyzed the five hotel proposals and advised the city claims that team was far too selective.

"The city consultants made decisions about what information to gather about each RFQ/RFP respondent and their respective public property lease proposals, chose what information to emphasize and highlight and decided what information or facts to exclude in its work produce, presentation and briefings to the selection committee and key decision makers," the latest lawsuit says. "This allowed the city consultants to effectively steer the selection committee."

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