NEW ORLEANS – The trial date is set for a lawsuit that challenges New Orleans' lease to a Four Seasons developer of the vacant World Trade Center tower but that developer is moving ahead with work on the project, a spokesman said.
"Our strategy is to aggressively defend our legal claims to the fullest extent of the law," Greg Beuerman, spokesman for the Carpenter-Woodward litigation team, which works with developer Four Seasons New Orleans, said in a Louisiana Record interview. "We believe the plaintiffs' claims are baseless and are not in good faith."
Four Seasons New Orleans is moving ahead with its plans to begin World Trade Center construction and renovation this spring, despite the Oct. 24 court date set by Orleans Civil District Judge Tiffany Chase. The case before her is brought by Two Canal Street Investors, a losing bidder in the 33-story building project. Two Canal Street claims the process by which New Orleans accepted Four Seasons' proposal was too secretive, biased and a clear violation of public lease law.
Chase previously has been quoted saying she may order New Orleans to scrap the 99-year lease granted to Four Seasons and restart its search for a developer. However, Chase also has said Four Seasons can move ahead with the project as the case progresses.
Last winter, a city-appointed committee, New Orleans Building Corp., considered proposals from five national and local hotel-residential developers. Acting on analyst reports that said the Four Seasons' proposal would provide the city with the greatest economic benefit, they selected Four Seasons New Orleans' $360 million proposal for the riverfront property. The proposal includes a Four Seasons hotel and condominiums by Carpenter & Co. of Cambridge, Massachusetts and New Orleans-based Woodward Interests.
The proposal by Two Canal Street Investors, partnered with Woodbine Development Corp. of Dallas, Monday Properties of New York and Washington, D.C. and Valencia Hotel Group, was for a $228 million renovation of the World Trade Center. That proposal would have included 318-room Hotel Alessandra and 240 apartments.
Two Canal Street filed suit the following April against the city and New Orleans Building Corp. in Orleans Parish Civil District Court. Two Canal Street's lawsuit claims it should have prevailed in the selection process because it offered the highest rent payments to the city. Under Two Canal Street's proposal, New Orleans would have received up to $65 million immediately at closing and more than $3 billion over the life of the 99-year lease.
For its part, the city claims New Orleans Building Corp. is exempt from public lease law and that Four Seasons' proposal will bring in greater economic benefit above and beyond rents paid to the city.
In October, the Four Seasons New Orleans filed its own petition, claiming damages against Two Canal Street.
During a hearing in November, Chase ruled that Two Canal Street won't be awarded the lease even if they prevailed in their lawsuit. Chase said she had the authority to require New Orleans Building Corp. scrap the 99-year lease with Four Seasons and start the selection process anew.
Chase set the Oct. 24 trial date earlier this month.
The Four Seasons team followed up the court date announcement with an announcement of its own, stating that they "welcome the setting of a court date and have great confidence in our legal position."
"With more than $10 million in annual tax revenues, 1,600 construction jobs and nearly 500 permanent jobs, Four Seasons New Orleans represents the largest single private economic development and jobs creation project in the city since Hurricane Katrina," the statement continued. "Our plans anticipated beginning construction in late second quarter of 2016 and the litigation has not changed our timing or plans."
With testing and design already underway, preliminary work will begin in the next three months, according to the statement.
It probably is too early to expect lessons out of this case.
"We don't really have a comment regarding this question at this time," Beuerman said. "Our focus is to continually move this important project forward and to bring significant new economic benefits to the city and its residents."