Louisiana Record

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Bill that could cost Two Canal Street Investors millions scheduled for May 23 House hearing

By Karen Kidd | May 11, 2016

NEW ORLEANS –  Representatives of Two Canal Street Investors plan to address a state House committee considering a bill that could cost the company millions of dollars to maintain its lawsuit against the city of New Orleans over development of the World Trade Center, a company attorney says.

"Hopefully, the right thing happens," Charline K. Gipson, an attorney with the New Orleans Davillier Law Group, said in an email to the Louisiana Record. "We plan to speak in opposition for the reasons previously shared."

The mayor's office did not respond to a request for comment.

The Louisiana State House Committee on Civil Law and Procedure currently is scheduled to conduct hearings on four pieces of legislation, including Senate Bill 447, beginning at 10 a.m. Monday, May 23, in Committee Room 4.

Senate Bill 447 does not name Two Canal Street Investors, the losing bidder suing the city of New Orleans, but the development company would have to post millions of dollars just to maintain its lawsuit should the legislation ever be signed by the governor. The bill would require a developer to post cash or security to maintain a lawsuit against the city and the New Orleans Building Corp., the public benefit corporation responsible for developing city-owned property.

The bill, which would apply to any such bidder in a similar city development, also would change rules pertaining to the process public benefit corporations may award leases. Current law does not require public benefit corporations to use a standard public bidding process to award a lease, but does require a lease award provide for a fair and equitable return of revenue. In another change, the bill also would remove the current "fair and equitable return of revenue" language for such awards.

The bill has been in the House since April 21 and in the House committee since April 25. What little House activity there has been followed a near unanimous vote in the Senate. With 36 yeas, the Senate passed the bill one vote shy of unanimous. The only nay vote was cast by Sen. Karen Carter Peterson (D-District 5), chairwoman of the Louisiana Democratic Party. Sens. Jack Donahue (R-District 11) and Eric LaFleur (D-District 28) were absent from the vote.

Peterson has not responded to multiple Louisiana Record requests for comment.

The bill was introducted into the Senate by Sen. Conrad Appel (R-District 9). The bill's sponsor in the House is Rep. Jimmy Harris (D-District 99).

S.B. 447 clearly is not getting the same traction in the House as it got in the Senate. The bill spent only approximately two weeks in the Senate, from April 5 to April 20, but now has dwelled longer than that in the House committee.

Two Canal Street Investors has maintained the mayor's office is attempting an end run around the judiciary by orchestrating the Senate bill. For its part, a spokesman for New Orleans Mayor Mitchell J. Landrieu in previous comments to the Louisiana Record was quite candid about the mayor's part in developing the new legislation.

"We’re working with Sen. Appel on this legislation, which intends to clarify the process for public benefit corporations to select a developer," Landrieu's press secretary said shortly after the bill was introduced into the Senate. "It also clarifies the appeal process in the event a party challenges the selection of a developer so as not to permit an unreasonable delay of an approved project."

Two Canal Street Investors is pursuing two lawsuits over the World Trade Center's development, both filed in Orleans Civil District Court. The older of the two is against the city and New Orleans Building Corp. while the second lawsuit names members of the real estate consulting team who advised the city in that process. The named defendants in that case 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 against the city and New Orleans Building Corp., filed last spring, is scheduled to go to trial on Oct. 24.

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.

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