NEW ORLEANS – A bill set for hearing before a state House committee later this month, which could cost one company millions of dollars to maintain its lawsuit over the former World Trade Center development, is a self-defense measure, a spokesman for New Orleans' mayor said.
"This legislation intends to clarify the process for public benefit corporations to select a developer and has implications beyond just the redevelopment of the former World Trade Center property," Hayne Rainey, press secretary for New Orleans Mayor Mitch Landrieu said in an email to the Louisiana Record. "It is important that when public procurements take place, redevelopment of public property not be handcuffed by baseless lawsuits."
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 10 a.m. Monday, May 23, in Committee Room 4. 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 New Orleans public development, also would change rules pertaining to the process by which 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 mayor's office has been candid about how closely the city is working in the state legislative process on this proposed state law since it first was introduced into the Louisiana Senate by Sen. Conrad Appel (R-District 9). The bill's sponsor in the House is Rep. Jimmy Harris (D-District 99).
Equally candid have been the comments from legal representatives of Two Canal Street Investors, which is pursuing two lawsuits over its failed bid to develop New Orleans' former World Trade Center. The company's attorneys have maintained S.B. 447 is an attempt by the mayor's office to do an end run around the judiciary.
S.B. 447 does not name Two Canal Street Investors; but if it passes the House and is signed by the governor, the development company would have to post millions of dollars just to maintain its lawsuits.
Representatives of Two Canal Street Investors plan to address a state House committee considering the bill, a company attorney said earlier this week.
The bill has been in the House since April 21 and in the House committee since April 25. Its introduction into the House 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.
Two Canal Street Investors' two lawsuits over the World Trade Center's development both are 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 lawsuit against the city and New Orleans Building Corp, filed last spring, is scheduled to go to trial in 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.