Handelman Lofts & Millennium Square involved the adaptive re-use of four historic buildings comprising most of a city block on Oretha Castle Haley Boulevard. The boulevard had bottomed out in the 1990s, and evidence of revitalization was scant when Mr. Miller first eyed the buildings in 2003. Nevertheless, the history and beauty of the abandoned facades were unmistakable, as their proximity to St. Charles Avenue and the CDB suggested opportunity.
At the time, Mr. Miller was uncredentialed in New Orleans, so over the course of several months, he negotiated a joint venture with a local nonprofit and set about planning and executing a redevelopment campaign. The work was arduous: most observers had concluded that the former Handelman’s department store and the adjacent structures, out of commerce since 1968, were simply too far gone to be salvaged. Likewise, the financial partners Miller solicited for investment expressed skepticism about the prospects for the Central City boulevard. But Miller forged ahead.
After obtaining the necessary land use approvals, the development team persuaded the city’s housing department to commit HOME funds to the effort, a local participation which proved instrumental in winning two tax credit awards. The project was gaining traction, but more challenges lay ahead, stemming mostly from the extraordinary cost of reconstructing the degraded and collapsing buildings.
An unwelcome surprise struck when the neighborhood lost it’s “difficult development area” status in 2004, threatening to rob the financing of direly-needed tax credit equity. That crisis was averted through creative legal gymnastics, but meanwhile, an exotic transactional structure chosen by Miller to maximize financial leverage heightened the squeamishness of prospective investors, prompting one to insist on the procurement of an IRS private letter ruling. In a separate theater of operations, one general contractor candidate after another declined the project, or submitted prohibitive pricing. Nevertheless, perseverance eventually carried the day, and in March 2005, Renaissance Property Group closed the LIHTC/HRTC financing, with WNC & Associates providing the equity.
Construction had been underway for six months when Hurricane Katrina rocked New Orleans, precipitating the levee failures which inundated most of the city. But Katrina’s floodwaters stayed about an inch from the project’s floors, and the project contractor, Citadel Builders, was back to work by early-October. By April 2006, the project was complete, and within approximately 10 days, 42 tempest-tossed refugee households found solace in its rebirth.