N.O. World Trade Center runners-up get shot at project

New Orleans CityBusiness, Oct 21, 2008 by Ariella Cohen

The New Orleans Building Corp. today unanimously approved a motion that will restart the redevelopment for the long-thwarted World Trade Center building.

The motion, which was introduced by Mayor C. Ray Nagin and tweaked by NOBC's board before approval, sets up a 120-day period by the end of which New Orleans developers Darryl Berger and Pres Kabacoff must sign a lease and fork over $27 million required by the lease or the property will be opened up for bidding.

Berger and Kabacoff were runners-up during the recent round of bidding for the project. In August, developer Full Spectrum of New York backed out of a project to convert the city-owned building into a hotel and residences.

In an interview with CityBusiuness two months ago, Kabacoff said he and Berger were considered teaming up for the project.

"On the 121st day, if the lease is not signed and the money not delivered, we go immediately go back to RFQ (requests for proposals)," Nagin said today.

Howell Crosby, an attorney for the World Trade Center, told the NOBC board that it was legal to allow Berger and Kabacoff to be given the first right of refusal before opening the project to bids. The City Council's attorney also agreed that the arrangement is legal.

The motion was approved after roughly 90 minutes of discussion over the best way to proceed with the redevelopment of the project.

The NOBC board was united in a desire to find a developer who will perform, although there was some initial disagreement over the decision to allow Kabacoff and Berger the right of refusal.

City Councilman Arnie Fielkow said if the project did not move forward in a timely fashion it would become a "black eye" for the city.

The project has been delayed for about 10 years and dates to former Mayor Marc Morial.

Starting Monday, Kabacoff and Berger have to pay a $600,000 deposit within 30. Immediately after the deposit is passed into escrow, the council will ratify the lease. After 90 days, the deposit is no longer refundable. And after 120 days if the lease is not signed and the $27 million is not paid, the project will be open to bidding.