A partner behind the Rice Mill Lofts redevelopment project in the Bywater section of New Orleans has purchased the eight-story Commerce Building in downtown Baton Rouge with plans to put in 100 market-rate apartment units and 75,000 square feet of retail space.
T.J. Iarocci purchased the vacant 180,000-square-foot building at Laurel and North Third streets from Bob Dean on behalf of a group of private investors for $1.3 million, according to documents filed at the Clerk of Court’s Office.
Iarocci, an Arizona native who also is a partner in several multifamily developments in Baton Rouge, said the award-winning Rice Mill Lofts project is a reference point for his $22 million redevelopment of the Commerce Building, which last saw life three years ago when the state used it for temporary office space.
“That’s what we do and that’s what we’re good at,” he said.
Iarocci said plans at this point are preliminary, but he has an idea of what he’d like to do.
“What I personally think the city needs is a large-scale, multi-use building, mainly residential and my plans at this point are to do more than 100 for-rent lofts — very contemporary — with 75,000 square feet of retail along North Third Street at Laurel and more than 100 (interior) parking spaces.”
Iarocci said the retail portion will be service-oriented, adding some kind of boutique grocery store seems worth pursuing.
“I don’t know if that’s possible or not, if someone’s interested in that, but it’s definitely needed,” he said.
From a design and aesthetic standpoint, Iarocci said the redevelopment will account for the character and history of the building, which was built in the 1950s.
It also will take advantage of the Mississippi River view from the building and likely will have some kind of restaurant or gathering spot on the roof, similar to what The Shaw Center did by bringing in Tsunami.
“It’s just a unique spot and a unique opportunity to do something like that,” he said.
He added, however, “We’re also 100 percent open to listening to what everyone in the city has to say about how this building needs to be developed.
“Our goal is to create a shining star for downtown,” he said. “We believe the quality of development here is going to lead to more development around that area.”
Iarocci said it will take about a year to line up financing and prepare to start renovations, and the buildout will take about 16 months.
A major residential project will help propel downtown into the final phase of its evolution into a 24-hour destination, according to Davis Rhorer, executive director of the Downtown Development District, said.
Beginning with Plan Baton Rouge in the late 1990s, downtown slowly emerged from being a place that only saw activity during the workday, but looked abandoned after downtown employees headed home.
Over the past decade, bars, restaurants and public parks have helped make downtown a place people could gather on evenings and weekends.
But concentrating permanent residents in the central business district, particularly young professionals through market-rate lofts and apartments, has been slow in coming — a half-dozen third-floor lofts here, some high-end apartments there.
Rhorer pointed out the largest residential development, 438 Main St. under way just around the corner, has 22 mixed-income units and already has a waiting list of 40 people.
The market, he said, is there. And 100 apartment units in the Commerce Building would provide a major push for the kinds of services — most notably a grocery store and a pharmacy — that only residents demand.
“The infusion of people living here, when you put it on Third Street ...,” Rhorer said, “the economic impact is 10-fold.”
Vision City Development Group helped bring Dean and Iarocci together to make the deal happen. Vision City, which consists of John Schneider, Derek Fitch and Trey Godfrey, had previously acquired four other downtown properties from Dean, two of which became Kress at Third & Main and the Hotel Indigo.
“We have been approached several times over the past five years by individuals interested in acquiring the Commerce Building,” Schneider said. “After meeting with T.J. for the first time, we knew that he had the vision, experience and financing to actually make it happen. We welcomed serving as intermediary between the parties.”
Iarocci’s other Baton Rouge-area developments include The Mansions in the Park, Bristol Place, Ivy Park and Zachary Parkside.
The deal also marked the first sale of a major office building here since the financial crisis tightened credit and sent the national economy into a tailspin.
The lending environment and the dearth of major tenants moving into the market has kept things quiet on the office-front, according to Branon Pesnell, a broker with Beau Box Commercial Real Estate.
It’s been about four years since a major office building has sold, he said.
Pesnell, who was not involved in the deal, said the Commerce Building is functionally obsolete as a traditional office building, but was a good candidate for a major overhaul.
“It always was more of a redevelopment play than a re-tenanting play,” he said.