Downtown BR River Park hits financing snag

Plans for a 50-acre development in downtown Baton Rouge’s Mississippi Riverfront have hit a snag that could affect parts of the project’s financing.

The River Park project is planned as a $600 million development to be built in phases on the downtown Riverfront adjacent to the Hollywood Casino.

Developer Pete Clements’ plans include public parking garages, a boardwalk, hotels, retail stores, green space, a public concert facility and residential space.

The development was expected to be financed in part by a Tax Increment Financing agreement approved in 2011 by the Metro Council. However, that agreement expired June 30 because the developer was unable to meet mandated requirements set out in the contract.

The agreement stated the city-parish would rebate its 2 percent sales tax back to the development to offset construction costs for the public aspects of the project.

Clements said the TIF agreement is “integral to the financing of the boardwalk and the park along the river,” which is a major part of the overall development.

William Daniel, chief administrative officer to Mayor-President Kip Holden, said River Park officials asked after the contract expired if it could be renewed.

“We were amenable to renewing it; the mayor thinks it’s a good project,” Daniel said.

He said an item was placed on the Metro Council agenda to extend the deadline, but it was later determined such an extension might not be permitted since the contract had expired.

Instead, Clements’ team will have to propose a new contract to be approved by the Metro Council. The Metro Council is expected to vote on the proposed new agreement on Aug. 28.

According to the initial contract, the developer had until June 30 to begin construction and secure lending for the project, and that failure to do so rendered the contract “null and void.”

Clements said Monday he was in the final stages of securing financing for the project before the contract expired.

“It takes awhile to put the financing together,” he said, explaining why he missed the initial deadline. “The financial markets have been very difficult, the most difficult I’ve seen in a long time.”

But Clements said he’s come a long way with the project so far and anticipates opening the entertainment district component of the development in 2015.

The entertainment district consists of the Baton Rouge boardwalk, which will have restaurants, sports bars, specialty entertainment venues, nightclubs and a centralized, covered concert facility, according to the contract.

Clements says the project is expected to generate $640,000 in property taxes, while creating 3,000 permanent jobs and 1,400 temporary jobs.

So far, the only significant construction on the project has been completion of the four-lane road under the Canadian National Railroad tracks that provides better access to the site. But that work was completed before the TIF contract with the city-parish was signed.

Metro Councilman Ryan Heck, who pointed out to city-parish officials that the contract had expired, said he hopes that a new contract can be negotiated.

“There were a couple sticking points in the original (cooperative endeavor agreement) that I thought needed more attention,” he said. “We should revisit those things before we just rubber stamp it.”

Heck is one of a handful of council members who have expressed concerns in recent months about the increasing use of TIFs in the parish, which divert sales tax away from the city-parish coffers to prop up private business.

“TIFs for retail applications, I just can’t get my head around them. But every case is different,” Heck said, adding that he wouldn’t speculate on whether he would support River Park.

Councilwoman Tara Wicker said she is disappointed the project, which is in her district, has fallen behind but remains hopeful it will be allowed to move forward.

She said the development eventually will be a destination attraction for Baton Rouge, drawing visitors downtown both from within the parish and from out of town.

“We have not done a really great job of embracing the fact that we are a city that has a wonderful river passing through it,” Wicker said. “This project celebrates that and brings it closer to us.”

Davis Rhorer, director of the Downtown Development District, said the River Park project will be worth the wait.

“It’s a massive development, and I’m quite aware that sometimes these projects take time,” Rhorer said. “But to have this type of infusion downtown and in the inner city is just going to be a tremendous asset and boost to economic development.”