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Tuesday, April 9, 2019

Cross Bayou Point Development

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Opportunity Zones open window of opportunity

A new plan to develop the Cross Bayou area north of downtown Shreveport has emerged. The plan is the vision of Larry English and the Gateway Development Consortium. Long-range plans for the 63-acre development project include new facilities for parish and municipal government entities, housing and a multi-use sports complex.

“We’ve been working diligently for the past 12 months to get to where we are now,” English said. “Here is the project we are preparing to bring to the citizens – Gateway Development will design, finance and build a new municipal complex for the state of Louisiana, consolidating their employees from across the city and moving out of the existing state office building.”

One of the first people English presented the GDC’s plan to was Dr. Tim Magner, president of the Greater Shreveport Chamber of Commerce.

“As with many economic development projects, representatives from the GDC came by the Chamber to share their project with us,” Magner said. “The Chamber tends to be positively disposed toward projects that have the potential to bring economic development to our community. Commercial development projects of this nature are complex and go through a number of phases in their development. The Chamber’s preference with complex projects has been to be incrementally supportive where we can, and to continue to do due diligence as the project evolves. The Chamber’s ongoing support then is predicated on learning more about the project and evaluating its practical feasibility and suitability for the community.”

English said he believes GDC has the support of the parish for a new criminal justice complex within the development.

English said that project would include consolidating the District Attorney’s Office, all of the courthouses and parish employees into one facility.

Caddo Parish District Attorney James E. Stewart Sr. said he is neutral on the development of Cross Bayou.

“I have no position whatsoever on the project,” Stewart said. “I don’t know enough about it. The question to me was, if someone came in and built a new justice center, would I be in favor of it? I would, if it’s modeled after the one in East Jefferson. I’m not asking for it. It’s not on my wish list. But if someone put it over there, I would be open to it.”

Another element of GDC’s proposed development is a multi-use sports complex.

“We had several conversations with the New Orleans Saints,” English said. “In the mayor’s last proposal, it was no secret that the New Orleans Saints were a part of that project, along with the Pelicans. We determined from those conversations they were very interested in moving their training facility here to the city of Shreveport, which we think would be fantastic.”

English said that the Saints officials wanted to know that the political aspects of the project were resolved before they got on board. He said Gov. John Bel Edwards told him he would help any way he could with those negotiations.

The GDC thinks the sports complex should move forward even if the Saints do not move their training facility here, English said. He said Shreveport doesn’t have a similar type of facility where Caddo Parish schools could play football and soccer.

English said Phase 1 of the project would include 500 residential housing units – 30 percent affordable housing, 30 percent market rate and 30 percent luxury.

English said officials with the state have asked what would happen with the existing state office building at Jordan Street and Fairfield Avenue. English said the state recently put $6 million into that building for mechanical repairs.

“We believe that if Cross Bayou were going full blast, it would stimulate other development in downtown. We believe that building sits on some of the most exciting property in the city to be redeveloped.”

The Cross Bayou Point development would be a public-private partnership, English said. Phase 1 of the development includes a $50 million public investment to assemble the land, environmental cleanup, hard banking Cross Bayou and putting in infrastructure. English said GDC already has spoken to the Red River Waterway Commission about hardbanking the bayou. He said GDC will work with the area’s federal lawmakers to bring the U.S. Army Corps of Engineers on board with the project as well.

English said he is confident he can generate the private investment needed to fund the project.

“I am confident that there is the political support in this city from the political community, the city and the business community to do this project,” he said. “I am confident we can get the $50 million number from all of these agencies.”

Raising the private investment needed will be the more significant challenge, he said. English said the private investment in Phase 1 would be $450 million to build the municipal and state office building, which GDC would lease to the state and parish.

When Congress passed Opportunity Zone legislation, it opened a door for projects like GDC’s Cross Bayou development to attract funding from major capital markets, English said. “That was a game changer for us,” he added.

The Cross Bayou development falls within an Opportunity Zone. According to the Louisiana Economic Development website, Opportunity Zones are a new community development program established by Congress in the Tax Cuts and Jobs Act of 2017. This new federal capital gains tax incentive program is designed to drive long-term investments to low-income communities. The new law provides a federal tax incentive for investors to re-invest their capital gains into Opportunity Funds, which are specialized vehicles dedicated to investing in designated low-income areas.

English said that timing is critical to take advantage of the Opportunity Zone designation. Investments made by the end of December 2019 that are allowed to sit for 10 years will pay no property gains taxes.

“Because we had this project well underway before that legislation came into place, we have the potential to be the first project in the country of this size and scale shovel-ready to take advantage of these Opportunity Zones,” he said.

“Developing Cross Bayou has been a goal of the city for at least 20 years,” Magner said. “The 2030 Master Plan, for example, mentions development on Cross Bayou at least 13 times. As such, a plan that can bring together the resources necessary to finally develop this area could be an important project in its own right as well as an anchor for other development in downtown. Also, most of downtown Shreveport has been designated as a Federal Opportunity Zone. This designation allows investors to potentially defer or eliminate preexisting capital gains taxes. A development which can leverage the Opportunity Zone designation to attract outside investment dollars might also encourage other OZ investors to look at additional projects in Shreveport, spurring additional growth.”

English presented the GDC’s plan for Cross Bayou to the Caddo Parish Commission at its March 21 meeting. The Commission passed a resolution authorizing the parish administrator and the Commission to enter non-binding discussions regarding Cross Bayou.

“Any time we have a developer with a project like this, we owe it to them to listen,” said Commissioner Steven Jackson, whose District 3 includes Cross Bayou. “Whether it will work or not is determined by the dedication of the developers. The market will dictate success, not the government.”

In May of 2018, the Shreveport City Council passed a similar resolution that supported then- Mayor Ollie Tyler’s authority to execute a non-binding memorandum of understanding between the city and GDC regarding the development of Cross Bayou Point.

English said that once the project does begin, looking at it in the long term will be the key to success.

“This is an intergenerational project,” he said. “When we say this is a 10-year, $1 billion project, the truth of it is, this project will probably take 15 years to complete. What we are doing is trying to build Phase 1. The reality of it is, the LeVette Fullers and Adrian Perkins have to see this project through. Projects of this size and scale simply go on. Our intention is to build a new neighborhood in downtown Shreveport.”

Magner said challenges remain to developing this area of downtown Shreveport.

“As with similar projects, the biggest challenges are the scale of the project and the unknowns with respect to acquiring and cleaning up the land,” he said. “Despite the interest in developing Cross Bayou over the years, there has been very little activity in that direction. At present, there are numerous owners of the various plots of land that comprise the Cross Bayou area, and several are or have been industrial sites. Consequently, there is a need to consolidate the land into a contiguous piece of property, which will require either the city, the parish, or a private developer to purchase or otherwise acquire the land from the existing owners. In addition, the existing or former industrial sites would need to be appropriately remediated to enable development to occur. Depending on what contaminants are found, the duration and expense of the cleanup will vary as will which oversight agencies (state DEQ and/or federal EPA) will be required to sign off on the final remediation.”

English said he is familiar with previous plans to develop the Cross Bayou area, and he believes GDC has learned from those attempts.

“I was in Shreveport when Mayor Ollie Tyler first brought her Cross Bayou proposal to the table,” English said. “I had no idea what that was about and only looked at it from a distance. I was invited down to city council the day of the vote. I went down, and I listened to the proposal really for the first time. I watched the project be voted down by the council.”

“What I noticed in that meeting was the consistent thing was Cross Bayou has to be developed. (That was) just not the right project, the right time.”

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