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City officials to select developer for old Sears property this week

Last Modified: Saturday, November 03, 2012 7:52 PM

By Eric Cormier / American Press

Lake Charles officials intend to choose this week one of three developers who are interested in buying 3.7 acres of land in the 600 block of Ryan Street to on which build housing and business developments. The land, once the longtime home of Sears, was purchased by the city in 2006 for $766,000.

It took two years to get the land ready for the real estate market. First, the city commissioned environmental assessments before commencing with the demolition of the abandoned shopping center in 2008. Since then there have been failed attempts to get the land sold or leased for commerce.

Last month, three developers responded to a request from the city for development plans and a purchase price to get the property off the market.

Baton Rouge businessman Donnie Jarreau has offered $957,500 to buy the land and build a $20 million residential and commercial facility that would have 188 multifamily units, along with on-site parking. The development would be called Ryan Street Lofts.

His plan includes a 30- to 60-day period to close the land deal, followed by a 180-day Federal Housing Administration financing process.

Jarreau has built housing in Denham Springs, Baton Rouge, St. Francisville, Natchitoches, Monroe and Brusly; multi-tenant projects; acquisition and rehabilitation projects; and “built to suit projects” for CC’s Coffee House, Dollar Tree, O’Reilly Auto Parts, Family Dollar and Goodwill.

Roger Landry, a developer from Lake Charles, has offered $628,000 for the land to build a residential and retail facility that would be home to 166 luxury apartments and 22,000 square feet of business space.

Landry estimates it would take 36 months to finish the project from financing to the end of construction.

In a letter to the City Council and Mayor Randy Roach’s administration, Landry said he has access to $2.5 million in private equity, with the remaining project financing, $17.5 million, being provided by a financial lender.

Geddings Development Corp., led by Lake Charles businessman Gray Stream, has offered $425,000 for the land. Stream has not released any preliminary plans about the potential development but said it could be 120-160 two- and three-bedroom units.

Geddings would use conventional financing to fund the project. The firm has overseen the development of Graywood and Gray Plantation in Lake Charles, while the Stream Co., which Geddings is associated with, owns Mahekal Beach Resort in Playa del Carmen, Quintana Roo, Mexico, and Hotel Matilda in San Miguel de Allende, Mexico.

District A City Councilman Marshall Simien said the property lies within his district. He and fellow councilmen John Ieyoub and Mark Eckard formed a committee to review the proposals.

“I think it is a high-impact piece of property that would spur a lot of activity in the downtown area. I hope that the people we look at, whoever we select, will bring their A-game and give the downtown bang for its buck,” he said.

He said the committee will offer a recommendation to the City Council during its regular meeting Wednesday at 5:30 p.m.

Lori Marinovich, executive director of the Downtown Development Authority, said residents are getting to see how government processes work.

“Cleaning up property like this, after it is bought by the city, is what we can do to get land like this back in commerce,” she said.

Marinovich, who has observed protracted negotiations between developers interested in building along the lakefront, said the former Sears property is easier to deal with.

“We declared the property surplus. By owning it, there were reduced hurdles that a developer had to contend with if this would have been public land that we would lease,” she said. “Also, I think a sale versus a lease is better for a developer.”

Roach agreed.

“It is a lot simpler selling a piece of property. There is no long-term involvement for the city, which would have to act as a landlord if the property was leased,” he said.

The group picked to buy the land will still have some issues to resolve before a deal is finalized.

“Offers have been made. We will accept one contingent on the developer getting their financing. Essentially, they would get an option to buy the property, but the deal would not be closed until financing is obtained,” Roach said.

On Friday, City Attorney Billy Loftin forwarded letters to each developer regarding the property value assessment. All of the potential buyers have been given an opportunity to “amend” their offer ahead of Wednesday’s meeting, he said.

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