Foreclosure notice delivered on Market Street Power Plant
by Rebecca Mowbray, The Times-Picayune
Monday August 10, 2009, 5:52 PM
ELIOT KAMENITZ/THE TIMES-PICAYUNE
The former Market Street Power Plant was foreclosed on Monday.Foreclosure notices were delivered Monday on a former Entergy power plant that a Miami developer purchased after Hurricane Katrina to turn into a $2.2 billion hotel, condominium, retail and entertainment development.
Florida investor Burt Eisenberg filed a petition in Orleans Parish Civil District Court triggering the foreclosure filing on the 104-year-old Market Street power plant after its owner, Market Street Properties LLC, failed to pay a $6.5 million note that was due in June 2007.
The note carries a 12.5 percent interest rate. Eisenberg, a trustee of the Market Street Trust, is seeking the unpaid balance of the loan, plus interest charges and fees since July 1, 2008.
If Miami developer Michael Samuel does not satisfy the debt, the 20-acre Market Street power plant property will go to auction sometime in October. "We are preparing to auction it," said Civil Sheriff Paul Valteau Jr.
Samuel, a friend of New Orleans attorney William Broadhurst, bought the giant brick plant from Entergy New Orleans Inc. for $10 million in January 2007 while the utility was in bankruptcy. The imposing brick building has been sitting idle since 1973 along the Mississippi River near the Ernest N. Morial Convention Center.The Web site for the developer Samuel & Co., says that "Entergy Station" would have included 1,500 residences, a boutique hotel, 600,000 square feet of retail and a 1,000-seat jazz venue. The Web site says that the project would be valued "in excess of $2.2 billion."
Samuel applied for $183 million in Gulf Opportunity Zone bonds to help finance the project. He received preliminary approval for them in August 2007, but Whit Kling, director of the State Bond Commission, said that Samuel withdrew the request in July 2008 -- the same month that Eisenberg now seeks to begin collecting interest and fees on the deal.
Neither Samuel nor Eisenberg returned phone calls seeking comment. Samuel, an experienced developer, would have been on the forefront of the real estate market implosion in Florida. During the time when he was working on the deal, banks have virtually stopped lending on commercial projects.
Many had looked to the project to pique interest in the New Orleans Building Corp.'s efforts to redevelop the Mississippi riverfront in New Orleans. The smokestacks of the Market Street plant are a distinctive feature on the New Orleans skyline, and the brick building is considered one of the few examples of industrial architecture in the city.
"If the last 20 years have been singularly about the redevelopment of the Warehouse district, the next 20 years will center on the transformation of the riverfront," said Sean Cummings, director of the city development agency. "We empathize with real estate developers in this challenging time, but hope that whoever buys the property will develop it in an inventive, world-class way."
So far, New Orleans has escaped the crush of foreclosures that have plagued other cities. Major buildings that have been seized and sold at foreclosure in recent years include the Plaza Tower on Howard Avenue, the Audubon Building next to the Ritz-Carlton New Orleans Hotel on Canal Street, and the defunct Claiborne Towers building, which previously served as both a hotel and apartments on Canal Street.
Rebecca Mowbray can be reached at
rmowbray@timespicayune.com or 504.826.3417.