Hotel Heralds New Phase for Perkins Rowe

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December 28th, 2008: Hotel Heralds New Phase for Perkins Rowe

• By CHRIS GAUTREAU
• Advocate business writer
• Published: Dec 28, 2008 

 Spinosa reached a tentative agreement with a flag for the 160-room hotel, and he’s expected to make the deal public next month.

Such an announcement would mark one of the last in a dwindling number of hurdles for the sprawling, 25-acre mix of commercial, residential and retail space that puts residents of the development within walking distance of many primary services.

Spinosa is only months away from completing the first phase of Perkins Rowe — an area that was an empty field just several years ago.

There’s another park to be built and one more residential building on the east side. But Spinosa says those should be finished by April or March.

There’s not much space available. Spinosa said most of the development has been leased or sold.

With the opening of outdoors retailer The Orvis Co. and steakhouse Texas de Brazil last month, only a handful of the retail spaces remain.

Spinosa said he would try to fill the vacancies with neighborhood conveniences such as a dry cleaner, an insurance agency or a jeweler.

The five-story hotel will offer more retail with the ground-floor lobby and 160 rooms on the four above, as well as meeting and conference spaces.

On the residential side, all but two of 69 units of an apartment building are leased. Another building opened this week, also with 69 units, 30 of which have been leased, Spinosa said.

Moreover, about 60 of the 87 condominium units are under sales contract. Fifty have been closed on.

“Traffic has slowed down,” Spinosa said of condo buyers when asked about fallout from the struggling housing market. “But they’re still coming in. We’ve been surprised.”

He also expressed surprise at the mix of buyers. The residential spaces were designed to attract young professionals. But two-thirds of them have been scooped up by buyers 65 and older and “empty-nester” couples alone again after their children have grown up and moved out.

“I think we’re positioning perfectly to go forward,” Spinosa said.

By Spinosa’s own candid admission, however, Perkins Rowe’s path to completion has been anything but perfect. 

Spinosa acknowledges, for example, progress suffered after a falling out with one of the original contractors. His plan for Parisian to come to Perkins Rowe imploded after the department-store chain was bought out in 2006.

And Wells Fargo forced both sides to scramble last year after the national bank shuttered a mortgage division it planned to move to Perkins Rowe. Wells Fargo put a smaller division there instead and sublet the remaining space.

Spinosa’s development company, JTS Interests, also has endured at least two lawsuits. 

In October 2007, a Miami leasing company sued JTS, claiming Spinosa hadn’t paid $1.4 million in commissions and fees. In December 2005, the Borders bookstore chain sued after Spinosa announced rival Barnes & Noble would open at Perkins Rowe. According to its suit, Borders said the announcement came during its own negotiations with Spinosa to locate there. 

The nation’s credit crisis has dealt its own hurdles, impeding Spinosa’s attempt to improve Perkins Rowe’s financing. 

Two years ago, JTS got a $170 million construction loan from a Cleveland bank to finish Perkins Rowe’s first phase. He’d been planning to move to the better terms of a conventional loan, when the credit market seized up.

“We’re anxious to get it done but not in this marketplace. Lenders want you to be finished. That’s when we’re in our best position,” Spinosa said. “We’re just waiting for these markets to settle down. You’ll see a push from us early next year.”

In any case, the delays apparently aren’t enough to stop the second phase for Perkins Rowe. 

Spinosa said much of it is still in the planning stage and not at a point at which he could comment. But plans are to start construction by late 2009 or early 2010. 

Most of the feedback from tenants and residents, Spinosa said, has been overwhelmingly positive.

But the most encouraging sign for him has been Perkins Rowe’s ability to draw visitors from beyond Baton Rouge. 

“The thing we’re most excited about is it’s a regional draw. People are coming from New Orleans, the surrounding areas,” he said. “That’s important for us to achieve. It certainly benefits the project and benefits Baton Rouge to a greater extent.”