Maritime Building in CBD has sold
Appearing on Nola.com and Written by Jennifer Larino
The Maritime Building in the Central Business District, recognized as New Orleans’ oldest skyscraper, has been sold and will reopen as timeshares in 2020.
The 11-story building, located at the corner of Carondelet and Common streets, was purchased prior to Mardi Gras (March 5) by a pair of developers working with Orange Lake Resorts, a timeshare operator based out of Orlando, Florida, according to a news release. Developers plan to renovate the 126-year-old property starting in May.
The Maritime, built in 1893 and considered the city’s first skyscraper, was redeveloped into apartments in 2010 by developer Marcel Wisznia. At the time, Wisznia pieced together tax credits and federally-backed financingto make the nearly $40 million project happen.
The Maritime now joins a growing list of CBD apartment buildings set to be converted into timeshares. Last May, the 17-story apartment building at 144 Elk Place was sold to Bluegreen Vacations, another Florida-based timeshare operator. The 98-unit building has since been converted to timeshares, forcing residents out. More recently, the Saratoga Building at 212 Loyola Ave., also owned by Wisznia, was sold to the RMR Group. They plan to reopen the property under Sonesta Extended Stay, a timeshare brand in the Royal Sonesta hotel family.
The Maritime’s corner on Carondelet is “one of the best locations in town” for timeshares, said Lenny Wormser, a senior vice president with HREC Investment Advisers, which brokered the deal as well as the Saratoga and Elk Place transactions.
In early 2018, the New Orleans City Council approved new zoning rules that make it easier for timeshares to operate in the CBD. Interest has surged, Wormser said.
“It’s definitely created an opportunity,” he said.
Affordable housing advocates say the trend is concerning. No matter how you slice it, housing options are being taken away from people who live here, said Breonne DeDecker, an affordable housing advocate who directs programming at Jane Place Neighborhood Sustainability Initiative, an organization focused on housing rights.
The Maritime is one of several properties the group has been watching as it maps the proliferation of short-term rentals across the city. The group also filed a complaint last October with the U.S. Department of Housing and Urban Development about the number of short-term rentals at the Maritime and Saratoga buildings. DeDecker noted city records indicate 24 operating short-term rental permits linked to the Maritime Building as well as 34 expired permits and 20 revoked permits. It was not immediately clear why the permits were revoked.
The Maritime was pitched as a development that would house local professionals and help spur more affordable housing nearby, DeDecker said. Wisznia worked closely with HUD and the Federal Housing Administration to craft the unusual financing behind the project. Ultimately, the project combined federal and state tax credits, and a FHA-backed loan under a special “two-tier” lease that required HUD to alter some of its program rules.
A decade later, the property has evolved into yet another tourism development with the help of federally-backed funds, DeDecker said.
“It’s sort of a bait and switch,” she said.
The Maritime timeshares will be Orange Lake Resorts’ first location in New Orleans as well as its first location in an urban setting. The company runs 26 timeshare resorts total, all under the Holiday Inn Club Vacations brand.
Despite recent activity, Wormser said timeshares in New Orleans remain a very small share of the hospitality market, which supports roughly 25,000 hotel rooms in downtown alone. Unlike many short-term rentals, timeshares look and run like hotels, and have been closely regulated for long time, he said.
“The timeshare use is no more intense than a hotel,” he said.
Housing advocates want the City Council to take another look at timeshares. DeDecker worries the model could be a way for developers to skirt affordable housing requirements city officials are considering baking into the citywide short-term rental rules currently being debated. At a Tuesday meeting, members of the City Planning Commission noted lucrative short-term rentals could be used an incentive for developers to add affordable units.