Mondo condo

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Mondo condo Downtown living in Baton Rouge may finally be a serious reality as various condo projects get off the ground. By Steve Clark , Business Report staff No, it's not an urban legend: Condos really are coming to downtown Baton Rouge, just not fast enough for people eager to get their hands on one, or in large enough numbers to put much of a dent in demand. Insiders say demand is huge, especially since Katrina, though the same storm that's serving as a catalyst for construction is sending construction and materials costs soaring. Turning downtown back into a place where people actually live (and sleep) is the keystone to the revival of Baton Rouge's old brick and steel heart. At least a couple of big projects, including the long-awaited River Place tower, are likely to break ground this year. Commercial Properties is contemplating perhaps 50 units at the site of the New Richmond Apartments. Small clusters of apartments, meanwhile, are already tucked away here and there. But if you want to live downtown with a roof over your head, options are few. Ideally, downtown needs 1,000 to 2,000 permanent residents in it to bring things back to life, say downtown development officials. Condo activity in 2006 will be the first steps toward that goal. John Schneider, president of a company with plans to put condos into the historic Kress/Welsh & Levy buildings at Third and Main streets, says demand for residential spaces downtown is only going to grow. "For the downtown area and size of Baton Rouge, I would not be surprised if there is a market for several hundred units," he says. "I've got [a feeling] that in the number of years it's going to take New Orleans to come back, Baton Rouge could easily see us getting to 750,000 people. If that happens, we're going to need a strong inner city." Cyntreniks Group, the real estate development company Schneider owns with Brace Godfrey Jr., bought the Kress/Welsh & Levy buildings from Bob Dean earlier this year. Dean sold the properties after backing off plans for demolishing them following a public outcry. Old Kress five-and-dime buildings around the country are considered architecturally and historically significant. Though hundreds have been demolished, many of the art deco structures have been rehabbed and converted into upscale mixed-use residential/retail. Baton Rouge's Kress building has an extra link to history: A lunch counter sit-in by Southern University students protesting the store's whites-only policy led to Louisiana's separate-but-equal laws being overturned. Schneider's company recently announced plans to put between 40 to 50 condo units into the property, which will require construction of a tower on top of the existing Welsh and Levy buildings. "Right now, the key question on the tower is just how tall it's going to be, how many floors are going to be there," Schneider says. "It's related to various factors, not the least of which is demand for the various units. I'm pretty confident of 40." The $15 million rehab will combine one- and two-bedroom units probably starting at around $200,000. Schneider says it's gratifying to have arrived early at the party when downtown only has about 20 apartments. "We're fortunate to be in a position that probably by the time ours opens I don't think there will be more than 30 or 40 available," he says. "Ours will pretty much double the population. But that's nothing." Another rehab, albeit less historic, is underway at the former All Suites Inn next door to the River Palms apartments on Third Street. Riverview Condominiums is a $6 million renovation being carried out by a partnership headed by Donnie Jarreau Real Estate that bought the property, along with the adjacent River Palms, last January. Jarreau says the project's 107 units are under contract to be purchased Jan. 20 by a California investor who'll rent them to FEMA contractors. But sales were hot even before Katrina, noting 70 of the units had deposits on them before the storm. "We never marketed," he says. "It was strictly word of mouth." Most of the buyers had planned to rent out the condos rather than live in them. The one-bedroom units will go for $100,000; the two-bedroom for $180,000. Jarreau says it's hard to go wrong with housing in Baton Rouge these days, what with a 1% vacancy rate. He predicts a wave of residential projects in the coming year, though labor shortages and the high cost of materials is bound to be a problem. "Our labor's already heading down to New Orleans," Jarreau says. "There's outrageous prices for labor down there. We're feeling the effects now, but I think we're going to feel it worse." Plus, the scarcity and high cost of land downtown will limit residential development but won't stop it completely, according to Jarreau who also says his group was lucky to get its hands on an old hotel with a structure good enough to make the cost doable. "There's not tracts of land to go build two-bedroom town homes," he says. "If you do something and you're spending $10 or $20 a foot, you've got to go up, and when you go up you're talking about high prices for construction." Going up is exactly what developer Richard Preis has in mind with River Place Condominiums, a $70 million, 30-story tower with 236,000 sellable square feet and perhaps 100 units. The project was two months away from groundbreaking when Hurricane Ivan hit last year, the same this year with Katrina. The price of construction materials shot up each time, forcing redesigns and forestalling construction. "Yes, we're late, but as I told everybody it's just like Howell Place: I'm the kind of guy that does it slow and right versus fast and wrong," Preis says. "It's going to be a big year for downtown." Despite the delays, River Place is a big-time go, with reservation agreements already signed for 65% of the planned high-end units. RiverPlace will be bordered by River Road, Lafayette, Laurel and Main streets. Construction, once it starts, should take 18 to 24 months. Darryl Gissel of Oak Real Estate says downtown's nascent residential boom is a welcome beginning to meeting an old demand. "For over a decade, people have wanted loft type living," he says. "When they've called I've had to say 'Sorry, we don't have it.' It's not that people didn't want to be here; it's that we couldn't offer it."