NEW ORLEANS -- The owners of the massive Market Street power plant – prime riverfront real estate that also plays a role in the Ray Nagin investigation – got out of Chapter 11 bankruptcy Tuesday.
U.S. Bankruptcy Judge Elizabeth Magner approved the plan by investors Adam Swickle, John Mannone and Dennis Sunshine to redevelop or sell the property within a year.
Two groups have loaned the investors more than $14 million to get the former plant back into commerce, and they have a year before they have to start paying back the loans.
Swickle said they have received proposals to turn the plant into a retail hub or a movie and television production studio. And he is confident one or more of the plans will get off the ground this time.
“We were restructuring, we were making it stronger, we were getting rid of some bad elements, some things that didn't make sense,” Swickle said. “Now everything makes sense and we're ready to move forward with some big projects."
Some of the elements they were “getting rid of” go back to Nagin’s involvement. The bankruptcy has dragged on since 2009 as Swickle’s group tried to force owners T.J. Fisher and Michael Samuel out of the deal.
The problems began when the contaminated plant was sold by Entergy in 2007.
Part-time French Quarter resident Fisher, her husband Stuart "Neil" Fisher and Florida developer Samuel bought the plant for $10 million, plus ancillary property valued at about $4 million.
Almost immediately, Nagin got involved, meeting with Samuel and city vendor Frank Fradella about their $650 million plan to turn the hulking brownfield into retail, condos, a park and a museum.
But now Fradella is the government's star witness in the case they're building against Nagin. Nagin hasn’t been charged with any crime and denies any wrongdoing, but Fradella has pleaded guilty to conspiring to bribe a public official known to be Nagin.
Fradella admitted paying Nagin tens of thousands of dollars in consulting fees after the mayor left office. And records show that Samuel also gave Nagin a lucrative post-mayoral gig worth about $90,000.
In 2010, Fisher sent an email to a partner saying Nagin would "get a piece" of any Market Street plant deal. But the project never materialized.
Swickle's team has been using the site for movie shoots here and there, but he says film companies have their eyes on it as a long-term anchor for Hollywood South.
"Big producers have come to town and said, ‘Why are you just using it for a location scene? Let's make it kind of like the crown jewel of movies. Let's do production. Let's do site. Let's do sound stages. Let's do everything right there in that neighborhood,’” Swickle said.
“And some major players have stepped forward now and said they're ready to move forward and we're going to explore those opportunities together starting immediately."
Swickle’s team has hired Michael Ullian as a real estate expert, and he said the plant is ripe for development now that it’s free of the bankruptcy stigma.
“Operating in bankruptcy is a very, very uncomfortable place for retailers to make a commitment,” Ullian said. “Now that we’re exiting bankruptcy and properly capitalized, we can move forward with some of those serious negotiations.”
So what makes Swickle’s team so confident that the development plans will work this time?
“Without sounding like a wise guy, the fact that Nagin's not here is one of them,” he said. “The new mayor (Mitch Landrieu) … is fantastic in this town.”
One way the city could benefit immediately is with tax collections. Swickle’s group has put $526,000 in escrow to pay taxes and late fees.
Magner is apparently sold on the Swickle team’s development plan. She said the budget is tight, but there are only two lenders taking on the risk and creditors will get more money than would have in a Chapter 7 liquidation, which would have only yielded about $5.5 million.
Magner called the latest plan "feasible and not likely to be followed by another (Chapter 11) reorganization."
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