Efforts to transform the 15-acre Airline Highway site formerly home to Earl K. Long Hospital into a mixed-use development have again lulled, though officials say activity will pick up once the IRS finalizes the rules for qualified opportunity zones.
Those behind the project have long identified the tax incentive program as a key funding source for the site’s redevelopment, along with other public-private partnership financing tools such as New Markets Tax Credits. But absent a final rule on opportunity zone investments, officials say they’re taking a wait-and-see approach before they get the ball rolling.
“What are the regulatory constraints? That’s our biggest question mark at this point,” says J. Wesley Daniels, acting CEO of the East Baton Rouge Parish Housing Authority, the project’s transaction facilitator.
While he doesn’t view funding as a challenge, Daniels says the housing authority and Partners Southeast, which is working on the financing, want to maximize private investment in the project—estimated to cost somewhere between $6 million and $9 million—as a way to “reduce the risk and protect public investments.”
In the meantime, they’ve secured three anchor tenants, each representing institutions of higher education, economic development, and health and wellness. As the anchors—which Daniels declines to name—sift through their budgets, identify individual funding streams and determine their space requirements, Daniels says an architect, on a pro bono basis, is tweaking the design concept developed by LSU students in 2015.
The design concept will be finalized in August, Daniels estimates. Afterward, he expects to formulate a development budget by September, release the finished concept and anchor partners to the public in October, and guide and navigate public bodies and processes over the following two to three months.
EBRPHA and Partners Southeast will then have to execute memorandums of understanding for each partnership, solicit developers and secure financing, for which Daniels says he doesn’t have a clear timeline.
Last September, officials working on the project—then including Daniels, state Sen. Regina Barrow and Mayor Sharon Weston Broome, who championed redevelopment of the site when she was a state senator—estimated a funding search would take about four months.
However, by the time January rolled around, the funding search was still ongoing. The trio never met in the time period. Instead, Daniels took the lead on the project and was securing partnerships with the three anchors.
“We had hoped to be further along in the development process,” Daniels says. “However, now that we secured the $30 million HUD Choice Neighborhood Grant, our team and partners will focus on finalizing the details of redevelopment.”
