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Mar. 18, 2013

Six Flags Mall in Trouble; Summit Closes $135M, Five-Hotel Deal

By Eliza Theiss, Associate Editor

After several strong weeks for the Crescent City retail industry that seemed to bring nothing but news of growth and investment, the white-hot retail sector was bound for some less than favorable news. According to a report by The Times Picayune, DAG Development Principal David Garcia recently told the Industrial Development Board that the planned Six Flags outlet mall cannot compete with the Riverwalk outlet mall, well underway in the New Orleans CBD. The announcement effectively put an end to the retail hopes attached to defunct amusement park and left officials wondering about the future of the 150-acre Katrina-marred site.

As previously reported on this page, DAG Development and Provident Realty Advisors’ joint venture to develop the Jazzland Outlet Mall project at the amusement park won out over several other proposals that included a new amusement park. Jazzland Outlet Mall was envisioned as a $40 million, 400,000-square-foot retail- and-entertainment district that was to incorporate some of the park’s features into its final look. It was to comprise an amphitheater, a big-box retailer, a hotel and several other entertainment components. The joint venture received a year to conduct due diligence. However, as previously reported on this page, Dallas-based Howard Hughes Corp. swooped in and took over ownership of the Riverwalk marketplace in mid-2012, promptly starting renovation and expansion work on the downtown mall, set to open before the 2013 holiday shopping rush.

The Times Picayune reported that DAG’s proposal to partner up with Howard Hughes Corp. on Riverwalk Marketplace was shut down by the latter firm. DAG reportedly will now look into developing an exclusively entertainment-oriented project at Six Flags.

In other news, Summit Hotel Properties Inc. announced closing on a five-hotel portfolio purchase in Louisiana. As previously reported on this page, Summit entered a deal to acquire five unencumbered Louisiana hotels for $135 million. The Marriott-branded properties total 823 rooms and are to be operated by a Marriott International Inc. affiliate. The purchase was funded with available cash and borrowings under Summit’s senior secured revolving credit facility. The portfolio includes two properties in Metairie, La. – a 153-key Courtyard by Marriott and a 120-room Residence Inn by Marriott – and three New Orleans hotels: the 140-room Courtyard by Marriott in downtown New Orleans near the French Quarter and the 202-key  Courtyard by Marriott and 208-room SpringHill Suites by Marriott, both located in proximity to the New Orleans Ernest N. Morial Convention Center.

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Photo courtesy of Courtyard by Marriott Downtown New Orleans’ Facebook page

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