New Orleans Plaza Tower sold, aims to be 325 low-income senior housing apartments

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David Garcia, a partner at Lincoln Avenue, said Tuesday that the aim would be to convert the 45-story tower into about 325 residential units and to come up with a plan for retail and other commercial uses for the ground floor and annex space on the Howard Avenue side of the complex.

The project — estimated to cost between $250 million and $300 million — would have to be financed almost entirely by public money, which will take many months to organize.

"We don't need any more hotel rooms because most of them aren't profitable right now, and those that are on the market are being sold for less than what the current owner paid for them," Waesche said.

Downtown office rents, which average around $19 or $20 a square foot, also couldn't generate enough revenue to justify a $250 million mortgage, he said.

The required financing will include approximately $130 million of tax-exempt bonds issued through the Louisiana Housing Corporation. The developers will also need Low Income Housing Tax Credits, as well as state and federal historic tax credits and a payment in lieu of taxes, or PILOT, deal from the city. Even then, there still will be a gap of about $35 million that will need to be filled with a "forgivable" loan from some public source, Waesche said.

Another big hurdle for the developers will be to make the building safe. Preliminary results of the engineering study, conducted by Simpson Gumpertz & Heger, showed that the building has a sway at the top of up to 50 inches in Category 5 hurricane winds.

The sales price for the building was not disclosed but both buyer and seller said it was very low for a property of its size. "Single-digit millions," Garcia said.

NOLA