DEVELOPER SELLS RIVERFRONT ACREAGE TO CASINO INTERESTS
Published: Saturday, July 16, 1994
Byline: By JEFFREY MEITRODT Business writer
In what local real estate brokers are calling the savviest deal of his life, developer Joseph Canizaro and his partners have sold 49 acres of prime riverfront property to gaming interests for $37.5 million.
The land is part of a 72-acre tract acquired for $11 million in 1991 by Canizaro's New Orleans 2000 Partnership.
"It was a career deal," said Hayden Wren, a broker with Landrieu-Wren/Corporate Realty. "Joe and his partners hit a home run."
Canizaro was less upbeat. The developer, who was forced to sell 23 acres of the tract to the New Orleans Exhibition Hall Authority earlier this year for a third phase of the convention center, said he regrets not being able to go through with his $1 billion mixed-use project for the site.
"It is bittersweet to me," Canizaro said.
Including the $13 million paid by the exhibition hall authority, Canizaro and his partners pocketed a total of $50.5 million for the 72 acres. That means a profit of 359 percent before interest, expenses and taxes.
The 49-acre parcel was acquired Thursday by a joint venture of Chris Hemmeter's Grand Palais Casino Inc. and Capital Gaming International Inc. Both companies will operate gaming boats on the Mississippi.
The transaction is the largest yet in the hot casino real estate market.
The previous record was set seven months ago, when Harrah's New Orleans bought a one-acre lot at the corner of Poydras Street and Convention Center Boulevard for $11.3 million, nearly three times what the land sold for several years before.
Canizaro did even better. Under typical market conditions, brokers said, his land wouldn't fetch more than $3 to $4 per square foot. This week's deal works out to $17.57 per square foot.
"Joe would never have gotten anywhere near that price if gambling hadn't come along," said broker Robert F. Talbot of Robert F. Talbot & Associates.
Still, Talbot said, the boat operators also got a break. If the partners had to assemble such a large parcel by buying up smaller properties, he said, they likely would have shelled out close to $35 per square foot.
"I think it's a tremendous play for both parties," Talbot said.
Ironically, Hemmeter's partner, Daniel Robinowitz, first offered to buy the entire 72 acres on the same day Canizaro's partnership acquired the tract in 1991. The bid: $22 million.
At that time, Canizaro noted, riverboat gaming hadn't been approved, much less a land-based casino in New Orleans.
"People forget that when we bought this land, gambling was not a fact of life," said jewelry merchant Coleman Adler, one of Canizaro's partners. "So there were risks. At that time, this property was viewed by many as an industrial waste site."
Adler's company, Mandeville Jewel Corp., is a 10 percent partner in the deal. Another 40 percent is held by Ding Corp., headed by William Goldring, president of Magnolia Liquor Co. Canizaro's New Orleans 2000 Inc. owns the remaining 50 percent of the deal.
Hemmeter, whose joint venture paid $15 million at the time of the closing, said Canizaro and his partners provided $22.5 million in seller financing.
Land bought by Hemmeter/Capital partnership.
Illustration: Joseph Canizaro [COLOR]
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