It began about 20 years ago with an idea that St. Tammany Parish could have its own multi-purpose events center. The center would attract conventions, trade shows, meetings and performances from all over the country, but no one foresaw the financial setbacks and construction delays that have followed since the project’s inception.
The Northshore Harbor Center was originally expected to cost no more than $10 million to build, and early consultants predicted the events center would be constructed in 2000. Now the center is expected to cost over $17 million. The first phase of construction, which began last year, won’t be completed until 2005.
The Northshore Harbor Center was first envisioned by board members of the Greater Slidell Area Chamber of Commerce back in 1984, according to former East St. Tammany Events Center Commission (ESTECC) Chairman Joe Anderson. He said the goal of the ESTECC has always been to develop an events center with the community’s needs in mind.
That goal, however, has turned out to be more difficult to accomplish than anyone had imagined.
In 1998, the ESTECC entered into an agreement with Tammany Holding Corporation in which Tammany Holding promised to donate 25 acres of land located in the northeastern quadrant of the Oak Harbor interchange off Interstate 10. The site was appraised for over $2 million.
Levee Never Built
Robert Torres, Sr., president of Tammany Holding said he applied for a levee permit with the Army Corps of Engineers for a levee that would surround about 1,000 acres of property including his Lakeshore Estates development as well as events center property.
“We anticipated getting a permit over four years ago,” he said. “I haven’t gotten a permit yet.”
The 1998 agreement states that a levee would be built of “sufficient capacity” to allow the completion of the proposed events center “without land filling expense beyond that which is usual and customary for levee protected projects similar to the events center project.” The agreement also states that the donee will not be required to raise the site’s existing elevation more than 3 feet.
Torres said he did not anticipate the amount of red tape that he would have to go through to get the levee.
“In dealing with different agencies, with delineation and determinations, it’s not easy,” he said.
Because the agreement stated that construction of the events center must commence by June of 2001 (a deadline that Torres eventually extended) the commission agreed it would not wait around for a levee that seemed increasingly less likely to come.
The land donation agreement also makes it clear that the donation hinged on the passage of a property tax to support a $10 million bond issue. The commission received $50,000 from the St. Tammany Parish Tourist Commission to promote the center and to fund the election, which passed in January of 1999. The public also approved a $1 hotel occupancy tax. Anderson called the passage of these taxes “a great milestone” in the events center saga, but said he did not realize at the time that more would be needed.
The commission was not aware that the levee would not be furnished until well after the election, he said.
Deciding what he commission should do next when it did become clear there would be no levee was tough, said Anderson. PEF Development Corporation, the ESTECC’s consulting firm at the time, became somewhat pessimistic about the future of the events center, said Anderson. Some suggested finding another site of filing a lawsuit against Tammany Holding. Those options would have been counterproductive, said Anderson, as the land donation was extremely generous. The commission decided to move forward with the project as best it could with what it had. PEF, which is no longer in business, pulled out of the project shortly thereafter.
Huge Dirt Cost
The absence of a protective levee coupled with wetland and engineering regulations meant that the ESTECC has to raise the site 21 feet instead of the anticipated 3 feet. The cost of dirt, engineering work, consulting fees, surveys and architects ultimately set the group back by over $4 million.
Torres said he offered the commission fill dirt for free, but the ESTECC declined to accept it.
"For some reason, they elected to purchase fill elsewhere,” said Torres.
When asked why the commission didn’t accept Torres’ offer, Anderson explained that the situation was more complicated than it seemed.
Anderson said Tammany Holding Corporation verbally offered to raise a 2-acre portion of the events center building site from about 2 feet below mean sea level to ~8 feet above mean sea level with fill material that would be excavated from the events center site itself.
Geotechnical engineers tested the fill material that was proposed to be excavated from the site and determined that it would not be suitable. Even if it had been determined to be suitable, said Anderson, the quantity of fill generated form the proposed excavation would not have been sufficient to justify the loss of a significant portion of the events center site.
Also, the quantity of fill to be generated form the proposed excavation would have been “grossly insufficient” to accomplish the 21 foot elevation that engineers required for the site, Anderson said.
“For these and other reasons the events center board was unable to accept Tammany Holding’s generous offer,” said Anderson.
Over $10 Million
At the time of the election, when the ESTECC still thought it would have a levee, the commission expected to fund the development for about $10 million. This estimate was based on projections in a feasibility study conducted in 1998 by Economic Research Associates (ERA). The study actually projected a cost of about $8 million for a 45,000 square foot facility, but that figure did not include parking lot requirements or the possibility for expansion.
ERA representative Dick Star could not be reached for comment.
“On thing that’s been so frustrating to us is the difficulty of attempting to build a facility in 2004 at 1998 prices,” said Anderson.
Anderson called this the “underlying problem” to the commission’s recent financial troubles.
“The estimates we has available to us in 1998, at the time we were campaigning for the $10 million bond issue, led us to believe we could build the facility with revenues generated from the sale of bonds and the imposition of the occupancy tax for hotels and motels,” said Anderson. “That was our game plan. That estimate’s now over five years old.”
When the commission’s architectural firm, Blitch Knevel Architects, drew up plans for the events center, it included the possibility of two additional phases of the building, allowing the entire events center to consist of 150,000 square feet, if the commission chose to expand.
The New Orleans engineering firm Morphy Makofsky, Inc. informed the commission that because of various regulations required without the levee, the commission needed to prepare the building pad for the entire 150,000 square feet. Otherwise it would be impossible to make any additions to the site in the future. This was necessary so that the building pad for all three possible parts could settle at the same time and be cohesive.
“This required significant design work,” said Anderson. “It’s a wetland area, and engineers place great importance on the foundation for that.”
Reasonable Delays
Engineer Ron Martinez told the commission that two and a half years is reasonable delay for design and construction settlement of a building pad.
“Despite rising costs, we believed the potential benefits outweighed the potential risks,” said Anderson.
During the two-and-a-half-year delay, development costs continued to rise. Now the commission is facing a cost of over $17 million for the first phase of the building, instead of the $10 million that was originally projected.
“Other than $750,000 which we will receive through capital outlay funding from the state … and monies received from the Tourist Convention Commission, we’re still attempting to build with the funding structure of 1998,” said Anderson.
The first phase of the events center will include a recital hall, meeting rooms, a glass walled lounge and exhibit space.
Anderson said the design that was originally envisioned has not changed. The first phase is scheduled to be completed in late December this year or early 2005.
“They’ve got a good project,” Torres said of the ESTECC.
He said he doesn’t think the commission should be blamed for the increase in the projected cost or the delay in construction.
“It’s nobody’s fault,” he said. “The cost of doing things is up. I personally think they’re moving along at a pretty good pace now.”