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South Shore Harbor
Developer floats hotel, condo plan
Project puts focus on water
Saturday, June 24, 2006
By Frank Donze
A company based in Nevada has proposed a hotel and condominium development for a waterfront tract on Orleans Levee Board property, a project costing more than $200 million that would represent the most significant post-Katrina investment in flood-ravaged eastern New Orleans.
Representatives of Atlantis Internet Group Corp. offered few details about their plans Friday to levee board commissioners, but promised to return next month with more information.
Donald Bailey, the firm's president, said the corporation has long-standing relationships with several deep-pocketed partners, some of whom he hopes to bring with him to the board's July meeting. A publicly traded corporation, Atlantis has interests in Internet gambling sites, gambling developments and commercial and residential real estate.
Bailey said that although his company wants to pursue all available tax incentives, it is prepared to use private money to build a 95-room hotel atop a barge inside the levee board's South Shore Harbor marina and 60 waterfront town homes and other amenities along the Lake Pontchartrain shoreline that fronts Hayne Boulevard.
Noting that the devastated area his company is targeting remains largely uninhabited nearly 10 months after the storm, Bailey, a former New Orleans resident, said the potential investors he has lined up believe the "tremendous challenge" is worth the risk.
"We believe we can overcome these hurdles," he said. "We are willing to take the lead in the redevelopment of New Orleans."
Until August, when Katrina laid waste to the marina, South Shore Harbor was home to the Belle of Orleans gambling boat. The casino, which was badly damaged by the storm, has been moved to Mobile, Ala., where it is undergoing repairs.
The casino's new owner, Kentucky hotel operator Columbia Sussex Corp., has ceased lease payments to the levee board, which has taken the company to court.
If the legal issues cannot be resolved and the Belle of Orleans does not return, Bailey said, his company would be interested in seeking state approval to take over the boat's gaming license and reopening its own casino as part of the proposed development.
Bailey said Atlantis Internet has three main divisions that specialize in electronic game development; slots development and distribution; and a casino development arm that concentrates on real estate.
The barge-based hotel Atlantis is proposing would sit inside the harbor, but Bailey said the bulk of the development would be built outside the marina, stretching three miles east along the lake to Bullard Avenue.
Bailey said he and other investors are "amazed that New Orleans lacks the waterfront development so many other waterside cities focus on."
He said his prospective partners include investors in a major Detroit hotel and casino, Motor City Casino in Detroit; the St. Regis Hotel in Detroit; and several residential communities.
If voters approve a proposal this fall to merge local levee boards into a regional authority, Bailey and other developers eyeing Lakefront property likely will deal directly with state government in the near term.
Under the merger initiative, the Orleans Levee Board's myriad assets that are unrelated to flood control, such as the Lakefront Airport and South Shore Harbor, would be moved to the state's Division of Administration while local and state officials decide what to do with them.
In the meantime, Levee Board President Michael McCrossen said, the agency will launch negotiations with Atlantis. McCrossen said Michael Olivier, the state's secretary of economic development, has been briefed on the proposal and will be involved in future discussions.
The ambitious proposal is Bailey's second attempt to do business with the levee board.
In 1993, Bailey's Atlantis Resorts International Inc. was granted an option to lease space at South Shore Harbor for a $25 million floating hotel similar to the one he is proposing.
That project, which never got off the ground, included plans for 100 upscale one-, two- and three-bedroom suites and 5,000 square feet of commercial space that could accommodate conventions, retail shops, a restaurant, a jazz supper club and a movie theater.
The plan that Bailey outlined at the time called for the five-story hotel to be built on a 330-foot by 95-foot barge that could be moved if threatened by a hurricane. He said then that the barge would be anchored by ballast and temporary pilings, similar to an offshore oil rig.
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Frank Donze can be reached at firstname.lastname@example.org
or (504) 826-3328. Business writer Greg Thomas contributed to this report.