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The New Orleans City Council voted to approve the PILOT (Payment in Lieu of Taxes) for The Rivana Apartments at the River District, marking a major milestone for the first phase of affordable housing to be constructed at the River District.

STORY BY RICH COLLINS, THE TIMES-PICAYUNE

City Council approves tax break for River District affordable housing development

The River District took a big step forward on Thursday when the New Orleans City Council approved a tax break to help fund the planned neighborhood’s first apartment complex, a housing project that’s been seen as key to showing progress on the long-delayed redevelopment.

In a 6-1 vote, the council approved a payment in lieu of taxes, or PILOT, agreement that will exempt the 220-unit affordable housing development known as the Rivana Apartments from taxes on the property for the next 40 years. In exchange, developers will maintain rents below market rate for the same amount of time.

Documents show that tax savings for the developers could top $30 million over the four-decade life of the deal.

The approval was one of the last hurdles for getting the first housing development moving in the River District, a nearly 40-acre tract of land along the Mississippi River just upriver from the Ernest N. Morial Convention Center.

City Council member Lesli Harris, whose District B includes the proposed $100 million Rivana project and the rest of the River District, said the vote was a win for the city’s workers and the community overall.

“We need a menu of options to solve the housing crisis, and we need affordable housing with a PILOT that means it can stay affordable for 40 years,” she said before the vote in council chambers. “This is high-quality housing in an area where it is needed.”

The council’s action was also cheered by the Rivana’s developers, a partnership between a subset of River District Neighborhood Investors, the consortium overseeing the River District project, and Providence Community Housing, a two-decade-old nonprofit that has built more than 3,000 units in Greater New Orleans.

The partners said the PILOT was the missing piece of a financing plan that includes funds from the city, state, the convention center and a private investor.

“Like all affordable housing deals, this project is challenging because it requires so many levels of capital and subsidy,” Providence CEO Terri North told the council. “This project is perfect for the essential workers that work in the French Quarter, CBD and for the convention center itself.”

Jim Cook, the convention center’s president and CEO, said through a spokesperson Thursday that the deal “brings new energy, investment and momentum to an emerging area of the city.”

Now the developers say they can move toward signing a master development agreement with the convention center and closing financing before beginning construction as soon as this year.

Second major River District project

The Rivana Apartments will be the second project to break ground in the long vacant section of the Lower Garden District, where city leaders hope to invest more than $1 billion in multifamily housing, offices, shops, museums and more. Discussions date back two decades, but the project gained momentum five years ago when the convention center selected RDNI as lead developer.

The River District project debuted with a ceremonial groundbreaking in 2023 and news that Shell would build a new $130 million regional headquarters there while Topgolf would build an entertainment complex.

The Shell building is due to be completed next year but the Topgolf deal has since fallen through. Late last year, the entire project stalled when RDNI backed out of talks with the convention center after missing performance and payment deadlines. But in January, the two entities announced they had agreed to a revised deal that gave the state-sponsored agency more control and more risk.

The original Rivana development team — part of the larger RDNI group led by local real estate veteran Louis Lauricella — includes Brian Gibbs, Tara Hernandez, Michael Merideth, Shawn Barney, and Nicole Webre. The five partnered with Providence in February, giving the nonprofit 51% of the project.

Together, the partners have secured funding from public and private sources, including the Louisiana Housing Corporation, the City of New Orleans, and the Ernest N. Morial New Orleans Exhibition Hall Authority, which is providing $6.5 million toward the $100 million total development. The state awarded $16.5 million sourced from a federal program that supports low- and moderate-income individuals.

Courtyard with a pool

Rivana design documents and renderings from Trapolin-Peer, a New Orleans architect, and San Francisco-based Gensler show a four-story structure surrounding a courtyard with a pool.

The building’s main entrance will be located at the corner of Race and Tchoupitoulas streets, just upriver from the new Shell building, which currently rises alone from several unkempt empty lots. Euterpe and Race streets will be extended to connect to Convention Center Boulevard, and there will be a parking garage entrance on Euterpe with retail on the first floor.

The building will include 500-square-foot studio apartments along with one-bedroom units between 650 and 750 square feet and two-bedroom units topping out at around 1,000 square feet.

North said people who earn $15 an hour will qualify for one of the building’s 60% AMI units and pay under $1,000 for rent, which she said is half the market rate for the area. She said workers who make $25 per hour will qualify for an 80% AMI unit and pay around $1,300 a month.

Through future River District developments, the RDNI consortium plans to create 900 residential units, about half market rate and the rest designated either affordable or workforce housing, which covers households making between 80% and 120% of the area median income.

Next steps

A convention center spokesperson said the Rivana team continues to work toward a financial close anticipated to be no later than July 29.

Test pilings for the building are already in place. Surveys, soil samples and other preliminary work has already been completed.

Gibbs Construction could start driving pilings later this year, one of the developers said after the city council meeting.

While the Rivana developers and their partners celebrated the city council’s decision, two council members expressed concerns about the decadeslong exemption before the vote.

Jason Hughes said he was worried that the units might not go to people most in need, and JP Morrell said it’s hard to justify giving away future tax revenue at a time when many homeowners are struggling financially and still have to pay their property taxes.

Hughes joined five other council members to approve the deal. Morrell was the lone no vote.