The Regeneration of Canal Street
Large developments, historic tax credits and the rise of short-term rentals are all playing their part in the redevelopment of an iconic New Orleans thoroughfare.
Once home of “ain’t dere no mores” such as Maison Blanche and D.H. Holmes, Canal Street has long been a go-to shopping destination for tourists and locals alike. And while stores have come and gone over the years at a speed almost as quick as the streetcars that move along the iconic shopping avenue – local real estate professionals are hopeful that a resurgence is underway.
According to Snappy Jacobs, CCIM Real Estate Management, there are multiple factors that are contributing to a change on Canal Street, including the continued growth of tourism in New Orleans, an increased interest in Downtown living, historically low interest rates, historic tax credits and opportunity zone legislation, along with capital via private equity investment, he said.
“Being positioned between the French Quarter and Warehouse District, Canal Street is now attractive for the conversion of upper floors to residential and additional hospitality uses,” he said. “Recent and current redevelopment of the World Trade Center site, Jung Hotel, the Sonder project in the 1000 block and the Biomedical District, are all evidence of Canal Street finding its place in the local real estate market.”
Along with historic tax credits, the VA hospital, University Medical Center and Downtown Development District of New Orleans are all playing a role in the street’s revival.
“Federal dollars and authorities having jurisdiction have been pressuring building owners for occupancy of the upper floors,” said Terri Hogan Dreyer, managing partner and principal of NANO Architecture and Interiors. “Additionally, tourism, luxury apartment rentals and new entertainment venues have all helped to increase foot traffic on Canal Street and convince building owners to develop their properties and upper floors.”
Wesley J. Palmisano, president and CEO of general contracting firm Palmisano, added that current projects along Canal are larger in scale than past ventures, which has created a momentum for development.
“Prior to 2018, Palmisano’s downtown projects spanned the Warehouse District, CBD, French Quarter and Marigny,” Wesley Palmisano said. “We are just now beginning construction on several Canal Street properties and are happy to be a part of the corridor’s resurgence. We see great opportunity for Canal Street’s comeback because the neighboring projects and developments have created the momentum and a reason to catch up.”
Palmisano added that there is currently an effort to renovate upper floors in the historic buildings and put them back into commerce as short-term rentals.
“Many of the historic buildings cannot support the buildout and back-of-house services for a hotel, and the short-term rental model tackles multiple efforts,” he said, adding that short-term rentals, “complement the larger-scale projects, put historic structures back into commerce, and offer travelers and locals a new way to experience downtown New Orleans.”
Palmisano has recently completed the renovation of 500 rooms at the JW Marriott and is the design-builder for the properties at 1016 Canal and 623 Canal.
“The 20th-century commercial building at 1016 Canal caught fire in January 2016, leaving only the exterior façade behind,” Palmisano explained. “The structure was shored to prevent further damage, and the burned remains were cleaned out of the site. Prior to the fire, the first floor was occupied by retailers and the upper floors were used for storage.”
Palmisano’s company is partnering with Quarter Holdings to restore the remaining primary and secondary facades, as well as construct a new, five-story mixed-use building behind the existing facades.
“The ground floor will be for commercial use, floors two through four will feature 47 units and the fifth floor will feature a new penthouse addition,” he said. “Preliminary shoring of the historic façade will be completed by March 2019, followed by construction and buildout. The project is scheduled to be completed by March 2020.”
Palmisano said the 623 Canal property will also be renovated to offer a similar model — ground level retail with short-term rentals available on the upper floors.
However, with major developments taking place along upper and lower Canal, and the surrounding neighborhoods, Palmisano said, “there is a need to make Canal Street a secure, approachable destination with amenities locals and visitors seek in a downtown environment.”
More to Come
What does the future look like for Canal Street?
“Overall, I see it as a multimodal, multifaceted corridor representing the different dialects of the city of New Orleans,” Dreyer said, adding that she views Canal Street as being composed of three definitive sections: the Mississippi River to Claiborne Avenue, Claiborne Avenue to Carrollton Avenue and Carrollton Avenue to City Park Avenue.
“The river to Claiborne will return to the international, large tourist and entertainment mecca, with a combination of luxury and affordable rentals,” she said. “Claiborne to Carrollton should strive to become a national medical corridor, serving the needs of the public and our service men and women. Through biomedical alliances, laboratories, pharmaceutical research and A.I., we can provide the basis for long-term employment and growth while complementing tourism and residential facilities.”
As for Carrollton Avenue to City Park Avenue, Dreyer believes it has the ability to become a corridor that provides “a backdrop for small businesses to establish themselves, continue neighborhood support and potential for residential units and small commercial to thrive. Perhaps an urban farm and a community market.”
Palmisano is steadfast in his belief that Canal Street could once again become more than a crossing point, returning to a true destination with upgraded retail options and an increased security presence.
“While much about New Orleans has changed, we could revisit the reasons Canal Street became popular in its heyday,” he said. “What did the area offer that we can adapt for a modern New Orleans that consistently references its past? The neighborhood needs options that are now traditionally only found in suburban environments.”
First Experiences of Canal Street
“Driving down Canal Street with my grandmother on Fridays to meet my grandfather for lunch at Betsy’s Pancake House, also going to Maison Blanche every year to see Mr. Bingle.”
Terri Hogan Dreyer
“My first experiences with Canal Street were as a child, en route to family visits to my grandmother’s place on Royal Street and restaurants in the Quarter, as well as attending Mardi Gras parades. The impression that it made was of a wide-scale, busy, vibrant street full of neon signs, especially Canadian Club and Walgreens, and historic architecture.”