The company that owns the Esplanade Mall in Kenner, once a retail powerhouse, is in talks to sell the shuttered mall to an Illinois-based firm that could convert some of the space to residential and recreational facilities and bring in new retail options, officials said Friday.
But the sale could hinge on the mall keeping a key tenant: the City of Kenner, which has occupied the long-vacant Macy’s building since the weeks after Hurricane Ida last August.
And that provision may run afoul of some city officials, who have expressed a desire to get city offices out of that space “as soon as possible” after Mayor-elect Michael Glaser takes office July 1.
The sale of the mall would mark a major win for the city, where officials have fretted for years over the fate of the property, once a major source of sales tax revenue. Before the city moved in, the Macy’s building had been up for sale. A consultant in 2021 advised the city to completely redevelop the entire mall, and litigation over unpaid property taxes, some of which date from decades before the current owners bought it, is still working its way through the courts.
The Esplanade once was a retail magnet for east bank shoppers, offering Macy’s, a Mervyn’s, a food court and two floors of stores. But in recent years, it has fallen into physical and economic distress. After Ida battered the city and the mall, it was shut down for good, with the exception of the Target and Dillard’s, which are owned by other corporations.
A sale and redevelopment could offer a lifeline and offer the first real hope of it returning to commerce in many years.
Talks between the owners of the mall and Windfall Properties, the Illinois-based real estate development firm, are ongoing and could be wrapped up by late summer, according to Felix Reznick of 4th Dimension Properties, which owns the mall with New York-based Kohan Retail Investment Group.
Reznick said Windfall hoped to keep the city in the Macy’s building to provide an income stream that would help fund renovation plans.
“Hopefully we can get a lease in place for at least 16-18 months so the buyer can get proper financing to build this project,” Reznick said Friday.
Windfall would get the main mall and the Macy’s building, but not the Target or Dillard’s. The company plans to bring an Asian market, a recreational facility and perhaps turn some of the mall space into residential units, Reznick said. Those uses would follow national trends that have seen retail spaces turned into mixed-use developments, similar to what is being done at Elmwood Shopping Center and at Clearview Shopping Center in Metairie.
Windfall did not respond to a message for comment.
Reznick declined to discuss potential prices for the sale. Reznick and Kohan paid $9.25 million for the mall in 2018.
City offices began moving into the Macy’s building soon after the hurricane heavily damaged the main city hall campus on Williams Boulevard. Within a couple of the months, a warren of temporary offices, hallways and ductwork had been erected in the sprawling retail space, including a City Council chambers and administrative offices.
Outgoing Mayor Ben Zahn’s administration arranged the move into the Macy’s building and administration officials have said that the rent — approximately $60,000 per month — may be eligible for reimbursement by FEMA as a hurricane expense.
Zahn and his top deputy, Deborah Foshee, declined to comment for this article.
Some council members and Glaser have expressed an urge to get the city offices out of Macy’s soon after the change in administration.
“I still stand by my comment that I plan on moving out of the Macy’s building as soon as possible,” Glaser said Friday. But what “as soon as possible” means is undetermined, Glaser acknowledged.
“I’ve been going around to city buildings to see which ones are habitable,” he said. He plans next to talk to department heads to figure out what their needs are.
Selling the mall and getting it back up and running is important, he said.
“It could be an economic boon if they have it up and running as a shopping center and retail or entertainment complex,” he said.
Council member George Branigan called the possible purchase “a big deal,” but said the City Council needs to make decisions with the city’s finances in mind.
“Do we want the Esplanade Mall to be redeveloped?” he asked. “Yes we do. But it’s got to make financial sense.”