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Four years after opening with proud predictions of a nearly full center and above-average retail sales, the New Orleans Centre shopping mall has yet to live up to its potential.
The mall is barely half filled with tenants, not counting its two anchor stores, and there appears to be little likelihood that many new stores are coming soon.
Yet next door, the mall's sister property, the 496,000-square-foot CNG Tower office building, has leaped to 100 percent occupancy.
The developer of the mixed-use complex, the Edward J. DeBartolo Corp., appears hesitant to discuss the project's current status. DeBartolo executives in New Orleans referred questions to the firm's Ohio headquarters, and officials there did not return telephone calls.
But tenants in New Orleans Centre and local real estate observers are not so reluctant to talk.
For some tenants, life in the shopping mall means too few customers and an uphill struggle for sales. The three-story shopping center is kept spotless by maintenance crews, but empty storefronts indicate all is not well.
"We'd like to see it leased more--that's the center's biggest problem," says a manager of a relatively large store in the mall. He spoke on the condition that he not be named.
Opened in 1988, New Orleans Centre still holds the promise of being a showcase property for the city. But results have been hit and miss so far.
The brightest spot is CNG Tower, a 26-story Class A building attached to New Orleans Centre. The building's managers recently landed a plum tenant, McDermott International Inc., signing the firm to a 200,000-square-foot lease several weeks ago. When McDermott moves in, the building will be full.
Real estate analysts say that's quite a coup in the sagging downtown office market, where even the city's newest office towers are averaging below 80 percent occupancy and older Class A space is less than 70 percent filled.
Dr. Wade Ragas, professor of finance and director of the University of New Orleans Real Estate Market Data Center, says CNG Tower's performance stands out. He acknowledges that there were reports of hefty rent concessions to convince McDermott to take up residence there, but...