Bon Carré developer rejects buyout

16 Dec 2001

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The Baton Rouge Advocate 15.12.2001

By SARA BONGIORNI and CHAD CALDER

Research Park Corp.’s offer to buy the troubled Bon Carré Town Center expired Friday after the development’s owner did not respond by a set time.

Mark O’Donnell, spokesman for the California development group that owns the Florida Boulevard project, has said Research Park Corp.’s offer was well short of the group’s bank loan, a statement he reiterated Friday.

"The fact remains that the offer was below the lender’s debt, and the lender wasn’t interested," he said. "It doesn’t matter what I think."

Research Park Corp.’s offer was revealed two weeks ago after the group, led by developer Norie Harrower, said it was unable to secure financing to complete the refurbishment of the former Bon Marché mall.

The group said the troubles stemmed from the high-profile bankruptcy of one of its partners, Reed Slatkin, who is under federal investigation for allegedly bilking friends and associates on the West Coast out of up to $500 million.

While Harrower and O’Donnell’s brother, Kevin, one of the group’s partners, have lost money to Slatkin, they say he took nothing from Bon Carré.

Harrower and O’Donnell said they are talking with other potential buyers, both local and national, whom they declined to identify.

While Harrower said that the local prospect could make a decision within the next 10 days, O’Donnell was less certain, declining to comment on the odds of a resolution coming before the end of the year.

Harrower said a local buyer would be preferable because it would likely take longer to close a deal with a national buyer, and also because he believes the project would be better off in local hands.

Eddie Ashworth, president of the tax-funded Research Park Corp., said he might make another offer in the future if the price is right.

"I’m not necessarily thinking that, but at some point if the property becomes attractively priced, we may look at it again," Ashworth said.

If Bon Carré goes into foreclosure, "It’s possible that the banks may approach us at some point," he said.

Top state officials oppose Research Park Corp.’s bid for Bon Carré, site of the Louisiana Technology Park. The state has committed $37.2 million to the park over eight years.

Research Park Corp. runs a state-funded incubator for start-up technology firms at the park, which also includes a commercial data center where companies can store vast amounts of electronic information.

On Friday, Gov. Mike Foster’s chief of staff, Steve Perry, said he hopes to meet with Research Park Corp.’s executive committee in the next 10 days to discuss options for stabilizing the Florida Boulevard development.

Those options include "moving more state enterprise out there," but it is too early to give details, Perry said.

"We’re looking at it," he said. "We just don’t know. We’re simply evaluating and analyzing what the possibilities are."

Harrower and O’Donnell said their conversations have been with Ashworth and that there have been no discussions with the state.

"I hear lots of things, but nothing specific," Harrower said when asked whether he knew anything about any additional state involvement in the project.

Perry said the state remains committed to the park but wants to explore ways to better "leverage" its investment there, including connecting it more closely with LSU.

O’Donnell said he does not know when First Tennessee could begin foreclosure proceedings, but the two parties are in close contact as the group looks for a buyer.

He pointed out that the group didn’t begin looking for a buyer until about Oct. 7, when the First Tennessee loan came to term.

"Our primary objective is to find a suitor and take care of the lender and take care of the contractors and the tenants," O’Donnell said.

O’Donnell said a foreclosure wouldn’t spell the end for the development.

"No one wants to see it go down that road, but when you have a foreclosure, you have a new owner — it just happens to be a bank," he said.