It’s been nearly three years since hurricanes Laura and Delta ravaged Lake Charles and the surrounding region, followed by a winter freeze and heavy floods the following year. While much progress has been made in the recovery, the city is still dotted with dilapidated homes, big box stores and former small businesses.
To spur economic development and fill in the gaps left behind by the storms’ wrath, the city for the second time invited potential investors to come and learn about opportunities in the hurricane-torn town, and those who came said they see potential.
“We’re very bullish on Lake Charles,” said Jackie Dadakis, whose company, New Orleans-based Green Coast Enterprises, is currently in the closing phase of purchasing a historic property in downtown Lake Charles, for conversion into a mixed-use commercial space to likely include office and hospitality tenants.
Dadakis was invited to speak at a panel at Thursday’s event at the Golden Nugget casino, where she shared her company’s experience of deciding to invest in Lake Charles commercial property following the inaugural event in 2021, just after the slew of natural disasters that hit the region.
The old Sears building in downtown Lake Charles once housed the bar and music venue Zephyrs on the city’s main drag, Ryan Street. Soon, it will be turned into a mixed-use commercial space, with offices and food stalls or restaurants.
“Sometimes, after a storm can be the best time to invest in a market,” Dadakis said. And while there’s plenty of rebuilding and redevelopment already underway, there are still opportunities to invest, even years after the storms.
This is especially true for office space, a market that has cooled severely in other parts of the country following the work-from-home wave spurred by the pandemic.
“The Lake Charles market is very unique in that way,” said Lauren Boring, project specialist with the city’s planning department. Because of the widespread destruction of commercial real estate by the storms, demand for office space remains strong in the city, she noted. “We have people beating down the door,” Boring said.
One of the most visible reminders of those losses is the Capital One Tower, wedged between the city’s historic downtown and the shoreline of its namesake lake. The 22-story office tower suffered severe storm damage and has yet to be restored, a process that has been the subject of extensive litigation between owner Hertz Investment Group, its insurer and the city.
The Capital One Tower in Downtown Lake Charles, seen here behind another office building, remains empty and severely damaged over two years after Hurricane Laura.
The tower was put up for sale earlier this year and is currently listed as pending on commercial real estate website Commercial Exchange, at a list price of $8.5 million. It’s still unclear who the potential buyers are, but the building is estimated to require over $100 million in repairs to be put back into commerce, with the other option being demolition.
Repair, rebuild or tear down and build anew: There are properties all over the city that provide promising investment opportunities and whose redevelopment would help the city recover, said Doug Burguieres, the city’s planning director.
“Any natural disaster affords opportunities for refreshing an area,” Burguieres said. And storm-damaged properties provide one significant advantage, he noted: infrastructure, such as sewer and water connections, are already in place. “That’s a huge opportunity,” Burguieres pointed out.
“It’s devastating to have these natural disasters in our area, but it really does leave an empty canvas to build upon,” said Joshua Smith, owner of local coffee shop, bakery and restaurant Coffee 30. Smith recently opened a second location in a commercial development that had been slated to replace an iconic skate rink after it closed in 2018, and finished construction after the storms.
“Investing in the historic fabric of our communities is one of the greatest things we can all be doing,” Dadakis said. Her company is in the process of remodeling a previously vacant building that was once home to the city’s Sears department store and, later, a bar and concert venue.
In addition to the availability of commercial space ripe for repairs and remodeling — and the demand for such spaces once they are ready for commerce — there’s another factor that helps sweeten the deal for investors: federal aid funds.
There are over $100 million in federal funds dedicated to economic recovery post-disaster in the pipeline for areas hit by Laura and Delta, administered through the Louisiana Office of Community Development’s Restore program, that will be split between grants to small business owners and local government for programming.
Other funding set aside to help the region recover has already borne fruit in the form of outside investment. Tax credits allocated specifically to disaster-struck areas are what drew the Banyan Foundation, a nonprofit developer of affordable housing, to the area, according to President and CEO Robert Coats.
McNeese State University economic professor and Director of the H.C. Drew Center for Business and Economic Analysis Dan Groft during a presentation on Lake Charles’ economic outlook at the 2023 Investors’ Day at the Golden Nugget on June 15, 2023.
Working with the city on site selection, planning and permitting has been easy, another reason why he plans to expand the foundation’s investment in Lake Charles. Coats, who came into town from Birmingham, Alabama, said: “We’ve been zooming through. We’re planning to do more.”
The foundation is scheduled to break ground on a new project, supported by a federally funded disaster recovery program, within the next three months.
Though the need for affordable housing, which was the focus of the city’s inaugural event targeting investors in 2021, is still great, Dadakis said there’s opportunities for investment across a variety of business types, targeting various income levels.
The presence of industry, especially the petrochemical and growing LNG export sectors, results in one of the highest area median incomes in the state, economist Dan Groft confirmed at a later panel. “I look around Lake Charles and I see a lot of spending power,” Dadakis said. “And honestly, not a lot of services to spend it on.”