Rouzan 'back on track' after Engquist acquisition
The controversial Rouzan development has been acquired by the team behind the Americana traditional neighborhood development in Zachary, who plan to resume work on the stalled Rouzan project Monday.
The team led by John Engquist, chief executive officer of H&E Equipment Services, acquired the commercial and residential portions of Rouzan from Tommy Spinosa in a deal completed Friday.
Engquist-Rouzan Residential Development LLC paid $21 million for 65 acres of land, which will be carved into 375 to 400 lots, said Charles Landry, a Baton Rouge attorney and business partner with Engquist.
Engquist-Rouzan Commercial Development LLC paid an undisclosed sum for a stake in the 32 acres of commercial property in Rouzan. Spinosa will become an investor on the commercial side of the development and maintain ownership of a 4-acre tract in the development.
“Anybody who buys a piece of property believes they have the best piece of property in town. Well, I do believe I have the best piece of property in town,” Landry said. “I do believe that Tommy has the crown jewel of real estate in Baton Rouge.”
Rouzan is located on a 120-acre tract near Perkins and Glasgow roads. About 75 homes have been built on the site.
Rouzan has been dogged by controversy for years. Nearby residents were opposed to the development because they feared it would make traffic worse. The 1st Circuit Court of Appeal ruled in 2014 that Spinosa improperly took and obstructed a 30-foot-wide servitude that belonged to two homeowners whose property is surrounded by the development. In September, District Judge Janice Clark awarded $97,000 to the homeowners, Dr. Bob Welch and Danny Hoover, and ordered Spinosa to restore a servitude to their homes.
Spinosa donated land for an East Baton Rouge Parish library branch in the development, but the library board voted to end the agreement after years of disputes over permits, traffic studies, infrastructure and who was responsible for each step in the construction process. And the legal and financial woes associated with Spinosa’s nearby Perkins Rowe development spilled over to the property.
To make matters worse, First NBC Bank provided financing for all of Rouzan. When that New Orleans bank was abruptly closed by federal and state bank regulators in April, Spinosa was stuck in limbo.
“That put all of Rouzan into suspension,” Landry said. “There was not a bank for Tommy to get a release from the mortgages,” Landry said. At the time, Engquist had a purchase agreement to buy 100 Rouzan lots, but the deal couldn’t go through.
Whitney Bank absorbed much of First NBC, but all of the Rouzan loans were sold by the Federal Deposit Insurance Corp. to a Boston-based investment group. When that happened, Engquist and Landry started negotiating to get Rouzan on track.
“We bought all of the Rouzan notes and all of the other notes Tommy had for his other ventures,” Landry said. “When we acquired the notes, it allowed him to have someone to talk to.”
As part of the purchase agreement, Engquist funneled $97,000 to an escrow account to pay off Welch and Hoover, and a lot has been identified that will provide access to their lots.
“That’s part of what we feel are the best outcome from acquiring Rouzan,” Landry said. “There were a lot of disputes and issues with neighbors. We’re coming in to address all these quickly so we can have Rouzan fulfill what it was intended to be: the best mixed-use, multi-family traditional neighborhood development in Baton Rouge.”
“There’s a huge need for office space in this area,” Landry said. He expects some demand to come from Rouzan tenants who would like to have an office they could walk to.
Plans are also in the works to revisit some of the development plans that didn’t materialize in Rouzan, like the Alamo Drafthouse movie theater that would have been the centerpiece of the development. Alamo Drafthouse dropped plans for a Rouzan location in 2016 because of delays in getting the major street plan for the development.
“A lot of these newer movie theater concepts that offer food and beverage and like to be embedded in a mixed-use development, those are opportunities for us,” Landry said.
However, Landry said getting a library located in Rouzan isn’t as important to him as getting commercial developments to come in, such as restaurants and retailers.
Engquist has a history of taking over stalled developments. In 2009, he led a group of investors who bought the 413-acre Americana development out of bankruptcy. Today, Americana has about 65 homes and a number of commercial tenants, including a Walk-On’s Bistreaux & Bar. An additional 20,000 square feet of retail is set to open in a month, along with 60 apartments, Landry said.
“This is a natural extension for us,” he said.