Cook: After seven years, Costco finally closes on Coca-Cola property
Published Sep 4, 2013 at 8:50 am (Updated Sep 4, 2013)
Costco closed on the 28-acre site of the former Coca-Cola bottling plant on Airline Highway on Thursday for $12,150,000, according to Mark Hebert of Kurz & Hebert Commercial Real Estate, who brokered the transaction. Along with the acreage, the site contains about 345,000 square feet of buildings. Costco's interest was apparently strong in the property at Airline and Interstate 12, because they paid nearly $10 per square foot for it, and that's not including the cost of demolishing the existing buildings to make way for its new warehouse store. Hebert estimates demolition expenses at more than $1 million. Costco plans to flip about six acres of the property to neighboring Celtic Media Centre. The site was already zoned C-2, so Costco did not have to have a zoning battle with the city-parish, but the building plan did require approval for traffic flow and curb cuts, which were obtained before the closing. "This was one of the most difficult deals I have ever been involved with," Hebert says. "I listed the property in 2006 and sent the information to Costco's home office in Seattle to see if they were interested. The site met their requirements, and a few months later it was put under contract by Visconsi Development, a co-developer for Costco. The agreed-upon price at that time was $15 million. Market conditions deteriorated, and in August of 2008 Visconsi let the contract expire. They considered closing on the site and sitting on it until market conditions improved, but changed their mind at the last minute." Hebert continued to keep the property listed for sale and managed it for Coca-Cola, leasing some space to Celtic on a short-term basis. Fast-forward to early 2012, when Mike Straits with Intrepid Development—an exclusive Costco developer—offered to purchase the property for $12,150,000, based upon a current appraisal of the property. "The day the contract was to be signed the local president of Coke passes away, and we had to regroup again," Hebert says, referring to Darian Chustz, who died in January 2012. "It took another 18 months to close the deal because of plan approval and DOTD permits—and don't even get me started on how competing retailers and agents tried to roadblock the deal. We had to do land swaps and have servitude agreements approved before we could move forward. It got to where getting the deal done was more about it being the right thing for the city as opposed to the fee I was going to get." From start to finish, Hebert worked on this deal for seven years. Costco will begin demolition of the buildings on-site this year and expects to open a 150,000-square-foot store in 2014. The company opened its first Louisiana store in New Orleans in August and has plans for stores in Lafayette and Shreveport.
(Appraiser Tom Cook owns Cook, Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)