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A 9% Deal With Ground-Floor Retail: What Esplanade Delille's Construction Start Signals

A 9% Deal With Ground-Floor Retail: What Esplanade Delille's Construction Start Signals
Development & ConstructionLouisiana

The Louisiana Housing Corporation (LHC) and housing partners marked the start of construction on the Esplanade Delille Apartments in New Orleans, a newly constructed, mixed-income affordable housing development. Across three buildings, the project delivers 50 one- and two-bedroom units, plus two ground-floor retail bays intended for community-minded local small businesses. LHC's contribution is $1.5 million in 9% Low-Income Housing Tax Credits (LIHTC). The project will meet Enterprise Green Communities criteria and include storm-resiliency measures, on a site LHC's release describes as having sat vacant. Anticipated completion is Spring 2027, with Landis Construction as general contractor, HCI Architecture as architect, Integrated Logistical Support, Inc. as civil engineer, and HRI Management, LLC as the future property manager.

A Competitively-Scored 9% Award, Not a Bond Deal

Unlike a bond-financed 4% deal, LHC's release states plainly that this is a 9% LIHTC award -- meaning Esplanade Delille went through Louisiana's competitive QAP scoring process rather than claiming an as-of-right allocation tied to tax-exempt bonds. At $1.5 million in annual credit across 50 units, that is roughly $30,000 of annual credit per unit -- a useful real benchmark for anyone sizing a competitive 9% application for a comparably scaled infill deal in a similar Louisiana market.

The Retail Bays Are the Real Underwriting Complication Here

Two ground-floor retail bays inside a LIHTC-financed building are not a detail to gloss over. Commercial space inside a tax-credit property has to be carved out of the eligible basis calculation, typically financed and leased on separate terms from the residential units, and tracked separately for compliance purposes across the credit period. HRI Communities framed the retail component as intentional: company president Josh Collen described the goal as a project that will 'contribute commerce and stability for the surrounding historic neighborhoods,' not just housing units. For a developer weighing whether to add a retail component to an urban infill LIHTC deal, this is a real example of the trade a sponsor made -- added community value and a second income stream, against the extra underwriting, cost-certification, and compliance work a commercial carve-out requires.

Mixed-Income Plus Green Certification Means Two Compliance Tracks, Not One

LHC's release describes Esplanade Delille as mixed-income, which layers income-restriction compliance across more than one AMI tier on top of the standard LIHTC set-aside test -- more units to track individually against their specific limit, not one blanket restriction. Add the announced Enterprise Green Communities criteria on top of that, and the property is carrying two separate certification and monitoring regimes through construction and into the compliance period: standard LIHTC income and rent restrictions, plus Enterprise Green Communities' own construction and operational standards. Neither commitment is unusual on its own, but a developer underwriting a similar mixed-income, green-certified infill deal should budget the added asset-management and reporting time both tracks require, not just the construction-cost premium.

Sources

This is EZFeasi’s own analysis of the news below, not the original reporting — read the source for the full story.

Originally reported by Louisiana Housing Corporation.

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