The site of the former Times Picayune building at 3800 Howard Ave., where Drive Shack began building a golf entertainment venue, has new owners planning a similar concept.
Brothers Alex and Nick Xiao closed the property on Tuesday, buying it from 3800 Howard Investors LLC in a cash deal for an undisclosed amount. New Orleans developer Joe Jaeger, who is listed as an officer of 3800 Howard Investors LLC, purchased the property in 2016 for $3.5 million along with other members of the company including Barry Kern, Arnold Kirschman and Michael White.
The Xiao are working with Dallas-based consultant Flite Golf & Entertainment to develop a $40 million venue called 504 Golf. If all goes according to plan, Alex Xiao said it will open in spring 2024.
The brothers have indoor entertainment and real estate development experience and have opened trampoline parks in Denham Springs, Harvey and Prairieville in recent years. They also own restaurants, retail developments, and apartment complexes throughout Louisiana.
“The next step is to make the 504 Golf a reality,” said Mike Sherman, a consultant at Sherman Strategies representing buyers. “It basically takes the concept of Drive Shack and makes it its own.”
Alex Xiao said the most pressing matter is to get through the approval and design stages. Sherman said they are in talks to finalize a deal with an architect and a contractor, and the cash deal shows their commitment to the project, he said.
“In this era of high construction costs and high interest rates and challenges that come with closing deals, these guys are an all-cash deal,” he said. “It makes the project so viable that others may be looking for an investment, they’ve already raised money.”
Alex Xiao said he and his family have been eyeing a golf entertainment complex since 2018.
“We did a lot of research,” Xiao said. “When the Drive Shack deal faltered, I thought maybe now is the perfect opportunity to try it.”
Xiao said their venue will have more “entertainment flare” and include a golf range.
504 Golf will also have a first floor space for golf enthusiasts and those interested in learning about golf, Sherman said.
“It’s the strong educational component that’s much more focused on the serious golfer,” Sherman said. “There are some neat things they’re coming up with that we’ll be debuting in the future. It’s really not just your national standard model, but something that’s being customized here, that’s a complete entertainment venue anchored by the golf experience.”
Drive Shack announced plans for construction in 2018 and was awarded a PILOT to help build a $29 million venue. Demolition of the newspaper’s former building began in 2019, with plans for a new facility with 90 air-conditioned batting bays, a gaming lounge, a full-service restaurant and bar, an outdoor lounge, and several meeting and event spaces. Developers estimated more than 350 jobs from the project.
The Dallas-based company halted construction in mid-2020 and said it would not resume work until mid-2020. Meanwhile, revenue was lost as pandemic restrictions forced the closure of its locations in four other cities. The parent company sold a California golf course and planned to use the proceeds to fund the New Orleans Drive Shack. On Monday, Drive Shack venues reported $10.1 million in revenue, up from $10.5 million in the same quarter last year.
Sherman described the Howard Avenue property as “a fully validated location where we have already completed tremendous ground and underground work”.
“If you think about it, all the incredibly important but boring things that are part of a development — the clearing, the grading, the infill, the utilities, the landfill — it was all done here,” Sherman said. “Nick and Alex find themselves in a situation where years and millions of dollars of painstaking work have allowed them to do the really fun part, which is going vertical and building and operating the facility and imagining and creating.”
He said the existing structure would be demolished and they would start over with a vertical building.
“You can’t think of a more mature project, which is why we have such a tight timeline,” Sherman said.
Xiao said he looks forward to developing the property as a local rather than a national chain joining. Dallas-based top golf has also been eyeing New Orleans for a similar venue in recent years.
“We love doing business in Louisiana,” said Xiao, who moved to Louisiana in the early 2000s. “Putting that smile on the faces of the people of New Orleans is amazing. I really appreciate the honor of doing it too. We want to do it locally.”