Paul Flower is President and CEO of Woodward Design+Build, a nearly century-old company that has developed hotels, hospitals, office buildings, apartment complexes and retail centers throughout the Gulf South.
Flower has also been involved with some of New Orleans’ most notable projects, most recently the Four Seasons Hotel in the former World Trade Center building. Flower sat down to discuss Four Seasons’ first fiscal year and its prospects for New Orleans.
The interview has been edited for length and clarity.
The Four Seasons has now been open for a little over a year. How is it going?
Our official opening was planned for the fourth quarter of 2021, but omicron hit the mark. So we didn’t really fully open in January… and we’re beating projections for the first year. We expect next year to be slightly better than our second-year projections, but a Four Seasons property takes about four years to fully ramp up, so you won’t see stabilization until year four.
What is the occupancy?
Eventually, we’d hope to be in the 70 percent occupancy area, and it’s going to take a while to get there. I think we’re going to be in the 60’s this second year, which is a bit higher than forecast, and I think in the third and fourth years we’re going to be in the 70’s – our forecast stabilization numbers. Oddly enough, however, we were able to deliver the rate we forecast from day one. We’re in the high $400s on average.
If you had to do it again, what would you do differently?
With a project like this, you could always have done things differently. We were delayed two years by a frivolous lawsuit, which caused a number of problems. If we had started two years earlier, our fundamentals would not have been affected by a five-month record high in the Mississippi. We would not have built during COVID. We would have missed three hurricanes and a tornado. So if I had to do it again, I’d happily do it without the lawsuit. I think because of the litigation we delayed the start of the design… call it one frivolous litigation, don’t know if it has to be three times. I think we would have been better off starting the design earlier and moving it forward. I also think we probably exaggerated a bit. There were things that we invested a lot more money in to do better. I think that will ultimately work in our favor, but it creates something – it requires more justice and things like that.
Where do you see the city’s hospitality industry headed? I know the nature of conventions has changed. Vacation travelers are coming back. Are you guests of Four Seasons?
With 341 rooms, we are the second largest Four Seasons in the world by room count. There was a lot of debate as to whether it should be that big. We will find out in a few years whether it was the right decision. But we were more than happy with the temporary orders we received and how the hotel was received. The group business is progressing and I think this decision will ultimately prove to be the right one. We will create group business figures for 2022 and exceed them a little, we are satisfied with that. … This hotel is like no other in the city or state. It’s the only five diamond hotel in the state and honestly I would compare this hotel to anything in the country. We are in a small market without many business travelers. We have to make it in the transient and convention business and I think eventually we will make it.
Now that this project is complete, what are you focusing on next?
It’s not quite behind us yet. We made the goals for the first year. Now we have to hit the targets for year two and there’s a lot of asset management going into that. But we’re looking at a number of things. We are looking at active adult development on the North Shore. We are working on a live work play development in a neighboring community, although I have a non-disclosure agreement on this so I can’t say where. We are working to redevelop the old Mercy Hospital on Bienville Street. We have a potential project in another state that we are reviewing. Most of what we are looking at is either hospitality, assisted living or some type of multi-family retail development.
As New Orleans faced crises on multiple fronts in the 1990s, the business community played a very active role in resolving them. Where is the business world today?
I believe they are there. I think we try to stay more in the background because some people who have been very visible in the past with good intentions also wrongly gave the impression that they were trying to run the city themselves and not be part of the city City. But I think if you look at a number of things, from the fact that we helped solve the fire department pension fund; the fact that we helped raise the Fair Share money for the Sewerage & Water Board; the fact that we’ve donated a lot of money no one ever sees to try to improve police recruitment; that we came up with a whole list of ideas about what to do with the criminal justice system to make it better and laid those ideas out. I think we were very supportive of the GNO Inc. coalition. You see people trying to help foundation schools. Sometimes we’re not as boisterous as maybe Jim Bob Moffett, but we’re there and a lot of people are working very hard.
What keeps you up at night?
When we refinance a project like the Four Seasons, like we just did, more than one or two people are interested in looking at it. If I picked up the Four Seasons building and put it up in Atlanta or Boston, we would have five or six people who would be interested in refinancing it. The fact that we’re in a small town that has the kind of economy we have — not as diverse as it should be — is a barrier to getting capital into projects in the city. We are burdened with high insurance premiums because of the hurricanes. That’s just the nature of our geography, but there are other things we could do — diversify our economy, improve our criminal justice system. We have to find a way to hold on to the start-up companies that we have here in New Orleans. Tulane has produced research that has been commercialized and that has produced start-up companies and we don’t have the facilities for them when they are ready to scale up.
Do you have hope for the city?
It’s difficult to deal with problems in this city and partly in the state that make it difficult to do business. It’s harder to get capital because you’re in Louisiana. There are a lot of people who just don’t come here because of our economy. The economy in New Orleans is not diverse enough, making it difficult. But I think this city has a lot to offer if only it does the things necessary to make us attractive enough to come here. I think the city has potential. I think the question is: how do we improve our tax situation and make government more efficient when it comes to doing business and diversifying our economy?