Oct 272017
 

The former Zara’s property at 2042 Prytania Street, following extensive renovations. (photographed in April 2017 by Google Maps)

The New Orleans City Council voted Thursday to begin the process of tightening the laws allowing short-term rentals in commercial property as a result of the long-running dispute over the fate of the former Zara’s grocery on Prytania Street — centered not on the business itself, but on the AirBnB apartments above it.

“I am offering this motion in response to what has been an outpouring of concern about the ease of acquiring a commercial short-term rental license,” said City Councilwoman LaToya Cantrell on Thursday. “I believe [the City Planning Commission] should look into this matter, and this is the first step toward that.”

Liz and Robby Blum bought the former Zara’s at 2042 Prytania Street and announced plans to renovate it into a new, upscale grocery in 2015. Their grocery-store idea drew widespread support, but as the renovations proceeded, their listing of five upstairs apartments on the AirBnB short-term rental website drew some neighbors’ complaints.

While the store was closed during the renovations, the property lost its grandfathered permission to operate as a grocery store in a residential neighborhood, reverting to residential zoning itself, and the owners needed a zoning change to restore it. The zoning they requested, however, — neighborhood mixed-use — would have also allowed the short-term rentals to become a permanent aspect of the property, so the city planner staff recommended that the property be rezoned as a neighborhood business, which allowed the grocery but not alcohol sales or the short-term rentals.

In August, after hearing from supporters of the grocery and opponents of the short-term rentals, the City Planning Commission decided to accept their staff’s recommendation and sent the matter to the City Council for final approval. On Thursday, Cantrell acknowledged the complexity of the issues involved.

“This case has been one of the most complicated cases that we’ve had in a very long time,” Cantrell said. “When this was originally presented to the neighborhood, the majority was in full support of a grocery store with the sale of alcohol. The contention is not from that use, but the expansion of what are existing temporary short-term rentals on the upper floors of the structure.”

Under the residential zoning, the apartments may only be rented out on a short-term basis for 90 days per year. None of the neighbors want those five apartments to be allowed as commercial short-term rentals year-round, Cantrell said — essentially creating opposition to the mixed-use zoning that allows alcohol sales when the neighbors would actually support alcohol sales.

“This zoning change has become a battle about short-term rentals,” Cantrell said.

Ultimately, Cantrell proposed a multi-part solution:

  • Rezone the Zara’s building to neighborhood business, not mixed-use, which allows the grocery store with no alcohol sales,
  • Propose a change to the mixed-use zoning to make AirBnB and short-term rentals a “conditional” use, requiring specific City Council approval, rather than a “permitted” use that is automatically allowed, and
  • Finally, rezone the building again from neighborhood business to mixed use, granting the alcohol sales after the short-term rentals have been restricted within the zoning category.

Neighbors in the Prytania Street row houses generally praised Cantrell’s compromise solution, but said they will likely seek more operating conditions on the business before the final vote for the full mixed-use zoning. Likewise, the owners are satisfied with the decision as well, despite the length of time it has taken to find it, said Nicole Webre, the owners’ representative.

“I appreciate this compromise,” Webre said. “It’s a true testament to how much the neighbors do care about their homes, and how much my clients care about the neighborhood, to want to work on a compromise. I’m glad that we’re on that path.”

Fritz Westenberger, who described himself as potential tenant and operator of an organic grocery in the space, said that ensuring alcohol sales at the site is crucial to the building actually becoming a grocery once again.

“No one in that business would consider opening a small specialized market without the ability to sell wine or packaged liquor,” Westenberger said. “These items have the high profit margins to offset the expenses of a business that needs time and money to figure out its model.”

Liz Blum also thanked Cantrell’s office for the months of work toward the compromise and the path forward. Cantrell in turn praised her for her patience and her investment, and said she would do all she could to expedite and streamline the rest of the city’s actions.

“When a council member submits a motion, it goes through a much swifter process,” Cantrell said. “That’s one of the reasons why I wanted to offer the motion, because time does matter, and you have spent a lot of it.”

City Councilman Jason Williams joined in the praise for the resolution.

“These are good outcomes,” Williams said.

The Council voted 7-0 in favor of the initial neighborhood business rezoning Cantrell proposed, allowing the owners to begin seeking a grocery store tenant without alcohol sales. Cantrell then proposed two more motions — both unanimously passed — directing the City Planning Commission to begin work revising the mixed-use zoning to restrict short-term rentals and then to rezone Zara’s yet again to mixed-use with alcohol sales, without the owners having to pay the filing fees a second time.

Each of those changes will require final City Council approval after the planning commission’s deliberations.

  • Joanne Hilton

    Does everyone realize that 90 days per year is virtually every weekend?

    • ChuckNoland

      It’s suppose to be a single period of 90 days straight, not mix and match. I’m not sure if they are enforcing it that way though.

    • Phillip

      Yes, 90 days is far to much for residential areas. It’s enough to effectively be a full time hotel. 30 days should be the max. It is currently more profitable to rent out a house for 90 days a year than to a 12 month full time renter and that has to change.

    • rebecca

      Yes….

    • Johnny Nola

      Not true. I recently did the calculations on a property I have that I can rent for $1800 a month long term. If I rent it for $250 a night for 90 nights, that is $1875 a month, but I have to furnish it, pay all utilities,etc. 90 days is not enough to make a profit above what you can get for your property as a long term rental.

      If it is your second home and you live in New York, then it is good for you. Otherwise it will not work.

  • rebecca

    First off this DOES need immediate attention…. and these NEW condo buildups along the Greenway in Mid City need to NOT be allowed to turn into hotel rooms….half a million dollars condos >>>>?