July 15, 2016 11:11 AM

The vacant megaclub tests the real-world implications of Downtown’s bar moratorium.

Photo by Robin May

The vacant Plaza building Downtown has become something of a case study for the district’s ongoing conversation about alcohol permitting, bars and urban activity.

The status of a standing, 13-year-old moratorium that tethers Downtown bar permits to 16 physical addresses puts unusual pressure on the building’s sale or occupation. The building at 314 Jefferson St., which previously housed Karma Nightclub, faces a provocative Dec. 31, 2016, deadline for making use of its permit, or risk losing it permanently, according to city Planning and Zoning Director Carlee Alm-LaBar. That’s a change of course from a dispute last year in which the city claimed the building’s license had lapsed after not hosting an operating bar or night club for more than a year.

Karma closed in January 2014, felled by a controversy of violence and inappropriate activity that resulted in a brief suspension of its liquor license. The next operators, a California-based consortium, installed a club called ICON for a weekend stint in April 2015. Two months later, after bringing longtime bar man Shannon Wilkerson to manage the club, the out-of-state group ultimately rebranded the business The Plaza Downtown — a rebirth, of sorts, of the popular 1990s Johnston Street megaclub owned by Wilkerson. Not long after The Plaza opened its doors, the city informed the club that its permit had lapsed following a year of inoperation since Karma’s closing.

The building has sat vacant since. City officials have recently entertained creating a conditional use permit that would allow multi-use businesses like music venues to obtain a bar license, but have yet to make any moves. Alm-LaBar says the issue has grown beyond the question of zoning and become a more complex set of concerns.

Critics of the moratorium say restricting the number of permits in part inflates the price of buildings with attached licenses by creating a de facto monopoly for grandfathered owners. The value of a liquor license’s scarcity is reflected in the $1.25 million listed sale price for the Plaza building. Current building owner Andy Monceaux, who also owns Marley’s Sports Bar just down Jefferson Street, bought the 15,000-square-foot building in 2003 for $230,000, long before the moratorium’s choke hold on development and prices took serious effect. Downtown’s other megaclub, Nite Town, which is still operating, is also on the market for $1.25 million.

Monceaux vocally opposes the moratorium, saying that it has kept prices up and made it difficult to operate.

“Free enterprise should remain free,” he tells ABiz.

There’s little doubt that easing the permit ban could change the type of operations that ultimately land in some of Downtown’s largest facilities. With the moratorium in place, market reasoning goes that vacant bar buildings will likely host yet more bars. There would be little reason to install anything else; to do so would risk a building owner’s most valuable asset.

Downtown Development Authority CEO Nathan Norris says the Plaza building, with its size and location, presents a tempting opportunity for all kinds of mixed-use developments.

Since 2014, the northernmost end of Downtown has experienced a renaissance of sorts, according Norris. A cadre of hip companies — like Rêve Coffee Roasters, Lagniappe Records and the upcoming Dat Dog location — have been big wins for DDA’s vision of a more daytime-activated Jefferson Street. Recent scores in terms of retail and amenity businesses — all of which have daylight hours of operation — were crucial in attracting IT businesses like Perficient, Enquero and CGI. CGI has not vacated its lease on the old Daily Advertiser building, which ends in early 2017, despite completing a new campus on Cajundome Boulevard.

Sources tell ABiz yet a fourth IT company is considering a Downtown location.

Downtown is thus approaching a crossroads, competing for and securing a highly educated workforce that typically demands a more progressive quality of life. So long as there is a cloud over the moratorium’s future, it’s unclear if Downtown will sustain the impressive multi-use growth that’s occurred of late.

For obvious reasons, a lift of the moratorium could result in the exact scenario it was created to avoid — an unmanageable number of bars. But the Plaza vacancy presents a case that tests the moratorium’s efficacy. If the ordinance remains as written, it would ironically restrict development opportunities to yet another bar or nightclub.

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