Developer John Montesano has less than 150 days to fulfill promises he made to the city-parish council, or his ambitious Chateau Mirage golf course community could be nothing more than a vast sand trap.
John Montesano's run-ins with City Hall are notorious.
"John fires off," says Lafayette City-Parish Councilman Lenwood Broussard. "He shoots you a whole slew of bullets. I kind of laugh because I know he's going to go into a rage."
The combative State Farm agent turned real estate investor and developer has taken on three administrations in his quest to develop raw acreage off Johnston Street into an ambitious project ' its latest incarnation calls for a $70 million championship golf course and gated residential community on 300 acres.
In its infancy, the project didn't have a shot under former Mayor Kenny Bowen, whom Montesano unsuccessfully attempted to recall during his final term in office. The vitriolic rhetoric between Montesano ' a city council member under Bowen from 1972-1976 ' and local officials continues to this day. When local officials hammered out a compromise at a May 2 Lafayette City-Parish Council meeting that granted Montesano another 180 days to complete road projects at the site, the short-and-stocky developer's mild demeanor that day was so out of character that Councilman Bobby Badeaux facetiously asked him if he had taken a Valium.
"It was like we were one big happy family," says Broussard. "He was like a grandpa with all of his grandchildren around him."
It didn't take long for the contentious maneuvering associated with the project to return. By the end of the month, Montesano was threatening to sue local government because its Department of Public Works had stopped him from proceeding at the site while it studied his drainage analysis. The merits of such a lawsuit are debatable, considering that Montesano began some construction on his project and rerouted drainage before he had approval from Public Works, according to the department's director, Tom Carroll. (Montesano did have a Corps of Engineers permit for the drainage work.)
"All they're trying to do is block me," Montesano told The Independent Weekly May 31, once again faulting local government by claiming LCG engineers were holding him to a higher standard than other developers on the drainage analysis. Acknowledging the complicated nature of the development, Carroll says most of the acreage is in the 100-year floodplain, so it must comply with National Flood Insurance Program and FEMA regulations.
Without the green light from Public Works, Montesano says he was unable to secure final financing, and the steadily rising cost of construction is hurting his bottom line. And since he still doesn't own large portions of the land slated for development, he claims the delays are affecting his ability to secure those properties. For example, he says he lost $125,000 in deposit money when his purchase options on the Stutes' family's 37 acres expired.
"They're going to delay this project right out of business," Montesano says. "I've been shut down for 45 days by the administration from the city. It's costing us right at $3,000 a day. It's been an ongoing blackmail situation." Montesano put the onus on everyone from Public Works and the council to the very top of local government. "The mayor has been invisible in this project. He has no leadership in this project whatsoever."
Both City-Parish President Joey Durel and Chief Administrative Officer Dee Stanley adamantly deny these charges, saying they have been available to help Montesano. Says Stanley, "To my knowledge, each and every call was returned within a reasonable period, usually the same day, regardless of who was called: me, Joey, Tom Carroll."
In fact, in part because of Stanley's work as a liaison between Montesano, his engineer and Public Works engineers, on June 7 the finger-pointing came to a halt when Montesano got a "notice to proceed" from Public Works ' signaling the start of the 180-day clock on his long-standing promise to pay for and deliver to the city road improvements at the site. While he works to finish the roads in time for the December deadline, the feisty businessman is also scrambling to buy from various landowners much of the land he hopes to develop.
For perhaps the first time in more than a decade, the pressure to turn this raw land into a first-class golf course community is now squarely on Montesano's back.
Montesano, who has no partners (other than his children) in the project, now says he has secured financing. The road projects and their estimated $14 million price tag, though, seem the least of his worries. When he got the go-ahead from Public Works, he only owned about 40 percent of the land proposed for development, according to Lafayette Parish Tax Assessor records.
"I just feel like he went about it differently," says Joe Lyons Jr., a representative of the Lyons family that sold Montesano about 90 acres over the span of a decade and plans to close any day now on 67 more. "Most people acquire the land before they start." The Lyons' family land is part of the golf course, and Lyons acknowledges giving Montesano permission to move dirt in preparation for the course before finalizing the purchase. Chateau Mirage already looks much like a golf course, with formed dirt mounds and lakes. The Lyons also have an additional 22 acres on the market for $100,000 an acre, and Montesano has first right of refusal. "At this time, we have not come to terms on that," the landowner says.
Montesano has yet to renegotiate a buyout with the Stutes family for its 37 acres on the proposed golf course, according to Shirley Stutes. "I'm not going there," Stutes says of the deal with Montesano. "I can write you a book. [The property's] for sale right now, and that's it." At one time Montesano says he had an agreement to buy the property for about $120,000 an acre.
Montesano notes he has a closing scheduled for July 21 on 6 acres owned by a local partnership. Blaming delays, he says he lost options on about 100 acres, leaving him with several agreements he has to renegotiate, in addition to deals that he's barely begun to hammer out.
When Montesano first proposed his development in the mid-1990s, he planned a major shopping center, much like the Super Target center on Ambassador Caffery Parkway. A chronology of events compiled by local government reveals a series of road and infrastructure issues Montesano has faced over the years.
"As we took some steps forward, we took two steps back because either we couldn't agree or he needed time to develop his plans," says Councilman Broussard. To date, the only aspect of the project that has come to fruition is the $15 million Chateau des Lions, a thriving upscale 180-unit apartment complex that opened in 2002. Additionally, sewage, water and street infrastructure has been completed on the 81-lot patio home development, which features two lakes.
Much of the original plan was scrapped by the late 1990s, and the golf course amenity was added, which represented a major shift in Montesano's vision for the project. It also created a host of new problems for him. In January 2003, at a Planning Commission public hearing, planning officials said Montesano had misrepresented how much property he controlled at the site, and the commission directed him to get written consent from all property owners whose land was part of the golf course.
But the road issues have been the sticking point. Montesano convinced the council to drop the extension of South Domingue Road from its master road plan, an improvement that would have taken it from Ridge Road to Duhon Road, because it would cut through his golf course. He promised to build a series of roads to help alleviate traffic, much in the same way South Domingue extension would. Deadlines were set for construction, and Montesano missed them, though he maintains that he has already made significant progress on one road. The May ordinance represents his third ' and final ' extension on the roads, according to local officials. (See related sidebar, Page 15.)
If Montesano blows the deadline this time, South Domingue Road extension is back on the books ' slicing right through Chateau Mirage's golf course.
While ambitious and complicated, Chateau Mirage would be a welcome addition to the cluttered and random retail development near the Mall of Acadiana, with the potential to alleviate traffic congestion at the intersection of two busy thoroughfares. Montesano's jumped through hoops and proved his detractors wrong in the past, hiring top-rated course designers, consultants and respected local professionals for the project.
But do the numbers work enough to make this project viable?
There's a joke among golf course developers that no one makes money until the third owner takes over, usually for a song, but that's not deterring Montesano. "It's a very lucrative deal," he insists. Montesano says he has already spent $8 million securing property and adding infrastructure and other improvements. When the project is complete, he maintains that he will have invested $70 million.
In terms of acreage, Chateau Mirage is on a scale similar to River Ranch. But River Ranch's high-density mixed-use development was constructed along significant existing and city planned arteries, and a cooperative spirit existed among its property owners, developers and local government on a number of key infrastructure issues. Montesano's project is missing most of those elements.
Montesano says Chateau Mirage's annual golf and facilities' maintenance will be supported by 500 members, who will pay a $10,000 initiation fee and $375 monthly, as well as other services offered by the clubhouse.
And he's counting on lot sales to pay off his capital costs. Lots on the 18-hole championship course, designed by von Hagge, Smelek and Baril, a renowned firm based in Spring, Texas, are priced from $200,000 to $300,000. Montesano says he's collected deposits on 40 of the 248 golf course lots (and another 18 down-payments on the 81 patio home lots ranging in price from $60,000 to $80,000). When work is completed on the clubhouse, a 32,000-square-foot structure that features restaurant and meeting facilities and a full spa, the golf course lot prices will jump up to $300,000.
Montesano maintains his community has a distinct appeal because of its open green space and proximity to a major shopping destination. About 90 percent of the golf course lots front the course itself. "You're going to think [you're living] out in the woods," Montesano says.
Additionally, he says two feasibility studies, one by a group out of Houston he hired more than three years ago and an update done several months ago by AmSouth Bank, Montesano's lender, show a tremendous demand among golfers for this open-space living in the heart of south Lafayette. "There's nothing like it," he says. "LeTriomphe is no competition because it's 16 miles down the road [in Broussard]. We're not going to compete with municipal courses or any of the other private courses. It's going to be the flagship of the whole state of Louisiana." Other private courses in the area include Acadian Hills and The Farm, both in north Lafayette Parish, and Oakbourne in the eastern part of the parish. LeTriomphe, a championship course that attracts professional golf events, is the only gated residential golf course community like Chateau Mirage.
Representatives from LeTriomphe and The Farm did not return phone calls for this story, and an Oakbourne official declined comment.
Montesano says he'll spend about $30 million in land alone; including land costs, he expects to pay about $1.2 million a hole to develop the course. By contrast, Lafayette's newest municipal course on University Avenue, The Wetlands, cost about $850,000 per hole to develop, with a total price tag of $10 million, including the clubhouse and all other facilities. The 182-acre tract cost $2.2 million, a fraction of what Montesano is paying, and will likely never be a money-maker for LCG. Including personnel, it costs about $1.7 million a year to maintain, according to Parks & Recreation Director Gerald Boudreaux.
Like other LCG officials, council members say they have never tried to hold up Chateau Mirage. "We want the project to happen," says Councilman Bruce Conque. "If you look at how much property tax he'll generate, you want him to succeed."
Montesano's missed deadlines, aggressive nature and unorthodox approach to following planning and permitting processes probably haven't endeared him to city council members. "I think government has made every attempt to work with Mr. Montesano, with his attorney, with his engineer," Conque says. "I'd like to get us out of the way, in terms of an obstacle, because I know we have bent over backwards to help him out."
Broussard, who's been in government 19 years, says most developers agree with Montesano that government doesn't move fast enough, a problem exacerbated on this project by the road issues and Montesano's evolving plans. The councilman says the project's checkered history has made progress difficult. "Sometimes I don't believe [Montesano]. Maybe it's because I don't have all the facts," Broussard says. "John's been a major problem, but John's doing a major [development]. If he pulls it off, it's a helluva project."
Chateau Mirage is in Broussard's district, so the councilman is praying there will be no more delays. "Given the fact that he's received the green light, if he can't pull it off right now, it'll be a shame that we went through this and had all these delays with moving the city forward, with moving traffic," Broussard says. "And he spent a lot of money to make some hills."
If John Montesano pulls off his massive golf course development, it should help alleviate traffic congestion near the mall. He has until early December to get three road projects completed, including the realignment of Town Center Parkway with Target Loop across from the mall at Johnston Street, so that there is one direct crossover in that area to the mall, instead of two within 100 feet of each other. (That odd configuration resulted from Montesano's construction of Town Center Parkway in the mid-1990s to make way for the Soloco building.) But first, he has to finalize an agreement to acquire a small piece of property from Hugh Uhalt, an attorney in New Orleans.
Montesano says that construction is half complete on the expansion of Town Center Parkway west to the planned Rue de Belier extension, a four-lane boulevard that will go from the roundabout on Ridge Road to Duhon Road, a project LCG plans to bid later this summer. Duhon Road intersects with Johnston Street south of the mall.
In exchange for LCG officials taking South Domingue extension off the books, Montesano promised to build a connecting road behind the old K-Mart from Ridge Road to Target Loop, which runs in back of T.J. Maxx and PetsMart in the Acadiana Square Shopping Center. Target Loop would thereby allow motorists to avoid Ambassador Caffery altogether (and stop the "alternate route" drivers now take through the K-Mart parking lot) to get to the mall area, because it will connect with Town Center Parkway, which once extended by Montesano would divert this traffic to the new Rue de Belier. If Montesano builds his roads, motorists will be able to take Domingue Road from Congress to Ridge, via an LCG project now under construction, and bypass Ambassador and Johnston Street altogether (until they get to Duhon, which would then feed them onto Johnston south of the mall).
Once built, the roads will be turned over to LCG.
Should Montesano miss the deadline, he'll have to prove that he's acquired all of the property for these road projects, dedicate them to LCG and post a letter of credit that would guarantee their construction. Otherwise, South Domingue Road extension goes back on LCG's long-term road plan and right through his golf course.