Six Flags, New Orleans (formerly known as Jazzland), is a 227-acre, abandoned theme park that closed when Hurricane Katrina wreaked havoc on the state in August 2005. The park grounds, situated on a low-lying section of Eastern New Orleans, created an artificial basin that was prime for flooding. Drainage pumps at the park failed during the storm, causing the berm to retain rainwater and seawater overflow from Lake Pontchartrain, and submerged the entire park grounds in four-to-seven- feet of water for over a month. Given the extensive damage, the park was closed indefinitely with no plans to reopen.
The site is now owned by the Industrial Development Board (IDB) of New Orleans, who continues to look for opportunities for redevelopment of the site. Peter McEnery, Founder and President of The McEnery Company, a real estate appraisal, brokerage and consulting company in New Orleans, took on the challenge of appraising the site for IDB.
Mr. McEnery shares valuable insights on this high-profile appraisal with us.
Q: How did you generate this appraisal assignment?
A: The City of New Orleans owns the site, and we were contacted by a representative of the Industrial Development Board of New Orleans. About half a dozen firms were asked to bid on this complex appraisal. I have done a lot of complex assignments, especially on undeveloped acreage, and I am very familiar with the location and the neighborhood.
Q: What was your approach when you started this appraisal?
A: We approached it as we do any appraisal assignment: We started with the land. We used the Highest and Best Use analysis, and we asked ourselves if this land was vacant, how would it be used? We also approached it as being an undeveloped tract. It was a brownfield site more than anything.
We did a thorough market area analysis and marketability analysis. We really needed to understand the market and how the property relates to the market, and then decide what tracts it takes.
Q: Did you use other experts to complete this appraisal?
A: After our initial site visit to the abandoned theme park, we knew that we needed to retain other experts to provide their expertise on matters such as the valuation of movables and the demolition and salvage of the movables.
Q: What were the biggest challenges in this complex appraisal?
A: From a technical standpoint, the appraisal wasn’t that complicated, but there were many physical challenges. There are 227 gross acres, with two bodies of water, significant parking, multiple amusement rides, and several buildings and structures, all of which are in very poor condition. Underdeveloped wetlands make up 17.2 of those acres. We had to make several site visits, and getting around the site was a challenge. Not only is it a large site, but there was continuous flooding and accumulated water due to poor drainage. We walked through the site and drove through it as well.
Q: And it was an abandoned site. How did that impact your assignment?
A: Given its high profile in the city of New Orleans, the site was ripe for trespassing and vandalism. Not to mention, there are several miles of marsh and lake around it, and no electricity. The gates were locked, but people could get in and out of it and do anything they wanted. Security patrolled the site 24/7, but there were instances of trespassing including people having parties and gatherings. There was also wildlife on the site—alligators, snakes, coyotes and wild pigs. Security needed to be present every time we went out to the site.
Q: You mention its high profile. How do you navigate appraising a property that receives so much local and national press coverage?
A: The familiarity of this site is a challenge in relation to the appraisal, not only by locals but by people around the country. Negative press coverage can help form public opinion, and we had to avoid all of the negative noise to conclude a well-reasoned and well supported opinion of valuation.
Q: And so, what was the final value reconciliation?
A: You will have to join us for our webinar on November 16 to find out.