Bywater upscale hostel developer buys land, moves forward with $16 million project

The developer of a Bywater upscale hostel closed a deal this week to buy the vacant Chartres Street riverside property where the controversial project is slated.

Ted Kelso of Pelican Royal LLC bought the former industrial land at 4019 Chartres St. for $2.47 million, a sale that was finalized Tuesday (Sept. 5), according to a news release from the developer.

The sale marks a step forward for the proposed $16 million, 185-bed hostel and hotel called Stateside — despite the fact that one neighborhood group has sued to block the project.

Stateside would be a 32,000-square-foot building with a mix of private and shared rooms, a laundry, courtyard, pool, restaurant, bar and coffee shop. The project stirred unease among some Bywater residents concerned it would attract rowdy tourists and further disrupt an increasingly sought-after residential neighborhood.

Kelso, who plans to live on the site, scaled back the size from 48,000-square-foot with a new design by Studio WTA architects after the City Planning Commission rejected the proposal. His team insists the development’s amenities will benefit locals in the neighborhood, not just visitors.

The City Council then approved a conditional use permit in a 6-1 vote in May. Zoning allowed for a hotel of up to 10,000 square feet without a conditional use permit.

“As we move towards our opening in early 2018, we continue to work with our neighborhood to make Stateside a welcome addition to Bywater,” Kelso said in the release. “We look forward to providing amenities for our neighbors, jobs for our community, and a new option for our growing tourism sector in one of our most popular, yet underserved, neighborhoods.”

Neighbors First for Bywater, one of two Bywater neighborhood associations, filed a lawsuit in Orleans Civil District Court on June 17 seeking to reverse the City Council’s decision. The group argues that the City Council violated zoning law, and that the second design should have been examined by the Planning Commission, which makes recommendations to the council.

The project “would significantly damage the fabric and nature of the community irreparably,” the lawsuit says.

Pelican Royal intervened in the case and asked for the litigation to be dismissed. The case is pending.

The other community group, Bywater Neighborhood Association, endorsed Stateside during the city approval process.

The 40,000-square-foot vacant lot was most recently used for a seafood processing plant. Councilwoman Nadine Ramsey, whose district includes the property, said she supports the hostel because it fits into Bywater’s history of being a mixed-use neighborhood.

Katherine Sayre, | The Times-Picayune