Decay on Display: Old Canal Street Hotel faces demolition amid city’s blight battle

NEW ORLEANS (WVUE) - In a city grappling with blight, the Old Canal Street Hotel stands as a stark testament to neglect. The property, once a beacon of potential at the corner of Claiborne and Canal, has now earned its place among the “Dirty Dozen” blighted structures in New Orleans.

The hotel, owned by Governor House of New Orleans L.L.C., tied to local developer Joe Jaeger, has faced years of complaints and code enforcement violations. Code Enforcement reports a total of $7,800 in fines and $300 in hearing costs since 2019 for issues ranging from sanitation problems and rodent infestation to graffiti and a defective roof.

Code Enforcement’s Thomas Mulligan says such blight impacts the city’s image.

“It’s really the gateway to our downtown, so tourists are going to see it. People passing through New Orleans are going to see it, and it really gives an inaccurate and an unfortunate impression of the downtown,” Mulligan said.

The Fate of the old Canal Street Hotel hangs in the balance as Mulligan says the city is pursuing a demolition order to potentially remedy the disrepair.

“We have an owner who has the resources to tie up a demolition in court for a little while, but we’re confident that we’re on the right side of the law,” he said.

Former Dept. of Safety & Permits Director Zach Smith says investors often face a lengthy permitting process and steep costs to properly maintain large commercial buildings.

“When are we going to say that a building just is too far gone? We see a lot of well-intentioned people come take the reins of property and they can’t make it work because it’s too damn expensive to renovate,” Smith said. “The building is laughing in the face of neighbors, neighborhoods and the city that people are protecting for historic preservation.”

After several requests for an on-camera interview, Jaeger’s attorney released a statement saying the building is for sale and being actively marketed.

Despite the claim that the building is actively for sale, skepticism remains. Real estate broker Ron Mazier suggests that developers might strategically delay sales, holding onto properties as they anticipate appreciation.

“They’re banking on that appreciation to be more than the fines. So, it’s almost strategic blight. A strategic blight is when they hold onto the property knowing it’s going to go up in value and who cares about the fines? So, they have time to wait it out. And real estate is one of these things where it’s 3, 4, 5 years cycle,” Mazier said.

The Downtown Development District says it is focused on the Canal Street area, seeing potential in the prime location with the newly constructed medical corridor.

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