In The News › Mall tax break wins New Orleans City Council support

Mall tax break wins New Orleans City Council support

Thursday, October 1, 2009
By CityBusiness staff reports
New Orleans CityBusiness

A controversial tax break to fund the redevelopment of an eastern New Orleans mall won approval from the New Orleans City Council today, even thought the council member in whose district the mall resides voted against it.

Developers Cesar Burgos, a New Orleans lawyer, and Ashton Ryan, president of First NBC Bank, were granted approval to use 2 percent of city sales taxes generated at the mall to fund their project. The developers also plan to use 2 percent in state sales taxes for the project
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They plan is to rebuild the shuttered mall and reopen it as New Orleans East Marketplace, a $200 million project the developers say will bring much-needed retail options to eastern New Orleans.

The tax break – a mechanism called tax increment financing – has had opponents, chief among them the New Orleans-based Bureau of Governmental Research, which has criticized the developers’ proposed use of TIF funding to pay off pre-existing debt associated with the site.

Today, Councilwoman Cynthia Willard-Lewis, a co-author of the TIF ordinance and in whose district the mall sits, cast the dissenting vote.

Her vote comes after a Sept. 17 council meeting at which she requested the council defer a vote on the TIF request.

Willard-Lewis has expressed concerns about the project before today’s vote.

On Sept. 21, she wrote a letter to Mayor Ray Nagin in which she said she supported the redevelopment of the mall but she complained about a lack of information about the developers’ project. In the letter, she requested a list of documentation from the developers, such as copies of mortgages and appraisals, and a letter of intent from a large retailer. She also said she wanted a professional analysis of the project and a review from the city’s economist on the impact the TIF will have on the city’s general fund budget.

“I’m happy,” Burgos said today after the TIF vote. “I think it’s going to be a wonderful thing for the entire city.”

But Burgos said he is disappointed that the TIF ordinance, as rewritten after the Sept. 17 council meeting, takes away the developers’ ability to use TIF proceeds to pay $11 million they owe to a Lowe’s home improvement store operating on the mall site.

Burgos said the developers have addressed all of the Willard-Lewis’ concerns.

“I still don’t understand why she opposed it,” Burgos said. “But her colleagues understood the project.”

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