In The News › N.O. board OKs tax breaks

Sep 19, 2007

Source: Times-Picayune

N.O. board OKs tax breaks

N.O. board OKs tax breaks
Watchdog wary of $1 billion push
Wednesday, September 19, 2007
By Greg Thomas
Real estate writer

Despite stinging criticism from a government watchdog group that demanded a moratorium on tax breaks awarded to developers, the Industrial Development Board gave preliminary approval to more than $1 billion in new projects Tuesday.

Projects approved include $60 million for a new hotel in New Orleans’ Central Business District and $550 million for an electricity plant in eastern New Orleans.

Before it met Tuesday, the New Orleans board already had approved Gulf Opportunity Zone bonds for $2.2 billion in projects.

The Louisiana Bond Commission has final approval of the bonds. Of the total $7.9 billion in GO Zone bonds the state can award, about $3.6 billion has been earmarked for New Orleans.

The Industrial Development Board has given preliminary approval of dozens of payment in lieu of taxes to many of the same projects. The board has been approving GO Zone bond requests and the payment in lieu of taxes, commonly called PILOTs, on a first-come, first-served basis. This year, the board has received 48 applications for PILOTs and GO Zone bonds, nearly five times those received in any year of the Industrial Development Board’s history.

On Monday, the Bureau of Governmental Research issued a statement stating the board had no clear cut processes, procedures or methods of prioritizing or ranking developer projects for GO Zone bonds or PILOTs. The PILOTs, which freeze property taxes at pre-development levels, erode the city’s tax base and give unfair competitive edges against the businesses that receive no subsidies, said BGR executive director Janet Howard.

But board President Jim Thorns said the PILOTs can generate as much, if not more, tax revenue through sales taxes and other means than just property taxes. He also insisted that the board continue to place local developers in line for the Louisiana Bond Commission.

Thorns urged the BGR to become involved in the vetting process, which Howard said BGR has offered to do in the past. She reiterated that BGR is more than willing to help with the process but that a committee to devise the rules and procedures and enforce them needs to produce final rules.

Despite the debate Tuesday, the Industrial Development Board of New Orleans gave final approval for bonds and PILOTs to Robert Fresh Market. If approved by the state, the exemptions would allow the local grocery chain to reopen the store at Robert E. Lee Boulevard and a new store at South Carrollton and Claiborne avenues by the end of October, said company owner Marc Robert.

Without the exemptions, Robert said he will be unable to build the South Carrollton Avenue store or repair and reopen other stores on St. Claude Avenue and on Canal Street. He is also seeking bonds and PILOTs for all four stores, but will proceed only with the Robert E. Lee store if the governmental aid is not forthcoming.

His lease for the Carrollton Avenue property is contingent on getting the subsidies.

Currently, Robert has one store operating in Metairie.

Other projects receiving approval for bonds and PILOTs from the board Tuesday:

— $60 million in GO Zone bonds for a 300-room hotel next to Loews on Poydras and 10,000 square foot restaurant at the Piazza d’ Italia architectural park. The hotel and restaurant would round out development of the city-owned property that developers Darryl Berger, Roger Ogden and Steve Rittvo have a 99-year lease on.

— $8.5 million in GO Zone bonds and a PILOT for developers Tom Crumley and Paul Flower doing business as Carl E. Woodward LLC. The developers want to build a 44-unit condominium building at 521 Tchoupitoulas St.

— $329 million in bonds for a culinary institute, a jazz club, retail space and two hotels at the Krauss Department Store and a section of the Iberville public housing complex, proposed by developer Tom Bauer. The Treme project was described without boundaries other than to give an address of 1301 St. Louis and 500 Crozat streets.

— $175 million in bonds to Lakewood Restoration Partners LLC to redevelop the Lakewood Country Club in Algiers. The 180-acre development calls for a new golf course, four-star hotel conference center, residential condos, a retirement village, office suites and retail space.

— $29 million in bonds to redevelop the Saratoga building at 212 Loyola Ave. into 153 residential units designed for the medical district. The project is pushed by Marcel Wisznia and minority partners.

— $26 million in bonds to convert the Stephens Garage at 840 Carondelet St. into 64 residential units. The project is proposed by Wisznia, Stephens Garage Building Manager LLC, Carondolet Street Parking LLC and Firewiz II LLC.

— $550 million in bonds to Sun Energy Operating LLC that has acquired a site in eastern New Orleans to turn waste into electricity. It is the only applicant not to seek a PILOT.

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Greg Thomas can be reached at gthomas@timespicayune.com or (504) 826-3399.

Sep 19, 2007

Source: Times-Picayune

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