In The News › New Orleans voters to decide Nov. 6 on Regional Business Park tax

New Orleans voters to decide Nov. 6 on Regional Business Park tax

By Bruce Eggler
The Times-Picayune

In October 2011, New Orleans voters rejected the idea of renewing a 20-mill tax on commercial and industrial property within the 7,000-acre New Orleans Regional Business Park. On Nov. 6, they will decide whether to revive the tax after a one-year break.

The tax money, about $218,500 a year, would go to the park’s management.

Although the tax would be levied only within the business park in eastern New Orleans, it is subject to a citywide vote. If it is approved, it would be in effect for 20 years.

The new proposal is virtually identical to the one that failed a year ago, but supporters point out that the tax lost by a relatively narrow margin, 53 percent to 47 percent, on a day when only 24 percent of voters went to the polls. With a much higher turnout expected on a presidential election day, they hope the result will be different this time.

Supporters again emphasize that the tax would apply only to a section of the city where almost no one lives and that no homeowners or renters would be directly affected by it. Even within the business park, any owner-occupied residential property would be exempt.

Opponents argue that there is little if any support for the measure from the owners of companies within the park, who would have to pay the tax but also would presumably benefit most from the programs it would finance.

To its supporters, the business park can be one of the city’s most important tools for promoting economic development. “If New Orleans is ever to do any sort of new light or heavy industrial activity, it has to be here,” said Joseph Shorter III, the park’s executive director since Jan. 31.

To its critics, though, the eastern New Orleans park has failed for 30 years to prove that its potential can be turned into reality, while the park’s management has been the subject of much criticism because of frequent turnover, political squabbles and ethical problems.

“The business park has done absolutely nothing that has benefited us in the 10 years since we bought this property,” the head of one company with an office in the park said this month.

Shorter hopes to counter that argument by spelling out exactly how he plans to spend the $218,500 the tax would bring in the first year: $40,000 for a cleanup campaign to remove trash and cut grass, $8,500 for cameras to try to identify illegal dumpers’ license plates, $60,000 to reinstitute a small-business incubator program that has been inactive since Hurricane Katrina, $60,000 for a revolving loan fund to assist new and expanding businesses, and $50,000 to repair the business park’s mostly vacant office building.

Even without the tax millage, the business park has an annual budget of about $350,000, with the money coming mostly from leasing space in a large warehouse building it owns.

Shorter said the park plans to spend close to $50,000 to support the tax renewal. It is unlikely anyone will spend much money to oppose it. Mayor Mitch Landrieu, whose support or opposition could be crucial, is staying neutral on the issue.

The Legislature created the Almonaster-Michoud Industrial District — known since 2004 as the New Orleans Regional Business Park — in 1979 to stimulate industrial and commercial development in the vast area bounded by the CSX Railroad tracks, the Industrial Canal, the Intracoastal Waterway and the Maxent Canal. Until this year, the park collected a tax of about 20 mills a year since 1982.

There are nearly 2,000 property taxpayers in the district, but according to the Bureau of Governmental Research, the vast majority own small plots of vacant land. Most of the district’s tax money comes from its 85 businesses. In 2011, the two largest taxpayers, Folgers Coffee Co. and Entergy, paid 28 percent of the taxes, and the top 15 paid 60 percent of the taxes.

Even critics concede that the business park represents a significant economic-development opportunity for the city. It contains large tracts of undeveloped land, and it has easy access to six railroad lines, the Industrial Canal, the Intracoastal Waterway, U.S. 90 and Interstate 10.

However, soft soil conditions can make development expensive, and much of the land is divided into hundreds of small lots located on “paper streets” planned decades ago but never built. Gaining title to these sites would be costly and time-consuming.

In addition, for many years the area has been plagued by illegal dumping, making it visually uninviting to business owners seeking a site to build or operate. The area also suffers from poor infrastructure and a lack of basic city services. Property owners complain of clogged drains, malfunctioning street and traffic lights, poorly maintained roads, overgrown and debris-filled lots, an abundance of junked cars, a lack of public transportation and little police presence.

BGR said that despite the park’s seemingly strategic location, it has always struggled to attract new businesses. Although the park’s management can claim a major role in persuading Folgers to consolidate its roasting operations in New Orleans, such success stories have been few. Park officials instead have floated ideas such as a motor speedway, a youth sports complex and a modern office park, but none was realized.

The park’s most recent audit, from 2009, found that management had misspent or failed to document how it spent more than $150,000 in grant money, and some current and former board members charge that the agency continues to waste tens of thousands of dollars a year.

“The idea of that board is absolutely great,” former board member Alicia Plummer said. “It could be an asset for business owners in the district.” But she said the board continues to be plagued by “political patronage and corruption.”

BGR suggested that rather than trying to recruit and assist individual businesses, a task it said is best left to the NOLA Business Alliance, the city’s public-private partnership for economic development, the business park should use its money to address the fundamental infrastructure and service needs of the district. The bureau said such an approach would help meet the real needs of tenants, some of whom said the park’s operations have been so limited that they would not notice if it disappeared.

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