Big Questions: Future Uncertain for Convention Center
By Jennifer Schecter
Source: Biz New Orleans
June 10, 2020
The New Orleans Ernest N. Morial Convention Center is facing unprecedented challenges. In April, a watchdog report critical of its hotel expansion plans cautioned against it in the near term. At its May board of commissioners meeting, the financial outlook was grim. And now, its leadership is in flux with a recent Louisiana state senate decision.
Last week, Louisiana Sen. Karen Carter Peterson deployed a rarely-used legislative function to veto the confirmation of former state Rep. Walt Leger III to the role of chairman of the board of commissioners of the Ernest N. Morial Exhibition Hall Authority, the governing body of the convention center that is a political subdivision of the State of Louisiana. Gov. John Bel Edwards had appointed Leger to the board of commissioners and issued a statement of disapproval at the move, calling Leger experienced and highly qualified.
“I am equally disappointed that Walt Leger was not confirmed as the chair of the Ernest N. Morial-New Orleans Exhibition Hall Authority, especially as Walt has been a key partner in the Fair Share negotiations with the City of New Orleans and as the state has operated a medical monitoring unit at the Convention Center,” said Edwards. “Walt has a passion for New Orleans and years of experience in the Legislature. He is an asset to the City and to the board and it is troubling that he was not confirmed.”
When asked for comment, Sen. Peterson responded with a non-specific process statement.
“The Senate confirmation process occurs during executive session of the Louisiana State Senate annually,” said Peterson. “That process is confidential. As reported, the individual mentioned was among a number of individuals who were not confirmed by the LA Senate.”
Peterson directed my further questions to the Louisiana Senate Secretary’s Office and provided me a non-working phone number.
Leger presided over the May board of commissioners meeting as chair, although it must have been officially in an interim capacity. At that meeting, the financial realities of COVID-19 were harsh. Staff reported that from March 10 through the end of the calendar year, 51 previously scheduled events have been canceled, accounting for a loss of $11 million in direct revenue and 460,000 anticipated visitors to New Orleans.
The hotel tax and sales tax on purchases made by those visitors will be at a staggering deficit as well. The City of New Orleans is projecting a $137 million budget shortfall, with sales and other tax collections anticipated to be $111 million less than expected this year.
And that brings us to the April report by the Bureau of Governmental Research (BGR) entitled “Conventional Wisdom: Pausing the Convention Hotel Deal to Assess the Pandemic’s Impact and Reduce Public Costs.” The convention center is still planning to build a 1,200-room hotel on the upriver side of its facility, and to then expand that area into a new entertainment district. The report examines the public cost of the new hotel and possible ways the convention center could accomplish the hotel while reducing the tax burden on the public.
It calls for the convention center to improve its transparency and accountability concerning the hotel project, as well as to pause all efforts on the hotel until after the pandemic subsides. To their point, the feasibility study conducted prior to the global pandemic cannot be counted on as an accurate window into the future.
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