City Council will consider formal opposition to Convention Center hotel at Thursday meeting
By Michael Isaac Stein
Source: The Lens
May 5, 2020
The New Orleans City Council will consider a resolution to formally oppose the Ernest N. Morial Convention Center’s publicly subsidized hotel development at a Thursday meeting.
The resolution, which appears in the agenda for the council’s meeting on Thursday, calls on the Exhibition Hall Authority — which governs the Convention Center — to put all of its long-term development plans on hold and tap into its reserves to support struggling hospitality and tourism industry workers in New Orleans, as well as its own contract workers.
“Rather than focusing on costly and unnecessary long-term developments, the Authority should instead use should instead use any available funds to create and maintain financial assistance options for New Orleanians in the hospitality and tourism industries — weather employees, gig workers, or independent contractors — whose income has been severely impacted by the COVID-19 crisis,” the resolution says.
The resolution also calls on Governor John Bel Edwards to appoint at least one member of the Convention Center board who comes from “the Convention Center Workforce, to ensure that workers’ concerns are central to the Authority’s decision making.”
The resolution — which is not legally binding — is sponsored by six out of seven City Council members.
The council is jumping into the fray of a weeks-long standoff between the Convention Center and the Coalition to Create a Fair Fund for Hospitality Workers — a coalition of unions and advocacy groups that formed shortly after the coronavirus took hold in Louisiana.
In March, the coalition came out with two central demands from the Convention Center — that it continue to pay the employees of its contractors as well as its direct employees through the remainder of the crisis, and that the Convention Center release $100 million from its reserves to provide grants to struggling hospitality workers citywide.
The Convention Center has committed to paying its 500 direct employees until May 16, but hasn’t made any such commitment to contract workers who do much of their work in the convention center but aren’t directly employed by them.
Last month, one of the largest unions in the country put its weight behind the coalition, threatening to pull its 2021 convention from the New Orleans Convention Center and warn other unions to avoid the city at the next executive meeting of the AFL-CIO.
Convention Center officials argued that the reserves weren’t as large as the coalition described, and that they were necessary to fund three interconnected developments worth well over $1 billion: a $557 million capital plan, a $702 million hotel and an “entertainment district” to surround the hotel that would include residential housing, bars, restaurants and venues.
The hotel and entertainment district would be built on 47 acres of currently vacant land that the Convention Center owns on its upriver end. The final cost and public subsidies required for the entertainment district are still unclear. But last month, the center released the public bids from the three development teams under consideration.
As noted in the resolution, The Convention Center originally said it was forging ahead with the three developments after the coronavirus crisis began. The best thing the center could do for the economic wellbeing of the city, officials argued, was continue with the developments they had planned.
The hotel hit another bump in the road last month when local watchdog the Bureau of Governmental Research came out with a report pointing out major concerns about the hotel’s financing structure and its prudence for New Orleans’ economy in light of the coronavirus. The report, which urged the Convention Center to pause and reassess the hotel project, is quoted in the council resolution.
“The proposed terms include nearly $800 million in public contributions over 40 years, making it one of the largest public-private partnerships in memory in New Orleans,” the report said
But after initially pushing forward, the Convention Center switched course. At it’s April 22 board meeting, the board announced that it was putting the hotel negotiations on hold. Key votes on the entertainment district have also been indefinitely delayed. And Convention Center board chairman Walt Leger announced that the board was open to taking a “fresh look” at the developments . Also at the meeting, the board voted to donate $1 million to two local relief funds that issue grants to out-of-work hospitality industry workers. The board has yet to address whether it will provide relief for people who work in the Convention Center but for an outside contractor.
In a Tuesday press release, the coalition was supportive of aspects of the resolution.
“We applaud the New Orleans City Council for their courage and commitment to working people in this industry by making it clear that $1 million is not enough and in calling on the Convention Center to support its contract and temporary workers as well as its direct employees.”
The coalition also wants the the council to expand the resolution by adding a commitment that it will keep current and future board appointees accountable to the fulfilling the other goals set out in the resolution. Nine of the board members are appointed by the Governor, while three are appointed by the Mayor of New Orleans and confirmed by the City Council.
The resolution supports the center’s decision to keep paying its 500 employees, but says it must support its contract workers as well. The resolution also supports the center’s decision to put the hotel and entertainment district on hold, and says that if they want to resume, they need to conduct new feasibility studies showing that the developments have real value for the public.
“Lastly, it calls on the center “to participate actively in public and citywide efforts to create a sustainable tourism plan for New Orleans, so that workers, their families and the greater community stand to benefit equitably from the city’s hospitality and tourism economy.”
This story has been updated with an additional comment from the Coalition to Create a Fair Fund for Hospitality Workers.
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