New Orleans Convention Center

Convention Center officials stress hotel proposal’s economic impact

By Kevin Litten

Source: | The Times-Picayune

August 23, 2018

Convention Center officials on Wednesday (Aug. 22) released an economic impact study that showed a proposed 1,200-room Convention Center hotel would have an estimated $282 million economic impact. The study also shows the Convention Center hotel would generate about 1,900 new jobs.

The study could help gird support for the Omni-branded Convention Center hotel, a project officials say is needed to help draw more convention business. The total proposal is expected to cost about $557.5 million.

But Convention Center commissioners also acknowledged that they have struggled to communicate the benefits of the hotel, which could require an estimated $738.8 million in property and sales tax exemptions and other subsidies over 40 years, according to the Bureau of Governmental Research. New Orleans Mayor LaToya Cantrell released a letter last week opposing the hotel, and activists showed up to a Wednesday board meeting to harshly criticize the proposal.

The study released Wednesday estimates the hotel would require $173 million in financing, including $76 million in room taxes, $13 million in sales taxes and $48 million in property taxes. The Convention Center would keep the profits from the hotel and would take ownership after 40 years.

The hotel would be located on the upriver end of the Convention Center on land owned by the Convention Center and would include a riverside pedestrian park.

Convention Center board Chairman Melvin Rodrigue said Wednesday that officials were waiting for the results of the study to begin discussing the plan in earnest with the public, saying the board didn’t have enough detail on the project to begin talks. He added that he has since spoken with Cantrell, but didn’t give an indication of whether she’d changed her mind on the project.

The mayor’s office declined to comment after Wednesday’s meeting.

“We have a job to do, and that is to talk about the economic impact and how it is beneficial to everyone in the community,” Rodrigue said, adding that “$282 million is nothing to sneeze at.”

Rodrigue continued: “We do need to shoulder the responsibility of the communication.”

Now that the economic impact study is complete, Rodrigue said that negotiations can begin with the Convention Center’s development partners, developer Darryl Berger and Joe Jaeger and Texas-based Matthews Southwest Hospitality. He said he expects a deal with the developers could be made by the first quarter of 2019.

Whatever that deal looks like seems likely to spur controversy among activists. Much of the opposition is rooted in a long-standing structure that Cantrell herself has criticized. The city and school system receive only about one-quarter of hotel taxes generated in the city; the Convention Center and the Louisiana Stadium and Exposition District keep the majority of the revenue.

That arrangement has long been sold as a good deal for the city because the Convention Center doesn’t depend on taxes paid by residents. But Cantrell has been critical of the arrangement, saying that more tourism dollars should be supporting the city’s general fund.

Opponents cited the arrangement several times during public comment, their criticism biting at times. One activist, James Ponder, referred to the hotel proposal as “grand larceny;” a group of activists left the meeting chanting “enough is enough.”

Gavrielle Gemma, representing the People’s Assembly of New Orleans, called the tax arrangement a bad deal, saying that when it was passed, “They didn’t realize it would be robbing the city budget of extremely important things.”

“You all think you can take the money levied — take it to actually build a hotel which will not pay any taxes back to the city?” Gemma said. “You do this because you think the people of this city are asleep. … Maybe it’s not today and it’s not tomorrow but there’s going to be an eruption in the city. One that you’re going to regret.”

Commissioners appeared unmoved by the activists, however, and Commissioner Dottie Belletto claimed the activists were not representative of the rest of the city.

“I apologize for what you saw in this room today. That’s not New Orleans,” Belletto said. “I think the community just doesn’t understand, so we just need to do a better job to understand these processes.”

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