With 45-year tax breaks in limbo, what’s next for massive planned Omni New Orleans hotel?

By Jonah Meadows

Source: The Time-Picayune | NOLA.com

June 1, 2026

For the second time in two months, state lawmakers have balked at approving a major tax incentive for the Omni New Orleans, the planned 1,000-room “headquarters” hotel for the Ernest N. Morial Convention Center that local officials contend is critical to attracting conventions and major events like the Super Bowl.

Last week, a key legislative committee that controls tax and spending decided not to take up a measure seeking to redirect nearly a half-century of state sales taxes generated by the new hotel back to its developer, citing ongoing concerns about the incentive, worth an estimated $265 million over the hotel’s first 45 years of operation.

“It’s created a lot of questions, and I use the word ‘angst,’ with legislators, so it was just best at this time to put it off again,” Rep. Jack McFarland, a Republican from Jonesboro and vice chair of the Joint Legislative Committee on the Budget, said on Thursday. “They need to go back to the drawing board.”

In April, following 20 minutes of questioning, the same committee deferred a vote on the incentive, saying the deal raised too many questions that convention center officials were not able to answer. In the weeks since, backers of the $550 million project say they have met with lawmakers to make the case that the incentive is needed to help finalize the deal, noting that the sales taxes at issue would not exist but for the hotel.

But McFarland, who also chairs the powerful House Appropriations Committee, said “right now, there are still a lot of concerns with the tax benefits and the sacrifice of public dollars.”

On Friday, Convention Center President and CEO Jim Cook acknowledged that the terms of the deal will have to be adjusted before the matter is brought back to lawmakers, which won’t happen until at least July, when the committee meets next. 

“We don’t know what that form will take when we get there,” Cook said.  

Cook said that his team has met with committee members multiple times in an effort to convince them that the hotel project is key to the economic viability of both the city and the state. 

“This isn’t just that we thought it’d be nice to have an Omni next door,” he said. “This is that our customers are telling us that, to stay competitive, we need to have a headquarters hotel right at the convention center.”

Inventive incentives

The developments are the latest setback for a long-sought project that hospitality officials say will determine the future of New Orleans tourism-dependent economy.

The developer, Dallas-based Omni Hotels & Resorts, is proposing to build a 27-story hotel adjacent to the convention center and the planned River District neighborhood that would lead to “up to 27 new events and conventions,” according to convention center representatives.  

Plans for the dedicated headquarters hotel include an agreement that would set aside about 800 rooms to be available for convention center events, which would give meeting planners the kind of large, guaranteed room block that rival destinations like Nashville and Atlanta already offer. 

But the project is controversial and complex, with several layers of financial incentives and approvals from various city and state agencies. Both have come under scrutiny in recent months.

In addition to decades of non-room state sales tax rebates, the convention center’s governing body has pledged Omni $80 million upfront and purchased the land for the hotel site between Convention Center Boulevard and South Peters Street for about $21 million.

The convention center’s development agreement with Omni also calls for the Louisiana Stadium and Exposition District, which oversees the Superdome and other publicly owned facilities, to rebate its 4% hotel tax on rooms at the hotel for its first 45 years in operation. The LSED initially said no to those terms, arguing that it needed to maintain borrowing capacity for renovations to the Smoothie King Center, LSED Board Chair Robert Vosbein said. 

“We have, however, been in recent discussions on this issue and are looking into all options to enable both the Smoothie King Center renovations and the Omni to go forward as planned,” Vosbein said in a statement. 

A report issued last year by the Bureau of Governmental Research found that both the state and the LSED would each sacrifice more than $250 million in tax revenue and could keep subsidizing the hotel long after its developer had met its profit goals.  Depending on how tax revenue generated many years into the future is valued, the public’s contribution would amount to somewhere between about a third and more than half of the project’s $600 million price tag, the report found.

Project backers contend much of that money comes from revenue that would not exist without the hotel, pointing to a study that found it will generate more than $15 million in new city and state tax revenue every year.

Changes to come

It’s unclear whether the sentiment expressed by McFarland and others at the State Capitol represents a mere hurdle or a more significant roadblock for the project.

The legislature has been preoccupied in recent weeks by redistricting battles that have intensified partisanship at the Capitol and deals like the Omni incentive have been pushed to the side amid larger political battles. 

Cook said Convention Center officials are trying to determine what changes to the state sales tax rebate plan are needed to make lawmakers comfortable with approving the project. 

“We’re trying to help them understand why it looks the way it does today and how that particular model was what was necessary to give Omni the comfort to bring this development capital and to take this risk,” Cook said.

If the convention center is unable to secure an incentive package equivalent in value to the one included in the agreement, it will need to find another way to come up with the money — or risk Omni walking away from the deal.

“If anything changes relative to what we’re able to get approval for,” Cook said. “We’ll have to understand the impact of that and see if there’s an alternative way to get to what was agreed with Omni.”

Representatives of Omni’s parent company, TRT Holdings, said in a statement they’re ready to move forward with what would be one of the largest public-private partnerships in state history, though they did not to say how much they’re willing to negotiate on the value of the incentive package.

“We respect the diligence of state leaders as they review the agreement and remain confident in the project’s merits,” the statement said. “The development remains on track, provided approvals are secured this summer to allow critical foundation work to proceed before seasonal high river conditions.”

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