Finger-pointing ensues after Hospitality District killed in legislature

May 23 2012 | Latest News
...Bill was pulled from Legislature...

by Ben Myers, Staff Writer
May 22nd, 2012 ·

The Hospitality Zone proposal for downtown New Orleans appeared to meet a bitter end today as the blame game gathered momentum.

A bill in the Louisiana Legislature that would have created a special taxing district focusing on the New Orleans tourism epicenter was pulled from consideration.

Amendments from state Sen. Karen Carter Peterson sealed the bill’s fate, according to proponents of the original measure. She was seeking to reduce the share of new hospitality taxes that the city’s tourism marketing organizations would have received from 66 percent to 50 percent. The changes would have also given City Council direct control of a special fund for enhancing city services and maintaining infrastructure improvements paid for primarily by the convention center.

Peterson also wanted to increase the services-maintenance fund from one-third to 40 percent of the new revenue, which included an additional 1.75 percent hotel occupancy tax.

In an interview Monday, Mayor Mitch Landrieu said Peterson’s amendments to the bill were a “nonstarter” because they ignored political reality and “don’t make any sense from a governing perspective.”

A Convention and Visitors Bureau press release quotes Chairman Melvin Rodrigue saying the amendments “effectively killed this very important marketing and infrastructure initiative” and “undermined the rationale” of the center’s plans to invest $30 million in French Quarter and downtown infrastructure.

In the release, Rodrigue leaves the door open to “finding other ways it can partner with the mayor and political leaders to improve our city,” though details were scant.

Also at issue was a 10 percent tax allocation to the French Quarter Management District, a state entity with no recurring revenue that focuses on quality of life and infrastructure, in Peterson’s proposal. The original bill, authored by Sen. Ed Murray, provided no money for the group.

This was a particular bone of contention for Landrieu, who heaped criticism on the FQMD for its “recalcitrance.” Landrieu characterized the group as demanding a share of money that industry – primarily hotels – had volunteered to forfeit for the city’s image.

“You don’t put in, you don’t get to take somebody else’s money and go do what you want with,” Landrieu said. “They cannot come to a table with no money and no responsibility, and take the money from someplace else to satisfy themselves.”

FQMD Chairwoman Kim Rosenberg disagrees with the notion that hoteliers are surrendering their own money, even if they agreed to the tax.

“It goes directly on to the credit card of the tourist. They should not say it’s their money,” Rosenberg said.

Additionally, she notes, the FQMD, while critical of the initial proposal, never disagreed with the concept and negotiated with industry leaders and the administration. Peterson, backed by Sen. J.P. Morrell and Rep. Helena Moreno, claims she was responding to constituents. The amendments were also supported by City Council members Jackie Clarkson, Kristin Palmer and Stacy Head.

But Landrieu insisted he was “counting votes” in the legislature and said that Peterson refused to accept a proposal that was workable.

“Had she been in all the meetings I had been in, or if she would have taken responsibility for creating this out of nothing, instead of coming in during the middle, she may have been more attuned to the political possibilities,” Landrieu said.

While industry clearly wasn’t pleased with Peterson’s amendments, it’s not clear which politicians, other than Landrieu, were fully against them. Only a few members of New Orleans’ state legislative delegation returned calls today. Reps. Wesley Bishop and Austin Badon expressed initial support, while Rep. Nick Lorusso said he hadn’t seen them.

Rep. Walt Leger said the new funding allocations were spread in too many directions. Clearing additional political hurdles – including earning Gov. Bobby Jindal’s signature and approval from New Orleans voters – were unlikely without industry support, he added while expressing willingness to continue working toward a solution.

Rosenberg, for her part, placed responsibility for the proposal’s demise on one person.

“It’s the mayor saying ‘no,’” she said.