Hospitality district, board could be in the works for New Orleans

April 30 2012 | Latest News
"The bills would raise millions to promote the city and keep downtown -- the French Quarter, in particular -- sparkling..."

April 29, 2012
By Michelle Krupa, Times- Picayune

Aiming to streamline government and seal off avenues to corruption, New Orleans residents after Hurricane Katrina pushed to consolidate public offices and require political appointees to be chosen based on their fields of expertise. But despite a campaign pledge to rein in the city's nearly 150 boards and commissions -- including a few where profligate spending has piqued prosecutors' interest -- it appears that Mayor Mitch Landrieu and local tourism leaders have been quietly pushing to create a new board to govern a proposed downtown hospitality district, though the mayor on Friday sought to distance himself from the effort.
At a public meeting last week, members of the French Quarter Management District unanimously backed a resolution that would strip the hospitality-zone board of three key powers: to levy property taxes, to issue bonds and to authorize tax-increment financing.

Under proposals by state Sen. Ed Murray and state Rep. Walt Leger III, both New Orleans Democrats, the district's board would be comprised of as many as 11 appointees, about half of whom would serve at the mayor's pleasure and without set terms.

The others would represent the city's six main public and private tourism associations. The directors of those groups generally are close allies of Landrieu, who in his previous job as Louisiana's lieutenant governor served as the state's top tourism official.

Though voters wouldn't directly choose any of the hospitality board members, the body would make policy decisions, and have the power to levy taxes and issue bonds, according to the bills.

The bills would raise millions to promote the city and keep downtown -- the French Quarter, in particular -- sparkling as civic leaders aim to attract 13 million visitors annually by 2018. About 8.75 million people visited New Orleans last year.

The initiative also aims to create a funding stream to maintain $30 million in infrastructure improvements that the Ernest N. Morial Convention Center-New Orleans' board last month promised to make in and around the French Quarter in preparation for next year's Super Bowl. Another $10 million in FEMA money is slated to be spent in coming months on the neighborhood's crumbling streets and sidewalks.

Landrieu, through his spokesman, repeatedly has declined to say why he won't push for the proposed tax increases in a more traditional way, by asking the City Council -- through his annual budget proposal, perhaps -- to put the recommended tax increases on a citywide ballot, rather than running the matter through a brand-new "superboard." Since taking office in 2010, the council has approved two Landrieu-proposed property-tax increases and a doubling of trash fees.

Spokesman Ryan Berni on Friday said, "Tourism industry officials and other residents have argued that another board should be created to provide additional oversight of the dollars raised by these specific taxes.

"Clearly, the administration wants to streamline government and have less bureaucracy so that the city is able to quickly deliver services the public deserves and meet the goals of the hospitality district," Berni said by email. "Unfortunately, some folks have lost sight of the big picture. The clock is ticking, and we haven't reached consensus. This great opportunity may pass us by."

In all, the hospitality bills propose raising an additional $16 million a year by boosting citywide taxes on hotel-motel occupancy and overnight guest parking, as well as increasing the sales tax on dining and drinking within a zone bounded by the Mississippi River, the Pontchartrain Expressway and Claiborne and Elysian Fields avenues. The proposed increases would have to be approved by voters citywide.

About $11 million of the new revenue would be split among the New Orleans Tourism and Marketing Corp. and the New Orleans Convention and Visitors Bureau to spend on advertising, stakeholders have said. The remaining $5 million would be invested within the zone for infrastructure maintenance and possibly to enforce city rules related to noise, trash and other quality-of-life matters.

Councilwoman Kristin Gisleson Palmer, whose council district includes much of the proposed zone and who attended a closed-door meeting of stakeholders Friday morning, said having a board administer the new taxes would ensure the revenue would not wind up in the city's general fund, and then possibly get spent outside of tourism hot spots.

She added that hotel and motel representatives want assurances that the revenue will be dedicated to tourism marketing and infrastructure maintenance.

"The hospitality industry at this point is agreeing to tax itself," Palmer said. "They want a guarantee that we are going to clean the French Quarter. They want to ensure that that money goes to the areas in which everybody agrees upon."

But some residents and business owners, particularly those in the French Quarter, have expressed concerns. They say the board as envisioned is too powerful, too beholden to the mayor and simply unnecessary.

"The proposed hospitality legislation raises a number of questions and issues," said Janet Howard of the watchdog Bureau of Governmental Research. She cited the imposition of a new district on top of existing ones, the "appropriateness of the proposed boundaries and governance," and provisions that would allow the board to authorize tax-increment financing districts and other sub-districts.

BGR plans to take a formal position on the bills after they're heard in committee next week.

Murray this week confirmed that negotiations are ongoing among lawmakers, Landrieu aides, tourism leaders, property owners within the zone and the French Quarter Management District, a 5-year-old state agency formed to dispense Hurricane Katrina recovery dollars within the historic neighborhood.

"I've heard the concerns from a lot of directions," Murray said, adding that he's not wedded to any model, or even "whether there should be a new entity."

"I'm not sure if there will be an independent board at this point," he said Friday. "There might not be a new board."

Calling the situation "really fluid," Murray said he would prefer that the City Council retain taxing authority within the district.

Murray said he intends to present some version of the legislation Thursday at the next scheduled meeting of the Senate Local and Municipal Affairs Committee.

Leger could not be reached for comment.

At a public meeting last week, members of the French Quarter Management District unanimously backed a resolution that would strip the hospitality-zone board of three key powers: to levy property taxes, to issue bonds and to authorize tax-increment financing.

"I have concern about at-will appointments by the mayor," French Quarter business owner, attorney and board member Robert Watters said.

Some board members said they want to control any new tax revenue earmarked for the French Quarter. The 13-member board includes members named by local resident and business groups, as well as by the mayor and the local council member.

Meanwhile, the president of the community group Vieux Carre Property Owners, Residents and Associates blanched at the possibility that the hospitality-zone board could lack anyone who lives or owns property in the proposed district.

"Who decides how that money is spent and what happens to it, I think, should come from the people who are being affected by it," Carol Allen said.

Darryl Berger, a developer and Landrieu ally who serves on the management district board, said during last week's meeting that he would "love the idea" of using existing community boards, including the FQMD's, to administer the non-advertising money. But, Berger said, he's gotten "pushback" from Landrieu aides and tourism officials who want more experienced appointees.

"We don't have a great track record so far," he said. "We have a terrific group, but the French Quarter Management District hasn't actually done anything yet."

Berger added that those doling out the cash should represent the entities that would be taxed, with the largest revenue generators being hotels and motels.