Revenue of $16 million a year would be used for tourism marketing and for infrastructure maintenance
With the French Quarter and other downtown areas poised to receive $40 million in infrastructure improvements in the run-up to next year's Super Bowl XLVII, Mayor Mitch Landrieu and tourism leaders want to raise the hotel-motel tax, as well as a sales tax on downtown dining, to maintain the improvements and promote the city. The extra money, which largely would come out of visitors' pockets, would amount to an estimated $16 million annually, officials said Tuesday at a French Quarter stakeholders' meeting.
View full sizeBCS fans were photographed in the French Quarter on Jan. 9. About $11 million would be spent by the city's two main tourism marketing agencies, with the rest earmarked for the upkeep of streets and other spending authorized by a new state-sanctioned board.
Landrieu strongly supports the creation of a "hospitality zone" bounded by the Mississippi River, the Pontchartrain Expressway and Claiborne and Elysian Fields avenues.
Under a package of bills pending in Baton Rouge, such a designation would allow the city to levy special taxes in the area, which stretches from the Warehouse District to the 7th Ward, and use the revenue to provide extra sanitation, police and other services in those neighborhoods.
Calling the measures by state Sen. Ed Murray and state Rep. Walt Leger "placeholder bills," Landrieu aides have cautioned that the new tax rates as proposed are likely to change. But with the legislative session nearly at its halfway point, officials of the French Quarter Management District, a 5-year-old state agency, hinged their discussion Tuesday on the numbers at hand.
Under the proposals, the hotel-motel tax levied at properties citywide would rise from 13 percent to 14.75 percent. The majority of the money collected -- about $11 million -- would be split equally between the New Orleans Tourism and Marketing Corp. and the New Orleans Convention and Visitors Bureau for advertising the city to leisure and business travelers.
The remainder of that tax increase would generate about $1.8 million a year for infrastructure maintenance in the hospitality zone, officials said.
Meanwhile, the sales tax on food and beverages consumed in restaurants and bars within the hospitality zone would rise from 2.5 percent to 2.7 percent. The tax is a portion of the 9 percent sales tax levied in Orleans Parish, meaning that with the change, the tax would rise to 9.2 percent in the zone. The $1.5 million it likely would raise would be directed to the maintenance fund.
The tax increase would have to be approved by a majority of New Orleans voters.
Another $300,000 generated from boosting the overnight hotel parking tax from 12 percent to 13 percent also would go to upkeep.
In all, the maintenance fund would require between $5 million and $6 million annually, developer Darryl Berger said. He and other tourism officials said other annual revenue sources would include: $1 million from the Louisiana Stadium and Exposition District, which oversees the Superdome; and $250,000 apiece from the two tourism agencies.
Those revenue streams, however, are not enshrined in the current legislation or inked in signed agreements, prompting concern among some neighborhood leaders.
"I think it is an absolute hoax to have marketing to get people to a city that is falling apart," Warehouse District resident Cassandra Sharpe said, referring to the tax revenue that would go to advertising. "You have streets that are falling apart. You have sidewalks that are falling apart. You have trash. There's no attention to detail."
Others said they want the maintenance account to finance the enforcement of quality-of-life regulations.
The current drafts "seem to ignore the fact that the French Quarter and many of the districts are residential districts," Brian Furness of the community group French Quarter Citizens said. "It's not just a hospitality zone. It's a place where people live. And that has to play an important role in determining how the nonmarketing funds are spent."
Robert Watters, a lawyer and Quarter property owner, said he supports generating additional money for improving tourist-heavy zones but cautioned City Hall not to treat the income as a new source to pay for basic services that should be supported by the city's general operating budget.
Before the new taxes could be implemented, the Legislature would have to approve bills creating the hospitality district and giving it taxing and spending authority. The City Council then would have to agree to place the measures on a local ballot.
Michelle Krupa can be reached at mkrupa@timespicayune.com or 504.826.3312.