Taxes, control over money still unsettled in hospitality district debate

At issue are improvements, possible marketing of French Quarter, downtown New Orleans

BATON ROUGE -- Another week will pass without a resolution of the ongoing debate over creating a new hospitality district for downtown New Orleans and the French Quarter, with dedicated taxes supporting improvements in the high-traffic zone and possibly marketing efforts on behalf of the city. The session ends June 4, a timetable that increases the pressure on all parties who have debated the details of bills that have yet to take the first step in the legislative process. And some authorities suggest that failure to reach a deal could threaten a $30 million commitment - apart from any new tax revenue - from the Ernest N. Morial Convention Center.

David Grunfeld, The Times-Picayune archiveLawmakers have yet to reach a resolution to the ongoing debate over creating a new hospitality district for downtown New Orleans and the French Quarter.

Sen. Ed Murray, D-New Orleans, has twice scheduled Senate Bill 573 for a hearing by the panel that handles locally focused proposals. But the Landrieu administration and tourism industry leaders have yet to come to an agreement, with Murray expected to pull the bill from consideration at a meeting later today. Rep. Walt Leger III, D-New Orleans, is sponsoring a corresponding measure in the lower chamber. The House local affairs panel did not convene this week.

The idea is to allow the city to levy special restaurant and hotel taxes within a district bounded by the Mississippi River, the Pontchartrain Expressway and Claiborne and Elysian Fields avenues. The money would be a sustained source of income for infrastructure improvements in the area. Key questions include who controls just what the taxes would be, who would control the money and whether to create a new governing board for the entity. There has been some push-back on the idea of adding a .25 tax to restaurant bills within the zone, given the argument that local residents are patrons, as opposed to increased hotel occupancy taxes absorbed almost entirely by tourists. Some French Quarter residents, meanwhile, have pushed back at the entire concept of attracting more visitors to the city's most iconic neighborhood.

Murray has indicated previously that he does not believe the plan requires a new entity, given a landscape that already includes groups like the New Orleans Tourism and Marketing Corporation, the Convention and Visitor's Bureau and other business and property owner associations in the French Quarter. Murray has also said that taxing authority should remain with the City Council.

The Convention Center governing board, meanwhile, already has approved a $30 million investment with the understanding that the new district would generate additional revenue. The money would go to the city, with a pending cooperative endeavor agreement dictating how it is spent.

Bob Johnson, general manager of the convention center, said said his board hasn't discussed what action it would take if the hospitality zone bill fails to clear the Legislature. "I suspect that the whole thing will have to be revisited if the district doesn't form," Johnson said. "We don't want to eschew the whole idea, but without some structure we would have to revisit how to get it done."

Johnson said the convention center would be concerned about committing $30 million without confirmation that some recurring income source for infrastructure improvements is in place.

"We still may be able to do some things without the district structure," Johnson said. "But the issue will become how it will sustain itself."

Landrieu spokesman Ryan Berni said, "The clock is running out this week. ... There is a one-time opportunity to invest a lot of money." Leger said the same, suggesting that failure to reach a deal could waste money already on the table.

Jaquetta White and Michelle Krupa contributed to this story.

Bill Barrow can be contacted at bbarrow@timespicayune.com.