Authority Obtains Significant Concessions from Hotel Developer to Benefit of City and State
The Ernest N. Morial Convention Center Exhibition Hall Authority (“Authority”) will hold a Public Meeting on Monday, October 21st to solicit public comment on its plans to develop a 1,200 room hotel attached to the Convention Center. The meeting will be held beginning at 6 p.m. in room 220 on the 2nd floor of the Convention Center above Hall B.
In May 2018, the Authority authorized its Executive Vice President, Michael Sawaya, to negotiate terms for the hotel and will continue its diligence process until a final financial closing takes place early next year. The new headquarters hotel is a central element in the Authority’s $557 million five-year capital improvement plan that includes transformative upgrades to the Convention Center, development of a pedestrian park that is currently under construction, and a 39-acre mixed-use development.
According to Authority Executive Vice President, Michael J. Sawaya, “The public meeting is designed to encourage local resident and business owner engagement in the largest investment in our city’s hospitality infrastructure in decades. We are excited by the plans that have developed, the progress we have made in our negotiations with the developer, and how this project will make us more competitive with other leading tourism destinations. As we continue forward, we understand that issues of importance to the public must also be taken into account as we move toward finalizing this milestone agreement.”
The newly negotiated proposed agreement represents a significant improvement in economic benefits for the City of New Orleans and State of Louisiana including a reduction of the financial incentive offered to the developer to 17% – far below an industry average of 37% on similar convention center headquarters hotel development projects.
Other concessions obtained by the Authority through these negotiations include:
- A property tax payment to the City of New Orleans estimated to be between $3 million and $5 million annually (previously no rebate was contemplated);
- A developer obligation of $250,000 in ground lease payments, escalating at 2% per year (the initial draft agreement contained no such provision);
- A change in ownership of the hotel parking garage from the Developer to the Convention Center Authority, which will receive $300,000 per year in lease fees.
“The concessions we have been able to obtain represent a “sizeable win” for the people of Louisiana and for our city and state governments,” said Melvin Rodrigue, Chairman of the Ernest N. Morial New Orleans Exhibition Hall Authority. “These concessions can give the taxpaying public confidence that the path we are on is the right one for our city and state – a path that will lead to the creation of 1,900 net new permanent jobs and the generation of more than $282 million total economic impact and generate $18 million new tax dollars for the City of New Orleans, and $6 million new tax dollars for the State, all while bringing a long underdeveloped part of our city’s riverfront back into productive commerce.”
During the 2019 state legislative session, legislators overwhelmingly passed HB 617/SB which grants the Convention Center Authority the ability to own the planned hotel after the bonds used to finance the hotel are retired.
Note: Due to on-going construction along Convention Center Boulevard, persons attending are urged to park in the “whale lot” in front of the Riverwalk Outlet Mall or, if arriving on foot, should cross the Boulevard and enter at Julia Street to ensure their personal safety. Convention Center staff will be available to help direct attendees to the meeting.
About the New Orleans Ernest N. Morial Convention Center
With 1.1 million square feet of prime exhibit space, in an entirely contiguous hall, the New Orleans Ernest N. Morial Convention Center provides the largest single exhibit space in the country. The New Orleans Ernest N. Morial Convention Center features an award winning staff and first class amenities, and is the sixth largest convention center in the nation. A consistent Top 10 host of the largest conventions and tradeshows in the nation annually, the Convention Center is also one of the city’s “Top Workplaces.” A leading contributor to the city’s robust tourism economy, the Convention Center’s event activity has produced $90.1 billion in economic impact since its 1985 opening, including $5.7 billion in new tax revenue for state and local governments.
About the Ernest N. Morial New Orleans Exhibition Hall Authority
The Ernest N. Morial New Orleans Exhibition Hall Authority’s (Authority) exclusive mission is to finance, construct and operate facilities in order to attract and conduct conventions, trade shows and other events that support and expand the economy of both the State of Louisiana and New Orleans Region. The Authority is composed of a 13-member board of commissioners, nine appointed by the Governor of Louisiana, and three appointed by the Mayor of New Orleans. Since 1985, event activity at the New Orleans Ernest N. Morial Convention Center has produced $90.1 billion in economic impact since its 1985 opening, including $5.7 billion in new tax revenue for state and local governments.