Saturday, November 05, 2016

Who is getting lifted up?

These are some of the comments tweeted out of yesterday's City Council budget hearings by NOLA.com reporter Greg LaRose. They are from Mark Romig's presentation concerning the New Orleans Tourism Marketing Corp.'s budget and goals. None of this showed up in either paper's account of the hearing each of which focused on the "spirited seniors" in the audience there to comment on the Council on Aging portion of the meeting.  If you want, you can always go watch the whole six hour meeting for yourself but it's nicer when the reporters report for you.

Anyway here's what you would have learned had you happened to be following along on Twitter.  The city's Tricentennial is coming. To help you celebrate, plans are already underway to launch the next marketing slogan and hashtag everyone is sure to love.


Get ready to be toast, everybody.  In the meantime, try not to get too over-fested.

The plague of festivals and mini-festivals arises from the unrelenting pressure to grow the number of annual visitors regardless of the costs. Other "destination cities" are beginning to grow wary of this practice.
But can tourism be too much of a good thing? When all the undoubted benefits are outweighed by the sheer aggravation, when numbers and money, the measurable things, are eclipsed by less quantifiable downsides, such as congestion, jobs that remain low-paid and insecure, and a deterioration in life quality for permanent residents?

One European city thinks so, and is daring to challenge the conventional wisdom that tourism is the bright white hope of a modern economy. The new Mayor of Barcelona, Ada Colau, was elected with a mandate to clip the mighty tourist industry’s wings. The last straw for residents, it seems, was the large number of young visitors fuelling a night-time economy deemed ever more antisocial. That, and the magnet that favourite areas of the city offered to petty criminals who saw tourists as easy prey.

The mayor has now declared a moratorium on new hotel licences and moved to clamp down on unregistered and illegal apartment-lets. The night-time economy will be subject to tougher policing. Business is already blaming her for killing the goose that laid the golden egg. But is she? Or is it rather a matter of the residents’ reclaiming the city as their own?

Unfortunately none of the decision-makers among our city's leadership is asking these sorts of questions. Instead we press on with schemes to jam as many visitors in as we possibly can going so far, even, as to open up the process by which our very neighborhoods are converted to de-facto hotels.  Nevermind the burdens this places on neighbors or on housing costs. We need to grow this tourism biz even more.
We keep doing this because we continue to labor under the notion that somehow we're going to figure a way everyone can "reap the benefits."



But that's not going to happen anytime soon.  Not without major reforms.  The following is from a NOLA.com article about tourism and its impact published back in August. It's a helpful reference when we're talking about the return on our "investment" in the industry.
The web of local subsidies has grown so complex that few know the full extent to which tourism in New Orleans benefits from tax support. 

Hotel stays, the single largest source of the subsidies, are subject to a dozen taxes, each established under a different state statute or city ordinance to benefit one of eight different entities. Some of the taxes are further broken down and redistributed among the recipients, obfuscating the true scale of the dedications and who benefits from them.

The BGR study estimated that the hotel taxes generated $165.9 million in 2015. After accounting for all the pass-throughs and levels of distributions, the watchdog group estimated that about $126.8 million -- 76 percent -- went to tourism-related entities. The remaining 24 percent went to public services such as city government, transportation and education.

No other major American destination city devotes a smaller share of its hotel taxes to local government than New Orleans, according to a recent study by the Las Vegas Convention and Visitors Authority. On average, the 17 cities in the study dedicated 65 percent of hotel taxes to basic services. New York dedicates 100 percent to its city government.

In addition to the hotel taxes, there are other special taxes and local sales tax exemptions that benefit tourism that were not included in BGR's examination. When they are included, the total dollar value of tourism subsidies was an estimated $154 million in 2015.
At present there is no plan to disentangle this web of revenue streams in a way that will allow us to "lift our people with tourism," according to LaToya's invocation.  But we're going to keep on growing the business in the meantime.  Because reasons.

So who is getting lifted up?  It sure isn't municipal government. As all those angry seniors can attest, the mayor's budget has cut most agencies receiving general fund dollars by five percent in order to shift more money to so called "public safety" priorities such as hiring another 400 police officers.  In addition the mayor is seeking to raise money directly off the backs of residents through a regressive tax on alcohol and an even more controversial proposal to double the number of traffic cameras in town.  The mayor says the budget this year is "balanced on a knife's edge."  And wherever we look, we find the poorest and most vulnerable among us are stuck with the pointiest ends of that knife.

Meanwhile, the Convention Center has all sorts of money it can't figure out how to spend.
While business has remained flat, the taxes received by the convention center have steadily risen. A decade ago, it collected $25 million annually. It's now up to $59 million, mostly from dedicated hotel/motel taxes.

Records show the center has amassed a reserve of $222 million. The reserve accumulation comes from an annual budget surplus, $25 million in 2015 - the Morial Convention Center doesn't spend all the money it takes in, even as the city itself pinches pennies to pave streets and pay police.
So while we're shaking down motorists and asking seniors to sacrifice, all of this public money under the Convention Center's purview is going where?  Right back into the tourism industry, of course. Which is to say it's going into the hands of the city's wealthiest oligarchs.  
Now the Convention Center wants to grow again. It plans to spend $175 million on a new project that includes creating a headquarters hotel.

“There will be entertainment, housing - we want the people who work there to live nearby - restaurants, attractions that are uniquely New Orleans-kind of attractions,” Johnson says. He envisions "a real 'Mardi Gras World' that the guy from Peoria that's down here in July, he can really experience Mardi Gras in a real, professionally done, multimedia interactive experience.”
Nevermind that "Mardi Gras in July" monstrosity for a sec.  Here's what the hotel project is all about. 
Things seemed to be falling into place when the Convention Center's board in early 2015 began negotiating with a group led by the Dallas-based Howard Hughes Corp. and local developers Joe Jaeger and Darryl Berger.

Hughes is an experienced national retail developer and owns the nearby Outlet Collection at the Riverwalk. Jaeger and Berger are both successful local hotel developers.

Johnson anticipated that the negotiators would reach an accord last summer and the Convention Center board would vote on whether to award the development team exclusive leasing rights, perhaps by the end of last year.

That still hasn't happened. "We're still slogging through it," Johnson said last week. "As you can imagine, it's very complicated."

It's unclear precisely what's holding things up.

One stumbling block, Johnson said, is that both sides are trying to get comfortable with the massive level of public and private investment contemplated. Although a deal has not been finalized, the board's vision for what should happen on the tract "is still intact," he said.

Johnson added that the discussions are complex and weighed down by a myriad of factors, including ironing out traffic plans and zoning changes. "We keep attending to those in hopes that we can eventually find a way to be able to accommodate everybody's concerns," he said.

Berger had a similar take, saying the deal has a lot of moving parts. "In a nutshell, it is complicated, to say the least," he said.

But he added that he expects an agreement by the end of the year, with plans being drawn up in 2017 and construction of a hotel beginning the year after that. Berger acknowledged some parties to the discussion are feeling "a bit of frustration" but said he personally is not. 
It's stalled a bit for the time being but Berger doesn't sound too discouraged. The "moving parts" referred to there involve a coordination of complicated zoning changes  and traffic planning in the works to create something the poo-bahs are calling the Trade District. Long time followers of your humble Yellow Blog may recognize this portion of our Noligarchs Map as "Jaegertown."



To this end, the Convention Center has been granted even more power to siphon off public money.
The Louisiana House unanimously approved legislation Tuesday (April 26) granting the Ernest N. Morial Convention Center new taxing authority to expand upriver with a 1,200-room hotel and entertainment district.

The bill state Rep. Walt Leger sponsored would open the way for the Convention Center to use tax increment financing, typically with a special sales tax that pays for infrastructure for a new commercial development.
Berger and Jaeger may be feeling "a bit of frustration" with the pace of things but it looks like their money is on the way. If you're a real estate developer, it certainly helps to have friends in high places willing to bend the rules in order to "incentivize" your business.  Donald Trump knows this. And look how well he's done.   But among those of us worrying whether we're about to be evicted by Airbnb or fined by an unaccountable traffic robot, it's difficult to gin up much sympathy.

Meanwhile, the Convention Center's bounty is being put to use to "lift up" some of the city's "culture bearers" after all. I'm pretty sure Ti Martin considers herself a culture bearer, anyway.
The former Louisiana ArtWorks building at Howard Avenue and Carondelet Street may soon change hands again for the second time in two years.

The likely buyer: the Ernest N. Morial Convention Center, whose governing board voted Wednesday to move ahead with plans to purchase the nearly 94,000-square-foot building a block from Lee Circle for $8 million.

The likely tenant: the New Orleans Culinary and Hospitality Institute, which bought the building in 2014 but has faced numerous delays in getting its planned project off the ground.

The institute is backed by a group of culinary and hospitality industry leaders, including restaurateur Ti Martin of Commander's Palace and chef John Besh.

It paid $6.2 million for the five-story building with the idea of opening a world-class culinary teaching facility in it, but the onetime furniture store remains vacant.
So this "Institute" of restaurant barons bought a building for $6.2  million which they are about to sell for $8 million in public funds. They propose to parlay that into a public-private "workforce development" scheme to churn out more minimum wage workers to supply their businesses.  That way they'll turn an even more  efficient profit as even more tourist dollars are extruded through the machine during the Tricentennial Toast and beyond.

Meanwhile the bulk of the city's bills will be collected from residents through the most brutally regressive of means until many of us can't afford to actually live here anymore. No problem for the NOligarchs, of course. That just means more room to grow that tourism business that keeps lifting them higher and higher. This is why they have to build their "Mardi Gras In July" thing.  Hope everybody enjoys that.
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