Monday, April 03, 2017

Whose streets? Tom's streets

Shit you can't do in Champions Square (Presented by Verizon)

Last week the NFL voted to allow the Oakland Raiders to move to Las Vegas. The reason, as always: pure extortion.
The relocation feels like the money grab it is. Davis and the other N.F.L. owners said they were impressed with the city’s potential, but what persuaded them most was the $750 million tax subsidy lawmakers in Nevada will provide for a big, modern stadium with suites, fancy restaurants and concession stands, not to mention the prospect of a marquee naming-rights partner and other financial benefits.

Fans might not care about such amenities, but in the money-first N.F.L., the other 31 owners certainly do because they receive a cut of what every team generates in its stadium. The Raiders have been near the bottom in the amount of revenue they have produced in their deteriorating stadium, which is more than 50 years old.
Now, in a sane world, hulking landmarks like sports stadiums probably should be expected to have a shelf life well past 50 years. That's allowing for the occasional renovation or two, which the Oakland Coliseum certainly has had.  But this is professional sports where decisions on such matters are more about what the ownership cabal can squeeze out of the public.  And every franchise relocation crisis brings a new opportunity. 
The owner Jerry Jones of the Dallas Cowboys, a power broker in the league who embraced and pushed the move, had an extra incentive. He owns half of Legends, a marketing and hospitality company. Last year, he persuaded the owners to let the Rams move to Los Angeles, and his company won the contract for the new stadium the Rams are building there. Jones pulled off the same daily double with the Raiders.
So the age of any stadium isn't nearly as important as what fortunes can be derived from building a new one. The Superdome is a few years past 40. And nobody is (currently) talking about any dire need to pull the Saints out of there.  The Advocate's Nick Underhill tries to tell us this is because the team's home grown ownership and management "gets it" or some such nonsense. But those of us with longer local memories than Underhill's might disagree.

Take, for instance, this passage where Underhill unquestioningly repeats Dennis Lauscha's assurances that all is well and the good people are working to keep you happy well into the forseeable future.
The Saints have already begun discussions with SMG’s Doug Thornton about how the two sides can keep this relationship going beyond 2025. The Saints have started soliciting proposals from architects for a long-term plan for the Superdome. The goal is to start shaping what the “next generation” will look like for the area around the stadium.

“I can sincerely say that our team and Doug and his team and the state, they’re investing in the future,” Lauscha said. “(All) of us want nothing more than to make that area great and really make it the jewel of downtown.”

He added: “You have two partners who want to dance. We’ve seen when that happens — particularly in our market, but all throughout all professional sports — when that’s the case, good private-public partnerships can exist and work long-term.”
[Before we get too much further into this, let's assume that, unlike Underhill, most of us remember well that Tom Benson was determined to move the Saints out of New Orleans when the city was at its lowest point after Katrina and had to be dragged back kicking and screaming. In case you are like Nick, though, and need a refresher, I always liked Oyster's explication best.]

Anyway, about that "jewel of downtown" public-private partnership the guys are all working on. It's less of a "partnership" than it is a.. well, grift isn't really strong enough a word for what this is. A new post at AZ takes an in-depth look at it. Apologies for the long quotation.
Easy Street...courtesy of Louisiana

The 2009 deal between Benson and the State/LSED consisted of two parts.

The first was an extension of the Superdome lease by LSED through 2025 and an $85 million dollar disbursement to the LSED by the State of Louisiana for improvements to the Dome as well as scaled payments to the Saints pending the amount of money the team generated annually from 2011 to 2024.

The second part of the deal involved the newly acquired Dominion Tower and properties purchased by Benson’s Zellia, LLC. In addition to the State agencies leasing over 70% of the office space in the tower, a state organization called the Louisiana Office Facilities Corporation (essentially an extension of the LSED) agreed to lease the New Orleans Center property which included the Mall and area now known as Champions Square, as well as the aforementioned parking garage for $2.3 million annually. The LSED agreed to take on the operations of the parking garage, mall and Macy’s retail store, retaining all revenues up to the $2.3 million mark (to compensate for the rent to Zelia), then any additional revenues would be split with Zelia 50/50. The agreement called for Zelia to be responsible for any initial renovations and repairs to the properties with the LSED maintaining daily operations and maintenance.

Benson/Zelia agreed to a $10.5 million dollar investment in the property over a three-year period (from 2010) and the LSED committed to making $85 million in capital improvements over the following two years with a completion date of 2011.

Public/Private Partnerships: The Road to Prosperity for the Private

After ratifying the agreement in an LSED Board of Commissioners meeting, Commissioner Robert Bruno stated the deal was (paraphrased from meeting minutes), “One of the most complicated, creative, bipartisan examples of a public/private partnership that could ever be imagined.”

Ron Forman, then President of the LSED Board of Commissioners and CEO/President of the Audubon Institute said (paraphrased from meeting minutes), “Without Mr. Benson’s willingness to invest, it could not have happened.”

How would one not be willing to invest in a multi-million dollar contract that placed any business risk solely on the State of Louisiana? The deal guaranteed near full occupancy rate of Benson Tower on top of a guaranteed 2.3 million dollars a year lease for the Champions Square property and the parking garage in which Zelia doesn’t even have to manage (The management of the properties is contracted to the company SMG by the LSED).

All Benson had to do was purchase the properties and the state took on any and all business risk to guarantee Zelia a financial windfall.
As obscene as all that is, it's pretty well known to most New Orleanians. (Except, I guess, Nick Underill.) Ask anyone to define the boundaries of Bensonville and most probably wouldn't even need to consult the Noligarchs Map.

But a lot of people may not know about the public street Benson's fiefdom managed to absorb for what appears to be zero compensation back to the city.. or scarcely any acknowledgement of the transaction.
An entire city street, the 1400 block of LaSalle which lies between Benson Tower and the Superdome, has been appropriated into the Champions Square venue….sans any contract with the City.

The street has been completely closed to automobile traffic with numerous permanent structures erected by the LSED including gateways  on both ends of the street.  During concerts and events in the Square these gateways are closed to the general public and used as a ticketing entrance for private events.
There are numerous problems with this, as Jason goes on to point out. Most crucially, it's probably illegal in that it violates a state constitutional prohibition on public property being "loaned, pledged, or donated to or for any person, association, or corporation, public or private." It's also just a ton of money the city is leaving on the table for use of the public property. At the same time the mayor is squeezing as much as he can out of ordinary people by raising parking fees, installing traffic cameras, and taxing people for air, he's doing this multi-million dollar favor for a billionaire.

Here's something else from the AZ report that would make you spit out your $12 Dome Foam.
If the City of New Orleans is as cash-strapped as Mayor Landrieu suggested when I interviewed him, why have we left millions of dollars on the table in respect to 1400 LaSalle?

When I asked the LSED if the City has received any compensation for the use of the street from them or Zelia they replied:
"The City of New Orleans has received the economic benefit of (i) the improvements that were made to LaSalle Street, (ii) the ongoing maintenance, repair, etc. of LaSalle Street, and (iii) increased tax revenues derived from events that occur at Champions Square. "
It’s kind of hard to understand how shutting a city street off to the public, taking it out of commerce (including parking meters and fines), installing permanent fixtures....all to generate income for a private venture...is an “improvement” or benefit to the City. 

If I fix the potholes on my own street, can I put up two gateways on each end and charge people to use it?
No. No, you can't do that with your street. These Newcomb Boulevard residents found that out the hard way a few years ago. Also, this is pretty much the same argument advanced by defenders of the city's Confederate monuments now scheduled for removal.
Led by the Monumental Task Committee, the monument supporters argue that the upkeep their members have done over the years at the statues of Gen. Robert E. Lee, Confederate President Jefferson Davis and Gen. P.G.T. Beauregard gives them an ownership interest in the statues and therefore a say in what happens to them.
Of course that wasn't a winning argument for the Monumental Taksers. But it's remarkable that the city (or LSED on the state and city's behalf) would turn around and make that case now.  It's especially dubious for anyone to argue that Benson has gained some sort of property right to LaSalle street simply by virtue of presuming to collect rent from it.  On the other hand, stealing public goods and purposing them to enhance the profits of billionaires is what the NFL was built on. So who could expect anything different?

And this does seem to be the way we treat our public spaces now be they streets, parks, or federally protected wilderness. If it isn't being monetized and "put back into commerce" we no longer recognize its communal value.  But as long as Mitch Landrieu and the neoliberals are applying the privatization model to New Orleans, they probably shouldn't just be doing it for free.

No comments: