You are not New Orleans

Sorry, guys. I know you went down to the Convention Center board meeting and got very mad online in person at them for trying to take all of your money and give it to Joe Jaeger. But Dottie Belletto regrets to inform you that you are fake news.

Gavrielle Gemma, representing the People's Assembly of New Orleans, called the tax arrangement a bad deal, saying that when it was passed, "They didn't realize it would be robbing the city budget of extremely important things."

"You all think you can take the money levied -- take it to actually build a hotel which will not pay any taxes back to the city?" Gemma said. "You do this because you think the people of this city are asleep. ... Maybe it's not today and it's not tomorrow but there's going to be an eruption in the city. One that you're going to regret."

Commissioners appeared unmoved by the activists, however, and Commissioner Dottie Belletto claimed the activists were not representative of the rest of the city.

"I apologize for what you saw in this room today. That's not New Orleans," Belletto said. "I think the community just doesn't understand, so we just need to do a better job to understand these processes."

The board was there that day to listen to a consultant they had hired specifically to tell them about how good the hotel would be for the "business and hospitality leaders" who we all know constitute real New Orleans.

The project has drawn support from many of the city’s business and hospitality leaders, who are eager to add another high-rise hotel to the New Orleans skyline, especially one that’s big enough and with the facilities necessary to serve as the headquarters for major conventions.

These "hospitality leaders" will spend all day and then some touting their value to the community if you let them. Often it sounds like they just enjoy flattering themselves but there's actually a purpose.  They need to produce enough bullshit copy to justify the hundreds of millions of dollars worth of public subsidies and tax credits that go into financing their pet projects.

To help cover the project’s cost, the developers are seeking $41 million in up-front cash from the Convention Center, which is funded by a variety of taxes. They also want a complete rebate to the hotel of a 10 percent hotel occupancy tax and a 4 percent sales tax on all hotel revenue from sources other than room rentals, which would last for roughly 40 years.

The developers further have requested a free 50-year land lease from the Convention Center with four optional 10-year extensions, which BGR values at $28.9 million, and a 40-year break on property taxes, which the group pegs at $43.7 million.

Altogether, BGR estimates that the requested tax breaks and incentives are worth roughly $329.5 million in today’s dollars.

In this case they are proposing to manage that generous package through a brand new "non-profit" entity created to operate the hotel... at least until the public money pays off all of its debts. This is an unusual arrangement, according to the consultant, although not entirely unique. Unfortunately whatever information about how it works elsewhere is classified.

HVR says there are very few other hotels being proposed using this 'non-profit' method--though a couple are 'confidential and he can't talk about them'

— MaCCNO (@musicculture504) August 22, 2018

Okay, well, whatever is going on in the black box there, Joe Jaeger told us a few months ago that it all ends well in 40 years when ownership of the hotel reverts to the Convention Center (and therefore, theoretically, to the public although there are all sorts of caveats attached to that we won't get into.) "In reality, this is a Convention Center hotel that will ultimately be owned by the Convention Center,” said Jaeger at the time.  Last week, though, the reality looked a little less certain.

HVR admits that there is a chance there is chance that the hotel could under perform and ownership would never revert to ownership to public (Convention Center) ownership

— MaCCNO (@musicculture504) August 22, 2018

In the long run we're all going to be under the ocean anyway so maybe nobody cares who owns that particular plot of submarine real estate in 2060.  But in the meantime the NOLA non-profit industrial complex are used to stealing money for one another via a specific type of organizational format and so here we are. For example, this is exactly how the Convention Center handed Ti Martin and  John Besh several million dollars so they could build a "non-profit" restaurant school (tuition and fees $14,775) to train their subsistence wage workforce.   Many will recall also the $40 million they gave Mitch Landrieu so he could put a bunch of surveillance cameras and bollards all over the French Quarter.

The Convention Center is sitting on piles and piles of money it has no idea what to do with. And since the city itself is broke, this strikes some people as unfair. Like the mayor, for one.

In the opening salvo in what could become a lengthy negotiation over whether the Ernest N. Morial Convention Center moves forward with its plans to build a high-rise hotel, Mayor LaToya Cantrell has expressed “grave concerns” about the large public subsidies being sought by the developers.

In a letter last week, Cantrell said she had “grave concerns about the amount of subsidy this project will receive and the future implications of this project on tax revenue in New Orleans.”

Which is why the "hospitality leaders" are never shy about telling you this is all their money in the first place.

Much of the opposition is rooted in a long-standing structure that Cantrell herself has criticized. The city and school system receive only about one-quarter of hotel taxes generated in the city; the Convention Center and the Louisiana Stadium and Exposition District keep the majority of the revenue.

That arrangement has long been sold as a good deal for the city because the Convention Center doesn't depend on taxes paid by residents. But Cantrell has been critical of the arrangement, saying that more tourism dollars should be supporting the city's general fund.

The city, the school system, RTA, the Sewerage and Water Board, the levee boards, the libraries, etc. all of them are expected to be grateful for what little dollars the hospitality leaders allow them to keep.  They're all broke but they're getting a "good deal."  Not nearly as good a deal as what Ti Martin and Melvin Rodigue and their friends get, of course. But as Belletto explained, they're what constitutes the real New Orleans so they're entitled.

Eventually it all works out. The New New Orleans these guys have built continues under its own momentum to spawn new growth in timeshares and short term rentals and other tourist facing uses for real estate that becomes more and more expensive even as it becomes less and less insurable.  The trick is nobody needs well funded schools, roads, buses and flood protection if nobody actually lives here.

I met with Melon at his shotgun home right around the corner from where he grew up. His house is next to a busy seafood spot and one block from one of the most central locations for second lines. The highway overpass there at Claiborne and St. Bernard avenues acts as a concrete echo chamber. It's where brass bands make sure to play their best songs.

When I told Melon he lived in a prime location for his work, he said, “Yeah, but I won’t be here for too long. This isn’t a neighborhood anymore. This is a goddamn hotel district.” Melon said his landlord is kicking him out to turn his apartment into an Airbnb. His neighborhood is one of the black neighborhoods most threatened by short term rentals. Most of that money goes to speculators instead of entrepreneurial home owners.

In a city that's already becoming just a bunch of "goddamn hotel districts," what's one more hotel, right? Complain all you want, but the fact of the matter is what you want doesn't really matter anymore. You aren't New Orleans. It's been a very long time since you could say you were.