The day the rent stood still

Well here we are at the first turn of a new month in the Time Of The Covid. Rent is due. How many are able to pay?  Even after three emergency acts of Congress and a few local declarations meant to protect renters, the answer is probably not as many as you may think. The emergency net we've thrown up has many holes.

The recently passed federal stimulus "CARES" act includes a ban on evictions and late fees that extends only until the end of July. After that, there's nothing to stop anyone being told to pay back rent or else. On top of that, the federal ban only applies to properties receiving federally backed mortgages or government subsidies.  If your landlord owns the building outright, you are on your own.  For the time being, renters in New Orleans are protected by a temporary postponement of eviction hearings in the City Courts until April 24.  The Governor has also suspended evictions statewide until April 13. Both of those dates will likely be extended but probably not for very long.

In the meantime, a lot of people are still being evicted through extra-legal means. Landlords are either sending out threatening notices or just physically locking tenants out of buildings.  If this is happening to you, by the way, you may try contacting Southeast Louisiana Legal Services, the Louisiana Fair Housing Action Center, or the City Office of Community Development. Beyond that, though, homeowners and renters facing foreclosure or eviction have only inadequate protections which may or may not be extended on a month to month basis.

The only way to provide a more reliable form of relief is for Congress to step back in with a "Phase IV" stimulus bill. The previous efforts have done nothing to provide Americans with the certainty they will need to make it through the 12-18 months before we expect a COVID vaccine could be available. Only the federal government can do this. That's where the big money gun is. We just haven't fired it in the right direction yet.

As long as no one is sure when they'll be able to work, people are going to need an income. The plan to get it to them already exists. We just need to make it happen.

Rep. Rashida Tlaib (D-Mich.), for example, proposed giving everyone $2,000 on prepaid debit cards, then $1,000 per month until a year after the public health emergency subsides. Recurring payments had been a Democratic priority the party was unable to achieve in the bill that passed last week.

Unfortunately the designs for this and other necessary expanded safety net spending have become mired in the latest iteration of the perpetually doomed "Infrastructure Week" package. We don't have time to wait, though.

Right now state and local governments are expected to expand services and maintain staffing levels while tax revenues plummet. they're going to need emergency funding.  Louisiana will get $1.8 billion from the CARES Act. We're all but certain that won't be enough.  The City of New Orleans expects to find itself with a $100 million budget deficit by the end of the year. Of the state's $1.8 billion, how much will be available to address the city's needs?  Right now it isn't clear if the city is guaranteed any of it.

The centerpiece of the state aid is the $150 billion Coronavirus Relief Fund, which state, tribal, and local governments can use this year to meet costs connected to the virus. Each state will receive at least $1.25 billion — though the District of Columbia will only receive about $500 million — while the most populous states (California and Texas) will receive over $10 billion each, we estimate.  In most states, a portion of the funding will go to local governments serving populations over 500,000. Tribal governments will receive $8 billion.

New Orleans's current population is probably not even 400,000 (fill out your Census form, by the way) so it's very likely we're all at the mercy of the state government. Whenever the legislature manages to reconvene, we'll talk about that then.

But hey do you know who does have $100 million just sitting around right now?  That's right. It's our friends at the Convention Center. The times being what they are right now, though, you can't just have a stash like that doing nothing without somebody taking notice.

A coalition of 21 local unions, advocacy organizations and other groups are calling on the Ernest N. Morial New Orleans Convention Center to release $100 million out of its unrestricted cash reserves to support hospitality industry workers who are out of work due to the coronavirus crisis.

The Convention Center has recently reported somewhere between $185 million and $215 million in unrestricted reserves, which it has accumulated through the collection of locally generated hotel, food and beverage taxes. In 2018 and 2019, those collections exceeded $65 million.

Convention Center officials did not respond to requests for comment for this story, including questions about the current value of its reserves.

Ha ha I'm sure they didn't.  Hell they just spent all of last year fighting with (well, okay more like doing a Kabuki play with) the mayor over whether or not this particular pile of money ought to be paying for city infrastructure repairs. Thanks to Walt Leger's work in the legislature, they got to hang onto it after all.  Guess what Walt Leger does now.

Accompanying the report on the rapid deterioration in the Convention Center's business outlook, on Tuesday board president Melvin Rodrigue said he would be stepping down from the position he has held since 2008.

Rodrigue, president and chief executive of Galatoire's, was recently elected as chair of the National Restaurant Association, a powerful lobbying group that has been pushing for relief measures for its hard-hit members. He has been in talks with the governor since late last year about a successor, he said Tuesday.

He will be replaced by Walt Leger III, a former state representative and the current general counsel for New Orleans & Co.

So is Walt going to turn around now and just give away all the money he earned his current job working so hard to secure?  Doesn't seem like it. But if service workers are still out of work, and rent keeps coming due month after month, and if no one in D.C. has fired off the money gun, then relief has to come from somewhere.  And seeing as how that $100 - $200 million was gathered off the backs of the very workers asking for it now, well, it looks like they've probably got dibs.

Oh no not the brand

This week the governor made the Convention Center available for use as a field hospital as the city continues to overflow with COVID patients. The plan is to ramp up capacity there to as many as 3,000 beds. The supplies necessary to accomplish this are still running short.  Supposedly this is a situation that should be made easier by the President's (rather late) disaster declaration but you never know what might happen if he doesn't feel adequately "appreciated."  Fortunately, he seems to think our governor is a "very good" boy. For now, anyway.

The board members, on the other hand, seem to have concerns.

For the Convention Center board, the idea brought back some bad memories from after Hurricane Katrina and the failure of the federal levee system, when the building was used as a shelter of last resort.

“We all see the convention center as the last resort,” Rodrigue said. “We know what it meant to try to come back from tragic images and what it meant for the brand of tourism in New Orleans after Katrina.”

How did "the brand" do after Katrina?  Fifteen years later, how was the tourism business doing in New Orleans?  Pretty well, right?  Too well, maybe.  Mardi Gras 2020 may seem centuries in the past right now but it was only a few weeks ago that the main topic in town was figuring out what went wrong with this year's celebration fraught as it was with tragedy and mishap.  Just as the virus panic was about to ramp up in New Orleans, The Lens published this Carnival retrospective by Jules Bentley. It's a shame the plague caused our attention to veer away so quickly because Jules's point, that over-tourism is killing us and our most cherished event, is something we should have had more time to talk about. This excerpt supplies the heart of his argument.

Mardi Gras brought New Orleans 700,000 visitors in 2006. It’s at least doubled since then. Multiple news organizations cite 1.4 million as the number of yearly Mardi Gras tourists these last few years, though it’s not clear to me where (or when) that figure originated. Since AirBnB hollowing out the city has made so many more tourist accommodations available, I’d expect the number has grown significantly past that.

The New Orleans tourism industry is thriving. It’s determined to keep attracting more tourists here; to succeed it must endlessly expand. Unfettered growth is the raison d’être of this powerful and heavily taxpayer-subsidized culture-extraction industry, the cause championed in its glossy promotional publications and schemed on in its secretive boards and colloquies.

Our city’s beautiful old streets are no wider than they ever were — certainly not to any degree commensurate with the growth of the masses filling them for Mardi Gras. As the yearly influx doubles and redoubles, the ancient, creaking infrastructure of New Orleans bows, groans and begins to give way.

Jamming 1.5 million humans into the same party space that struggled to accommodate half a million in 1970 is, put simply, unsafe. Like the workers killed in the Hard Rock Hotel, this year’s Carnival deaths can be viewed as not anomalous or exceptional but natural, built-in byproducts of an insatiable tourism industry that’s rendered our so-called city leaders handmaidens to its greed. The sloppy rush and corner-cutting on the deadly hotel was itself likely driven — though we’ll never know precisely to what proportion — by its profiteering developers’ declared desire to have it open by Carnival season.

Any so-called solutions that promise safer parade routes must admit and address this reality: New Orleans cannot physically accommodate our rate of tourist growth.

Prominent among those "secretive boards and colloquies" referred to above is the Convention Center leadership. While Jules is arguing that it is their brand in particular that is killing us, they are still resistant to helping save lives during the virus crisis because that might hurt the brand.

Board member Stephen Caputo asked it might be better for the Convention Center to put up some sort of incentive for hotels to take on the burden instead.

“This is our community and I think we’re all feeling it and want to help as much as we can,” Caputo said. “And I think we’re trying to temper that with our obligation to the center for its long term financial success, recognizing that if they show images of the Convention Center being turned into a hospital, it would hurt our brand.”

As the situation moves forward, it's important that we remember how this works.  We should be familiar enough having seen it before. The size of the recovery effort will be determined in Washington.  But the shape of our "recovery" is determined by decisions made by people like Rodrigue and Caputo as they carve out the shares. We already know what their priority will be.

We probably shouldn't allow people like that to choose what happens to the rest of us.  But there's little reason to be optimistic. Our track record isn't great, anyway.  On the other hand, maybe some of us have learned a few things from experience. 

The Convention Center has been discussed as a potential shelter during other hurricanes that have threatened New Orleans but Honoré said those discussions never went anywhere because of opposition from its board, a quasi-independent body. In the current crisis he said he believed the governor likely had to forge ahead over the board's opposition.

Convention Center officials and board members have declined repeated requests for comment about the possibility of using the facility as a field hospital.

“There’s an attitude with this convention center board that we will not use the convention center to save our own people and they can go to hell,” Honoré said.

Free milk and a Brown's cow

A full two years after the announcement of its closure, the Brown's Dairy complex is going up for sale.  Does there go the neighborhood?

For decades Central City has been an affordable neighborhood for African-American residents. The NAACP has historic roots there. Dryades Street (now Oretha Castle Haley Boulevard) was a major shopping thoroughfare with dozens of bustling stores and an open-air market. The Brown’s Dairy redevelopment will create further gentrification and change the traditional residential mix. It could also drive out some long-time renters. The Muses, a mixed-income apartment complex, currently provides the highest concentration of affordable living units in the area.

Listing agents formulated two prospectuses for the site – one that highlights mixed-use redevelopment and a second prepared for hotel investors. Without a zoning waiver, the site could accommodate a 550-room hotel. There is already a successful Quality Inn less than one block from the site. Hospitality industry real estate broker Lenny Wormser believes the site is not appropriate for a major hotel chain such as the Marriott, whose development costs are in the range of $450 per square foot including land. More affordable hotel chains such as the Comfort Inn could build out the site for $150 per square foot or even less, Wormser said. Even at $150 per square foot, development costs could reach $30 million, a previously unheard of budget for any Central City construction project. The city could approve a height variance perhaps in exchange for new affordable housing offsite.

Why go "offsite"?  Is that even a thing being talked about or is Columbus just helpfully suggesting it?  These kinds of set aside deals are insufficient tokenism in the first place even when they're applied directly to the development in question.  Moving them "offsite" just cedes the question of protecting the neighborhood altogether.

And Central City is in need of protection.  According the most recent Data Center neighborhood profile, 67.6% of renters there are "cost burdened" (defined as households that spend over 30 percent of their income on rent.) The Brown's lots are also important in that they are on relatively high ground. Every land use decision that deliberately excludes poor and working class New Orleanians from the limited range of sustainable real estate is yet another missed opportunity to create an equitable housing policy.  When Brown's closed two years ago, it meant a loss of 185 working class jobs. It looks like the plan is to replace those with more nice things for rich people and more upward pressure on rents.

On the other hand, you could probably put like five Top Golfs on that property so, you know, best highest use, right?

Speaking of Top Golf, it looks like Joe Jaeger and Melvin Rodrigue have completely broken up now. Jaeger had been on board to develop the now green-lighted Convention Center hotel. But that changed after Rodrigue appeared to cut a separate deal to build a Top Golf on vacant riverfront land controlled by the Convention Center. Jaeger was already involved in a venture to open a competing golf arcade franchise on the old Times-Picayune property. The Top Golf plot prompted him to leave the hotel deal in a huff.

Jaeger told NOLA.com | The Times-Picayune he has no intention of returning to hotel project. He said he has deep concerns about Convention Center leadership. He declined to mention any leaders by name.

Jaeger said those concerns remain after seeing the lease terms revealed in the now-quashed Topgolf deal. The situation is baffling given the millions the authority spent on consultants to develop a master plan for the acreage it owns, he added.

The Convention Center leadership includes Michael Sawaya president and general manager of Ernest N. Morial Convention Center, and Melvin Rodrigue, president of the New Orleans Exhibition Authority. The 12-member authority board has a mix of business and civic leaders.

If the leadership remains the same, “I don’t want anything to do with anything on that property,” Jaeger said. “It just doesn’t work for me.”

Now, even though the hotel has been authorized and the Top Golf deal mothballed, neither side is interested in making up. Instead they are moving ahead to develop their adjacent properties independently of one another.  Thanks to LaToya Cantrell's embarrassing "grand bargain" with the tourism oligarchs, Rodrigue now has legal authority to treat the Convention Center pretty much like his own private development company. 

House Bill 617, passed by the Senate on a 33-0 vote on Sunday, authorizes the Convention Center to build and own the $550 million, 1,200-room hotel proposed for the upriver end of the giant exhibition hall. The bill also clears the way for the Convention Center to develop other vacant land it owns next to the site

He hasn't decided what to do with it yet. But whatever it ends up being, the hard part was making sure the taxpayers would back it. That's all done now, thank you very much, Mayor Cantrell.

In his email, Rodrigue admitted the vision is still being formed, though he expects convention center leadership to turn more of its attention to the future of those lands now that plans for a headquarters hotel are progressing.

“We know the type of programming elements needed to make it a successful mixed use development and have lots of ideas of what those look like,” he said.

"Mixed use," meaning some riverfront condos and retail, maybe.  There might have to be a little "affordable" set aside somewhere in there. Or maybe that can go "offsite" too. 

Jaeger is making plans for the Market Street power plant.  Or at least he would like to.  This makes it look like there aren't many solid ideas at the moment. But there are plenty of public subsidies available should any ideas emerge.

Jaeger intends to push Market Street forward starting this summer. His team attended the International Council of Shopping Centers conference in Las Vegas in mid-May. Market Street was among the projects they looked to chat up among investors. Jaeger said he and his team plan to revisit previous redevelopment ideas, including the possibility of an entertainment use for the space.

Redeveloping the century-old property will be costly. The work will likely involve environmental remediation. But developers would be able to leverage historic tax credits, Jaeger noted. The plant also sits in an Opportunity Zone, a federal tax break program that is spurring frenzied investment in real estate. That could attract investors, he said.

“It’s difficult, but it’s got some reasons why it could happen,” Jaeger said.

So here we are again with all this public money available to throw at all this vacant land on high ground.  Nobody really cares what gets built there, specifically.  Meanwhile, this city has a serious housing crisis.  Somehow, despite all the recent rhetoric about what constitutes a "fair share," nobody can figure out how to connect these two facts.  Maybe nobody wants to.