Nearly two years of negotiations between Ernest N. Morial Convention Center officials and a team of developers over a proposed $1.5 billion riverfront development next to the center have "stalled out to a degree," according to the president of the board that oversees the giant meeting facility.
The project, which center officials have been pushing for several years, would include a large hotel, retail outlets, restaurants and entertainment venues.
Melvin Rodrigue, the president of the board, offered the "stalled out" evaluation of the pace of discussions late last month amid mounting frustration voiced by at least one board member as well as local tourism officials over the lack of movement on a deal that both sides had pledged to either finish by the end of 2016 or consider putting out to other developers.
"We've been negotiating with these people for two years now," board member Robert “Tiger” Hammond, president of the Southeast Louisiana Building and Construction Trades Council, said at a meeting of the Exhibition Hall Authority. "Seems like a long time, and I just think we ought to expedite this."
But Rodrigue is urging patience, explaining that Convention Center leaders have had a few distractions lately as state and local officials have turned to the cash-flush agency for help with other projects.
The Convention Center announced last month that it has finalized a deal to purchase the former Louisiana ArtWorks building at Howard Avenue and Carondelet Street for $12 million.
The former Louisiana ArtWorks building at Howard Avenue and Carondelet Street may soon chang…
The arrangement, which Rodrigue said was done at Gov. John Bel Edwards' urging, includes a 40-year lease with the New Orleans Culinary and Hospitality Institute, which bought the building in 2014 but ran into problems getting its planned institute off the ground.
Additionally, the Convention Center last month agreed to chip in $23 million toward Mayor Mitch Landrieu's ambitious public safety plan, a $40 million effort that includes an expanded surveillance camera network around the city.
The $40 million public safety plan proposed recently by Mayor Mitch Landrieu and being consi…
Both deals have raised questions among some fiscal watchdogs about whether the Convention Center should continue bringing in nearly $60 million a year from state-approved hotel taxes, a sales tax on food and drinks sold throughout the city and other assessments.
"The other projects have definitely eaten up a lot of our time, from a priority standpoint, to try to get those deals done, which we have accomplished now," Rodrigue said, adding that negotiations on the riverfront project are "now our top priority."
Rodrigue, the president of Galatoire's Restaurant, said the talks have taken longer than expected because of the complexity of the deal, which has been slowed down by many factors involving multiple parties, including the city, the state and the Port of New Orleans.
Still, some related work soon will begin. Roughly $84 million is being spent largely to transform Convention Center Boulevard into a more pedestrian-friendly street designed to connect the Warehouse District to the French Quarter in an attractive, enticing way.
Rodrigue said he expects that work to be underway by summer; meanwhile, he said, negotiations for the bigger development will continue.
"Over the next few months, if we don't feel like we're making progress, we'll definitely go back" to the drawing board, he said, noting that the board has received inquiries from other interested developers.
Tourism officials view the proposed hotel and retail district as essential for New Orleans to remain competitive with the roughly two dozen cities that are its chief rivals for convention business and major sporting events.
After a recent two-weekend stretch that included Carnival parades and the NBA All-Star Game festivities, which filled the city's roughly 25,000 hotel rooms downtown to capacity, many in the local hospitality industry are eager to add another high-rise hotel to the city's skyline.
And even though the Central Business District has seen a wave of recent hotel construction and conversion projects that are adding nearly 4,000 rooms to the city's inventory, some industry veterans believe thousands more are needed to meet the demand forecast for the coming years.
"It takes a long time for a deal like that to come together, not to say that it shouldn't be done faster or there's a problem I'm not aware of," said Lenny Wormser, senior managing director of Latter & Blum's hospitality division. "But this is one of the best things to hit the city, other than the airport (expansion)."
Ernest N. Morial Convention Center officials reached a preliminary agreement Tuesday with Ne…
The Convention Center purchased the vacant 47-acre tract for $45 million in 2000. It was once slated to become home to another 500,000 square feet of exhibit space for the 1.1-million-square-foot exhibition hall. Those plans were scrapped after Hurricane Katrina in 2005 as tourism leaders realized the extra exhibit space would not be needed.
The center's board has long hoped to have a master developer lease the site long-term and spend at least $700 million on a 1,000-room "convention-quality headquarters hotel," as well as residences, restaurants and a performance venue.
In early 2015, the center's board 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.
Neither Berger nor Peter Aamodt, senior development manager for Jaeger's firm, MCC Real Estate, returned calls for comment.
Asked last September about the dragging talks, Berger said the deal was "complicated, to say the least," but that he expected to reach an agreement by the end of 2016.
Negotiations over a potentially $1.5 billion development project tied to the Ernest N. Moria…
Despite the ongoing delays, Rodrigue said he hasn't lost faith, but he acknowledged that there are "a couple of things that we have to be able to meet in the middle on."
"I think we're going to make something happen. That's my gut feeling," he said. "We're pretty far down the road with this group."