Owners of the Harrah's casino would get a no-bid, 30-year extension of their exclusive contract to operate in New Orleans under legislation overwhelmingly approved by the Louisiana House on Thursday.
The measure, which does not allow Harrah's to expand its gambling space, passed on a 79-12 vote, with little debate and with 13 members not voting. House Bill 553 now goes to a Senate committee for consideration, the next step in the legislative process.
HB553 would extend Harrah's contract with the state by 30 years, and the Las Vegas-based company in return "shall make" an investment of about $350 million.
House Speaker Taylor Barras, R-New Iberia, the sponsor of HB553, got the House Thursday to change the bill to require that the company “shall make” the investment, apparently because of concerns that the original bill only required Harrah's "to pursue" the investment.
The bill does not specify how long Harrah's has to make the investment, but Barras in an interview afterward said he expects Harrah's to finish the project in two to three years.
Harrah's officials have said they plan to build a 340-room hotel and add a food court, a night club and other amenities on the casino site at the foot of Canal Street and on Fulton Street across Poydras Street from the casino.
HB553 also calls for Harrah's to pay the city $3.6 million per year that the state had been required to pay but had not always provided. HB553 also calls for Harrah’s to pay the state an additional $3.4 million per year. The bill calls for raising those amounts every two years depending on the inflation rate.
Under current law, Harrah’s pays the state 21.5 percent of its gambling revenues or a minimum of $60 million per year, whichever is greater. Last year, the payment was $60 million. Under the original legislation passed in 1992, Harrah’s pledged to pay the state $100 million per year but later, following a bankruptcy, won legislative approval to reduce it to the $60 million.
Harrah's current contract with the state doesn't expire until 2024, but company officials locked up the support of legislators – and New Orleans Mayor-Elect LaToya Cantrell – to act now with the carrot of the $350 million investment and the new jobs and tax revenue that would result.
Besides Barras, they have also won over Gov. John Bel Edwards, a Democrat. Harrah’s lead lobbyist, Randy Haynie, has hosted a fundraiser for Edwards at his home and has raised money for dozens of other lawmakers.
Haynie and Harrah’s General Manager Dan Real also won the backing of the Louisiana Restaurant Association and the Greater New Orleans Hotel & Lodging Association. To win the latter’s support, Harrah’s agreed to limit the convention space it would build.
As Barras told a hushed House on Thursday, Harrah's officials are promising that the $350 million investment would create 600 construction jobs and 500 full-time positions and generate millions more in tax payments to the state and to the city.
Of the 12 members who voted no, only three were Democrats, reflecting that Republicans generally are more likely to oppose gambling measures than Democrats.
Some 25 years after Louisiana lawmakers legalized a single land-based casino in New Orleans, Thursday's vote reflects that Harrah’s has won widespread support in New Orleans and around the state. The original casino legislation passed the House by a single vote following a tricky maneuver by then-House Speaker John Alario involving the voting machines.
Still, the casino continues to cause some concerns.
Louisiana Family Forum, a conservative faith-based group, took no position on the bill because it did not expand gambling, but its president, Gene Mills, in a document passed out to legislators, questioned whether the state would be getting a good deal.
“We are unclear as to why it is in Louisiana’s best interest to move the contract renewal forward at this moment in time,” Mills wrote. “Perhaps there are valid reasons for an early and expedited contract extension. Those reasons have not been presented or explained in full public view.”
Mills also noted that Harrah’s made an upfront payment of $125 million in 1994 to secure the original 30-year monopoly contract. Neither Barras nor Edwards is asking Harrah’s to make an upfront payment for the 30-year extension.
Three legislators didn’t vote on HB553 even though they had voted on the bills that immediately preceded and followed the Harrah’s measure.
One of them was state Rep. Rick Edmonds, R-Baton Rouge, a long-time pastor at Bethany World Prayer Center who previously served as a vice president of Louisiana Family Forum.
This reporter approached Edmonds afterward to ask how he would have voted on HB553. He did not respond.
State Rep. Pat Smith, D-Baton Rouge, was another of the three.
“I didn’t read the bill, I don’t know,” she said when asked how she would have voted.
The third one, state Rep. Barbara Carpenter, D-Baton Rouge, said she would have voted in favor of it.
If the Legislature ultimately approves HB553, as appears likely, Cantrell and the New Orleans City Council would have to approve the project because the city of New Orleans is Harrah’s landlord. City officials are still trying to determine exactly what approvals Harrah’s will need.
Those approvals – which will likely involve the new hotel and might involve a revision of the lease – will give the city leverage to extract more money from the casino company.
How they voted
Voting to extend Harrah’s 30-year contract extension (79): Speaker Barras, Reps. Abraham, Abramson, Anders, Armes, Bacala, Bagley, Bagneris, Berthelot, Billiot, Bishop, Bouie, Brass, C. Brown, T. Brown, Carmody, S. Carter, Chaney, Connick, Coussan, Cox, Danahay, Davis, Dwight, Emerson, Foil, Franklin, Gaines, Gisclair, Glover, Guinn, Hall, J. Harris, Havard, Hazel, Henry, Hilferty, Hoffmann, Hollis, Horton, Howard, Huval, Ivey, James, Jefferson, Jenkins, Johnson, Jones, Jordan, N. Landry, T. Landry, LeBas, Leger, Leopold, Lyons, Mack, Marino, McFarland, G. Miller, Jay Morris, Jim Morris, Norton, Pierre, Pope, Pugh, Pylant, Reynolds, Richard, Schexnayder, Shadoin, Simon, Stagni, Stefanski, Stokes, Talbot, Thibaut, White, Wright and Zeringue.
Voting against HB553 (12): Reps Amedee, R. Carter, Crews, Falconer, L. Harris, Hensgens, Hodges, Hunter, Jackson, Magee, Miguez and Seabaugh.
Not Voting (13): Reps. Carpenter, G. Carter, Cromer, DeVillier, Edmonds, Garofalo, Hill, Marcelle, D. Miller, Moreno, Pearson, Smith and Thomas.