Mayor LaToya Cantrell has called off the announcement of a deal with hospitality officials to help fund New Orleans’ infrastructure, throwing the much-anticipated agreement into doubt just hours before she was set to claim victory at a press conference Wednesday morning with Gov. John Bel Edwards.
The move comes as state Rep. Neil Abramson, D-New Orleans, and the Cantrell administration are seeking more time to study some of the amendments in a bill that would enact an important element of the deal.
House Bill 589, sponsored by Rep. Walt Leger III, D-New Orleans, involves the Ernest N. Morial Convention Center and contains some key language paving the way for a 1,200-room hotel the center hopes to build.
Cantrell spokesman Beau Tidwell said the issue centered around whether the amendments to the Convention Center bill included provisions the mayor has sought to ensure accountability and transparency on the project.
Those amendments were provided to the city late Tuesday afternoon and are still being reviewed, Tidwell said. But there are serious concerns from the administration about the current language in the amendments.
"If it remains as it's being presented to us now, it's unacceptable," Tidwell said.
Abramson’s concerns caused him to cancel plans to have the Ways and Means Committee, which he chairs, hear HB589 on Thursday.
A source familiar with the negotiations disputed the idea that there was anything in the amendments that had not already been hashed out at the negotiating table and agreed to by the Cantrell administration.
Tidwell said the administration is "absolutely still at the table and the conversation's ongoing."
"This agreement has the potential to impact the lives of New Orleanians for generations. We have a responsibility to get this right, and make sure all the details are right," Tidwell said in a follow-up email. "We are treating this with great care because it’s important. It’s more important that we get it right than that we get it 'right now.' "
The deal would position the city to receive $48 million in one-time money for the Sewerage & Water Board and up to $27 million per year in annual funding for the agency. That would be most of the money that Cantrell has been seeking.
Cantrell and Edwards had planned to hold a triumphant press conference on the steps of the state Capitol on Wednesday at 10 a.m. with hospitality leaders.
Representatives of the New Orleans hospitality industry and Mayor LaToya Cantrell’s administration reached a tentative deal Monday that would …
“We received a call from the mayor’s office that the press conference is off,” said Christina Stephens, the governor’s press secretary. “We’re trying to understand why. We’ll have more information in the morning.”
Abramson, Cantrell’s floor leader in the Legislature, said late Tuesday night that he had only received amendments to the Convention Center bill at 4 p.m., giving him little time to study them. That was around the same time word started to spread that a joint press conference would be held Wednesday to announce that the deal was done.
“I think at this point -- from the city’s standpoint -- they need to review it, understand what’s in there and make sure it's what was in the general discussions,” Abramson said.
Abramson said that if the amendments match what had been previously discussed, there would not be complaints about moving forward with the agreement. It’s not clear how long that would take or how it would affect the tight timeline needed to move the bills through the Legislature before the end of this year’s session.
“I’m optimistic as I always have been that a deal is going to get done,” he said.
If the two sides are unable to come to terms on the Convention Center bill, it's possible the city could try to move its own package of bills, sponsored by Abramson, to redirect money away from tourism groups to the city. When asked about that possibility on Tuesday night, Tidwell said, "all options are on the table," though he stressed that the mayor's office is trying to resolve the issue through negotiations.
Since last fall, Cantrell has been pushing for more money for the S&WB to pay bills owed by the cash-strapped agency and to make emergency repairs to prevent flooding. Cantrell also has been seeking recurring sources of money for the S&WB to pay for its ongoing needs.
The deal is supposed to include three major elements. The first is a 1 percentage point increase in the tax on hotel guests in New Orleans. This would require a two-thirds vote by both the House and the Senate and approval by Edwards. Abramson is sponsoring House Bill 522 to carry out this piece. It would raise $12.5 million per year for the S&WB.
A second piece would raise the tax on short-term rentals in New Orleans by 6.75 percentage points to equalize the rate with the hotel tax. The tax would go into effect if the Legislature approves House Bill 43, sponsored by Rep. Jimmy Harris, D-New Orleans, that calls an election in New Orleans and if voters then approve it.
The third piece involves $28 million in one-time money from the Convention Center but also involves plans by Convention Center officials to build a massive hotel at the building’s upriver end.
Should the overall deal fall through, it would leave the Cantrell administration with few good options.
Bills must start to move soon in order to make it all the way through the legislative process by the end of this year’s session on June 6. Lawmakers are beginning to feel that they don’t have a lot of time for rehashing a series of negotiations that have been going on for months. Some lawmakers already thought it would be a tough lift to get the package of bills that make up the deal through by June 6.
On Tuesday night, another uncertainty was whether the Cantrell administration’s decision to call off the announcement would sour its negotiating partners on the idea of returning to the table. If a new agreement is not reached, Cantrell’s team would face the daunting task of trying to get a series of bills that would take money from tourism groups through the Legislature on its own. Efforts by previous mayoral administrations to do so failed.
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