A NEW ORLEANS TRIBUNE EDITORIAL
Plans to build a hotel in the footprint of the Ernest N. Morial Convention Center Development District received a pretty tough blow in recent days with a clear and resounding voice of dissent from Mayor LaToya Cantrell.
It’s not she doesn’t think the city could use a convention center hotel with great amenities to attract even more visitors to the Crescent City. But the mayor has made it clear that if developers of the proposed hotel plan to bring their project to fruition with free land and millions in tax credits and incentives essentially offered on the backs of hardworking New Orleanians, she will not support the plan.
The mayor’s concerns were carefully laid out in an Aug. 9 letter to the Convention Center Board President Melvin Rodrigue. In it, she said:
“Chief among my concerns is the level of overall subsidy towards the construction of the hotel. Under the current proposal, the developers will be able to build the hotel on free land, pay no property taxes and enjoy a direct subsidy of over $40 million directly from the Convention Center. On top of that, there is a call to waive sales and occupancy taxes worth hundreds of millions of dollars over the life of the hotel. That’s money our citizens cannot afford to do without.”
Yes, we know this isn’t Sunday service; but if it were, we’d be shouting down the aisle, “Amen, Mayor Cantrell! Amen!”
She couldn’t be more right! Even if you buy into the narrative that New Orleans just cannot do without a hotel that connects to the Ernest N. Morial Convention Center via a walk-through bridge, the fact is that we cannot afford to do it this way. Our city needs too much and so do its hardworking citizens. We need too much to give away loads of tax credits, incentives and free land to rich developers.
To be quite honest, we find it strange that the very developers behind the big plans for the convention center hotel, Darryl Berger and Joe Jaeger, are among those that opposed Harrah’s attempt to extend its contract with the state by 30 years and the casino’s proposals to build more amenities and a new hotel – a proposal that we also did not support and that ultimately failed at the legislature. As we understand it, they are also among those putting their might and money behind the campaigns against short-term rentals, seeking to push out local homeowners who have come to depend on the income they have been able to generate from the tourism industry. We have no doubt, that their motives are rooted in their own personal gain. To be sure, it would be a lot easier to convince the powers the be that a convention center hotel is needed if one successfully stifles the competition posed by other hoteliers or local homeowners who have been able to improve their financial outlooks, increase retirement incomes, pay taxes or even keep their homes out of foreclosure thanks to STRs.
The other irony is that in recent days and weeks, we’ve watched the city get tough on folks who haven’t paid their water bills—and rightfully so. The city needs that money. Those fees are a part of the S&WB operation budget. And folks ought to pay for what they use so long as their bills are accurate and fair.
We’ve watched the city press the pause button on short-term rentals to get a handle on the industry and hopefully strengthen regulations that benefit the city, the local property owners that take part in the programs and all residents in general. Regulation is a good thing, and the city should be able to collect taxes on the short-term rental industry as well. In fact, those dollars would be a great help in addressing the current affordable housing crisis.
At any rate, the point is that it is abundantly clear that our appointed and elected officials know when and how to put their collective foot down. Short-term rental property owners and water utility customers are finding that out the hard way. It’s way past time to exercise that same sort of tough, no-nonsense approach with big-time, big-monied developers and corporations that seem to eye New Orleans like its some sort of endless piggy bank.
If you didn’t know, New Orleans is running short on equity and it surely has some issues to work on when it comes to prosperity, especially as it relates to ensuring that ALL of its people are faring well before another penny is doled out in corporate welfare. It’s time out for the rich getting richer while the poor and working class barely get by.
With that, The New Orleans Tribune is in complete agreement with the Mayor on this proposed development and just about any other that takes from city coffers while its people suffer. Still, just in case you need some convincing, remember numbers don’t lie. Our city CANNOT afford to give away millions in tax revenue or to make land donations for private enterprise. Our situation is too dire.
So, before we give one incentive to one more developer, maybe we ought to get serious about economic development and opportunities that are equitable.
According to the Prosperity Index published earlier this year by the Data Center, in 2016 nearly one-third of New Orleans’ White households earned over $114,632, while only six percent of Black households earned that much—a difference of 500 percent. On the other end of the spectrum, 47 percent of all Black households (47 percent) earned less than $23,237. Only 14 percent of White households earned less than $23,237 during the time period.
And before we give another free tract of land to one more developer, how about we make sure every New Orleanian is housing secure.
Our city and its people struggle with affordable housing issues. According to the same Data Center report, 51 percent of renters in New Orleans paid unaffordable housing costs in 2016, much higher than the 41 percent of renters nationally. And renters aren’t the only ones feeling the pinch. According to the Data Center, New Orleans’ homeowners struggle to afford housing costs more than their peers across the nation, with, 25 percent of New Orleans homeowners spending more than 35 percent of pre-tax household income on their mortgage, taxes, utilities, and insurance compared to only 17 percent of homeowners nationwide.
Before we forgo another dime in tax collection, maybe we should consider the money that could instead be funneled in improvements in health care, education, and infrastructure.
In the area of health disparities, the Data Center report points to disparities in mortality rates, access to health care, and other risk factors such as nutrition and exposure to air pollutants especially in poorer, often segregated neighborhoods, all fueling healthcare disparities.
When it comes to education, a look at 2017 ACT scores layout the disparities. 2017 graduating classes from all public and private high schools in New Orleans, African American students averaged 17.6 on the ACT and Hispanic students averaged 21.3. Meanwhile, White students averaged 25.3 on the ACT – 44 percent higher than African American students and 19 percent higher than Hispanic students.
The Data Center report also notes that White 2017 graduates taking the ACT were four times more likely to be attending a private school than a public school. However, Whites in public high schools had ACT scores on par with those in private schools. White students in private school scored a 25.3 on average while Whites at public schools scored 25.2 on average. On the other hand, Black students were nearly five times more likely to be attending a public school than a private school, with those attending private schools scoring a little less than two points higher on average than their peers at public schools.
And while it is absolutely true that folk who legitimately owe water bills ought to pay up, we still figure that may be a hard pill to swallow for the many New Orleanians whose property was destroyed about a year ago after the learning the hard way the S&WB system wasn’t operating at full capacity at that time.
How about we drive across any of the many potholes in our great city with abandon and then decide whether it makes any sense for New Orleans not to collect every dime in taxes that is due it, especially from the well-heeled developers that dare ask for subsidies and tax breaks.
Before we sell our souls for even a few hundred more minimum wage jobs, how about we get serious about tackling crime and violence at its root by creating more opportunity and access for all. To be sure New Orleans has work to do here. It wasn’t that long ago that the city released its disparities study, which indicated that the report did find disparities in other areas, including the city’s use of Black-owned firms for construction projects, the overall use of Asian-American and Hispanic-American owned firms and a lack of DBE goals and use of women and minority-owned firms for contracts to purchase goods.
In the area of criminal justice, The Data Center report notes that some needed changes have resulted in a significant decrease in jail incarceration rates for both Black and Whites. However, racial disparities remain. Inmates at the Orleans Justice Center are nearly four times more likely to be Black than White, “even after accounting for the larger Black population in New Orleans.”
The bottom line is that the Mayor is spot-on and we love that she didn’t mince words or play games. She stood up for the people she serves on this one!
This proposed development isn’t right for New Orleans—not this way, not this plan. Simply put, the developers have too much to gain while far too many New Orleanians literally have NOTHING to lose. Our city and its people need those tax dollars and any money that would be relinquished via incentives and gratis property transfers way more than we need a convention center hotel.