New Orleans continues to be carved up into various State created “districts” and territories, generally sanctioned without public input, and come with their own various sets of sovereign powers such as the power to tax, the power to create debt and the power to expropriate - to name a few. Districts are controlled by boards made up - for the most part - of Louisiana’s economic elite.
Hmmm, so the State freely hands out powers to the wealthy to tax the middle class that have been largely subjugated into indentured servitude. Sounds a lot like a plantation.
District boards will argue that the revenue streams created by taxes are needed to benefit those that live within “district” boundaries. Yet residents already pay various kinds of tax that are supposed to do just that. Income, property and sales tax to name a few. The mind boggles. How many layers of taxes will residents of New Orleans be required to pay before they see their streets fixed, their street lights turned back on, their sidewalks fixed, overgrown lots cut back, and the maintenance of other city assets? Some of the taxation district boundaries overlap creating double and triple whammy scenarios.
Meanwhile, the rich get richer.
One Trapazoid that stands out because it is not a district is the Iberville/Treme – also deemed “NewCity.” In a hugely anticlimactic moment, New Orleanians woke up one morning to discover that New Orleans real estate mogul Pres Kabacoff, son of Lester Kabacoff, won the contract to redevelop the Iberville Public Housing Development. Public money is shovelled over to real estate moguls for projects like this all the time. What makes this project different however, is that when the federal Department of Housing and Urban Development awarded New Orleans a Choice Neighborhoods grant totalling $32 million dollars, what began as redeveloping just the Iberville Public Housing Development, ballooned into redeveloping the entire Greater Treme area [bounded by North Rampart Street, St. Bernard Ave., Broad Street and Tulane Ave].
Iberville/Treme is what is known as a Place-Based Development. Place-Basedis the alternative to people-based and is all the rage. It’s the new supposed panacea to all that ails struggling neighborhoods. So much so, that Mayor Landrieu brought in William Gilchrist - the Chair of the Public Private Partnership Blue Flight for Urban Land Institute - and created an entire office just for him. The office of Place-Based Planning.
The problem with Place-Based Developments vs people-based developments is that while certainly property owners benefit, after construction is completed, where is the money to help lift low income families and community development? Without community benefits agreements [CBA’s] with the developer securing commitments to the community, people are often left without wealth building opportunities and CBA’s are difficult to achieve and often don’t work.
A district that likes to believe it is also a Place-Based Development - anchored by the new UMC and VA hospitals that are replacing an historic neighborhood - is BioDistrict New Orleans - [formerly Greater New Orleans Biosciences Economic Development District -GNOBEDD],
The BioDistrict has to the power to tax, to borrow, to impose impact fees, to implement a master plan and to expropriate through third party entities such as LSU, but one should ask - is this “District” really necessary?
The 15 member board - [2 are positions for residents of Mid-City that have not yet been appointed] - is led by James P. McNamara of McNamara Associates, Inc. - a real estate consulting firm.
Apparently, according to the news, the Biotech and Biosciences industry in our area is going strong and is becoming a haven for entrepreneurs even though BioDistrict New Orleans is next to broke, will receive no funding this legislative session, and had their plans to levy a 1.5% tax on new and renovated commercial structures doused by the city due to an overburden of already existing tax in the parts of the district that overlap with other districts, and potential new taxes by the sewerage and water board and the proposed Hospitality District.
That did not stop the Board of the BioDistrict from voting to levy a 1.5% tax on new and renovated commercial structures anyway in what is known as sub-district one. BioDistrict New Orleans created new sub-districts one and two within their greater boundary as reduced taxation sub-districts in response to strong opposition by the Mid-City Neighborhood Organization to being included in the boundaries. The BioDistrict is in desperate need of operating funds. In sub-district one, the tax on new construction and renovations is estimated to net them $2,055,000 for the following buildings: the Jung Hotel, the new Hornets Training Arena, the Texaco building and the Old Israel Augustine School - (the last two overlap with the Iberville/Treme development). This proposed tax will have to be approved by City Council in order to take effect.
Should we trust that the BioDistrict Board does not intend to tax residents of Historic Mid-City in the future? There is plenty of reason to be sceptical. Take the French Quarter Management District for instance. When it was created by the Legislature, it was specified that the FQMD could not tax. Some years later, the legislation was amended giving them the power to submit taxes to the voters. When they took it to the voters however, it was voted down - giving credence to the importance of staying informed.
The Hospitality Zone is the district most talked about district as of late, talked about because of the heroic efforts of neighborhood groups, preservationists, concerned citizens and business owners latching on to that moving train this past legislative session and putting on the emergency brakes. The smoke from the friction is still in the air.
The proposed Hospitality Zone otherwise known as SB 767, is a piece of legislation that was pushed by the Mayor and the hotel and tourism industry, that essentially bites off a chunk of the French Quarter, the Marigny, the CBD and the Warehouse District in order to create a taxation zone where, in theory, tourists and residents would be taxed on amenities such as hotels, parking, restaurants and entertainment in order to create a new revenue stream for infrastructure improvements and capital projects for the effected communities. The original legislation omitted any kind of transparency or accountability. The Convention and Visitors Bureau wanted tax-payer money without having to open their books.
It is understandable why the tourism and business community would not want to be accountable or transparent. The New Orleans Convention and Visitors Bureau President/CEO Stephen Perry, was shown to have a salary of $390K per year in a public records request.
Hotel owners took particular pride in the great sacrifice that they were making for our treasured historic neighborhoods and the folks that live in them. This, of course, begs the question - if this new taxation district was for “the community”, then why wasn’t “the community” invited to the table at the very beginning of the formation of this legislation, and why was only 1/3 of the revenues that would be generated by such a zone originally allocated to “the community” while 2/3rds of revenue would have gone to various hotel and tourism boards?
In an article written in NOLA.com, James Gill exposed a horrifying 2009 $2 million dollar tourism “master plan” that was produced by a group of Boston consultants hired by a taskforce set up by then Lieutenant Governor Landrieu. The plan centers around perception based news marketing that caters to tourists and would largely obscure front page news headlines reflecting day to day realities for residents in order to woo visitors to choose to spend their vacation dollars here. To “turbo-charge the Riverfront” as it was written - and engorge the numbers of tourists to almost double, focusing on young men that want debauchery.
That would certainly destroy what makes these places so special. That being that they are residential districts! People actually live and work there. It is not just a Disneyland tourist attraction.
“Sure those tourists who clog the streets and sidewalks by day, and trash the joint in their cups by night, spend a lot of money, and we have relied on them for a long time. Kowtowing to them, and hiring out-of-town consultants to peddle the same old nostrums, requires less of an effort than finding a more dignified source of revenue.”
Luckily, our council members and legislators were listening when efforts led by superheros VCPORA FQC, FMIA, the Warehouse District, Lafayette Square, Louisiana Landmarks, and residents ferreted out this legislation and spoke up to express their grievances about the unequal split of revenue and the creation of a board that would control the district but would be largely out of the realm of public control. No accountability or transparency measures were included in the original draft of the bill.
The bill went through many revisions culminating in an amendment submitted by Senator Karen Carter-Peterson that pretty much leveled the playing field and turned the bill into what was it’s stated intention that is to benefit the community. The bill, as amended, is available here.
- It adds a 10 year “sunset” provision;
- It abolishes the advisory board (which was dominated by tourism interests);
- It removes the Faubourg Marigny from the Taxing Zone;
- It reallocates the new tax revenues in the following manner:
- French Quarter Management District – 10% (infrastructure)
- Multicultural Tourism Network – 10% (tourism/marketing)
- New Orleans Tourism Marketing Corporation – 20% (tourism/marketing)
- New Orleans Metropolitan Convention & Visitors Bureau – 20% (tourism/marketing)
- City of New Orleans via “Hospitality Zone Dedicated Fund” – 40% (infrastructure)
- It makes all receiving agencies and organizations subject to public records requests for these funds (but not necessarily for the rest of their operations) – but even then – doesn’t it just become a shell game. All agencies that receive taxpayer’s money need to open their books);
- It requires that a written report be submitted to city council annually accounting for the use of these funds by all non-City Council agencies (as the city already has its own budgeting and reporting requirements);
- It no longer permits the expansion of the zone via the creation of “special districts”;
- and it no longer permits the acquisition of property necessary or desirable for carrying out the objects and purposes of the district.
The bill was better but not where members of the effected community wanted it and apparently too sour for tourism and hotel industry leaders and the Mayor. The bill is shelved for now but likely not dead. Ideally, if the rhetoric about benefiting the community is true, the creators of the bill will go back to the drawing board and hold extensive meetings with the community, as the community - not the tourists - know best what they need.
One development district that has emerged recently is interesting and will be one to watch.
Senator J.P. Morrell’s bill [SB 677] recreates the New Orleans Regional Business Park in New Orleans East and is meant to draw jobs to the area and spur economic growth. The idea came about as a collaborative effort with neighborhood groups and the New Orleans East business community. What makes this district different from others is that - “this law only redirects existing sales tax revenue, it strengthens the hospital and invites economic development without raising any taxes or granting ad valorum taxing authority to the NORBP.”
We shall see.