Zurik: Convention Center's cash piles continue to grow

Zurik: Convention Center's cash piles continue to grow

NEW ORLEANS (WVUE) - Five months after our stories questioned large cash reserves at New Orleans' Ernest N. Morial Convention Center, those reserves continue to grow. But one lawmaker is trying to redirect some Convention Center money to the city to pay for police or code enforcement.

In the past year, the Convention Center's reserve fund has grown from $222 million to $241 million, at last report.

"This is the reality of how the business is doing, and right now it's not a very pleasant reality at all," says Heywood Sanders, a public administration expert and author of the book "Convention Center Follies: Politics, Power, and Public Investment in American Cities".

Critics say the center has underperformed, but continues to sit on cash. Last year, the center had a surplus of around $30 million. Once again, the center took in more money than it spent.

But supporters of the Convention Center have a tight grip on that money, and they don't want to see it go anywhere else - toward police funding, for instance, or street repairs.

"Simply adding more revenue to fund an expenditure is a weaker, deficient alternative to organically growing the economy and creating jobs with it, and creating new tax revenues with it," says Stephen Perry, president and CEO of the New Orleans Convention & Visitors Bureau.

The center could be getting even more money. Airbnb's and other short-term rentals will be taxed like hotels. According to current law, that tax money will go toward the Convention Center.

"My goal is to separate these new short-term rentals," says Rep. Helena Moreno of New Orleans, "and the taxes from those short-term rentals [would] predominantly go to the City of New Orleans, or a fund that's going to help the quality of life of the citizens of New Orleans.

Moreno has introduced a bill in the legislative session that would slice some of that Airbnb money away from the Convention Center, and give it to the city in a new fund.

"In this fund, it could only be drawn down for code enforcement, law enforcement, ems and fire, things like that," Moreno tells us, "quality of life issues for the people of New Orleans."

Moreno says it could add $1 million to $3 million a year to the city.

While the hospitality industry generally opposes stripping the center of any existing money, some supporters do support Moreno's Airbnb plan.

"I see an opportunity here to give the largest share of the pie, unrestricted, to the mayor," Perry says. "So, the mayor could develop a strategic plan, present it to the council, have all of us weigh in and deal with the issues of compliance, deal with issues of public safety."

Earlier this year, the Convention Center did commit millions to help fund the mayor's public safety plan.

Moreno thinks her bill will get legislative support, which will open more funding for the city. But that's still a small percentage of the millions the center gets every year that it never spends, while city officials continue to struggle to pay police and pave streets.

Bob Johnson, the long-time general manager of the Convention Center, has announced his retirement, effective September 2017. The board will begin a search for his replacement.

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