Harrah’s contract renewal awaits Senate action after winning House approval

Harrah's contract proposal

NEW ORLEANS (WVUE) - Now the state Senate gets its turn to decide if Harrah’s Casino in New Orleans is awarded a 30-year contract renewal.

FOX 8 asked Senate President John Alario Friday about the chances of the House-passed bill emerging from the Senate intact.

“Yes, I believe it’s in good shape, but I always reserve the right to read it again,” Alario said via text message.

House Speaker Taylor Barras, R-New Iberia, shepherded HB 544 to approval on a vote of 84 to 9. The casino’s current contract is not up for five years.

"This does not include an inch of expansion of gaming,” Barras said of the deal.

Harrah’s remains optimistic but said it’s not over until it’s over.

"We haven't obviously crossed the finish line yet, but as far as negotiations go everyone has really put their best foot forward,” said Harrah’s New Orleans executive Dan Real.

The bill requires Harrah’s to invest $325 million to upgrade its property including a new hotel by July 2024.

"It is a great economic benefit to New Orleans, not only with that capital investment,” Barras added.

Harrah’s says the hotel that would go up on its current site will help it remain competitive in the gaming industry.

"We turned away over 100,000 visitors to the city of New Orleans last year …We're not competing with the Marriot and the Hilton and the other hotels in the city. Our customers are coming from 300 miles and beyond,” Real stated.

The legislation retains an annual minimum payment to the state.

"In 2022, that minimum payment owed by Harrah’s increases to $65 million,” Barras said.

And there are other payments Barras characterized as one-time or temporary.

"So, upon the execution of this contract and approval by the Joint Committee on the Budget, a $25 million payment from Harrah’s will be made, shared between the state of Louisiana and the city,” Barras said.

Barras said another $40 million would flow to government if Harrah’s exercises a separate real estate option next year.

Additionally, there is the $3 million annual casino license fee.

Still a state legislator from neighboring Jefferson Parish asked why the state is willing to renew a contract that is not close to expiring.

"Why are we jumping the gun and doing it five years earlier?” asked Rep. Patrick Connick,” R-Marrero.”

“What we've got, we've got a facility in place with significant investment, a leasing agreement with the city and that property,” answered House Speaker Pro Tempore Walt Leger, D-New Orleans.

Real addressed criticism by some that the casino is not operating in the best interest of the state and city as it seeks the new contract now.

"Sometimes people believe that we're trying to renew this contract early in some type of strategic way that is not in good conscience or good faith with the best interest of the city and the state. Quite the contrary,” he said.

And the legislation also changes how the city of New Orleans would get funds to cover casino support services like police and fire protection.

"This new contract eliminates that, allows Harrah’s to make a support services payment to the city of $ 6 million annually, gets the state out of that casino support business,” said Barras.

"Definitely for the city the support services agreement goes from $3.6 million to $6 million a year,” added Real.

Mayor Latoya Cantrell support the proposal.

"It will generate millions of dollars in recurring revenue to help address our vital infrastructure needs. This bill and this deal are the right move, right now,” Cantrell said in a statement.

If approved, some of the money from the agreement would benefit early childhood education and cancer research.

Copyright 2019 WVUE. All rights reserved.