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Tuesday, May 22, 2012

Hospitality Zone Bill Appears Dead

Posted By on Tue, May 22, 2012 at 12:21 AM

Sources say the proposed "Hospitality Zone" bill appears dead for this year’s legislative session. That news comes after a Senate committee amended the proposed measure at the request of state Sen. Karen Carter-Peterson, D-New Orleans. Hospitality industry leaders reportedly cannot accept Peterson’s amendments, and they are said to be ready to pull the plug on the bill.

The amendments apparently caught the hospitality industry by surprise. Hotel and restaurant interests were the initial backers of the bill, but they ran into howls of protest from neighborhood residents in the French Quarter and Marigny. Residents of Marigny asked to be taken out of the “zone,” a special taxing district that would raise some $15 million a year, most of it in hotel taxes on tourists. The money was supposed to fund ongoing marketing efforts and be combined with $40 million up front in infrastructure improvements. The $40 million was to come from the Convention Center’s fund balance ($30 million) and from the city’s share of Community Development Block Grant funds ($10 million).

Ultimately, the disparate groups affected by the proposal — along with City Council members, legislators, Mayor Mitch Landrieu and the hospitality industry — failed to reach a consensus on how the tax revenues should be divided. Peterson’s amendment to the original bill took a significant portion of the marketing funds away from the private Convention and Visitors Bureau and the public Tourism Marketing Board and redirected it to other groups. That apparently caused the hospitality folks to back out, leaving the proposal, by state Sen. Ed Murray, D-New Orleans, without its principal supporters.

It remains to be seen if the bill’s failure will lead to the Convention Center pulling back on its commitment to spend $30 million on infrastructure improvements.

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