ZONE OUT stepping up in Baton Rouge! (Photo credit: N. Chapman)

On Thursday, 5/17/12, LA Senate Bill 573 “SPECIAL DISTRICTS. Creates the New Orleans Hospitality Zone” was presented to the Local & Municipal Affairs Committee of the Louisiana Legislature.

Starting at about 7:00 AM, those traveling to Baton Rouge to oppose this matter began gathering at the Decadence Shoppe Café on N. Rampart, a small restaurant that has been supportive of the ZONE OUT opposition. A group of 25 citizens (on their own time and their own dime) arrived to make the trip. We traveled in one bus with enough seating available that everyone could have their own two-seat row if so desired. To identify our group’s participants, we wore simple yellow stickers reading “ZONE OUT.” WWL TV’s Bill Capo was on hand to see us off first.

The ZONE OUT delegation was lucky enough to arrive at the State’s Capitol Building before the multiple buses that also traveled to Baton Rouge on behalf of the New Orleans Convention and Visitors Bureau (NOCVB) and other industry-related bill supporters. At one point, we were told that the “Tourism Matters” proponents had ten buses to shuttle people from the Mercedes-Benz Superdome to Baton Rouge and back… It is unclear to me if this was accurate or if all of those buses rolled. As an added incentive, tourism and hospitality industry workers who were willing to go to Baton Rouge yesterday enjoyed the benefit of free parking at the Superdome as well.

Supporters of the bill were either wearing red prominently or NOCVB-provided red “Tourism Matters” t-shirts and also carrying cardboard fans bearing that motto. I would estimate that, between industry executives and “general supporters,” there were at least 150 people. Casual questioning of some of the younger participants revealed that at least some of the supporting minions were, in fact, “on the clock” (compensated) for their participation.

All in all, I’d guess that we (the ZONE OUT delegation) were outnumbered at least six to one.

The crowded hallway outside of Committee Room F.

We stood in the hallway outside of Committee Room for more than two hours until the doors were opened to allow our admittance. It was crowded. On several occasions, the Fire Marshal and other Capitol Building personnel had to clear a path of travel. It was uncomfortable and, at times, a little pushy as the supporting contingent jockeyed for an improved position. What mattered at that point was simply getting as many ZONE OUT people in the room as possible — given that the capacity was limited (maybe 50 seats for observers and a finite amount of standing-against-the-walls space), this was our best chance for essentially leveling the playing field in terms of visible representation. Once the doors opened, I’d estimate that 2/5ths of the observers were ZONE OUT advocates and that the remaining 3/5ths were present to support the bill.

Although LA SB 573 was technically the second matter on the agenda, there were several other matters coming before the Local & Municipal Affairs Committee yesterday that were dispatched first in an efficient manner. About an hour after the meeting started, Senator Murray opted
to address this bill first of the three that he’d had in consideration for
the day.

I’ll be honest… I don’t know exactly what other ZONE OUT participants were wishing for, but I personally was hoping for a “Study Resolution” as the outcome of this bill’s consideration (a resolution authorizing a committee to study an issue following adjournment of a legislative session). Metaphorically speaking, it’s a little like hoping for a “stay of execution” and the chance that it would allow for greater participation in the choice of method in the interim. In my opinion, however, even this was a bit of a long shot.

I’m happy to say that what actually occurred was nothing of the sort.

We’d been aware that yet another newly-revised version of the bill had been created at about 7:30 PM on Wednesday, 5/16/12. The biggest change was that, instead of a “superboard,” there would now be an “Advisory Committee” that would present its proposed budget to the New Orleans City Council (but would still be equally unaccountable with regard to the general public’s participation). I believe that this “Substitute of Senate Bill 573 by Senator Murray” was what was submitted for consideration before the Committee when this matter was addressed yesterday.

From the start, Senator Karen Carter Peterson (District 5-Democrat) became invested in the discussion of this bill; aside from the Committee’s Vice-Chair, Sen. Tarver, she was the only member of the committee to address this matter directly. She spoke with clarity and passion about her experience representing the French Quarter for a decade when it was part of her district and of her concern for its needs, identifying it as “an anomaly,” and adding that it “stands out and there’s much more to be done in that area.”

After introductory remarks by the bill’s primary sponsor, Senator Edwin R. Murray (District 4-Democrat), Sen. Peterson grilled Mayor Landrieu’s representative — Deputy Mayor and Chief Administrative Officer Andy Kopplin — regarding the $30 million in funds to be provided by the Convention & Visitor’s Bureau for infrastructure repairs and putting the best shine on the French Quarter in advance of hosting the Super Bowl in February 2013. As reported in the Times-Picayune, she asked Kopplin “why it seems the Convention Center money is a ‘quid pro quo.’ Kopplin disputed the characterization, saying the board and the city merely want a long-term financing stream to support initial investments.”

Sen. Peterson also noted that special districts/non-governmental entities are usually created with the inclusion of a “sunset clause” (meaning that it would need to be revisited by the Committee at a future date and either reinstated or retired at such time). Sen. Peterson asked if it would be problematic for the city’s administration to add such a clause; Mr. Kopplin replied, “Yes, it is.”

Four additional speakers spoke in support of the bill, including Darryl Berger of The Berger Company (New Orleans Convention and Visitors Board At Large Board member, French Quarter Management District Board of Commissioners member, etc.), Melvin Rodrigue (Ernest N. Morial Convention Center Board President, Chief Operating Officer of Galatoire’s Restaurant), and two spunky hospitality industry workers (one of whom stated that she was also a French Quarter resident; I don’t remember if the other mentioned such). As if coached to do so, supporters of the bill applauded openly in response to the remarks of these two young ladies, both wearing the requisite red “Tourism matters” t-shirts.

After the supporting commentary concluded, a brief flurry of activity ensued at the Committee members’ table. Senator Peterson then introduced “Amendments proposed by Senate Committee on Local and Municipal Affairs to Substitute for Senate Bill 573 by Senator Murray.” At that moment, the entire game changed. I was lucky to receive copies of both the substitute bill as presented and these proposed amendments from the Sergeant at Arms. The details are as follows:

The “Hospitality Zone” boundaries are as follows: “…all territories within the boundaries of the Pontchartrain Expressway, at the point where it intersects with the Mississippi River to Claiborne overpass/I-10; I-10 to Canal Street; Canal Street to North Rampart, along the rear property lines of parcels that front on the downriver side of Canal Street; North Rampart to Esplanade Avenue, along the rear property lines of parcels that front on the lakeside of North Rampart; Esplanade Avenue to the Mississippi River, along the rear property lines of the parcels that front on the downriver side of Esplanade; the Mississippi River back to the point where it intersects with the Pontchartrain Expressway.”

(Technical note: this means that the portion of Tremé that borders on N. Rampart Street is now included in the zone, as well as the portion of the Faubourg Marigny that borders on Esplanade Avenue… I suspect this is to allow for the repair of sidewalks, street lights, signage and such on both sides of these streets.)

Original/Revised version: “Superboard”/”Advisory Committee” made up of appointees and hospitality/tourism industry executives.
New Amended version: ABOLISHED! The New Orleans City Council and the French Quarter Management District would now administer the non-tourism/marketing funds.

Original/Revised version: 33-1/3% to the New Orleans Convention and Visitors Bureau (NOCVB), 33-1/3% to the New Orleans Tourism Marketing Corporation (NOTMC), and 33-1/3% to the “Hospitality Zone Dedicated Fund.”
New Amended version: 20% to the NOCVB, 20% to the NOTMC, 10% to the New Orleans Multicultural Tourism Network, 40% to the “Hospitality Zone Dedicated Fund,” and 10% to the French Quarter Management District. The amendment also expressly states that funds dispersed to the Hospitality Zone Dedicated Fund “shall only be used for public safety, sanitation, infrastructure, and maintenance thereof, and code enforcement” (meaning that administrative expenses must come from another revenue source). Finally, funds in the Hospitality Zone Dedicated Fund “shall supplement and enhance those services routinely provided by the city or its agencies.”

Instead of 66-2/3% going to tourism and marketing and only 33-1/3% going to repairs, care, and upkeep, this changed the balance to 50% going to the services and maintenance for the Hospitality Zone and 50% going to promoting tourism/marketing. (Note: It is currently estimated that ~$15 million in revenue will be generated annually from the taxes included in this legislative instrument.)

Original/Revised version: Recommendations regarding the expenditure of funds for services/maintenance purposes would be made by the “Advisory Committee,” subject to approval by the New Orleans City Council (submission of a budget would be required).
New Amended Version: Four-fifths of the services/maintenance funds would be administered directly by the New Orleans City Council; one-fifth would be controlled by an existing political subdivision of the state of Louisiana created in 2007 by the Louisiana Legislature pursuant to R.S. 25:796, et seq. — the French Quarter Management District (FQMD). It is expected that the FQMD will hold open meetings that allow for public attendance/participation.

(Technical note: It should be noted that the FQMD also has an appointed board without term limitations for Board of Commissioners members and there is no known mechanism for removal of a Board member for unsatisfactory performance. The majority of its board members remain as appointed in 2007, including appointees by former Mayor C. Ray Nagin and former Councilmember James Carter that haven’t changed during the current administration. This may need to be addressed in the near future, particularly since the sunset date for this district is June 30, 2014.)

New Amended Version:

§140.558 Accountability
    A. There shall be a pubic accounting of all funds received as a result of this Subpart as well as a prompt response to public records requests in relation to these funds irrespective of the status of the receiving organization.
    B. All entities identified for funding under R.S. 33:130.557(F), except R.S. 33:130.557(F)(3), shall submit an annual report to the New Orleans City Council and the Legislature that identifies their use and allocation of the funds. The annual report shall be submitted on October first each year. The first report shall be due October 1, 2013, and shall cover allocations made in the prior fiscal year.

(This means that the NOCVB, the NOTMC, the French Quarter Management District, and the New Orleans Multicultural Tourism Network must publicly report and be accountable regarding the disbursement of these funds; the exception applies to the portion of the funds controlled by the New Orleans City Council, which is already bound to existing budgetary deadlines, reporting requirements, and public records requests responsiveness.)

Original/Revised version: The special district would have no expiration date.
New Amended version: The special district would “sunset” in ten years’ time, meaning that it must be re-approved by the Legislature at that time or it would be dissolved.

Original/Revised version: Included the right to “acquire by gift, grant, purchase, or otherwise all property, including rights of way; to hold and use any franchise or property, real, personal, or mixed, tangible or intangible, or any interest therein, necessary or desirable for carrying out the objects and purposes of the district.”
New Amended version: Removed/abolished.

Original/Revised version: “The district may create subdistricts…”
New Amended version: Removed/abolished.

New Amended version: The New Orleans City Council is required to adopt an appropriate resolution giving notice of its intention to levy taxes, and the proposition for the levy of such taxes has been “submitted to the electors of the city at an election held for that purpose and the proposition has received the favorable vote of a majority of the electors voting in such election.”

The city is also authorized and empowered to levy an additional tax on the occupancy of hotel rooms in the city (not to exceed 1.75%), to levy a tax on food or beverages for consumption on or off the premises “not intended for home consumption” within the “Hospitality Zone” (not to exceed 0.2495%), and to levy an additional 1% tax with respect to overnight registered guest’s overnight parking. (I would prefer it if this applied to all commercial parking enterprises within the zone — not just “overnight” parking.) These taxes do not appear to be subject to the previously-noted requirement of a proposition and vote; I believe that they are automatically “empowered” via this act of legislation.

After these amendments were presented and read into the record, five speakers from the opposing ZONE OUT delegation spoke (prominent neighborhood association leaders and business/community figures). Given that many of the major issues were addressed by the amendments (abolition of the new and unnecessary governing structure, lack of accountability, subversion of processes that would allow for oversight and citizen participation, etc.), comments were brief — there simply wasn’t time to fully consider the amendments presented just moments before in order to react in a more direct manner.

(I was later informed that our delegation had submitted a list of seven speakers, including my name; for the sake of parity, however, the number permitted to do so was five. I’m grateful to have “made the cut” for the list that was submitted, even if I did not have the opportunity to address the Committee directly.)

The amendments were approved unanimously by the Legislature’s Local & Municipal Affairs Committee. In all truth, everyone in the room was stunned to some degree — support (by my observation, particularly Sen. Murray and Mr. Kopplin) and opposition alike.

On the ZONE OUT krewe’s bus, bound for Baton Rouge.

What comes next? The bill will now head to the full Louisiana Senate, where it will need to be approved before June 4, 2012. Keep in mind, however, that this bill can still be be pulled from further consideration or changed/amended again at any time between now and then (although Sen. Peterson did state unequivocally, “Blanket statement: If these amendments come off, I… probably… am off” (meaning that she would withdraw her support). She continued, “And I would hope that that would not be the case, because they are all significant and there’s a constituency that’s reflected behind each one of those amendments.”

Please keep your fingers crossed that any modifications that might occur from this point on are limited to improvements to this legislation… this isn’t over yet.

Thank you to EVERYONE who took the time to contact our elected officials, either by email or phone, to express your concerns re: LA SB 573. I am absolutely certain that these amendments were created, in part, in response to your actions. These game-changing amendments belong to every citizen who chose to get involved.