By Tim Morris, Columnist firstname.lastname@example.org,
NOLA.com | The Times-Picayune
The fate of Harrah’s quest for a no-bid, 30-year extension of its state casino license in New Orleans, a full six years before the contract expires, could be decided Monday (May 14) in a Senate committee that appears to be leaning toward putting the issue on hold.
The casino company’s chances dimmed considerably Sunday when Sen. J.P. Morrell, D-New Orleans, announced that he would oppose the proposed extension in House Bill 553 when it comes before the Judiciary B Committee. Morrell said the bill is “an unwarranted distraction” at a time when lawmakers should be focused on dealing with a shortfall in the state’s budget that takes effect July 1.
“A $650+ million shortfall is less than two months away,” Morrell said in a statement posted on The New Orleans Agenda. “As we squabble, 35,000+ nursing home recipients are being told that they are about to be evicted. With no clear and reasonable revenue agreement in place, we alternate between closing hospitals with medical schools, burdening families with crippling college debt, or cutting services to the Department of Children and Family Services.”
Morrell is the third senator on the seven-member Judiciary B panel to express reservations about the proposal. Sens. Eric LaFleur, D-Ville Platte, and Norby Chabert, R-Houma, told The Advocate that they favor postponing the measure until next year.
The other committee members are Sens. Gary Smith, D-Norco; Ronnie Johns, R-Lake Charles; Karen Carter Peterson, D-New Orleans; and Gregory Tarver, D-Shreveport. The meeting is scheduled for 1 p.m.
That the fate of Harrah’s extension comes down to a single vote is an astonishing reversal of fortune over the past six weeks. The bill, which is sponsored by House Speaker Taylor Barras, R-New Iberia, easily cleared the lower chamber with a 79-12 vote March 29.
The proposal is touted as a major economic development advance for New Orleans. Harrah’s officials have promised to spend $350 million to build a new 340-room hotel at the casino while adding a complex that includes a high-end food court, a modern nightclub and an entertainment district on Fulton Street between the existing Harrah’s hotel and its parking garage.
Harrah’s also would increase its annual payments to the state by a minimum $7 million a year to at least $69 million annually by the end of the contract. The casino also recently sweetened the deal to pay the city of New Orleans an additional $6.3 million beyond the $21 million in upfront money that Harrah’s lobbyists had recently agreed to.
Caesars Regional President and Harrah’s New Orleans General Manager Dan Real issued a statement Sunday saying that a vote against the bill “is a vote against growing the economy.”
“Louisiana cannot afford to turn away a nearly $350 million unsubsidized investment in a project that will grow the pie for everyone,” Real said. “Louisiana cannot afford another year delay on 600 construction jobs and 900 permanent jobs. The City of New Orleans cannot afford another year fighting for its $3.6 million budget allocation for casino support services. That’s why HB 553 has broad support from the business, labor and hospitality communities. We all need HB 553 now.”
Despite lining up support from key tourism and restaurant groups, Gov. John Bel Edwards, New Orleans Mayor LaToya Cantrell and others, the Harrah’s train began to skid off the rails with questions about the speed of the process and lack of public debate and input. There also was the very logical question of why the contract should not be put out for public bid to ensure that the state, city and its taxpayers are getting the best deal possible.
And why the rush now, six years before the current contract expires? Harrah’s proposal could be a great deal for everyone, but our elected officials should be sure before signing on for 30 years.
Morrell, who has become that rarest of species — a lawmaker who is both thoughtful and effective — framed the issue perfectly.
“Negotiations of this kind are about maximizing leverage and should never be negotiated until each party is on equal footing,” he said in his statement Sunday. “The State of Louisiana is broke and can’t pay its bills, a circumstance that makes any extra money seem attractive. That’s not a good place to start a negotiation.”
The Senate committee should vote to hit the pause button and let both sides have a free and honest debate about this proposal.
Tim Morris is an opinions columnist at NOLA.com | The Times-Picayune. He can be reached at email@example.com. Follow him on Twitter @tmorris504.