Future of New Orleans Saints on Bond Commission Agenda | Legislature
With the overthrow of the first domino later this week in Baton Rouge, the Saints football team could either be in New Orleans for the next 30 years or leave town sooner than you think.
A simple yes from the State Bond Commission would bring down other elements of a complex financial arrangement – allowing for the signing of contracts, continued renovations, and possibly the Saints’ stay in New Orleans until 2055.
The Edwards administration is pushing for a favorable vote by November from the panel that oversees government borrowing. The first step begins Thursday when the Bond Commission begins discussing the details.
“We’ve kind of reached a point now where we need to fish or cut the bait,” Administration Commissioner Jay Dardenne said. “And the way we get involved in this project is to get the Bond Commission to vote on what’s called a ‘debt commute’.”
In theory, the job of the State Bond Commission is to make sure that political subdivisions have the means to borrow money, that projects are …
But the governor faces opposition from lawmakers tired of New Orleans’ demands and tired of subsidizing a football team owned by the widow of a billionaire car salesman, who in 2005 insulted the Louisiana capital.
Already, members of the Bond Commission have raised concerns about New Orleans administrative policies and are slowly pushing forward a legally approved proposal to use $ 25 million in the future to work on the Caesars Superdome.
The problem is now a different and much more complex chain of the same agreement, with an urgent deadline. Its support is far from assured.
“I have nothing against New Orleans,” said Republican Republican Lafayette Stuart J. Bishop, who chairs the powerful House Ways & Means Committee and sits on the Bond Commission. “I just think we have to start looking at how we spend our money. How do you justify spending tens of millions on luxury suites that less than 1% of Louisiana residents can sit in when you don’t have clean running water in rural parishes? “
The Edwards administration maintains that keeping the Saints allows New Orleans to compete for lucrative Super Bowls and other major sporting events.
Although the Saints are a small market team, the Superdome is within walking distance of hotels, restaurants, and all kinds of entertainment, which is one of the reasons New Orleans has hosted 11 NFL Super Bowls. – a 12th is planned for 2025.
The 2013 Super Bowl in New Orleans had an economic impact of $ 480 million with $ 35 million in direct tax payments to the state, according to the Division of Administration.
The Louisiana Stadium and Exposition District, which manages the public facility, argues that the Superdome is responsible for $ 578 million in economic activity annually, including $ 19 million in taxes.
After the death of her husband, Tom Benson, Gayle Benson became the primary owner of the Saints and New Orleans Pelicans of the National Basketball Association. Last month, Benson, 74, announced that the teams would be turned over to the city as the sole beneficiary upon his death.
The State and the Saints are negotiating a continuation of the team’s lease with the Superdome, which expires in 2025. Terms under discussion would keep the Saints in New Orleans for another 10 years, with two 10-year renewals. years after that. The NFL prohibits teams from moving if it means breaking a lease.
“Those who have criticized past relationships with the Saints, in some cases with good reason,” said Dardenne, “should recognize that this is truly a partnership in the future that requires the Saints to invest in a state assets, keeps them here with a lease until 2055, and recognizes Ms Benson’s stated estate plan, which requires the franchise to remain in New Orleans as a condition of purchase when the Saints are sold when he died.
But all of this, especially the lease, hinges on the state government’s commitment to complete a $ 450 million modernization that would bring the 50-year-old facility up to NFL standards before Super Bowl 2025. This construction is half completed. More luxury suites, a new lobby, further improvements to the concessions and other upgrades are yet to be completed.
In order to start the third and fourth phase to complete the renovations on time, construction contracts must be signed by December 31st.
The state cannot legally sign any contract until the money is in hand, and it does.
“The lease will not be signed until we commit to the $ 450 million renovation, as this brings the Dome to the level necessary to meet NFL requirements,” Dardenne said. “The money has to be there and the only commitment we can make at the moment, because the money has to be there by the end of the year, is the ‘debt commuter’. “
Approval of “switched debt” by the Bond Commission would allow the state government to use the money owed to it by the Louisiana Stadium and Exposition District, known as LSED, for construction.
LSED chairman Kyle France limited his comments on the matter to expressing confidence that the state will succeed in closing the deal.
In August 2019, Louisiana agreed to renovate the Superdome at a cost of $ 450 million. The state would contribute $ 90 million, the LSED would give $ 210 million, and the Saints, for the first time, would invest $ 150 million for improvements.
In 2013, LSED had refinanced the costs of repairing Hurricane Katrina. Because so few buyers came forward, the state bought the LSED bonds, putting the Superdome in debt to state taxpayers approximately $ 60 million.
As part of the 2019 deal, the state requested permission to convert LSED’s debt. The maneuver would allow the state to allocate just over $ 60 million towards its $ 90 million renovation contribution and free LSED to use its money for construction instead of paying the debt.
The Bond Commission and lawmakers wanted to dig a little deeper before signing off on the complex idea of ’debt commutation’ in 2019. Then the pandemic struck and the problem persisted.
Attorney General Jeff Landry, who rarely agrees with Governor John Bel Edwards, issued a five-page notice on June 8, concluding that the debt conversion program was legal. “Essentially, instead of the district (LSED) paying the debt service to the state, the district would invest that money in the Superdome,” the opinion said.
LSED is funded by hotel / motel taxes in the parishes of Orleans and Jefferson, as well as the costs of organizing events, as well as money from what is called a bill of bond anticipation which allows money to be spent now from the proceeds of a future bond. Revenue fell as hotel / motel taxes fell 72% and self-generated revenue fell 90% as all scheduled events were canceled due to COVID.
Still in the process of repaying its 2013 debt to the state, LSED had to use all available revenue for operating expenses, instead of construction.
Now the construction contracts for Phases 3 and 4 are due to be signed by the end of the year and neither LSED nor the State have the money to keep construction on track to go forward. complete by 2025 when Saints’ lease ends and the Super Bowl is set to come to town.
“There may be some members of the Legislature who want to come up with one-time money, and if they commit to doing that, that would be good. But they haven’t done it yet and they haven’t signed up because of the anti-New Orleans effort, ”Dardenne said. “We have to have the decision by the end of the year.