Monday, May 21, 2012

Just give us all the money and no one gets hurt...

...don't ask questions, don't turn around, keep your eyes and your mouth shut.

That's kind of how this whole HoZone money/power grab has been presented to the public from the get-go.

Yesterday we had a prescient, yet familiar , article from Jaquetta White in the TP about the New Orleans Convention and Visitors Bureau's outright contempt for transparency and their continued denial of public records requests.  If you watched the videos of the committee meeting in my previous post you will have noticed that the CVB members in the committee hearing insisted that they have complied with all PRR's.  That is simply not fo' true.  This organization has purposely hid behind their public/private title, claiming that their "private nonprofit corporation" status protects them from having to turn over their books and expenditures.

While the CVB does provide a generalized audit to the state legislative auditor every year, they do not provide audits on detailed expenditures.  This is an organization that is already getting millions of dollars annually from an existing hotel/motel tax and it refuses to be transparent about how that money is spent and exactly what the public is getting in return.  I would dare say the CVB is the largest, most secretive fiefdom funded by public money in the city and now they are asking to possibly double their annual income from tax generated revenue (I will expound on this claim in a minute) without having to provide detailed accounting of how the money will be spent.

I have heard that during the failed merger attempt, the mayor's office pressed the CVB's CEO/President, Stephen Perry, on the transparency issue but was continually stonewalled.  The CVB's excuse for not releasing their books went something along the lines of "We are in the travel and hospitality industry and therefore we have to spend a lot of money on entertainment and travel.  We don't think the public would understand our expenditures if they were to be made public."

Hah!  No shit.  So they are basically saying "If the public actually saw our books and how much money we spend on globetrotting and wining and dining they would have a don't ask us to show that anymore.  Oh and don't ask us why we keep running multi-million dollar deficits every year either."

That's a pretty neat trick.  Too bad the cats at the Public Belt Railroad and Patricia Schwartz Core didn't have Steve Perry's playbook.

In a previous post I told you to hold that thought about Sen. Karen Carter Peterson's demand to the CVB that they start complying with ALL public records requests.  Well...I know there has been more than one set of PRR's submitted to them within the past few weeks and we'll see, this week, if they live up to their claims they made in the committee meeting.  Especially now that a state senator has called them out and they are asking for millions more in public funds.

Which brings me to another point...just how much money are we talking about with this HoZone tax?  The running number is being pitched as 16 million annually.  The amendment Sen. Peterson introduced to the bill would divide that money as follows:

Infrastructure (City Council oversight) - 40%

Infrastructure (French Quarter Management District) - 10%

Tourism Marketing ( CVB) - 20%

Tourism Marketing (NOTMC) - 20%

Tourism Marketing (Multi-Cultural Tourism Network) - 10%

So theoretically the CVB would be pulling in about 3.2 million annually from the tax zone as the bill stands.

Or maybe not.  I was curious as to how they came up with that projected number of 16 million.  I took a look at the hotel/motel section only (the largest income source of the taxed entities) to see what kind of numbers that would pull in.  Referencing data from Smith Travel Research from 2011...this is what we're looking at:

New Orleans Market:  275 hotels

New Orleans hotel/motel rooms:  36,611

Current Pipeline (more rooms that will be available next year):  1445

Total Hotel Rooms:  38,056

Days available:  365

Total Room Nights (2011):  13,890,440

Average Monthly RevPAR:  $78.38

Total Revenues (2011):  $1,088,733,000

Ok so, let's take a look at what the new tax should generate off these numbers....

Proposed hotel/motel tax rate for the HoZone:  1.75%

HoZone hotel/motel tax revenue generated (from 2011 numbers):  $19,052,827

That's 19 million and it doesn't even take into account the restaurant and parking taxes proposed for the zone.  I am guessing this thing is going to generate between 25 and 30 million...possibly double what they are projecting.  However the RevPar number is a cumulative average of all hotel rooms rented in the city, while the bulk of hotels lie in the proposed Hospitality Zone, many do not.  I do not believe the tax will apply to hotel/motel rooms outside of the Zone so this number may be high...still it will most likely be higher than the base 16 million they are projecting for all the extra taxes imposed.  

Also, they are not factoring in the annual increase in room rentals we've seen almost every year for the past few years.  The 2012 numbers are already up 20.4% (per Smith Travel Research) from last year. That puts this year's total revenues at $1,310,834,532.  That would put the 2012 tax generated from only the hotel/motel tax @ $22,939,604 (Please check my math).

If those numbers increase exponentially over the currently proposed lifespan of the Zone...we could possibly be looking at 50+ million dollar annual pull from these taxes before the proposed sunset amendment.  I think we are already close to double what they're saying it will pull out of the gate.

This is a staggering sum of money.  Keep in mind that the very first draft of this bill had the two marketing entities, CVB and NOTMC pulling in over 80% of the cash.  They then presented a compromise and came down to taking 2/3 of the total haul...leaving only 1/3 of the money for infrastructure.  KCP's amendment knocked their marketing share down to basically 50/50 with a 10% margin going to another tourism marketing entity, the Multi-cultural Tourism Network.

And the CVB expects to take that money without having to show line item expenditures or provide transparency and access to their books?  


1 comment:

Anonymous said...

Stephen Perry must have something to hide considering he will not release a line item detail of the NOCVB's spending. Oh, I forgot we would all not understand the wine and dine spending.