Council members blast River District team for cutting city out of contract
8th January 2024 · 0 Comments
By Josie Abugov
Contributing Writer
(Veritenews.org) — New Orleans City Council members on Thursday (Jan. 4) criticized the team behind the River District for quietly cutting the city out of a 35-year agreement – which sets the terms for operations and public subsidies in the $1 billion residential and entertainment development – and calling for greater transparency as the massive project moves forward.
During the council meeting, councilmembers-at-large Helena Moreno and JP Morrell said they did not learn that the 35-year agreement was approved in early December – which allows an unelected public board to raise sales taxes by up to two percent in the River District for the length of the deal – until just this week, when Verite reported on it.
“I was not aware that the council was being cut out, whatsoever,” Morrell said. “Until I got outreach from media partners asking me about it, I had no idea that the council had been excised.”
Tara Hernandez, a member of the River District Neighborhood Investors private development team, and Councilmember Lesli Harris, who represents the area that includes the development and was part of the decision to cut the city out of the contract, defended the move, saying the team didn’t have time to wait for the council to come on board.
“We have other deadlines we have to meet,” Hernandez said. “We have to keep moving.”
Another controversial part of the River District project – a $22 million property tax break to the River District developers for a new building that will house oil giant Shell’s regional headquarters – also came under fire at the meeting.
Shell has seen its share prices rise since the beginning of the ongoing war between Israel and Hamas in the Gaza Strip. And on Thursday, dozens of pro-Palestinian protesters in attendance at the council meeting stood up and chanted “no tax breaks for genocidal Shell” and “money for housing, not genocidal Shell” while waving posters interchangeably about Gaza and the River District. The council had the group escorted out of the chamber by police.
The news of the December vote on the 35-year River District cooperative endeavor agreement came to light this week when Harris pulled a council vote on it off the last Thursday’s agenda.
The agreement included the River District Neighborhood Investors private development team along with a public economic development body largely made up of members of the board of commissioners for the Ernest N. Morial Convention Center, which is behind the River District.
As originally written, the contract also included the city as a party, meaning it would require a council vote to take effect. That vote had been scheduled for the council’s Dec. 1 meeting – the same meeting where council members voted to approve the Shell tax break.
But when it came time to vote on the larger operating and taxing agreement, Moreno raised concerns that the public and the council had not been given enough time to review its terms. Harris opted to defer it. Members of the public, along with local media and at least some council members, expected that vote to happen at a later council meeting.
But later the same day, members of the New Orleans Exhibition Hall Authority Economic Growth & Development District convened in the council chambers and voted to enact an amended version of the agreement the full council had just discussed. This version notably removed the city as one of the parties in the deal.
The meeting convened with just enough public notice to avoid violating the state’s Open Meetings Law. The city advertised that the meeting was occurring on its website but without any information about what was to be discussed or voted on. An agenda was posted on the council chamber door but was not available online.
Harris, one of two council members on the development district board, was the only City one present at the later meeting. Morrell, who as council president at the time was also on the board, was absent. He said on Thursday that he was unable to make the meeting because of family obligations.
By cutting the city from the agreement, the parties involved in the current deal are the New Orleans Exhibition Hall Authority Economic Growth & Development District and the developers, the River District Neighborhood Investors.
Moreno was appointed council president during the Council meeting and will be able to vote as a member of the economic development boards going forward. She said she looks forward to including the city and working on the River District development process and serving on the district and subdistrict governing bodies.
“Regardless of the merits of this project, the speed and the afterthought and the catching up of this entire process has really soured a lot of people,” Morrell said. “Everything will be under intense scrutiny going forward.”
The official withdrawal of the original agreement – now legally moot – prompted a spirited back-and-forth between Moreno, Morrell, River District developers, and Harris.
Moreno and Morrell condemned the rushed and shrouded approval of the broader River District agreement. They pointed to inconsistencies between the board’s resolution authorizing the agreement – which listed the city as a party – and the final agreement itself, which cut the city out. And they noted that they had not been given access to those Dec. 1 meeting documents on Thursday.
Morell said the “jarring” speed of this agreement’s passage has prompted discussions within the council about the pace and transparency surrounding economic development projects. He said his office is currently drafting legislation to present within the next week or two that will add financial incentives and public advertisement process requirements for economic development projects.
“If an economic development project is a good project, it can stand the light of day,” he said.
Responding to Moreno’s questioning about the agreement that bypassed the council, Hernandez, said the group decided to move forward without the city following “trepidation at the council meeting.” While it had always been the goal of the developers to include the city in their public-private partnership, Hernandez said, she also noted that the economic development district did not legally require the city’s involvement. A city staffer told Verite earlier this week that the development group hoped to move forward with the agreement because Shell had the option to terminate its lease by Dec. 1.
Hernandez said she is open to bringing the city back in with a second agreement.
Harris, who sits on the economic development district and a newly-created subdistrict composed entirely of the same board members, stressed to Moreno that she wants to work toward involving the city in the process.
Defending her participation in the December vote, Harris said that she felt it was important to move quickly on the cooperative endeavor agreement because of the hundreds of units of affordable and workforce housing the developer have promised in the River District. The agreement contains language providing funding streams for those units, including using savings to the River District developer from the Shell office building tax break.
“I don’t want to lose the forest for the trees,” she said.
This article originally published in the January 8, 2024 print edition of The Louisiana Weekly newspaper.
