NEW ORLEANS -- The chairman of the state's Louisiana Stadium and Exposition District says the LSED and the city of New Orleans are back at the negotiating table for the first time in years, seeking to work out a lease for the state's use of LaSalle Street at Champions Square.
Officials with the LSED said talks have resumed because of a WWL-TV investigation last week that reported the so-called Superdome Commission took over the street without compensating the city.
“I’ve been in contact with the governor and the mayor of New Orleans,” said Kyle France, chairman of the LSED. “I spoke to some of the key folks today, right before the LSED board meeting, so I am confident that something will be worked out here pretty soon.”
WWL-TV found the LSED rejected city’s $3.3 million valuation of the 1400 block of LaSalle Street, which runs between the Mercedes-Benz Superdome and the previously abandoned New Orleans Centre mall.
Rather than work out an agreement prior to shutting the street to traffic, the LSED simply paved over the roadway and began building permanent structures it, causing it to blend in with the rest of Champions Square.
Three years ago, the city started going around the LSED to try to work out a land swap to exchange LaSalle Street for state-owned portions of Duncan Plaza across from City Hall and the adjacent Health Education Administration of Louisiana parking garage. It was part of a now-scuttled plan by Mayor Mitch Landrieu’s administration to move City Hall into the former Charity Hospital building.
Doug Thornton, who operates Champions Square for the LSED’s management company SMG, said LSED was cut out of the negotiations at that point. The LSED, otherwise known as the Superdome Commission, had refused to pay the city’s asking price of $3.3 million in 2011 because they didn’t agree with the valuation and because the state was developing the street for a public benefit.
Thornton said he understood that the city needs to be compensated, but also said his team had to protect the state’s public money and couldn’t overpay for the lease.
“This is not a matter of anyone's fault,” Thornton said. “There's just been discussion about how to move forward and in the meantime, there's been a lot of commerce generated there and a lot of public good.”
Thornton said it’s not proper to contrast the city’s failure to collect payment for LaSalle Street with the $3.5 million price a subsidiary of Harrah’s paid to purchase a block of Fulton Street, shut it off to vehicular traffic and turn it into a pedestrian mall.
He said the state put $17 million into developing Champions Square for public benefit, not to make money for a private entity.
“You’re dealing with a public agency, the state of Louisiana, which is represented through SMG,” Thornton said. “This is a public space and the benefit here is for the public good. (On the other hand) Fulton Street is operated by Harrah’s, a private company and surrounded by private development.”
The issue of the taking of LaSalle Street was first reported by Jason Berry, a blogger called American Zombie. Berry questioned if New Orleans Saints owner Tom Benson was getting private benefit from the use of a public street because Benson’s company Zelia LLC leases the Champions Square property and an adjacent parking garage to the LSED.
Thornton said Benson and his companies get no economic benefit from events held at Champions Square.
“There is a revenue-sharing arrangement with Zelia, but … no money has been paid to Zelia at this point,” Thornton said. “It potentially could at some point if the site is developed in a more robust way. But under the current operating format, I would say no.”
That’s because the LSED, through SMG, is allowed to recover all of the costs of operating Champions Square, as well as all maintenance and capital improvement costs before any revenue-sharing kicks in.
Events at Champions Square earned more than $4 million in gross revenue for LSED over the last nine months, but operating expenses totaled more than $3 million. Thornton said events at Champions Square have also generated more than $1 million in tax revenue for the city since it first opened in 2010.
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