NEW ORLEANS -- New Orleans hoteliers were crying foul at Tuesday's meeting of the New Orleans Industrial Development Board. They object to a huge tax break the downtown Hyatt Regency is now due to receive. The tax break is supposed to help the Hyatt's new owners Poydras Properties, LLC, secure the financing to finally reopen the Katrina-shuttered complex. "The attempt is to rebuild this city and put an important property back into production," said IDB President Walter Flower, III. Before Katrina the Hyatt paid the city nearly $2.3 million a year in property taxes. This year, the city dropped the tax burden on the vacant hotel to about $625,000 dollars. At Poydras Properties' request the IDB further reduced the tax to $320,000 a year for the next 15 years. The Greater New Orleans Hotel and Lodging Association told the board, the deal puts other hotels at a competitive disadvantage. "No one could argue that a hotel that will boast the city's newest facilities and most ample meeting space that projects a $40 million dollar profit in it's fourth year of operation should pay less than 20 percent of the property taxes that its competitors do in a free market," said Hilton Riverside GM Fred Sawyers. According to the board, the tax break would increase Poydras Properties' ability to get financing to redevelop the hotel. The developer has been trying to sell about $200 million in GoZone low interest bonds for the past year with no takers.
"We need to give them the time to get up and running," said IDB member David Thompson. "We need to get the bonds sold so we can get the revenue, so it can get up and running."
"It's been vacant for too long," said IDB member Darrel Saizan, Jr.. "It's going to have a positive impact on the whole corridor."
"Our city faces a $68 million deficit in the coming year," said Sawyers. "Now is not the time to be transferring tax dollars to developers."
Hyatt owner Poydras Properties did not send a representative to the IDB meeting. There is a "claw back" provision in the deal that would require the Hyatt to pay higher property taxes after five years.
A higher assessment would kick-in if business at hotel beats certain projections.
