Eric Paulsen / Eyewitness News
NEW ORLEANS -- At the time it was conceived, the deal Gov. Bobby Jindal made with Saints owner Tom Benson seemed like a win-win situation, keeping the team here in New Orleans and, at the same time, bringing the old Dominion Tower building back into commerce.
In the original plan the state wanted to house state offices and part or all of City Hall there. The hope was to make the area a one-stop shop for city and state business, with plenty of parking in the area.
The city’s deal never got off the ground, but they decided to move offices in, filling about two-thirds of the building.
The governor, who had the option of using FEMA money to new build a state office building downtown, thought this was the perfect compromise and would save the state millions of dollars.
It was hailed a great plan – that is, unless you owned one of the buildings that used to lease space to house state offices. All of a sudden there was a lot of empty office space – around 320,000 feet – in New Orleans and Jefferson Parish.
And that, according to the head of the Jefferson Business Council, Lee Giorgio, is driving an already depressed regional office market way down.
“Again from the Benson standpoint, they’ve been giving perks that none of us as building owners have,” Giorgio said. “They have property taxes that’s been waived. They have parking situation where they’ve been given over 700 parking spaces for, like, 12,500 a year at the Superdome. They’re getting a premium on their rent.
“So when you start putting all these factors together, then a private business owner can’t compete.”
And Giorgio said to make matters worse, to fill the rest of Benson’s building, about 168,000 square feet, Benson has been undercutting the market at rates no one can match.
In one instance Benson tower tried to lure People's Health to their building, away from their current home at Lakeway Tower in Jefferson Parish. It almost worked, until Jefferson Parish President John Young stepped in.
“We had to go to the mat to save one of the companies in Jefferson Parish. Now, I can understand moving state officers, that was part of the original deal, but when Benson uses these tax incentives and these favorable tax treatments to attract individual, privately owned businesses out of Jefferson Parish, that’s where we have to draw the line,” Young said.
While the business council says keeping the Saints here was important, they are asking the state do something to try and help them:
- Bolster the office market, which got hit hard by the Benson deal, with possibly a mortgage pool to help building owners keep their properties from foreclosure until they can replace tenants.
- Put a clause in the Benson contract forbidding him from undercutting the regional average market price.
- Give them a parking contract at the Superdome, like the one Benson has.
Jindal said he stands behind the deal he made, calling it the best for the state, but said he does want to work with business here.
“I think the real solution here is to help grow the economy so you have more tenants,” Jindal said. “We’ve met with the business council and some of those leaders and said we’d be more than happy to work with them on targeted tax incentives to bring in new companies or to help existing companies grow.”
And while the business council welcomes that, it doesn't take care of the problems building owners are facing right now in an already depressed economy.
“We’re talking 320,000 square feet right now, so where do you come up with 320,000 square feet of replacement?” Giorgio said. “Louisiana is not drawing that many new businesses that require office space in downtown area.
“So if we were to come back in and we said from the state perspective, they are going to move state agencies into the Benson Tower. Well that’s fine. Let’s take some from Baton Rouge, let’s take from some Lafayette, let’s take some from Shreveport and let’s spread it around.”
But that didn't happen, so all the business council is saying now is there needs to be some kind of compromise with the state to help out.
They are hoping to meet with the governor soon, adding they're glad the Saints deal happened, but believe it's just not fair that they are shouldering the bulk of the burden.
Our calls to Benson's office for comment on this story were not returned.
