New Orleans Approves Tax Deal for $625 Million Omni Hotel

The New Orleans City Council approved a 45-year tax arrangement on Thursday for the planned Omni New Orleans, one of the last local steps for a $625 million convention headquarters hotel across from the Ernest N. Morial Convention Center.

Rather than paying a conventional property-tax bill, the Dallas-based developers would make yearly payments in lieu of taxes. Those payments would be set from the average per-room tax bills at five large downtown hotels that are already open. The 27-story tower is planned with 1,006 rooms and about 100,000 square feet of meeting space on the former Sugar Mill site, and it would be the first hotel of 1,000 rooms or more built in the city in more than 40 years.

Jobs, taxes and a long incentive

City officials project about 2,500 construction jobs and 1,400 permanent positions once the hotel is running, along with roughly $8 million a year in local taxes, including about $5 million for the city and more than $1 million for the Orleans Parish School Board. They also estimate more than $18 million in one-time taxes and fees. Council Vice President Matthew Willard sponsored the measure.

Public support does not stop at the PILOT. The Convention Center has agreed to turn over its share of hotel, food-and-beverage and sales taxes generated at the property, plus extra taxes from a special subdistrict drawn over the site, for 45 years, though it would keep an option to buy those incentives out. In August the Convention Center’s board revised the package, agreeing to pay the developers $120 million up front on top of $80 million already in the deal, instead of nearly $837 million spread over 45 years. The state Bond Commission approved those revised financial terms in September.

One more trip to Baton Rouge

The Convention Center still needs Bond Commission approval for the borrowing that would let it meet its obligations to Omni, and some residents have objected to the financing, as well as to housing costs and traffic around the site. The Bureau of Governmental Research, a local watchdog, has argued that breaks of this kind should last no more than 20 years and should rise toward full taxation over that span.

Site work is under way and construction could start before the end of the year, with an opening targeted for 2030. HERE New Orleans reported the council vote for local readers.

For more local business coverage, see HERE New Orleans Business.

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