New Orleans renegotiating $558M convention center hotel
- The New Orleans Exhibition Hall Authority has restarted negotiations with two local developers who proposed building a $558 million, 1,200-room Omni Hotel on an 8-acre site near the city's Ernest N. Morial Convention Center, according to The New Orleans Advocate.
- Current plans for the hotel include 150,000 square feet of ballroom and meeting space, as well as ground-level retail. The development team includes the same individuals who tried to negotiate a $1.5 billion mixed-use hotel complex for a 47-acre site near the convention center a few years ago as part of the city's push to draw in more meeting and event business.
- The hotel development team is asking the authority to contribute $41 million in addition to a 10% rebate on hotel occupancy taxes and a 4% rebate on other revenue until the debt is repaid, which should take about 40 years. Once paid in full, ownership of the hotel reverts to the authority, which can then operate, lease or sell the property. Developers plan to operate the hotel under a nonprofit structure, so they are also asking for a property tax break.
Convention center hotels are a must these days if cities want to lure lucrative trade shows and meetings away from competitors like Las Vegas and New York City, where officials have authorized big convention center remodels to increase capacity.
For example, the 600-room Hyatt Regency Portland at the Oregon Convention Center, scheduled to open late next year, has already been credited with helping to book 12 conventions through 2024. Overseeing the project is Dan Mehls, vice president of project development in Mortenson Construction’s Portland office. A few months before crews broke ground on the hotel last year, Mehls told Construction Dive that amenity-rich hotels like the Hyatt are what make convention centers profitable. Cities fight for the business, he said, because big conventions are also an economic boon, boosting airport, retail and dining revenue as well.
This is likely one of the reasons Miami Beach hasn't given up on a new convention center hotel, even though voters rejected a past proposal back in 2016. Miami Beach city officials voted this month to issue a new request for proposals in the hopes of getting another hotel development deal on this November's ballot, according to the Miami Herald. The hotel would be built on the same site that was part of the failed plan but would be about 30% smaller.
- The New Orleans Advocate After Round 1 stalled, New Orleans convention center officials restart talks for Omni Hotel
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