Next governor will have to deal with Saints
Posted by kmarszal October 17, 2007
By Jeff Duncan and Ed Anderson
When the next governor takes office in January, Saints owner Tom Benson will be waiting at the negotiating table.
The football team's lease agreement with the state will expire after the 2010 season, and the new governor will have to extend the contract or the Saints will become a free agent franchise, capable of relocating to another city without penalty.
The four leading gubernatorial candidates said that won't happen on their watch, although they are vague on what incentives they would offer the team to stay in New Orleans.
All agreed, however, that the Superdome, now undergoing a $211 million post-Katrina facelift, is still a functional venue for football and they do not see the need for a new stadium anytime soon.
The candidates also said they would make a similar commitment to the Hornets, including a pledge to fulfill the state's contractual obligation to build a training facility for the National Basketball Association team.
Candidates weigh in
State Sen. Walter Boasso, D-Arabi, said he would make negotiations a priority "to ensure the Saints stay in Louisiana, because of the sales tax revenue and tourism dollars" generated for the city and state.
He said he would consider granting the National Football League franchise an annual subsidy but would also look at other options "as long (as) it is fiscally responsible."
Democrat Foster Campbell, a member of the Public Service Commission, said that although he has always supported the team, he voted against the present $186.5 million deal to help keep it in New Orleans when he was in the state Senate. He called the agreement "too generous and too dependent on state funds."
Campbell said a new deal with the Saints would be a priority for his administration but added that he is opposed to direct subsidies to the team. He said his plan to remove individual and corporate income taxes -- if lawmakers impose an oil processing tax -- would help the team's bottom line.
"The state also needs to make selling the naming rights to the Louisiana Superdome and the New Orleans Arena a priority," he said.
New Orleans-area businessman John Georges, running without a party affiliation, said it will be "a priority to negotiate a long-term lease with the New Orleans Saints, keeping the organization in place to grow our economy, rebuild our tourism industry and support our statewide fan base."
Georges, however, would not commit to a specific state subsidy for the team. Instead, he said he would form a committee of business experts and government officials "to develop fair, cost-effective proposals that make economic sense and are financially beneficial to the Saints, the state budget and Louisiana's taxpayers."
Calling the Saints a key element of the New Orleans economy and the linchpin for the city to land Super Bowls with an estimated economic impact of about $300 million, U.S. Rep. Bobby Jindal, R-Kenner, said he would make a long-term deal with the club a priority.
However, he said, "any financial incentives by the state (to the franchise) should come from money the Saints generate for the state, rather than taking any money away from health care, education or other critical needs."
Jindal did not make an outright commitment to a state subsidy in a new agreement.
"It is important for Louisiana to keep the Saints in New Orleans," he said. "As governor, I would consider this investment in the same manner as any other economic development investment, carefully gauging the economic return on the investment made to ensure it made sense for taxpayers."
Finding the money
State officials expect the annual subsidies to be a major point of contention in negotiations for a lease extension with the Saints.
Under their current contract with the state, the Saints receive 100 percent of game-day revenue generated at the Superdome as well as annual subsidies that escalate to as much as $23.5 million in the final three years of the deal.
"Everybody agrees that the Saints should stay," said Doug Thornton, the regional vice president of SMG, the company that manages the Superdome. "The question is: Under what conditions?"
The current contract relies on revenue from the Orleans-Jefferson parish hotel-motel tax to finance most of the inducements to the team. However, droughts in tourism after the Sept. 11 terrorist attacks in 2001 and Katrina in 2005 created multimillion-dollar shortfalls in the Superdome budget, forcing state officials to dip into alternative accounts to pay the team. Similar shortfalls are expected in future years.
"It's no secret that there's a need for a new source of revenue," said Tim Coulon, chairman of the Superdome Commission of the Louisiana Stadium and Exposition District. "The next governor needs to be fully prepared and briefed on the issues and be prepared to deal with it."
Quiet on new stadium
Thornton and Coulon both said any long-term deal with the Saints should include a plan for a new stadium. While noting that the renovated Superdome should remain viable for 10 to 15 more years, they said the state must be proactive and immediately launch a plan to finance a new stadium.
Boasso, Georges and Jindal said they would consider a new stadium proposal but generally agreed that the Superdome remains serviceable for now.
Campbell said the only way he would support a new Saints stadium is if it "no longer makes sense from an architectural and financial standpoint" to continue to fix the Superdome.
Boasso said a new stadium should be put to a referendum.
Georges, a former part-owner of the New Orleans Brass hockey team, said the Dome is still good as a "comprehensive venue for professional football and other forms of entertainment" but promised to impanel a group of structural engineers, stadium architects and NFL executives to determine the stadium's life span.
Jindal said the renovations to the Superdome in the past two years "have improved the facility to make it more competitive from a football business perspective." He said the stadium "appears to be serviceable as a football venue" for now.
Jindal said before a new stadium is built, it is "crucial" to expand the economy to attract new businesses to the state to help buy tickets, rent suites and "generate the revenues needed to make such a (new) facility viable."
Jindal said any state tax money used to build a new stadium "would need to be done in a way that would guarantee a productive return to the economy of the city and the state," and he also would require that a share of the costs be borne by the NFL and "other resources."
Few specifics on Hornets
The candidates were largely supportive of the Hornets. But like their discussion of the Saints, they offered few details about how much financial backing they would be willing to offer.
"My administration will lobby local leadership and state lawmakers for adequate funds to keep the New Orleans Hornets competitive in the market and in the NBA," Georges said.
Jindal said he would "consider subsidies for the Hornets in the same fashion as subsidies or incentives for any other employer or industry in the state by determining if the investment is the best use of the taxpayer dollars and will provide a positive return on our investment without taking away from other critical needs in our state," he said.
Boasso also said he would need to research the basketball team before committing to annual subsidies.
"I believe we need to look at an independent study that shows whether or not the sales taxes the Hornets bring into Louisiana are worth subsidizing," he said.
All the candidates said the state needs to fulfill its contractual obligation to the Hornets by building a state-of-the-art training facility for the team.
Coulon said the next governor will face more pressing concerns, such as health care, education and economic development, before considering professional-sports issues. But, he added: "I think the Saints and the media and the fans are going to make it a priority, with respect to the potential for a Super Bowl, with respect toward providing some stability and security of a long-term deal. How (the pro sports) relates to the other priorities of the state, I'm not quite sure. But it certainly is going to come up."
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