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saintz08 05-14-2004 12:50 AM

State facing $10 million shortfall on payment to Saints

State facing $10 million shortfall on payment to Saints

The Associated Press
5/13/2004, 5:20 p.m. CT

NEW ORLEANS (AP) — The state is more than $10 million short of $15 million due to the New Orleans Saints on July 1, because of the crash in tourism after the Sept. 11 attacks.

The payment is part of a $186 million deal worked out in 2001 to keep the team in Louisiana.

It was not clear what will happen if the state cannot meet its side of the agreement. Arnold D. Fielkow, executive vice president of administration for the team, did not return calls from The Associated Press.

The tourism collapse has cost Louisiana much of the money expected from the hotel and motel tax in New Orleans and neighboring Jefferson Parish, said Craig Gannuch, a budget analyst for the Senate financial office.

"There is a very large deficit this year and one projected for next year," Gannuch said.

Money expected from the tax had been earmarked for the Saints and the New Orleans Hornets. The state is short $11.8 million for the current year and expects to be $13.5 million short next year on those payments. About $10.2 million of this year's shortage is due the Saints, Gannuch said.

Former Gov. Mike Foster prodded the state Legislature to approve $187 million in concessions and payments to the Saints to keep them in the Superdome. The Saints had complained that the Dome was outdated and kept them from being economically competitive.

The payments were to start at $12.5 million last year, $15 million this year, and ultimately $23.5 million.

Some of it was to be from Superdome sources such as concessions, merchandise sales, and rental reimbursements. But most was to come from the hotel tax.

In addition, naming rights for the Dome, projected to bring in $3 million a year, have not been sold.

Last year SMG, the private company that operates the Superdome for the state, gave the state $3 million to help meet the shortfall.

"That was a one-time situation," said Superdome general manager Doug Thorton. "There are discussions about how to handle it. Obviously if the taxes are not there, you have to find it somewhere else."

The Legislature will have to deal with the problem. Last year, state officials opposed taking money from other state funds for the payment.

"One of the options is to default or re-negotiate the payment," Gannuch said. "Or to find money from additional sources."

Sen. Francis Heitmeier, D-New Orleans, said, "We don't have an answer right now" about how to come up with the money. "We're looking at the different options."

Denise Bottcher, Gov. Kathleen Blanco's press secretary, said the governor wants to meet Saints owner Tom Benson soon to discuss the matter. "They're going to talk about the financing that was arranged under the previous administration."

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