When we entered 2020, Citizens for a New Louisiana decided to go back and review some of the challenges and tax proposal solutions from previous years. The goal was to identify the issue the tax was supposed to address and then identify solutions to those same issues, but without the need for new taxes. One of those major challenges was the closing of the Buchanan Street garage.
Regular readers will recall when we first addressed the garage, which was primarily used by employees and visitors of the parish courthouse. One article explored an idea on how to repair the garage with existing money. Another one reviewed our position that the parish-owned garage shouldn’t be sold to the city because it used to generate $90,000 a year in revenue for the parish. It’s now been over a years since the garage closed and sat dormant.
Starting from the beginning
As with any problem, the best thing to do is return to the beginning. The first, most simple question was remembering when, exactly, the garage was closed. Below is the text of the LCG press release announcing the closure, dated October 12th, 2018:
FOR IMMEDIATE RELEASE
October 12, 2018
Buchanan Street Garage Closure
An immediate closure of the Buchanan Street Garage has been deemed necessary following a structural reassessment conducted today. The engineers who conducted the inspection recommended closure of the garage in the interest of public safety.
Vehicles will not be permitted in Buchanan Street Garage until further notice.
Members of the public who would otherwise park in the Buchanan Street Garage will be redirected to park at the Vermilion Street Parking Garage located at 121 E. Vermilion St. or at available on-street parking spaces. Additionally, the City Hall overflow lot located at 100 Hamilton Place (behind A-Net’s Bridal and Johnson’s Boucaniere) is available for public parking.
Provisional parking arrangements are being made for employees working in the Parish Courthouse who currently park in the Buchanan Street Garage.
The Buchanan Street Garage closure is indefinite, and a plan to address the safety issues is underway.
We then went back and reviewed the engineering assessment we received in 2018. All this time, we assumed the assessment said the garage was unsafe. However, we can’t find where it actually says the inspectors “recommended closure of the garage in the interest of public safety.” Upon further inspection, we realized the date didn’t correspond with the press release anyway.
The press release says October 12th, but the engineering document was dated August. Obviously this wasn’t the assessment that closed the garage. We submitted a records request for any engineering documents from October. LCG replied with this repair plan estimate, dated three days after the closure: October 15th. That estimate opens with the line, “Now that the Buchanon [sic] St. Parking Garage is closed to the public…” but still makes no reference to the garage being unsafe.
Obviously, something is missing. We submitted yet another records request, explaining that the press release said the assessment was performed on October the 12th. The reply came back, “We have provided you with all the documents that LCG has which are responsive to your request.”
If there’s no assessment declaring the garage unsafe, what’s really going on?
Immediately after the garage was closed, then Mayor-President Joel Robideaux put out a request for proposals. The plan back then was to convert the garage into some kind of “mixed use” project. There were several proposals submitted, but the one that stood out was the Dreamhome project, by a New Orleans developer named Acadia. That rather detailed proposal is dated April 14, 2019 – about six months after the closure. The article on Developing Lafayette says it’s an $83 million project, however, page 67 of the proposal itself only accounts for $67 million. Even if we include the $770,000 attempted purchase of the facility in ordinance O-112-2018, the total is still well below the $83 million price tag.
When the Dreamhome project was announced, we wondered how the city could afford to spend so much to prop up a private development. Page 66 of the proposal talks about a TIF tax being one of the funding mechanisms, but doesn’t associate a dollar amount. Page 67, with the money breakdown, references only two sources: mortgage financing of $47 million, and “private funding” of $20 million.
Could the Economic Development District (EDD) be that “private funding?”
The Downtown EDD Ordinance O-225-2019 calls for the levying of several different taxes, also known as Tax Increment Financing or “TIF” for short. One is a 1¢ sales tax, another is a 2¢ hotel tax that excludes the only hotel in the district. The proposal includes the government constructing a hotel, so we can only assume that’s where the 2¢ would come from. However, neither the ordinance nor the Cooperative Endeavor Agreement (CEA) include an estimate for how much money the new tax district is expected to bring in.
Enter Downtown Development Authority’s Executive Director, Anita Begnaud. During one of the council meetings about these districts, she estimated the tax revenue to be about $700,000 per year. The term of the agreement is 25 years, so the simple math on that works out to $17,500,000. That’s $2.5 million short of the $20 million needed.
Where can the city find $2.5 million?
While it’s possible to tap resources from LPTFA or LEDA, that’s not what happened for another project on the December 6th, 2019, meeting of the Lafayette Consolidated Council. If you remember, that’s when the City of Lafayette virtually granted $1.5 million to the Lafayette Bottle Arts Lofts project. Technically, it was a forty-five year, third-mortgage, at zero percent interest and fully dependent upon the project turning a profit after paying everyone else off AND filling up a reserve fund with an unspecified amount of money.
The short version is, it was a gift of $1.5 million to a brand-new LLC in New Orleans created expressly for the purpose of this one project. To us, that’s the most likely model to be employed here. This hypothesis is further backed up by all of the districts, except for the downtown one, having created brand new LLCs named for each project.
The downtown project has been planned for two years or more
During the November 19th, 2019, council meeting, several council members asked “what’s the rush?” The answer came back that this project had been in the works for at least two years. That date seems to precede Mrs. Begnaud’s taking the helm of DDA on September 24, 2018. However, two years ago (when the project planning began) she was OneAcadiana’s Senior VP of Governmental Affairs.
It was also OneAcadiana that recently published the booklet, “How We Compete.” If we turn to page five of that very document, it describes in vivid detail the very same process used to create these EDD districts. It even includes placing both sales and hotel taxes into the districts. Case studies in the back of the booklet describe using that tax money to pay for construction of hotels, restaurants, and apartments.
Tying it all back to the “unsafe” garage
If OneAcadiana has been planning at least the downtown project for two years, would it be safe to assume that events of the last few months were part of that planning process? After all, the Dreamhome project only works by repurposing the Buchanan garage. The only way someone could repurpose the garage would be if people stopped using it. Declaring the structure “unsafe” would certainly accomplish that task – especially if no one bothers to ask for the documents.
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