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Hightower Hotel Ready to Wreak Havoc?

Shreveport Mayor Keith Hightower triumphed when the state Bond Commission approved 11-2 to allow the sale of $40 million to finance the city’s convention hotel. But a larger question remained about the viability study which may have made a difference in the final vote.

At first, the two Louisiana Tech researchers who compiled the report had serious misgivings about the profitability of the hotel. Panicked at this conclusion, the Hightower administration relayed further information to the pair who then revised their results.

The additional information was that the city was going to dedicate sales taxes from the hotel toward debt service, as well as reminding the analysts that the city would not have to pay property taxes on this city-owned property. That turned a projected roughly $355,000 deficit into a $512,000 profit, annually.

Yet let’s think about this for a moment. First, while the city wouldn’t be paying taxes on the land, that also means that the city is beggaring other local jurisdictions out of property taxes such as the Caddo Parish School District and Caddo Parish. You might argue that this may be all come out right for these other bodies because the extra business generated by the hotel from conventions will help out some in the additional sales tax assessments (even if it is unlikely so much could be generated to make up for that lost property tax revenue).

But note the guiding assumption here that the hotel, courtesy of the convention center, will enable additional revenues to be generated above and beyond existing lodging revenues. This is by no means guaranteed, particularly in light of the fact that, as a recent Brookings Institution report made clear, convention business continues to stagnate and as more pressure builds in Texas to legalize some more forms of gambling (oops, “gaming;” gambling is prohibited by the Louisiana Constitution) whose citizens provide 60 percent of Shreveport-Bossier’s casino business, by the time the hotel would open in 2006 the market may be considerably smaller than it is now.

More likely the new hotel would simply steal business from the private sector, in essence taking the sales tax revenues derived from private-sector hotels that would have gone into the city’s coffers to fund other services. In short, this project likely is going to rob Peter to pay Paul, and in its wake shrink the private sector in lodging. This cannot be good in the long run, a city running hotels and driving private interests out of business and not generating any additional revenue for its citizens compared to if it was not a hotelier.

It’s almost certain that the hotel now will be built. And any projected losses to the city probably won’t be detected until, or can be obscured by, Hightower when he leaves office at the end of 2006, itching for a run for the state Senate in 2007 or possibly Congress in 2008. Hightower’s political career may prosper as a result of this, but the odds are a lot longer that Shreveport’s citizens will also as a result of this.

It's High Noon for Hightower

It’s Shreveport Mayor Keith Hightower versus his (numerous) critics today, as he and the city go in front of the state Bond Commission to gets its stamp of approval on $40 million of bonding, without restriction, to allow the city to finance the building of a hotel next to its burgeoning convention center.

His problem is the project’s critics include almost all of the Shreveport legislative delegation. What might give them a little extra weight is that the estimated cost of the Hightower Hotel is actually $52 million, and Hightower is counting on $12 from the state free and clear. Actually, there’s still some ambiguity about this amount, as it is subject to the state attorney general’s review that state capital outlay monies can be used for this purpose – something requested by some of these legislators.

In addition, most of these legislators have expressed publicly that they believed a public vote ought to be taken on the matter. This echoed sentiments of three of the seven city councilors (all Republicans, while the four Democrats voted to give Democrat Hightower the authority to petition the Commission without such a detour).

There also exists the matter of a study of the matter requested by the Commission, in a highly unusual move, assigned to researchers at Louisiana Tech. To this date, no definitive study of the viability of the hotel has been performed as Hightower has based his case on two marketing studies.

Add into the mix the financing authority of the bonds, the Louisiana Community Development Authority, is under legal investigation, the law firm hired by Hightower to advise on the project also may fall under a legal microscope, ambiguity over the role of whether the city or a Hightower-stacked Hotel Authority would really have responsibility over the hotel, and a lawsuit filed by, among others, local private hoteliers arguing this use of funds demonstrates the city falsely represented to the public that a hotel would be developed and constructed by a private developer, as part of a bond election in 1999, in which voters approved funding for the city's $100 million convention center that did not include any amount for development and construction of a hotel.

In short, legislative opponents of the move could argue to Commissioners (the majority of whom are legislators themselves) that the state ought to have some security for its $12 million commitment and that a public vote would ease concerns over the shadowy way Hightower has operated in this matter. Of course, Hightower can argue that the city’s legislature, representing the people, even if by a narrow margin, consented to this.

Perhaps the most important variable to this will be whether and how much weight state Democrat Sen. Lydia Jackson will throw around in opposition. She and Hightower are engaged in a battle for political control of Shreveport, or at least for the Democrat Party’s influence in it. In the most recent rounds of local elections, Jackson’s political machine emerged victorious over Hightower’s or most any other’s preferred candidates for safe Democrat seats.

Jackson also was instrumental in scuttling Hightower’s plans to fund the hotel through a Tax Increment Financing district which would have eased the process for him. Both how much more control over the political environment she can consolidate in doing this and the degree of her own personal misgivings about the project will determine how much of an effort she will put into lobbying the Commission.

Most likely, the Commission will grant the bonding request – it seldom does not when a mayor with statutory backing asks. It is highly unlikely to turn down the request, period. But there’s a chance that it could turn it down but indicate that it would be much more receptive to a future request that included an affirmative public vote. Given the result of The Times (Shreveport) October survey which showed 76 percent of city residents in opposition to a city-financed hotel, in essence that probably would scuttle the idea.

That means that not only is a huge financial decision for Shreveport in the balance today, but also Hightower’s political credibility and influence.


We're not missing you yet, Big Mike

Mike Foster as governor did some good things for the state, but since his retirement he has the annoying habit of whenever opening his mouth of reminding people why we’re probably better off without him fussing around the Governor’s Mansion.

Gov. Kathleen Blanco quite properly is trying to end the state’s subsidization of the New Orleans Saints – the only major-league professional franchise in the country that receives, at this time, a direct cash subsidy from government (the state in this case). That deal, naturally, had been worked out by Foster.

The Saints, who receive $80 million a year in shared revenue from the NFL, have already received $52.5 million from the state under the Foster-era arrangement which is to last several more years. Blanco's plan would be through the year 2025 and require a new tax source of approximately $10 to $12 million a year to be worked into a refinancing and update of the current Superdome lease, a tax deal most likely paid by the real, direct beneficiaries of the Saints' presence, the greater New Orleans area.

But Foster can’t quite understand why everybody is so upset about this:

"When will people ever look at the Saints as just another business?" he asked. "The truth is, there was an economic study done that I personally checked on. The Saints make the state money. The Saints are an economic engine. Do we want to run off a business that makes the state money? Should we help them to the point that we lose money? No, but we're making money. If you listen to the debate, you would think the state has put oodles of money into this. We haven't."

Actually, as the above article points out, some have criticized the now-UNO Chancellor Tim Ryan's study, for a number of reasons. In fact, sports franchises increasingly have become vanity projects, given the escalation in player’s salaries. A number lose money with just an owner’s deep pockets keeping them afloat.

Most disturbing about Foster’s statement is the incredible assertion that he doesn’t think the state “has put oodles of money into this …. We haven’t.” Now, I realize that to multi-millionaire Mike that $52.5 million is chump change, but to me and virtually everybody else it’s real money. Can you say $157.5 million more for Medicaid? Or $472.5 million to finish up I-49 (that would pay for extending it right through Shreveport to the Arkansas border)? That how much we could have leveraged from the federal government out of that sum.

The fact is, as the governor has said, the Saints may have become a luxury the state can’t afford. New Orleans is one of the smallest television markets in the NFL but let’s let economics rule here. If we consider the state the Saints’ market (and a number of Dallas Cowboy fans in northwest Louisiana would beg to differ), it might not be big enough to sustain them. Let them go to greener pastures if they feel they can; I won’t root against them and I’d rather see the dollars spent on something like long-term health care.

As for our ex-governor, we hope the door didn’t hit you on the way out.


The Fifth Isn't the Third

Wiley Hilburn, Jr., is the head of the Journalism Department at Louisiana Tech University and has taught there for many years, credentialing a number of journalists some of whom now populate the largest newspaper in northwest Louisiana, The Times of Shreveport, Bossier City and the Ark-La-Tex (more colloquially known as “The Times”). He writes a weekly column for The Times, in which this gem, about the political success of U.S. Fifth Congressional District (northeast and part of central Louisiana) Republican Rep. Rodney Alexander, appears, here describing many of the parishes in the district:

The Ouachita River parishes are desperately poor, beyond third-world standards. Ingrained, generational poverty has bred a Faulkneresque grind of illiteracy, violence, corruption, drugs and even arson.

Each sentence is breathtakingly ignorant. Regarding the first, I do not know this man but I can tell you now from this sentence that there is no way he has spent any meaningful time in the Third World outside of hotels, restaurants, and other attractions that cater to foreigners, if he’s ever been outside of a developed country before. If he had spent any time interacting among ordinary people in their domestic environments going about their business in a Third World country (LDC or “less developed country” is what us comparative politics teachers call them), he would never have made such a contrafactual statement. Take it from somebody who has accumulated weeks of time trooping around the big cities and the back roads of 15 LDCs on four continents, 99.44% of their populations live in worse conditions than the typical person in poverty in the U.S., Fifth District or elsewhere in America. It would be these peoples’ dream to have pure, running water in their houses, 2,200 calories a day, or access to our health care system for just one day – things virtually every American or LA-5 resident has.

But don’t take just my anecdotal impressions as evidence. Check out some U.S. Census data concerning the Fifth District. Let’s concentrate on just a few indicators there, and compare them to just a few countries (this data courtesy of the World Bank):

% living on under$2/day0.037.414.37.426.310.3
% in secondary ed97.123.031.2NA56.1NA
% w/telephones94.320.224.735.540.162.7

Actually, that last category overstates the LDCs relative to the Fifth District because the U.S. figures include only land lines, while the World Bank data includes mobile as well (which inflates the figures by at least 50 percent). And the five states I picked have two things in common, (1) I’ve been to them and (2) they are all among the more “advanced” LDCs economically. Consider places like Mali, the Central Africa Republic, even oil rich Nigeria (all of whom at least 60 percent of the citizenry live on less than $2 per day) and you’ll see that Hilburn’s assertion that conditions in the parishes along the Ouachita are “beyond third-world [sic] standards” is beyond stupid.

In the next sentence, Hilburn manages to show he comes up short on theory as well as on facts, repeating the old canard that poverty, not individual human agency, is the source of “illiteracy, violence, corruption, drugs, and even arson.” Maybe he hasn’t heard that the U.S. has sunk around $7 trillion into anti-poverty spending the past four decades, and our poverty rate hasn’t budged. Maybe he doesn’t understand that if you don’t subsidize poverty through generous welfare programs, curtailed by a Republican Congress pointing an electoral gun at Democrat Pres. Bill Clinton in 1996, more people get off welfare rolls and on to employment rolls, the surest way to reduce poverty.

“Poverty,” when defined as “lack of financial resources,” does not cause the social pathologies he describes. It is a certain set of attitudes which cause poverty that also cause these deviant behaviors; both are associated with each other by their relationship to poverty but are not related to each other (see here for a summary of the academician most associated with this formulation). In short, poverty is not something primarily caused by lack of monetary resources; it comes from having a set of attitudes that are suboptimal to the earning of money – attitudes which also lead to “illiteracy, violence,” etc.

Until enough policymakers with the attitudes demonstrated by Hilburn in his column accept this, their prescriptions will do nothing to solve poverty in the Fifth District or anywhere else. And it certainly doesn’t help when journalists who think as does Hilburn on this subject perpetuate their myths.


I'm now an "Internet kook."

So says C.B. Forgotston, a perceptive critic of the spending habits and “good old boy network” ways of Louisiana politics, when I told him of my decision to publish this blog.

He and a few others – commentators, state officials both elected and bureaucratic, even journalists – surface from time to time with their trenchant observations about the things that need to happen to raise this state from its bottom-dwelling status in so many ways. Or they may be like Lou Gehrig Burnett’s
FaxNet Update, which casts a similar critical eye (among its news reporting) on politics in northwest Louisiana. The problem is, they are few, and the attitudes they want to change are widespread. That’s why when a guy like C.B. persists in disseminating his opinions on the web, those of a different persuasion call him an “Internet kook.”

I’ve been one of those people for over a decade now that gradually has thrust himself out onto these ramparts. Us college professors are used to weighing forth on things (we’re supposed to do this by sticking to teaching fact and theory, not giving opinion, in the classroom; some of my colleagues in higher education actually do) and having been a journalist in my distant past, it’s become second nature to me to write columns frequently, so perhaps this is the next evolutionary step.

Actually, I’m not a big fan of blogs. Not to insult anybody, but I can’t see why anybody would be interested in somebody prattling on about their lives as if the world was dying to know about their individual soap operas, which from what I’ve observed the vast majority of blogs are. Rest assured you will rarely if ever see anything about my personal life in here, the privacy of which I intensely guard in any event.

At this stage of my authorial life, however, blogging appeals to me because, while for other publications I continue to follow the traditional “deadline” model of writing columns, with blogging I have the freedom to submit pieces when I want when perhaps they are the most timely, in most any size or format I choose. Obviously, if I admit this, I have a kind of compulsion to voice an opinion when I feel it would be worth something; the question then is, what compels me?

The answer is simple: given my training, interest, and breadth of knowledge, I think I can contribute to the debate, a public policy free-for-all that is going to determine the future of northwest Louisiana, the state, America, and the world. Two of my three university degrees were funded in part by taxpayers, so this is one way to continue to pay back their investment in me. I aim to take that education and learning I have experienced to articulate ideas and to help readers understand the political issues and what’s at stake in the world of politics.

In fact, that’s where the name of this blog comes from. For several years I hosted a talk radio show which was called “Between the Lines,” and my
FaxNet Update column is called the same. In both endeavors I have striven to bring out hidden aspects lying beneath news or opinion, in order for readers/listeners to have a better idea of the context of these events and ideas, to give them more ammunition by which to critically appraise the issues presented, so that they may be better able to draw their own conclusions about from where the public policy debate must proceed. Which, come to think about it, is what I do as a university professor.

I don’t know what’s going to happen here. I suspect I’ll post something most every day, at varying times given my teaching schedule. My guess is I will primarily discuss Louisiana politics, with some attention paid to northwest Louisiana’s, and some national and international commentary sprinkled in here and there. A state journalist I know remarked to me that he thought a high-quality blog during the Louisiana Legislature’s session might actually perform a service to readers. If I can pull that off (that fun begins in late April), then I’ll rest easily that I haven’t been wasting time and electrons in committing myself to this.