Friday, May 17, 2024

Bond commission at odds over Superdome debt forgiveness plan

by BIZ Magazine

By William Patrick | The Center Square

The Louisiana State Bond Commission has not resolved a $63 million funding issue regarding the New Orleans Superdome, putting the final phases of a multiyear $450 million renovation plan against an end-of-year deadline.

Failure to reach a timely agreement also could affect the future of the Superdome’s main tenant, the New Orleans Saints football team, whose lease is up for renewal in 2025.

The lack of resolution, however, is not about whether to finance the stadium renovations, but how.

Gov. John Bel Edwards and Jay Dardenne, commissioner of the Louisiana Division of Administration, have advocated for a debt “commutation” for the Louisiana Stadium and Exposition District (LSED), a political subdivision that oversees the Superdome.

Senate President Page Cortez, R-Lafayette, is resistant to the idea, saying instead, “Pay your debt.”

The LSED refinanced Superdome loans in 2013 after Hurricane Katrina. Doing so, Cortez said, involves small annual payments until they “balloon” in years prior to the 2039 due date.

Cortez said the LSED owes $60 million on those refinanced loans and cannot go to the bond market to raise more money for current renovations unless the state forgives the existing debt.

“We’re going to say we gave you the money, you agreed to pay us the money back, now you can’t pay it back, and we have to forgive you so you can go back to the market and get the $210 million,” he said.

As part of the $450 million Superdome improvement plan, the LSED pledged $210 million, while the Saints committed $150 million.

Edwards said in 2019 the state would cover the remaining $90 million, which is now in jeopardy. Only $3 million of the state’s portion has been committed, and $25 million has been approved but not yet paid.

Dardenne implored the commission Thursday to adopt the debt forgiveness proposal during a commission meeting at the Louisiana Capitol. He urged members that waiting to use budget surplus money or appropriate funds through the 2022 regular legislative session’s capital outlay budget would take too long.

“It is critical in order to maintain the timeframe that is in place to complete phases 3 and 4 in time for the scheduled Super Bowl in 2025 that that work begin early next year,” Dardenne said. “For that to happen, the contract has to be signed by the end of this year.”

The bond commission meets monthly, though commission chairman and state treasurer John Schroder said members should meet and discuss a resolution before November’s meeting.

Cortez said he wanted more information before he could make a decision.

“There’s not been a bit of transparency,” he said.

Matthew Block, an attorney representing Edwards, said he was happy to provide more information to those hesitant of the debt forgiveness option and the public deserves an answer.

“If the genuine interest is to solve this, and I think it is, then we’ve got to come up with the money and pay for this,” said Block, lamenting the “11th hour” dispute.

Rep. Stuart Bishop, R-Lafayette, concluded the meeting with a jab at Block, saying he should “poll the public to see what’s important to them: water and roads or upgrades to suites in the Superdome.”

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