BATON ROUGE, La. (AP) - A proposal to extend Harrah’s contract to operate the New Orleans land-based casino for up to three decades narrowly scraped through a Senate committee Monday, despite concerns about giving the company a no-bid deal years ahead of the contract’s expiration.
With a 4-3 vote, a Senate judiciary committee advanced the contract arrangement , which heads next to a Senate financial committee for review Tuesday. But passage of the measure sponsored by Republican House Speaker Taylor Barras came only after senators heavily rewrote the House-backed proposal to give Louisiana far more money from the deal.
The changes to the bill offered by Sen. Gary Smith, a Norco Democrat and committee chairman, would require Harrah’s to pay $40 million upfront for the renewal, 75 percent to the state and 25 percent to New Orleans. Additionally, the company’s $60 million annual payment to the state would be boosted to $100 million.
The changes could bring in more than $1 billion more for the state over the life of the deal.
“It’s a better bill today than when it came over here,” said Sen. Greg Tarver, a Shreveport Democrat.
In exchange for the payments, Harrah’s would get up to a 30-year extension to manage the New Orleans casino until 2054 - and would agree to a $350 million upgrade to its facilities within six years, adding new restaurants, building a second hotel and enlarging its entertainment space.
Passage in the Senate is uncertain as disagreement over the contract has continued to build through the legislative session. If the Senate agrees to the deal, the measure would have to return to the House for consideration of the rewrite.
Barras described the contract extension as “an economic development opportunity in New Orleans” that would create new jobs and more money for the city and state.
“We couldn’t have asked for a better business partner,” he told senators.
Opponents criticized the lack of a competitive bidding process to determine which company will run the New Orleans casino and the absence of an outside analysis of the financing proposal.
Senators questioned why Harrah’s was rushing to complete a new deal six years before the current contract expires and why the company didn’t offer details about a possible sale transaction that wasn’t discussed when the bill was moving through the House.
Dan Real, general manager for Harrah’s New Orleans, said he wasn’t trying to hide anything, and he noted the financial transaction had been reviewed by the state gambling board. Sen. Karen Carter Peterson, a New Orleans Democrat, said the state shouldn’t turn away a hefty development investment because the lobbying effort was poorly handled.
Sen. Norby Chabert, a Houma Republican, said the deal seemed rushed.
“I don’t think it’s a question that the state wants to continue its relationship with Harrah’s,” he said. “I don’t think there’s anything wrong with pumping the brakes a little bit.”
Real said the rush was driven by demand for upgrades to the New Orleans facility, which he said could only be made with a long-term deal.
Gov. John Bel Edwards said Monday that he hadn’t reviewed the rewritten bill but had “reservations” about the House-passed version. He seemed interested in having the legislation pass, though he didn’t describe what it needed to win his support.
“I would like to get the bill in a good-enough shape that I could consider signing it,” the Democratic governor said.
Voting for the bill in the Senate committee were Peterson, Smith, Tarver and Sen. Ronnie Johns, a Republican from Lake Charles. Voting against the bill were Chabert and Sens. Eric LaFleur, a Democrat from Ville Platte; and J.P. Morrell, a Democrat from New Orleans.
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House Bill 553: www.legis.la.gov
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