The Ernest N. Morial Convention Center board moved forward Thursday with its long-planned $575 million “headquarters” hotel, approving a deal with operator Omni Hotels & Resorts for a design that would include a 300-foot tower in the Warehouse District.
If approved by the city, the 1,000-room hotel would be the largest built in New Orleans in nearly half-a-century. The convention center’s leaders have called for years for a large new hotel attached to the center, which they’ve argued is necessary to compete with cities like Austin, Nashville and Orlando to bring in new conventions.
During its regular monthly meeting Thursday, the 13-member board voted unanimously to enter into binding agreements with Omni Hotels’ parent company to develop the hotel.
“This is a great day; we need this,” said board chair Russell Allen after the vote, pointing to the results of a report by the center’s consultant that estimated it would bring in more than $200 million in additional revenue to the city’s economy each year.
The deal approved Thursday makes binding the tentative deal announced last year. The center’s leaders said they’ve already closed earlier this month on the purchase of The Sugar Mill site on Convention Center Boulevard. The plan calls for construction to start in early 2026, with completion in 2029.
Ernest N. Morial Convention Center’s proposed 1,000 room Omni Hotel in Warehouse District, expected to be completed in 2029.
The proposal has faced opposition from some Warehouse District neighbors, who gathered dozens of signatures when it was first outlined at community meetings last autumn. They’ve argued that the height of the building is more than twice the district’s zoning limit and would destroy the character of the historic neighborhood.
They are also opposed to the convention center’s plan to acquire the adjacent Mississippi River Heritage Park from the city and incorporate it into the hotel, and they’ve expressed worry about parking.
Gov. Jeff Landry, who last year installed Allen, a Texas businessman and major Republican Party donor, as chairman of the convention center board, welcomed Thursday’s move.
Big draw
“This hotel will draw new meetings, conventions and business travelers to the region, benefiting hospitality-related businesses and creating more jobs for residents,” Landry said in a prepared statement. “It’s a gamechanger for the tourism industry that powers New Orleans, and I look forward to seeing Omni New Orleans become a landmark for hospitality and a symbol of growth in Louisiana.”
The agreement approved on Thursday would require the convention center to pay for about $70 million of the total construction costs, in addition to the cost of buying the Sugar Mill and Mississippi River Heritage Park. There is also a package of city and state tax breaks to help finance the deal.
At the board meeting on Thursday, the convention center’s acting CEO, Alita Capparotta, presented a consultant’s report showing that the new hotel would bring in additional meetings and add 1,400 new permanent jobs, as well as producing an additional $15 million a year in local and state tax revenue.
Tom Morsch, a consultant at Hotel Asset Value Enhancement, who has been working on the center’s hotel effort for the past six years, pointed out that Omni’s parent company would be the sole developer of the project, which would avoid having to pay the cost of having a third-party developer, which is more typical of hotel projects.
Under the terms of the deal, Omni would sign a ground lease for 60 years that pays rent and a profit share to the convention center based on the hotel’s performance. Omni has an option to buy the hotel after 30 years.
An earlier deal to build a 1,200-room Omni hotel on a site at the upriver end of the center fell through when the third-party investment firm pulled out during the COVID pandemic. Omni has since changed its strategy and has become direct owner and developer of most of its hotels.
Mike Smith, head of real estate development for Omni’s parent company, told the board Thursday that his company would spend the next several months engaging with the community and city officials to explain the merits of the project.
“This is just the first step,” Smith said. “We need to work with the city and the community and we have a year’s worth of design work to go.”
The board was shown some initial “conceptual” designs which Smith said were done with the historic area in mind. The exterior of the building would be darker brick and steel to blend with existing Warehouse District structures, many of which have been restored and converted into swanky residences or office blocks over the last few decades.
The Festival Park section of the 1984 World’s Fair was located on land now occupied by Mississippi River Heritage Park in New Orleans’ Warehouse District, photographed on March 29, 2019. (Photo by Mike Scott, NOLA.com | The Times-Picayune). The Omni Convention Center hotel plan would incorporate the park in ways yet to be set out by developers.
He said they also expect to “activate and create a sense of people and presence” around the park, so that it would attract coffee shops, restaurants and the like.
Mary Arno, a resident of the Federal Fibre Mills Condominiums, a converted warehouse next to the proposed hotel site, was at Thursday’s meeting and said dozens of her neighbors are opposed to the hotel project because of its obtrusiveness.
Speaking after the meeting, Arno said she and other residents plan to step up their opposition and will be meeting with elected officials.
“The convention center has a right to build a hotel on land they own,” Arno said. “What they don’t have the right to do is build an oversized behemoth in the middle of an historic residential neighborhood and on top of a public park.”
Hospitality support
The hotel has the support of a wide swath of the city’s hospitality sector.
Walt Leger, head of New Orleans & Co., the city’s tourism marketing agency, said he expects that Omni will address neighbors’ concerns, while noting that the property where they are building is on the edge of the Warehouse District directly across from the convention center and near other existing hotels.
Leger said event planners have come to expect headquarters hotels connected to convention centers, something that New Orleans currently lacks.
The city’s largest hotels are also aging, and a new one, if designed appropriately to fit into the Warehouse District, could prompt upgrades at other properties.
“Our hotels have been here for a long time,” said Leger. “The reality is that there are upgrades that are needed.”
Jim Cook, general manager of Sheraton New Orleans Hotel and a member of the convention center board, noted that the 1,100-room hotel he manages was built in 1978 at a cost of around $100 million.
“We haven’t had a catalyst like that since,” Cook said. “It’s amazing that we’re now looking at something like this, an investor coming into New Orleans with an investment of over half-a-billion dollars.”