New Orleans Convention Center’s ‘headquarters hotel’ plan rankles Warehouse District residents

The Ernest N. Morial Convention Center’s leaders, fearing competition from other cities for major events, are now making their case to New Orleans residents for a new, $570 million “headquarters hotel” on a site in the historic Warehouse District.

The first reaction from neighbors to Convention Center CEO Michael Sawaya’s proposal suggests he has a fight on his hands.

“I took great offense to his presentation,” said Jonathan Hill, a board members of the Bakery Condominiums on South Peters Street, a block from the proposed hotel site, who attended a meeting last month where Sawaya explained the plan. “He wants to destroy the history and the culture of our neighborhood.”

Hill was among about 50 Warehouse District homeowners who turned up for the public meeting at The Common House, a private club that now occupies the former site of the Louisiana Children’s Museum.

Many were frustrated by what they heard about the hotel, which would likely be nearly 300 feet tall and replace The Sugar Mill event space, a renovated 19th century sugar storage facility, which is at the corner of John Churchill Chase Street and South Peters Street.

They had questions about the height of the proposed building, the fate of an adjacent park and plans to alleviate additional traffic in the area.

David Federico, 70, who is president of the Fibre Mills building condominium board, said he had collected signatures opposing the project from 60 of the 250 residents at Fibre Mills, and that the nearby Bakery Condominiums had also begun to gather signatures.

“It’s going to be a nightmare,” Federico said. “I’m not opposed to the Convention Center getting more business…but they have to consider the people who live and pay taxes down here.”

For Sawaya, who has battled local critics for years as he pressed to create the River District neighborhood that’s now expected to rise on the barren upriver acres adjacent to the Convention Center he oversees, the hotel represents a critical investment.

New Orleans, he has argued, has fallen behind other cities it competes with for convention business, such as Nashville, Atlanta and Orlando, all of which have built “headquarters” hotels that are attached to their convention centers.

Sawaya has been making that case since he took charge of the New Orleans facility a decade ago. These days, the bookers for big conventions typically require large blocks of rooms and they prefer hotels that are attached to the event space to help create a sense of community.

If you don’t have one you lose business, Sawaya has said, and the Convention Center is a big driver for the city’s hospitality sector.

“It will introduce a new market and mean more events, bring more jobs, generate new demand for rooms for other hotels in the market and more spending at local restaurants and other businesses,” Sawaya told his board in arguing for the new hotel.

In Nashville, Omni Hotels and Resorts group built a 21-story, 800-room convention center hotel  over a decade ago. Sawaya said he now has a tentative deal with Omni to build a 1,000-room hotel on the Sugar Mill site.

The project would be financed mostly by Omni, with the state-owned Convention Center investing $70 million in the project. It has already agreed to pay $20 million to acquire the Sugar Mill site from John J. Cummings III and his partners.

A previous deal with Omni to build a 1,200-room hotel on an eight-acre site at the upriver end of the Convention Center fell through in 2020 when its major financial backer pulled out amid an uncertain outlook during the pandemic.

Omni’s executive vice president in charge of real estate, Mike Smith, told the Convention Center board in May that the hotel group had soured on the upriver location because development of the surrounding River District acreage at that end of the Convention Center was still too uncertain.

Omni wants to build closer to the French Quarter, Smith said.

However, Warehouse District residents are less interested in the commercial rationale than in the impact a new skyscraping hotel would have on their neighborhood.

“When residents began asking about zoning restrictions — current height restriction is about five stories — as well as the demolition of a historic edifice, the Sugar Mill, all Sawaya would say, is, ‘That has nothing to do with us, that’s up to the city,'” said Mary Arno, a writer who lives in the Federal Fibre Mills Condominiums building across the road from the proposed hotel site.

Sawaya said at the meeting that the hotel would likely have to be about 25 stories high, which would equate to a height of about 300 feet. The city’s zoning rules currently have a height restriction of 125 feet for that part of the Warehouse District.

“I left with more questions than answers,” said MaryNell Nola-Wheatley, policy research director at the Preservation Resource Center, which has a historic preservation interest as well as having its offices near the proposed site.

The residents also voiced concern about the fate of the Mississippi River Heritage Park, which was incorporated into the hotel project on slides presented at the meeting.

The park is adjacent to The Sugar Mill and is currently owned by the city. However, a new state law sponsored by freshman state Rep. Alonzo Knox redrew the boundaries of the Convention Center’s economic development district this year in order to incorporate both the park and The Sugar Mill.

The effect of that change in state law is unclear. A state entity does not technically require the approval of Historic District Landmarks Commission or the City Council for variances to the city zoning laws, according to two city planning officials who weren’t authorized to speak publicly. However, it is a contentious legal grey area, they said.

Early in the process

Sawaya said this week that it is premature to talk about details of the project.

“We worked to make clear with the meeting participants that nothing other than the purchase of the Sugar Mill property has been determined,” he said via email.

“Many meeting attendees present wanted to know how tall the hotel would be, the plans for the Heritage Park and ultimately where future hotel employees would park,” he said. ” Our ongoing discussions with the city have included ideas for improving, maintaining, and programing the park for the betterment of all of the residents, as well as the future hotel guests.”

He said there are also talks with the city about building more parking facilities to accommodate additional employees, visitors to the River District as that neighborhood gets built, as well as growing numbers of cruise ship passengers who board nearby.

At an Oktoberfest block party on Tuesday, residents of other nearby condominium buildings, including The Cotton Mill on Poeyfarre Street and One River Place, buttonholed Lesli Harris, the City Council member for the district that includes the proposed hotel site, to voice their concerns.

Harris noted there are still no designs for the project, which she maintained would need various levels of city approval.

“I have encouraged the Convention Center to meet regularly with the surrounding constituents to keep them informed and so the neighbors can provide any feedback on the project,” she said via email.

Monica Ferraro, an attorney who lives at Fibre Mills, where she is vice president of that building’s condo board, said she fears the project might get pushed through over the objection of the Historic District Landmarks Commission, as was the case with the old Dixie Machine Works building on Annunciation Street last year.

“After Katrina, we really worked hard with the City Council and the planning commission to keep the Warehouse District what it was,” she said. “There is already a lot of disruption from the existing hotels all around us, plus the cruise ship traffic. And honestly, nobody comes to New Orleans to stay in a hotel; they come to walk around the historic neighborhoods.”