Convention center deserves serious inquiry by city
Published 12:18 am Tuesday, March 7, 2017
Buz Craft and reform-minded Vidalia aldermen are busy reviewing financials and peeling the onion on convention center operations. The Vidalia convention center was built with a USDA grant with insufficient thought of future operations and maintenance. Craft, only eight months in office, now reports a prior period convention center operating loss of $1.3 million. If Craft should make the mistake of following Natchez’s tourism formula, he could end up with a hotelier managing Vidalia’s convention center, paying the hotelier $20,000 monthly, receiving no annual financial plans or operating reports, and perhaps hearing the convention center manager say job No. 1 is to fill the hotelier’s hotel.
Meanwhile, the Natchez Convention Center public debt is now $7.745 million, with $700,000 due July 1. Re-issued special obligation bonds still run to 2024 and produce savings on interest paid of a little over $200,000 in 25 years. These savings appear to be offset by financial brokerage and attorney’s fees paid to professionals selected by our elected officials to package the 2006 bond refunding deal. So, to pay that debt, our shrinking city (more than 40 percent since 1970) depends on local hotels, bed and breakfasts, restaurants, caterers and bars that sell food — the Big 5 — to collect tourism taxes to reduce this public debt. Meanwhile, the Grand Hotel gets 15 years of tax breaks under TIF bond funding, with non-TIF hotels subsidizing the Grand. This also means the Grand does not really have to compete with other hotels until 2023. Then, it only has to compete for 10 years, under the deal cut by the city.
Email newsletter signup
Eighteen months after former commissioners on the Natchez Convention Promotion Commission received complaints from the Big 5 that convention business leads had dried up and almost all convention work appeared to be steered to and captured by the Grand, a group quickly coalesced and 300 Big 5 persons petitioned the commission and city to investigate.
Former commissioners reacted. A year has passed since David Gammill, former commission chair, prepared to announce public hearing dates for input on requests for proposals, known as RFPs, for future management of the convention center and other commission properties. Attorneys opined that the 2006 contract between the city and Warren Reuther’s New Orleans Hotel Consultants was gone as of 2012, because the city had no authority from the commission to extend the contract beyond 2012. The former commissioners later resigned en masse when the former mayor shut down the commission investigation. So, today, the city on “La La Hill” allows the convention center operations to continue without written agreement and almost no reporting.
The current commission has not set or published dates, times and venues for public hearings to address these issues. Unmet city/commission requests for Reuther’s company’s contractually-required annual reporting of convention center operations for the past 10 years should not further impede this process. Neither Mr. Reuther nor his company should be rewarded for failing to submit required annual financial plans. The city should exercise its inspection rights to go into Reuther’s company bank accounts, audit them to certify segregation of Grand and convention center operations, and certify that the city is not paying Grand bills with taxpayer money. Why does the City on “La La Hill” continue to allow Reuther’s company to operate the convention center, while his company thumbs its nose at the City? Or, is this just the culmination of 300 years of malaise and indifference to doing public business publicly?
Continued delay and tepid city inquiry into hard numbers hurts all of us. Only with public input can the commission prepare RFPs with point-system grading and baseline requirements, as well as distinguish services a proposer can provide to meet community needs, convention centers managed, and references. Public officials should independently vet and request a certified history of contract compliance and other information from proposers’ clientele, with grading of certified information produced and public proposer presentations.
RFPs check government and promote transparency. Let’s put “La La Hill” to final rest. Mr. Reuther can submit a management proposal for the convention center like others, and his company may be the best choice. For now, Reuther’s company owes Natchez, as fiduciary to the city in the 2006 contract he signed, many, many answers, including any evidence that Reuther’s company has put Natchez ahead of his private business interests. This is required in the 2006 contract. Our public officials need to follow Vidalia’s lead and insist on strict contract compliance, with consequences. If alderpersons cannot bring themselves to do it, they should resign and let someone else step up to do this necessary work — before our city is completely and irrevocably financially lost. The prior mayor shut down the commission investigation — the current administration needs to do the hard work it was hired by us to do.
Paul Benoist is a Natchez resident.