Bill allows state to meet financial responsibility to team
Demonstrating it can operate a hurry-up offense more adeptly than most quarterbacks in the history of the New Orleans Saints, the Louisiana legislature Monday evening passed a plan that will allow the state to meet its financial responsibilities to the NFL club next month, when the franchise is due a payment of $15 million.
The amended proposal, House Bill 619, passed by a near-unanimous vote, but gained the approval of lawmakers only about an hour before the mandatory 6 p.m. adjournment of the legislative session. The bill allows the Superdome Commission to borrow up to $7.5 million from the Department of Economic Development to make up the shortfall in the payment due the Saints on July 5.
The measure passed the state House by a 99-1 vote and was approved by a 37-0 count in the Senate. It permitted first-term Gov. Kathleen Blanco to keep her pledge that general fund revenues would not be tapped to make up the shortfall.
Under a plan negotiated with club owner Tom Benson by then-Gov. Mike Foster in 2001, the Saints are to be paid a $186 million incentives package over a 10-year period. But the state revealed last month that, largely because of a precipitous plummet in tourism and the drop in hotel and ancillary taxes that accompanied the slump, it was $10 million shy on this year's payment. The shortfall was subsequently amended to about $7.1 million.
Had the state failed to make the $15 million payment by July 5, it would have had 75 days to make good on its responsibility, or the Saints could have abandoned the city and not been subject to a $75 million exit fee.
Through executive vice president of administration Arnold Fielkow, who served as point man on the 2001 contract with the state, Benson reiterated his desire to remain in New Orleans. But as the NFL has recently ramped up efforts to place a team in Los Angeles, likely by the 2007 or 2008 season, rumors have escalated that the Saints might well be a candidate to fill the void in the nation's second-largest market.
While only a temporary solution, Monday's action by the legislature should silence those rumors, at least for now. The Superdome Commission will have eight years to repay the loan and the money must come from revenues of the Orleans and Jefferson counties, and from sources such as hotel-motel taxes, taxes on rental cars, or Superdome tickets and parking. The bill does not state if the loan is to be repaid with interest.
"This will take care of the state's obligations to the Saints for this year," acknowledged Rep. John Alario.
Left unsaid, however, is how Louisiana will deal with future payments to the club, which reach $23.5 million in 2009 and 2010. What transpired Monday buys the state some time, but Blanco will almost certainly have to convince Benson to renegotiate the incentives package she inherited from predecessor Foster, and that could prove a tough sell.
Just last week, Benson, operating under the approach that a deal is a deal, suspended talks and intimated he would not re-open negotiations with Blanco until the 2004 payment was addressed. Fielkow did seem, though, open to some compromise in the future.
He noted last week: "We look forward to sitting down with them after July 5 to discuss the existing contract and also other manners involving a long-term situation which will keep the Saints competitive with the other 31 teams in the NFL and also be beneficial to our entire community."
New Orleans has ranked for several years near the bottom of the league in revenues and Benson, at one point, suggested a new stadium was in order. There have been a number of disputes in recent years between the club and the Superdome Commission.
The deal brokered in 2001 was aimed at increasing profitability for the Saints and also ensuring the team would not be tempted to relocate. But the revenues intended to fund the accord, notably hotel and motel taxes, have been sluggish as the New Orleans tourism and convention industries struggled in the wake of the Sept. 11, 2001 attacks. The state has also failed in efforts to sell naming rights to the Superdome.
Len Pasquarelli is a senior NFL writer for ESPN.com.
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