Millions in Super Bowl dollars can be a powerful allure for a financially strapped city such as New Orleans, but the NFL championship game is not impetus enough for the state to rush into an impractical long-term stadium agreement with Saints owner Tom Benson, SMG senior vice-president Doug Thornton said Wednesday.
The state and city hope to submit a proposal for the 2013 Super Bowl (XLVII) to the league by its April 1 deadline.
"We're 45 days out; that's a lifetime," a smiling Thornton said during a break at the monthly meeting of the Louisiana Stadium and Exposition District board of commissioners at the Superdome. "Hell, Merrill Lynch and Bank of America merged over a weekend, and that was an $85 billion transaction. So we can certainly do something in 45 days."
When the laughter subsided, Thornton said negotiations are ongoing with Saints officials, noting the parties "have made tremendous strides over the last nine months, but we don't have a deal."
"While a Super Bowl is very important, it's not the driver here," he said. "We can't be burdened by that deadline. We are trying to fix a flawed business model here. It's more important to get it right than it is to worry about meeting some deadline.
"To structure a deal that will benefit both parties going well into the future is more important than submitting a bid for a Super Bowl that potentially could come back sometime (to New Orleans) in the future. We can still bid on 2014 or 2015. Obviously, we want to be back in the rotation. But the long-term nature of the contract is more important than the short-term benefits that we might receive for a 2013 Super Bowl."
Thornton disclosed Tuesday that LSED, the board that runs the Superdome and New Orleans Arena, is expected to run a $27.5 million shortfall in the fiscal year starting July 1 due in large part to the subsidy the state owes the Saints and Hornets.
Thornton told members of the General Government Subcommittee of the House Appropriations that there are not sufficient revenue streams to close the gap between the financial obligations to the area pro sports franchises.
He cited three principle factors that have influenced the projected shortfall:
-- A scheduled increase in debt service by roughly $9 million.
-- Flat projections for hotel taxes and self-generated revenues.
-- High fixed contractual obligations to the area sports teams.
"Look at what has happened to this deal since it was struck in 2001 -- 9/11, Katrina, Gustav and now this recession," Thornton said. "No one could have foreseen the economic conditions that we're faced with now."
Ron Forman, chairman of the LSED board of commissioners, said it is critical that all parties reach a long-term agreement that can stand the test of time.
"Expenses are going up, and revenues are going down with tourist dollars the way they are," Forman said. "And it's important that we fix it now and not come back each and every single year to our legislators with the same problem.
"It's important that we look for a long-term solution and not just put a band-aid on the problem. So we have to do the best we can and predict what numbers are going to be and come up with the best case practices and work toward that outcome."
In other LSED business, the board of commissioners passed three resolutions that will cover the contractual costs of approximately $450,000 in capital improvements, renovations and Hurricane Gustav-related repairs made at Zephyr Field.
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Brian Allee-Walsh can be reached at ballee-walsh@timespicayune.com or 504.826.3805.
