By Ariella Cohen, The Lens staff writer |

At a final budget town hall meeting Wednesday in the French Quarter, Mayor Mitch Landrieu threw his support behind a new special taxing district in downtown New Orleans.

“We are trying to conceptualize what the district should look like and who the major players are,” Landrieu told a crowd assembled at the Château Bourbon Hotel in the French Quarter. The district could include the French Quarter but wouldn’t be restricted to it, he said.

The comments came in response to Vieux Carré residents who asked him to consider designating their neighborhood as a special taxing district wherein tax revenue generated there would be funneled back into upkeep of its streets and infrastructure. He said he was “thinking about” doing such a thing but for an area that includes the New Orleans Arena and the Superdome, hosts to the 2012 Final Four college basketball tournament and the 2013 Super Bowl.

“We’re going to be hosting over 150 events…. and right now, we are thinking about ways to maximize the crowds and the impact,” he said.

All special taxing districts require the approval of the state legislature. The Central Business District already has one special taxing district – the Downtown Development District. The designation, approved in Baton Rouge in 1974, means that property owners in the area bounded by Iberville Street, the Pontchartrain Expressway, Claiborne Avenue and the Mississippi River, pay a dedicated tax for extra street cleaning, development and marketing efforts. This year, the tax garnered the board-run Downtown Development District $7.7 million, according to the city’s 2011 budget.

During the most recent legislative session ending in June, Gov. Jindal signed off on a  law  that creates another district bounded by Poydras Street, Loyola Avenue, Girod Street, South Liberty Street, Julia Street, Le Rouge Street, Howard Avenue, and South Claiborne Avenue. The board-controlled  Louisiana Sports and Entertainment District has the legal authority to issue state-backed bonds, impose tax-incremenent financing and levy taxes, though it has not yet taken any of these revenue-generating actions.

The district came after years of talk with developers, Superdome officials and Tom Benson, who owns the Saints as well as the valuable commercial real estate flanking the dome. Unknown is how the new district will interact with the existing Downtown Development District, but early conversations indicate that it will not be a self-supporting district like the DDD, but rather more of a subsidy that pulls revenue from visitors or government in effort to encourage growth.

Last year, the city closed off a block of Lasalle Street between the stadium and Benson Tower Street to create Champions Square, a pedestrian mall dedicated to pregame festivities.  The attraction was sold as a first attempt to bring commerce and crowds to the cheerless, underused area around the stadiums.

On Wednesday, the mayor seemed to be telling French Quarter residents that the idea is still kicking around, but perhaps with a broader mandate and theme.  The issue, he said, is money.

“The question is, whose,” he said. “We still have to figure out who can help pay for this.”

Under current agreements with the Louisiana Stadium and Exposition District that control the Dome and the New Orleans Arena, where the Hornets play, there is no sales tax on food or drinks bought at either facility. This means that without a way to lure crowds out of the arenas for food and drink, the city loses millions of dollars a year in potential tax revenue. A new district could potentially help with that conundrum, though such sports districts have not been as successful as hoped in other cities and the development itself could cost billions.  The only developer other than Benson who has stepped in, Domain Cos., has already said that “public support” will be needed to realize its vision.

Where that public support will come from is unclear. Domain has suggested a “payment in lieu of taxes” agreement or a tax-increment-financing plan, both of which would dedicate tax revenue to private development.

The city is now working to secure the necessary state approvals for a special taxing district at the Lake Forest Plaza site in eastern New Orleans. If approved by the state, the tax-increment-financing district agreement would mean that a portion of the increased tax revenue generated by the redevelopment of retail at the site would go to the site’s developers, rather than to general coffers. It’s taken years to get the potential agreement to the point where it is now and the state has still not approved it.

On Wednesday, Landrieu emphasized the difficult choices the city will have to make as it pursues these various economic development and infrastructure projects at a time of global economic instability. It was the same theme that dominated the previous six meetings.

“All this discussion about China, India Greece,” he said.  “It affects you.”