"Room" for Improvement
A Special Report on Illegal Hotel Rooms and Illigal Operational Practices
in New Orleans Hotels
Introduction
For better or for worse, New Orleans finds itself on the threshold
of a new millennium having hitched its economic wagon to the convention/tourism
industry star. White-collar jobs in oil exploration are leaving town.
The port provides only a fraction of the employment it once did. The
hospitality industry is now the biggest, most lucrative, game in town.
One out of six employed New Orleans residents work in some hospitality-related
enterprise. More than 16,000 workers are employed in French Quarter
and Central Business District hotels. According to Bill Langkopp, spokesperson
for the Greater New Orleans Hotel/Motel Association, the local hospitality
industry is "the goose that lays the golden egg."
If that trite metaphor applies at all, then the hospitality industry
has certainly been a very expensive bird to raise and feed. Public tax
dollars built the Convention Center and Superdome, the pillars of the
tourism infrastructure. Just about every hotel built or rehabilitated
here in recent years has received some form of taxpayer subsidy - including
property tax abatements, guaranteed HUD loans, enterprise zone tax credits
and more.
And what about those golden eggs? What have we gotten in return for
our huge public investments in the name of economic development? While
profits, room and occupancy rates for New Orleans hotels are among the
highest in the country, wage rates for the largely African-American
workforce that cleans the rooms, carries the bags and serves the meals
are at the bottom of the national scale. Even banquet serving, once
an avenue to a middle class income and lifestyle for African-American
New Orleans residents, has been reduced to just another poverty level
temporary job. When workers here try to improve their lives by choosing
to form a union, they are met with fierce resistance, illegal intimidation,
harassment, and even termination from management. Furthermore, the relatively
under-burdened hotel industry does not pay anything close to its fair
share in taxes, depriving city government, its residents and taxpayers,
of the revenues necessary to run a modern American metropolis.
As though they did not already have it good enough, now comes clear
and convincing evidence that some hotel operators show a casually arrogant
disregard for city laws, regulations and ordinances and may be going
to questionable lengths in their quest for greater profits. Some hotels
house paying overnight guests in rooms that the city knows nothing about.
Because some property owners ignore or flaunt the rules laying out the
process for obtaining required building permits, zoning variances and
occupancy permits, visitors to our city are unknowingly renting illegal,
unregistered, unlicensed hotel rooms.
With these off-the-books rooms for rent, these hotel owners avoid the
cost, time and uncertainty of success of the permitting process. This
callous disregard for the law is further evidence that the industry
is quite prepared to accept the gracious and substantial monetary benefit
allocated to them through the city's efforts to maintain New Orleans'
image as a premiere tourist convention destination.
Rather than working within the legal parameters of hotel ordinances
the industry, in numerous cases, has placed profit above ethical and
legal standards and has gone so far as to break the law to gain further
profit. By not paying the correct property taxes on their buildings
these owners have taken crucial revenue away from a city that is in
dire need of all income generated by the industry they work so diligently
to court.
Who are some of the scofflaws thumbing their noses at city hall? How
do they get away with it? What can be done to clean up the abuses and
make sure all property owners follow the rules equally? The following
report, compiled by the HOTROC AFL-CIO research department, describes
examples of the problem and offers recommendations for reform.
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