Spanish Plaza would get new music space, revamped restaurant under City Hall tax-funded plan

Spanish Plaza, the public space at the foot of Canal Street that New Orleans officials have long worried was neglected and underused, would get a new event space for musicians and other improvements through a new, tax-funded plan working its way through City Hall.

The proposal, which is still being negotiated, would be funded by an additional 2% tax on sales at the shops at Riverwalk Outlets, which was acquired last year by Houston shopping mall operator RockStep Capital.

The Spanish Plaza upgrade would be part of the broader transformation of the New Orleans riverfront that was set in tow six years ago by former Mayor Mitch Landrieu, with an array of public-private initiatives creating new parks and other public areas, as well as major upgrades to hotels, attractions and the Canal Street-Algiers ferry terminal.

Earlier this summer, the Audubon Institute offered a glimpse at plans to develop the Esplanade Avenue and Governor Nicholls Street wharves, which would finally link the upriver developments near the French Quarter and Central Business District with the downriver Crescent Park. Audubon also completed the $41 million overhaul of its aquarium that included the addition of a brand new insectarium.

More attention

The 76,500 square foot Spanish Plaza, which was dedicated in 1976 to commemorate the city's Spanish heritage, already has benefited from a $7.5 million project to renovate the fountain and revamp its brick surfaces.

However, city officials now argue that it needs more attention to bring it fully to life, including renovating the building that previously was home to two restaurants but has been unoccupied and dormant since the COVID-19 pandemic. That area of the city was particularly badly hit as it traditionally relies heavily on cruise ship passengers for foot traffic, which disappeared for a year-and-a-half amid coronavirus restrictions.

"This is a real opportunity to create a vibrant public space here," said Jeff Schwartz, director of economic development for Mayor LaToya Cantrell.

Schwartz said the initiative was suggested by RockStep last year as a way to not only add a consistent draw to the public square in the form of music and entertainment, but also to fund additional security there and to make capital improvements to the unused restaurant spaces.

“I think it’s going to be a great asset for the area as ships dock," said City Council member Lesli Harris, who represents the area. " I’m excited about the new developer and revitalized shops, which will benefit residents and tourists alike.”

Harris last week sponsored an ordinance creating the Riverwalk-Spanish Plaza Economic Development District, which will get the proceeds of the sales tax collected by the city and oversee spending on the new project.

The city is negotiating a cooperative endeavor agreement with RockStep and a council vote is expected sometime in September.

However, the basic terms have been set and Tim Koltermann, one of RockStep's owners, said the plan would be to try and issue bonds based on the future tax revenue in order to raise $6 to $7 million to make the initial capital investments.

Entertainment destination

"We've bought into this modernization of the riverfront lock, stock and barrel and we couldn't be more excited about this project," Koltermann said. "We're going to create an entertainment and food destination for New Orleanians and tourists alike."

As well as the new stage by the fountain with year-round programming, Koltermann said plans currently call for combining the space that previously housed two restaurants into one 10,000-square-foot restaurant space. He said they also might add another upriver restaurant and some retail components.

All of the commercial space, which is on city-owned land, would be leased to RockStep. The firm would then sublet the property to operators at market rates.

Public interest

Rebecca Mowbray, CEO of the Bureau of Governmental Research, a public policy watchdog, said she couldn't comment directly on the new Riverwalk-Spanish Plaza's plans has they haven't yet been made public.

But she said that similar set-ups in New Orleans have suffered from a lack of transparency and lax oversight. She also noted that while this creates a new tax stream, it is still public money diverted from other uses.

"While there is no loss of existing revenue, they are still taxpayer dollars," Mowbray said. "The City Council or other local governments using the mechanism should ensure the additional sales taxes are reinvested carefully and strategically to generate efficient, effective public outcomes with sufficient transparency and accountability."

Robert Rivard, a lawyer and community activist who has publicly criticized similar economic districts, argued that they have often resulted in the diversion of public money from services like policing and education into projects that mainly benefit private interests.

"To my mind, if a private entity wants to develop assets that are essentially going to benefit them, they ought to do it with their own money,"  Rivard said. "Otherwise, it smacks of high-end welfare."

Schwartz said current negotiations do not include any capital investment by RockStep. He said the improvement of the restaurants and other commercial spaces at Spanish Plaza would be a public benefit.