DEVELOPERS TEST RIVERGATE PLAN
Published: Wednesday, September 15, 1993
Byline: By FRANK DONZE Staff writer
Casino developers are quietly testing reaction to a proposal to partially demolish the Rivergate convention center - apparently trying to compromise with city officials demanding that the building be torn down, City Hall sources said Tuesday.
The plan, which representatives of Harrah's Jazz Co. have outlined for some city officials in a conceptual form, calls for removal of the Rivergate's roof while preserving three walls and the building's foundation.
The wall facing the Mississippi River would be moved toward the river to enlarge the building's footprint, allowing for 200,000 square feet of gambling space on a single level, the sources said.
The proposal also calls for developers to add as much as $15 million to dress up the exterior of the casino - further evidence of their desire to find a balance between the city's desire for a new building and Harrah's intent to keep costs under control.
Harrah's Jazz officials, who are trying to work out a business arrangement with developer Christopher Hemmeter before presenting a plan to the city, were unavailable for comment.
But details of possible casino designs have begun to emerge as Hemmeter and Harrah's Jazz Co. continue negotiations and work to gauge support for their plan.
Mayor Sidney Barthelemy and several City Council members have vowed to reject any agreement that doesn't include demolition of the Rivergate.
Their concerns were heightened last week after a top Harrah's official indicated that a Harrah's Jazz Co. has not yet decided to tear down the the Rivergate and build a new building in its place.
Gov. Edwards, Hemmeter and Harrah's Jazz Co. said the Rivergate would come down when Hemmeter and Harrah's Jazz announced their merger-in-principle last month.
Harrah's Jazz, the state's chosen casino operator, and Hemmeter, who holds a lease to the city-owned Rivergate, announced a joint venture last month. At the time, they said the temporary casino would go in the Municipal Auditorium and that the Rivergate - the only authorized site for a casino in Louisiana - would come down in favor of a new building at the foot of Canal Street.
Both announcements were in accordance with the wishes of Barthelemy and the City Council.
In his first public comments on the subject, Ronald Lenczycki, president of Harrah's New Orleans, said last week that the plan that ultimately goes to the city could offer an alternative to demolition of the Rivergate and may not recommend placing a temporary casino in the Municipal Auditorium.
Lenczycki wouldn't comment on what other locations are under consideration for a temporary casino, but sources say Harrah's wants to build it on land across from the Rivergate, next to the Canal Place shopping center.
If the city agreed to the Canal Street location, the developers would consider a cash payment of about $15 million - the estimated amount needed to renovate the run-down Municipal Auditorium. The Barthelemy administration has said it cannot agree to a temporary casino on Canal Street because its construction, with work on the nearby Rivergate, would create chaos.
Furthermore, administration officials say the auditorium casino site is critical to the city's long-range plan to rejuvenate North Rampart Street, a formerly vital commercial strip now considered risky to investors.
While Harrah's officials have said their reluctance to use the auditorium is based solely on the extra expense it would add to the project, City Hall officials briefed on the plan said concerns about the safety of casino customers wandering through the neighborhoods is also a driving force.
Initially, Harrah's Jazz Co. wanted to renovate the Rivergate in three 40,000-square-foot phases, with the first phase serving as the temporary casino. The plan allowed for an expansion to 200,000 square feet on the Rivergate's second level if the market would bear a larger casino.
That plan was accepted in August by the state casino board but was said to have been abandoned in the Aug. 25 compromise.
In his comments last week, Lenczycki said a new building might not be affordable, considering that Harrah's Jazz has made many financial commitments, including the promise of a $125 million gift to the state and an agreement to honor $39 million in pledges Hemmeter made to the city.
Harrah's officials said last week that they hoped to have a plan - including architectural drawings - ready to present to the city today. But an official close to the negotiations said it is unlikely that the city will receive anything before week's end - if that early.
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