Louisiana Bond Commission approves deal to modernize the New Orleans Superdome
The Louisiana State Bond Commission approved a nearly $1 billion financing plan Thursday, a portion of which will be used to renovate and modernize the Mercedes-Benz Superdome, the home of the National Football League’s New Orleans Saints.
While the 44-year-old Superdome needs upgrades due to its age, the improvements are also being used as a bargaining chip to negotiate an extension of the Saints contract, which expires in 2025.
The commission voted unanimously to allow the Louisiana Stadium and Exposition District to issue a series of new money revenue and refunding bonds and bond anticipation notes over several years to fund $450 million in improvements.
“Is the state on the hook for the bonds?” asked State Treasurer John Schroder, who chairs the commission.
The LSED will be obligated to repay the debt, not the state, district officials said, adding that the financing will not count against the state’s bonding capacity.
The district will be issuing $560 million of new and refunding revenue bonds with 31-year maturities, portions of which will pay for some of the renovations with the balance refunding, for debt service savings, all or a portion of outstanding bonds issued in 2013.
Some $350 million of BANs with five-year maturities will be issued in several series. The BANs will provide short-term interim financing for the renovations, and eventually will be taken out with long-term bonds.
The new debt will be secured with $210 million from the LSED’s 4% hotel occupancy tax, a $150 million contribution from the Saints, and $90 million from the state.
The source of Louisiana’s contribution hasn’t been determined, and still must be approved by the Legislature. The Bond Commission was told that there are at least three sources the state could consider funding its contribution from, including surplus funds that are expected this fiscal year.
Gov. John Bel Edwards, who has talked with team officials about the stadium project and extending the Saints contract, released a statement thanking the commission for approving the plan of finance.
“For several months, we have been working in partnership with the New Orleans Saints and the Louisiana Stadium and Exposition District behind the scenes on several business matters, including discussions of improvements to the Superdome,” Edwards said Thursday. “Following today’s action, I believe that in short order, we will finalize a long-term lease extension that keeps the New Orleans Saints in the Superdome for many years to come.”
The goal is to negotiate a 10-year contract extension with the team, and additional options to extend the contract up to 30 years.
The stadium improvements will include removing the sideline ramp system and installing new elevators and escalators, building new lounges and expanding box suites, constructing a new visiting team locker room as well as a lobby and improvements to concessions.
Work will also include bringing the facility into compliance with the Americans with Disabilities Act, installing new systems for audio and visual broadcasts and displays, upgrading security systems and new signage, as well as transportation and cooking distribution improvements.
While the Superdome is home to the Saints, the iconic facility also serves other sporting events and championship games, concerts, conventions, trade and consumer shows. It also was a massive shelter after Hurricane Katrina struck in 2005.
The renovations are expected to be completed by 2024, in time for New Orleans to host its 11th Super Bowl. The championship NFL game has been held there more times than any other city.
The Superdome improvements were not required by the NFL in order for the city to hold the Super Bowl, the Bond Commission was told. The improvements are designed to extend the life of the facility and will be less costly than building a new stadium.
The structure of the bond deal hasn’t been determined, and underwriters haven’t been selected.
PFM and CLB Porter are the district’s co-financial advisors. Foley & Judell LLP and Auzenne & Associates are co-bond counsel.