Hotelier bemoans New Orleans patch job

LOS ANGELES (Reuters) - Lack of progress in New Orleans is frustrating the hotel developer who launched plans for a jazz park last year to revitalize the hurricane-ruined city.

"Nothing has come together," said Strategic Hotels and Resorts Inc. BEE.N President and Chief Executive Laurence Geller said Wednesday, speaking at the Reuters Hotels and Casinos 2007 Summit in Los Angeles.

"If you go down there, there is not a single high-rise crane. There is paste, patch, glue, duct tape, mending -- but there's not 'New!' The ebullience isn't there."

Strategic owns the downtown New Orleans Hyatt high-rise, whose shattered windows were an icon of the damage done in 2005 by Hurricane Katrina. The storm and flooding afterward drove out nearly the entire city population.

Geller is not the only one to see a slow recovery. Casino operator Pinnacle Entertainment Inc. (PNK.N: Quote, Profile, Research, Stock Buzz), which has reopened its Boomtown gambling hall on the outskirts of the New Orleans metropolitan area, said that the recovery was a "slow burn."

"It's going to take years, we think, to rebuild New Orleans effectively," Pinnacle Chief Financial Officer Stephen Capp told the Reuters Summit.

He added that while the city was not going away, many former residents were moving to the suburbs, and it was not clear when corporations would step up with major investments.

Last May, Geller and New Orleans Mayor Ray Nagin announced a $700 million-plus plan to redevelop part of the city center as a jazz park that would link the Superdome stadium, a redeveloped Hyatt, and a swath of government and business buildings.

At the time, Nagin forecast that park construction could begin in about a year, and the plan was seen as both an indicator of the potential for a strong recovery and a test of the city's ability.

But, Geller said, authorities were not finding needed funds.

"They are not systemically going about it," he added. "New Orleans is a study in ineptitude at every level -- at the local, the state and the federal level."

Strategic has spent about $35 million to redevelop the Hyatt and another $5 million on plans for the park, Geller said, estimating that the Hyatt would reopen in mid to late 2008.

The jazz city's tourism could recover in 2009 or 2010, based on planned conventions and meetings, Geller forecast, but eventually Strategic will cut its risk and sell at least part of its stake in the Hyatt.

"I would not buy this asset again as a public company," he said. But he added that a gamble could pay off in New Orleans for those willing to make it through a couple of tough years.

"If I was a private entrepreneur, if I was a hedge fund or somebody today, I would make a giant bet on New Orleans," he said.