Daily Report AM debuts

This is the first edition of Daily Report AM, which will be delivered at 10 a.m. each weekday. The new Daily Report PM will be delivered each weekday at 3 p.m. Our afternoon editions will also include several new features. Monday, there will be a calendar of events for the upcoming week, along with the "Executive Spotlight." Tuesdays will feature John Maginnis' weekly column and highlights from Real Estate Weekly, while Wednesdays will feature a new weekly column from Executive Editor JR Ball and highlights from 10/12 Weekly. Thursday will feature highlights from 225 Select, and Fridays will feature the best from 225. We hope you enjoy the new Daily Report. Send your comments to editors@businessreport.com.

Capital Region home sales drop 23% in 2008

Baton Rouge-area home sales plunged by nearly 23% in 2008, falling to their lowest level since 2001. According to figures from the Greater Baton Rouge Association of Realtors Multiple Listing Service, there were 7,341 homes sold last year in the region, compared with 9,508 sales in 2007. GBRAR President Sandy Daly blamed the sales drop on several factors, including the financial meltdown, which made it tougher for potential buyers to get a loan; national coverage of the housing crisis, which caused locals to think things were as bad in Baton Rouge as in hard-hit markets such as Las Vegas or Southern California; and Hurricane Gustav, which knocked out business for much of September.

Daly noted a good sign: Average sale prices rose 2.4%, from $196,211 in 2007 to $201,550 in 2008. East Baton Rouge and Livingston parishes held up the best in the down market, with average sale prices modestly increasing. In Ascension Parish and the "other" category, which includes MLS sales in West Baton Rouge, East and West Feliciana, Iberville and Pointe Coupee parishes, average sale prices dropped.

Daly says she's "guardedly optimistic" that 2009 will be a better year for home sales. Mortgage rates are at 40- and 50-year lows, and there are efforts in Washington to kick-start the housing market with tax credits. "In the last two weeks, there has been tremendous interest, with phones ringing," she says. "Thinks can't get much worse than last year."—Timothy Boone.

New Orleans looks to duplicate B.R.'s video game success

New Orleans economic development officials have set up a partnership modeled after the Baton Rouge Area Digital Industries Consortium in order to attract video game companies to the Crescent City, New Orleans CityBusiness reports. Michael Hecht, president and CEO of Greater New Orleans Inc., says the city's Digital Media Alliance was modeled after BRADIC "to some degree." There will be some differences, however. While BRADIC has concentrated on marketing and workforce development, DMA will look at policy and providing capital for start-up businesses. Hecht says the plan isn't to compete or try to steal businesses from Baton Rouge. He notes that San Francisco and San Jose combined to "create critical mass" for the video game industry. Read the story here. Read the recent Business Report story about BRADIC here.

Lawmakers approve EBR hurricane spending, but question costs

Although there were a few objections raised regarding administrative costs, state lawmakers overwhelmingly approved a proposed action plan last week that includes more than $33 million in hurricane relief spending for East Baton Rouge Parish. The plan, which the Louisiana Recovery Authority drafted to address parish-level needs for rebuilding, now goes to the U.S. Department of Housing and Urban Development for final approval. It outlines how $438 million in federal Community Development Block Grant funds should be spent statewide.

The Legislature, since it's not in session, voted by mail over the past two weeks on five separate parts of the plan. While the Senate voted unanimously in support, there were nine opposing votes in the House against the amount of money earmarked for administrative costs for local and state governments. "It's just excessive," says Rep. Jerry "Truck" Gisclair, a Larose Democrat who voted against the provisions. "No matter how you look at it, $22 million is way too much just to run a program like this. That's just creating overhead and the money isn't going where it should."

LRA spokeswoman Christina Stephens says the "recovery effort is growing," especially as the state prepares to receive $438 million from the federal government to fix the challenges left behind by hurricanes Gustav and Ike last year. Stephens says the initial CDBG allocation could eventually grow by another $400 million or so. If all goes as planned and HUD approves the plan, East Baton Rouge should start seeing its money in the spring, Stephens says.—Jeremy Alford

Former LCTC head receives national honor

Walter Bumphus, former head of the Louisiana Community and Technical College System, will receive the 2009 National Leadership Award from the American Association of Community Colleges. Bumphus is being recognized for more than 30 years of leadership with community colleges throughout the nation. Bumphus left Louisiana in 2007 to take an endowed chair with the Department of Educational Administration at the University of Texas. He also works as an educational consultant, assisting more than 85 community colleges and universities throughout the U.S., Canada and Puerto Rico. Bumphus will be recognized in April at the opening session of the AACC annual convention in Phoenix.

Bush defends presidency in final news conference

In a nostalgic final news conference this morning, President George W. Bush defended his record vigorously and at times sentimentally. He also admitted many mistakes, from the "Mission Accomplished" banner during a 2003 Iraq speech to the discovery the alleged Iraqi weapons of mass destruction he used to justify war didn't exist. After starting what he called "the ultimate exit interview" with a lengthy and personalized “thank you” to the reporters in the room who have covered him during the eight years of his presidency, Bush showed anger at times when presented with some of the main criticisms of his time in office. He particularly became indignant when asked about America's bruised image overseas. "I disagree with this assessment that, you know, that people view America in a dim light," he said.

Bush said he realizes that some issues such as the prison for suspected terrorists at Guantanamo Bay, Cuba, have created controversy at home and around the world. But he defended his actions after the Sept. 11, 2001 terrorist attacks, including approving tough interrogation methods for suspected terrorists and information-gathering efforts at home in the name of protecting the country.

With the Iraq war in its sixth year, he most aggressively defended his decisions on that issue, which will define his presidency like no other. There have been more than 4,000 U.S. deaths since the invasion and toppling of Saddam Hussein in 2003.

News roundup: GM executive says automaker might need more money … Dodd says further bank aid must include pay limits … Oil falls below $39 as investors eye U.S. earnings

Worst-case scenario presented to Congress: General Motors Corp.'s chief operating officer said this morning the automaker has presented a worst-case scenario to Congress in which it would need more money than the $13.4 billion allocated by the Treasury Department. But Fritz Henderson would not speculate on whether GM will need all of the $18 billion in government loans it sought from Congress in December. Henderson said he is confident GM will work out concessions from the United Auto Workers. GM, Chrysler and the union have been talking about labor cost reductions and other concessions required under the government's loan terms. The companies have until Feb. 17 to hammer out amendments to their current labor contracts that would bring worker costs in line with those of employees at foreign auto companies' plants in the U.S.

Struggling homeowners also targeted: The Senate will not approve more bailout money for banks unless it includes limits on executive pay and help for struggling homeowners, Senate Banking Committee Chairman Chris Dodd said today. "Executive compensation needs to be dealt with, we mentioned foreclosure mitigation needs to be part of this as well," Dodd, a Connecticut Democrat, said on ABC's Good Morning America. President George W. Bush, working with President-elect Barack Obama, might ask Congress for permission to use the remaining half of a $700 billion bailout program aimed at stabilizing the financial system. The purpose of the request would be to have the funds in place soon after Obama takes office on Jan. 20.

Economic worries outweigh boosts: Oil prices fell today on concerns over global economic growth, with key U.S. corporate earnings results expected to give a new reading on crude demand in the world's largest consuming nation. Economic worries outweighed factors that would normally boost the market—Mideast tensions, signs that OPEC was implementing large-scale production cuts and the Gazprom-Ukraine gas dispute. Light, sweet crude for February delivery was down $2.25 to $38.58 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract on Friday fell 87 cents to settle at $40.83. Although still far from their Dec. 19 closing of $33.87, oil prices fell 17% last week, weighed by fears that rising U.S. unemployment will undermine crude demand.