BusinessReport.com

Budget-busters

All the pomp, pageantry and positioning that’s fueled the Commission on Streamlining Government is coming to a close—sort of—as members begin meeting on a weekly basis and voting on recommendations to send to the Legislature later this year. Granted, the commission, created by Gov. Bobby Jindal to address the state’s multi-year, billion-dollar shortfall, still is drenched in politics, but concrete results, for good or bad, are beginning to surface.

So far, the suggestions accepted by the commission have been wide-ranging in scope. Among them are proposals to reduce the number of state employees and the number of state vehicles; plans to increase the employee-to-management ratio in the Department of Social Service; efforts to consolidate and/or outsource certain state services and operations in the areas of social services, mental health, public health units and accounts receivable across state agencies. Some of the recommendations include specific expected cost savings. Most do not.

The commission, however, did not accept a recommendation pushed largely by Treasurer John Kennedy to create a single board for higher education, rather than the various panels now running the show. Sen. Jack Donahue, D-Mandeville, chair of the streamlining commission, ruled the motion out of order, explaining the Louisiana Postsecondary Education Review Commission has been charged with examining the state’s higher-education system.

Now the process moves into what could be the most important step: public input. “There is no doubt that we are going to have to reduce state spending, not only to deal with our short-term budget limitations, but also to move toward a more prudent and focused use of taxpayers’ dollars,” Donahue says. We want to move in that direction with the public’s help.”

You can view all of the proposals and formally comment at senate.legis.state.la.us/streamline/. Such public comments will begin surfacing at the Oct. 27 meeting, and Donahue says the appropriate advisory groups “may or may not decide to revise their recommendations to the full commission” based on the input. The 10-member commission is facing a Dec. 15 deadline to submit its initial recommendations to the governor and Legislature. With the state facing a $1 billion shortfall in the 2010-11 budget year, Jindal has charged the commission to identify $802 million worth of savings in those recommendations.—Jeremy Alford

Trying transit

Signs on Capital Area Transit System buses sometimes implore you to “try transit,” although chances are you haven’t. But maybe if the bus moved a bit faster, more people would.

A Bus Rapid Transit [BRT] system attempts to mimic some of the speed and convenience of rail travel without as much cost or new infrastructure. Generally, the buses have their own dedicated rights-of-way. The federal government backs BRT projects across the country, and CATS has been working to get the necessary local funding match since 2005. This year, the system finally has been able to request proposals and hopes to select a firm to begin a comprehensive set of studies of local transit needs, including BRT possibilities, by the end of the year.

“For some people, ‘studies’ is a bad word,” CATS board chairman Christopher Tyson says. But any community hoping to receive 80% federal funding for a BRT project that could cost $50 million has no choice. He says the studies will cost about $3.7 million, also funded with an 80-20 match.

CATS has had preliminary talks with the team creating the next version of the Horizon Plan, East Baton Rouge Parish’s comprehensive land-use plan. The team also is working on transportation issues, although transit consultant Nelson/Nygaard was removed from the roster to make the project cost more palatable to the city-parish, team leader John Fregonese says. Whoever CATS hires won’t fill that gap, a source within the team says.

“Both are needed, in our opinion,” the source says. Nelson/Nygaard would have provided a holistic, detailed analysis of the parish’s transit needs. The BRT initiative is more limited in scope, and might end up recommending a single corridor, such as Florida Boulevard, for BRT service. Fregonese says BRT probably makes more sense for Baton Rouge than sexier—but more expensive—options like rail.

Tyson says CATS has narrowed 26 candidates for the vacant CEO position down to a handful. The finalists will be presented to the public before a decision is made, he says.—David Jacobs

Corporate immunity?

The H1N1 virus might be high on the radar of businesses, schools and healthcare institutions, but it’s not the first pandemic to potentially threaten continuity, says LSU Professor Arjen Boin, a crisis-management expert at the university’s Public Administration Institute.

“Think about small pox and SARS,” he says. “It doesn’t really matter what it is, the basic idea in crisis management is that you prepare generically for a threat.”

After the Sept. 11, 2001 terrorist attacks, large corporations and a growing number of small- and mid-sized businesses adopted plans that address anything that could interrupt operations, Boin says. Hurricane Katrina triggered another wave of so-called continuity planning, particularly in this region.

“We follow an all-hazards approach,” says Jim Shortal, director of business continuity for Cox Communications in Atlanta, which sets policy for the company’s regional outfits. “We look at what happens if technology, facilities or people are unavailable.”

Cox’s South Louisiana operations employ 1,800 people in 17 parishes, including 850 in Baton Rouge. Shortal says the company currently is watching reports from the Centers for Disease Control and Prevention about H1N1 and ramping up prevention efforts, and it already has a strategy in place to deal with interruption related to widespread illness.

“We’ve been working on this since the avian flu became a threat in 2006,” Shortal says.

Still, a growing number of companies, healthcare institutions and schools in the Capital Region have taken prevention to a new level this year. MidSouth Bank invested in hand-sanitizing systems for its 35 facilities in Louisiana and Texas. Messaging about hand-washing has become ubiquitous, and some public entities and companies are bringing immunization clinics on site. Cox is one.

Seasonal flu vaccine has been widely available, and this month, shipments of swine flu vaccine began to arrive in the state. The Louisiana Department of Health and Hospitals encouraged the first shipment to be given to children ages two to 10 years. By the end of October, the state should have received several hundred thousand doses of the vaccine, spokesman René Milligan says.

Shortal says if Cox experiences a widespread outbreak, or if large numbers of parents are forced to stay home with children because of illness or school closures, the company might temporarily increase its work-from-home model. Currently, telework is offered as an incentive for eligible employees who want to avoid commuting.

“We’re networked for it,” Shortal says.

Boin says businesses in need of plans should run scenarios.

“You should ask, ‘What if half our people don’t show up for work? Then what?’” Boin says. “You have to really look at your critical processes, what makes money, and imagine if they didn’t work. Then you prepare for it.”—Maggie Heyn Richardson

Fit-test

Think you are more fit than your peers?

Business Report launches its second Fittest Execs competition, where the Capital Region’s most efficient and effective businessmen and women go head to head in a health-and-wellness contest.

The competition highlights leaders who are setting an example for their employees while focusing some deserved attention on people who take fitness to the highest level.

The Capital Region’s fittest executives will compete in four categories [men 44 and under, women 44 and under, men 45 and older, and women 45 and older].

The contest is open to all mid-level managers and executives. In addition, companies with a minimum of five participants are eligible for a team competition.

To participate, click here. Once you have registered, you will be contacted by a representative of Bally Total Fitness Baton Rouge to schedule your personal health-and-wellness appraisal.

Fitness appraisals will take place at Bally Total Fitness Baton Rouge through Friday, Nov. 20, with the results to be announced in the Dec. 29 issue.

The beat goes on

Despite torrential downpours, the beat goes on at Live After Five in downtown Baton Rouge. Rain generally drives the band to stop playing, but crowds stick around despite bad weather, says Davis Rhorer, executive director for the Downtown Development District.

The first fall Live After Five event on Sept. 11 was an exception. The Neighborhood Stars concert and LSU tailgate party were rained out, and the lack of a crowd downtown was palatable to Baton Rougeans who are accustomed to attending and the businesses that count on it.

Jack Warner, an owner of Happy’s Irish Pub, The Roux House and Schlittz & Giggles, says business doubles during and after a Live After Five event, but on rainy days, business slows to a normal Friday night.

“If there’s a good band, good weather and a good crowd, you’d better get ready to take advantage of it,” he says. “But it’s not something to build a business model around, that’s for sure.”

“Live After Five has a huge ripple effect during the evening,” Rhorer says. “People tend to spill over into other live music venues or restaurants afterwards. They really see an influx of people, which was the idea.”

The band has rescheduled for Nov. 6, so the loss of economic impact will be remedied later in the year.—Emma James

BookReview: Celebrating Failure

Author: Ralph Heath

Publisher: Career Press

Year: 2009

Pages: 191

You almost felt a little sorry for him.

You gave one of your employees a project and he screwed up. Not a little, either. No, this was a colossal mistake, and you can see that he’s mortified, times 10. He’s apologized on several occasions, and this is fixable [eventually], but you don’t know whether to laugh, fire him or send him off to a remote work post in Northern Siberia.

But hold off …

He won’t make that mistake again, will he? That means he’s learned from it. In the book Celebrating Failure by Ralph Heath, you’ll see that you should not only expect mistakes in your company, but that you should actually seek them.

For more than 30 years, Heath was the owner of a high-profile ad agency in a small Wisconsin city, and he counted several worldwide corporations on his client list. But because of a lesson he learned as a child, Heath had an unusual way of running his business: His employees were celebrated for their failures. Mistakes not only were allowed, they were encouraged.

I liked this book. It’s easy and quick to read, filled with stories that make their point, and you’ll even get a few chuckles now and then.

Heath does fail to stay on topic. Much of this book is about how to treat employees and customers and how to run your business well, which seemed to be instruction in avoiding failure, not celebrating it. Nitpicky, yes. It doesn’t make this book any less useful, but it’s worth noting.

I wondered if brazen risk-taking would be warmly embraced in all companies. Although it’s not addressed here, Celebrating Failure probably would work best at a company whose employees don’t have to answer to profit-minded, ultra-conservative shareholders and boards of directors.

Still, if you’re looking for a way to energize employees and you have the leeway to do so, this book will make you want to act tomorrow. Celebrating Failure is a book you shouldn’t fail to read.—Terri Schlichenmeyer

ExecutiveSpotlight

Richard L. Preis

Managing director

Morgan Keegan Co. Inc.

Hometown: Baton Rouge

Richard Preis doesn’t shy away from much of anything—that includes controversy over his proposed Capitol Lofts apartments in Spanish Town, as well as bright colors. Preis (pictured in the Irene W. Pennington Planetarium at the Louisiana Art and Science Museum), the managing director of Morgan Keegan and the president of Maxco Development, loves adding a pop of color to his “uniform”—typically an orange tie and button-down oxford shirt—his home and his work. One of Preis’ favorite gifts from his wife is a pair of bright yellow planters that adorn his front porch. Maybe it’s just his design aesthetic, or maybe it’s all a part of his inclination to take chances in business and in life. “I would like to see more people in Baton Rouge start thinking outside of the box,” he says.

To read more of Preis’ Q&A, click here.

FastForward

Americana’s second verse

Business Report’s Feb. 24, 2009 cover story, “Field of broken dreams,” highlighted the battle over Americana, a TND proposed for Zachary. A dispute between J. David Matthews and Chris Mestayer over control of Shearwater Companies, which was developing the project, ended up in court and work was halted. New Towne Development Group, the corporate entity that oversaw the proposed TND, defaulted on its mortgage and Matthews filed a suit to put it into involuntary bankruptcy. An attempt by John Engquist, Patrick Campesi and Michael Campesi to buy out Matthews’ interest was going through the courts. Matthews’ attorney said he wasn’t sure how the project would end up out of the legal quagmire. “Based on what I’ve seen, I don’t see how,” John Wolff said.

But at the end of September, a group of investors bought the 414-acre site on La. Highway 64 west of La. 964 for $7.1 million.

Old Towne Development Group, made up of Engquist and the Campesis, bought the site after getting approval from a bankruptcy judge, says Ashley Moore, Engquist’s attorney. The judge ruled Matthews did not have a claim. Old Towne was formed last year to purchase the mortgage and buy the property out of foreclosure. Of the sale price, $6.7 million went toward crediting Old Towne for buying the mortgage. Moore says Old Towne wants to go ahead with building Americana, which will feature an elementary school, a YMCA branch and will be tied into the planned BREC park next door. “This is a great piece of land that’s perfectly situated,” Moore says. “Zachary is an attractive community, and there’s no doubt it will be developed.”—Timothy Boone

TheGoodLife

Machination of the stars

Some watches on the market are status symbols. They have big price tags, shiny facets, heavy, clinking platinum links. They are reliable, beautiful and coveted.

And then, there’s the Patek Philippe Grand Complications 5159, a self-winding wristwatch. It’s handcrafted by a single technician with at least 40 years of experience making watches at the Geneva-based, family owned company. And unlike those seen on billboards, marketed by celebrities, this timepiece is unassuming and reserved in appearance.

The 5159 is distinct. It’s produced and assembled at a single location, where the finest details like hand burnishing, machine finish, coin edges and inset rubies are put in place. A ledger is kept of each owner to wear the watch, handwritten in a book, like a family history kept in the front pages of a prayer book.

The face itself features the display of a perpetual calendar, which accounts for leap years, and sunset and sunrise astronomical displays.

Of course, it also has a price tag that is a cut above the rest: $83,200 at Lee Michael’s on Corporate Boulevard. Somehow, the watch itself is a reminder of man’s fascination with the obsession and love of time, from sundial to London’s Big Ben.

The 5159 is less a status symbol of the “good life” and more an act of possession and reverence for the celestial world. It’s a machine forged to find order in the passing of time.—Olivia Watkins

Fortnight Oct. 21 - Nov. 3

October 21 -- Conducting university research with commercial potential and the current investment environment will be among the topics discussed at the state’s first [Inno]State innovation summit. The summit, scheduled from 8:30 a.m. to 4:40 p.m. at LSU’s Lod Cook Conference Center, will serve as an opportunity to connect entrepreneurs, investors, emerging companies and others from across the state on developing an innovation-based economy. More information can be found at innostate.org

. October 22 -- After a highly controversial year for workers’ unions, Baker Donelson is playing host to a seminar for business owners called “Unions at Your Door: What Every Employer Needs to Know” at 8:30 a.m. at the law firm’s downtown office. Information about the seminar is available from mejames@bakerdonelson.com.

On this day in 2007 - October 26 -- The Baton Rouge Area Foundation’s corporate arm, Commercial Properties Realty Trust, stepped out of its involvement in the old Advocate site on Lafayette Street downtown. The leveled lot finally went on the market earlier this month.

October 27 -- Capital One Bank, Wright & Percy Insurance, Business Report and Ashco Exteriors Inc. will be honored by the Better Business Bureau of South Central Louisiana at its annual Douglas Manship Sr. Torch Awards for Ethics in Business Banquet. The event, to be held at 7 p.m. at the Crowne Plaza Hotel, will feature LSU Baseball Coach Paul Mainieri as its guest speaker. For more information, call 346-5117.

On this day in 2008 - November 3 -- The Louisiana Bankers Association and Louisiana Realtors assured the media that the Louisiana financial market was steady despite declining consumer confidence as a result of the international financial woes. While the region did experience a slight slowdown, mostly evident in the impact on chemical and industrial companies and a moderate reduction in the commercial and residential real estate market, the groups were proven correct.

BusinessOfPolitics

Kennedy ambitions in check

It takes a special kind of Republican to second-guess Gov. Bobby Jindal, who’s among the darlings of the national party. Then again, it also took a special kind of Democrat to repeatedly undermine former Gov. Kathleen Blanco when she was in office.

Maybe it’s just that Treasurer John Kennedy (above), a popular-Democrat-turned-lonely-Republican, has a problem with authority figures, even if he is one himself. Or maybe it’s possible that Kennedy, who lost a run for the U.S. Senate last year after failing at other preceding bids, is ready to take on Jindal. “I’m having a lot of fun with what I’m doing right now,” Kennedy says. “I’m planning on running for re-election.”

Nonetheless, Kennedy is making the rounds and grabbing headlines. It’s clear he’s hitting his old stride again as the state’s budget hawk. His bold proposals have been well-reported in recent weeks because of his outspoken participation on Jindal’s Streamlining Government Commission. As chairman of a subcommittee on efficiency and benchmarking, Kennedy has voted for 19 action items along with members of the advisory group—many items Jindal has been criticized for not exploring himself.

Melancon trails Vitter

With roughly a year to go until voters choose Louisiana’s next U.S. senator, incumbent David Vitter (top) is enjoying a comfortable lead over Congressman Charlie Melancon (bottom) in terms of campaign finances and public-opinion polling. Vitter, R-Metairie, came out 10 points ahead in a statewide poll conducted earlier this month and is raising money at a rate of 2-to-1 over Melancon, D-Napoleonville. Campaign-finance records for the third quarter of the year will be available next week through the Federal Election Commission, but Vitter is expected to report $1.2 million raised for July through September with $3.9 million total in the bank. Melancon, who represents the 3rd Congressional District, said his campaign would report about $750,000 for the quarter and $1.8 million cash on hand.

Bradley Beychok, Melancon’s campaign manager, said the congressman raised a large portion of the money over the past month, since he officially declared his candidacy, while Vitter has been preparing for the race this entire cycle. “This strong fundraising performance shows that Charlie will have the resources to run an aggressive campaign in 2010,” Beychok said. “It also shows that Louisianans are ready for a different approach from a more bipartisan, disciplined and honest senator.”

As for public opinion, national polling firm Rasmussen published the results of its first Louisiana tracking survey for the 2010 election cycle. Vitter notched 46% in the poll, Melancon 36% and the undecided faction 13%. Five percent of respondents held out for “some other candidate.”—J.A.

Lights, camera, action!

If you notice mysterious signs around town and more trucks and trailers than normal, it’s because three movies are in production in Baton Rouge.

Ticking Clock, a psychological thriller about an investigative reporter who stumbles upon the journal of a murderer that lists plans to butcher specific people, is shooting in Mid City until the end of October. The movie stars Cuba Gooding Jr.

Video Girl also will shoot around Mid City throughout the month. The movie is about an aspiring ballerina, who ends up working in the music video industry in Baton Rouge after she sustains an injury. Her success in videos leads her to move to Hollywood, where she tries to build a new life while maintaining connections with her family back in Louisiana. The movie, which also is being shot at the Celtic Media Centre, stars Megan Good, who appeared in Saw V, Brick and The Love Guru.

Production of Battle: Los Angeles will continue through December. The big-budget, science-fiction thriller is scheduled to be released by Columbia Pictures on Feb. 18, 2011. City-parish officials say there will be numerous action scenes that will require street closures. The public will be notified in advance so drivers can plan accordingly. A section of Interstate 49 in Shreveport was shut down for a month to shoot scenes for the film.—Timothy Boone

Eastern influences

Huiheng Medical Inc., a Chinese firm, has decided to build a manufacturing plant in Baton Rouge that will produce radiotherapy equipment for national and global distribution, Chief Executive Officer Xiaobing Hui says.

The proposed plant would create 200 to 300 jobs with an average annual wage of $65,000 to $75,000. Estimated revenue is $300 million per year with products selling in a global market.

Hui, through translator and Baton Rouge businessman Eugene Ji, says the decision was made because of a face-to-face meeting with Mayor Kip Holden in China earlier this year and subsequent follow-ups.

Huiheng would be manufacturing its Whole Body Gamma Knife, which targets tumors with radiation from multiple directions. The technology has a global patent and approval from Chinese authorities, and Huiheng has applied for approval from the U.S. Food and Drug Administration. Hui expects to move on plans for a Baton Rouge facility in the middle of next year if the technology is approved.

Holden says the benefit to the city is tremendous in jobs and partnerships between Huiheng and area hospitals. The company visited Mary Bird Perkins Cancer Center, Baton Rouge General and Pennington Biomedical Research Center, among others.

“This is a tremendous opportunity,” Holden says. “We could be the first place in the United States where this type of equipment would be distributed.”—E.J.

ONTHEBEAT

Smart cash: Three Metro Council members, along with State Sen. Sharon Weston Broome, have been awarded $1,000 scholarships to attend a smart-growth conference in Seattle in February. The Center for Planning Excellence selected Broome, D-Baton Rouge, along with Councilwomen Donna Collins-Lewis, Ronnie Edwards and C. Denise Marcelle.

New fittings: Bronco Fabrication and Manufacturing has signed a long-term lease for a 52,000-square-foot warehouse in Prairieville, a move that will lead the company to hire about 100 more workers over the next several years. Bronco, which provides pipe and vessel fabrication for EXCEL Group, will retrofit and equip the warehouse off La. Highway 621.

Growth spurt: Raising Cane’s continues to grow, adding its first locations in Prairieville and in Boston. The Boston location is in a building owned by Boston University. It’s the first New England location for the chain, which has traditionally moved into college cities and towns. The Boston location is the 87th restaurant for Cane’s.

Tax-less: A stretch of Perkins Road from the Southdowns Village shopping center to Baton Rouge Gallery in City Park has been designated by the state as a cultural products district, meaning that original works of art will be exempt from sales taxes. This is the second such district in Baton Rouge; one was established last year downtown.

Gassy: Construction is slated to begin in November on a new system that captures methane gas from the North Baton Rouge Landfill, pending approval from the Metro Council. The project will include installation of a methane gas collection system at the landfill, along with a 3.75-mile and 1.5-mile pipeline to transport the methane gas to the plants.

East of Texas: The Capital Region ranks as the third-best job market in the country. Baton Rouge was the only non-Texas city to finish in the top five, according to the Bizjournals.com employment rankings. The study looks at several factors, including the unemployment rate and changes in private sector employment. Austin ranked first, San Antonio second, Houston fourth and Dallas-Fort Worth fifth.

Moving day: The downtown sales and marketing office for the RiverPlace development has closed and moved to Mid City. Richard Preis, who is developing the high-rise condominium tower on the Mississippi River, says he’s still working on the project. By shutting down the sales and marketing office at the corner of Third and Laurel streets, Preis says he’s saving $5,000 a month in rent.

Friendly banter: The Securities and Exchange Commission says Stanford Financial Group investors cannot be subject to clawbacks on their original investments. That means investors should not have to give the receivership any money if they have only recovered original funds they used to purchase the certificates of deposit, which have been at the center of the alleged Ponzi scheme.