In 1952, businessman Maurice ?Heymann created Lafayette’s Oil Center on the site of his plant nursery at East St. Mary Boulevard and Pinhook Road.
The office complex started with 11 oil firms in four buildings and eventually grew to 16 blocks with 90 buildings in the 1980s. Today, the oil and gas tenants of the center’s many brick buildings share space with retail shops, banks and medical firms, a sign that times have changed in Lafayette.
A city that once depended wholly on the oil industry for its livelihood has become a medical and technology hub with a thriving tourist industry—and several designations to its name. Last year, Lafayette was named a “Top 10 Great Innovation Market of the South” by Southern Business & Development magazine, and Inc. magazine named it the “42nd Best City in the Nation for Doing Business.”
In the past 15 years, Lafayette has garnered a revitalized downtown, state-of-the-art museums, hopping live music scene, several traditional neighborhood developments and a municipally owned fiber optic loop. Armed with a solid resume of accomplishments, the city hasn’t forgotten about its oil and gas roots, but it isn’t the same old Lafayette.
“Lafayette’s economic makeup has changed significantly in the last 20 years,” says Lafayette Economic Development Authority President & CEO Gregg Gothreaux. “Much of Lafayette’s success today can be traced to the efforts made to diversify our industry base, while at the same time continuing to support and grow the re-emerging oil and gas industry.”
Diversification didn’t happen naturally. In December of 1985, Lafayette was forced to rethink its makeup when the economy was devastated by the collapse of global oil prices.
An industry that had been building since the first oil discovery by Superior Oil in Acadia Parish in 1932 finally reached its peak in the mid-1980s. When prices fell below $12 per barrel in 1986, the result was a bankruptcy rate that rivaled that of the Great Depression and an unemployment rate of 12.7%. Exxon closed its Lafayette office, and Amoco, Marathon and Mobil laid off 3,000 workers.
City leaders had to act fast and put their heads together to come up with a plan to diversify the city’s economy, according to the 1990 book, Lafayette: Where Yesterday Meets Tomorrow, written by Director of UL Lafayette’s Center for Louisiana Studies Carl Brasseaux. He notes the establishment of a “major high-tech park” north of town (today known as Northpark Technology Center), tourism, the university and retail sales as the impetus for jumpstarting the city’s economy.
Lafayette has had 23 years to put that plan into place, so when oil prices began to fall from their $150 a barrel high last summer to less than $40 a barrel in December, the city was put to the test. Did Lafayette pass?
Already, there are signs the ?community is starting to feel some sort of impact. In March, The Independent Weekly reported that oil services company Tesco Corp., based in Houston with an office in Lafayette, had given most of its workers unpaid, involuntary time off to cut costs. Last year, jewelry empire Stuller Inc. laid of 45 employees, about 2.5% of its workforce.
And the Lafayette Business and Career Solutions Center on East Vermilion Street says that while a huge influx of workers from one company or industry has yet to occur, locals are losing their jobs.
“We actually started a traffic report because we have so many people coming in,” Tina Johnstone, the center’s local area coordinator, said in mid-March. “We’ve broken a record two weeks in a row now and had to bring in extra computers.”
Johnstone says the data they’ve collected shows many unemployed workers coming from the oil-related field of machinery, one of those being her son-in-law. “We were able to find him a part-time job in a machine shop, but no full-time work,” she says.
But Gothreaux is convinced Lafayette is still better off than it was two decades ago.
“Although oil and gas is still the backbone of Acadiana’s overall economy,” he says, “in Lafayette mining [oil and gas extraction] falls behind a number of other sectors in terms of its share of the total workforce.” Mining currently represents 11% of the workforce, compared to the 17% it represented in 1985, and today, health care beats out mining as the largest single employing industry with 13% of the workforce.
UL Lafayette Economics and Finance Professor Tony Greco points out that retail and government have also surpassed mining, with retail employing 11.5% of the workforce and government 11.4%. Leisure and hospitality—a growing industry with plenty of potential—isn’t far behind at 10%.
“Lafayette is diversifying with energy, not away from it,” Gothreaux says. “With Lafayette serving as the regional hub for health care, professional services, retail, entertainment and post-secondary education, a sustained drop in oil prices today may have a negative effect on Acadiana’s economy, but overall we are in a better position to handle the impact than we were in the 1980s.”
Greco says the city learned from the 1980s crisis “not to put all our eggs in one basket,” a primary reason why we’re not suffering as badly as the rest of the nation. In fact, many companies are taking a business as usual approach to operations in Lafayette and continuing to invest in the Hub City.
Our Lady of Lourdes is leading the health care surge with a $211 million, 396,000-square-foot medical center project to be built on Ambassador Caffery Parkway and Frem Boustany Boulevard. Considered the largest construction project in Lafayette history, the hospital will replace Lourdes’ existing campus and offer patients optimum care by focusing on design efficiencies like interchangeable rooms that can accommodate patients in different stages of recovery and the use of nonporous surfaces to control infection risks.
“We have redesigned the entire delivery of health care for the 21st century,” Lourdes President and CEO Bud Barrow says. “We looked at best practices on an international scope, and we redesigned our hospital the way health care is developing and proving to be more successful.”
He calls Lafayette a legacy market for the hospital, which has a 60-year history in the city. Says Barrow: “Lafayette is a growing city, situated on an energy corridor, and I think it will be an important market to serve for the next century.”
Following suit, Lafayette General Medical Center is embarking on a $75 million renovation and expansion project, and Women’s & Children’s Hospital is continuing to expand to the tune of $13 million this year. Down the road from LGMC, public home health company LHC Group has also jumped on the medical bandwagon and received accolades for it. Last year, the company was listed at No. 8 in Forbes magazine’s “Top 200 Small Businesses.”
Lafayette has long been known as a hot spot in the state for food and festivals, and Lafayette Convention and Visitors Commission Executive Director Gerald Breaux says his organization plans to keep it that way. “Our game plan is to stay with our core product—our food, music and culture. We want people to continue to come and are staying with the basics,” he says.
LCVC is currently advertising to the “drive” market in the five-state area, promoting events like Blue Dog creator George Rodrigue’s exhibit at the Acadiana Center for the Arts through April 26, Festival International de Louisiane the last weekend in April, the “Eat Lafayette” campaign from June-August and Festivals Acadiens in October.
A partnership between several organizations has also produced a tourism initiative of a different kind. The Entertainment Industry Initiative is selling Lafayette as a forward-thinking, technologically advanced area, while recruiting film, music and digital media production companies. With the help of the Louisiana Immersive Technologies Enterprise (LITE)—a supercomputer that allows users to immerse themselves in a 3-D virtual reality cube—companies like Bullet Films can get their computer-generated imagery without having to leave town.
Although technology is currently the city’s smallest employing sector, at 2.3%, Gothreaux says it “has potential for growth as Lafayette is increasingly carving out a niche for itself in digital media, software development, immersive training and other high-tech fields. With assets like fiber and LITE, Lafayette is building a workforce and infrastructure that can meet the traditional and nontraditional technology needs of all industries in the region.”
Lafayette’s municipally-owned fiber optic loop makes the city’s technological capabilities that much more attractive by providing broadband connectivity to these companies. And Lafayette Community & Technical College, along with UL Lafayette, has created curriculums and is turning out a labor pool for these industries.
Compared to the rest of the country and state, Lafayette’s unemployment numbers remain low and have been since 2006. At 3.3%, the city is well below the national rate of 7.8% and state rate of 5.9%. Wages increased 3.9%, and retail sales are up. “Things are still pretty strong,” Greco says. “There haven’t been any single-industry job losses or closures. We still have people selling homes, activity taking place.”
Chief Operating Office for Coldwell Banker Pelican Real Estate Steven Hebert says in terms of the national collapse of the housing market, “Lafayette was late to the party.”
He predicts a shorter, easier recovery thanks to several factors. “What has been our savior is the oil and gas economy, diversification, controlled home values and the fact that little, if any, of the most risky loans were made here,” he says.
Hebert does, however, warn that oil still has an significant impact on this market.
“As far as I’m concerned, the big ‘if’ that could render everything said thus far meaningless is the flux of oil and natural gas prices,” Hebert says. “Prices are certain to rise but when and how much are the questions on everyone’s lips. We have indeed diversified our economy, but make no mistake about it, this is still an oil town and as that industry goes so does Lafayette and Acadiana.”
Despite fluctuating oil prices, companies like Chevron, which has 350 employees at its Lafayette office on Johnston Street, insist they are not going to skip town this time. “Chevron is financially sound,” says Gulf of Mexico West Public Affairs Representative Qi Wilson. “We have not had any layoffs, and we are still hiring recent college graduates.”
In his State of the Parish address this spring, City-Parish President Joey Durel was optimistic about Lafayette’s future and made a promise to make Lafayette better than it was 25 years ago. He called the city the “crown jewel of Louisiana” and said Lafayette is “far from doom and gloom.”
Both Greco and Gothreaux say that remaining on top during these tough economic times requires that business owners and citizens keep a positive attitude. “Eventually, things are going to turn around,” Greco says, “so let’s not join the recession. Let’s just stay out of it as much as we can.”
Gothreaux says the key is continuing to embrace energy, but think about it in a different way. “While oil and gas is still the major industry in Acadiana, other energy segments such as renewable energy, electric power and solar energy are being pursued and developed in the region,” he says. “Acadiana is positioned to become a Southern leader in biofuels and renewable energy thanks to existing oil and gas infrastructure. Our region has the potential to produce energy from various sources and has an existing workforce with the skills necessary to make the transition.”
CITY SNAPSHOT
Population 113,544
Median age 34.6
Race
White 66%
Black 30%
Asian 2%
Education
High school diploma 86%
Bachelor’s degree 34%
Median household income $42,159
Mean travel time to work 21 minutes
Homeowners 59%
Renters 41%
Median home value $144,500
