Leading the nation in new capital investment, Lake Charles has been called the biggest story in economic development today. Combined, Calcasieu and Cameron parishes have less than 200,000 people, and residents are being told to prepare for a boom that could dramatically increase the local population, straining the area’s infrastructure while also bringing untold economic benefits.
Since the discovery of sulfur in Calcasieu Parish in 1867, Lake Charles has developed a reputation for being a hotbed for industry. The first oil well there was drilled in 1901, and six ports, two airports, the nation’s largest railroad network and an industrial park followed, making Lake Charles—among other things—an attractive location to build facilities to export liquefied natural gas.
The $73 billion in announced industrial projects for southwest Louisiana far exceeds the capital investment cities like Dallas, Atlanta and Baton Rouge are expecting over the next five years. South African chemical company Sasol Ltd. is the largest single investor—its gas-to-liquids plant represents an investment estimated between $16 billion and $21 billion—and other recent announcements from Cheniere Energy, Trunkline LNG, Sempra/Cameron LNG, Magnolia LNG, Leucadia and G2X Energy have the area preparing for unprecedented growth.
Cameron LNG just announced approval of its natural gas liquefaction and export facilities at its Hackberry terminal in Cameron Parish, with a projected cost of $10 billion. Southern California Telephone & Energy has proposed a $9 billion LNG plant on Monkey Island in Cameron Parish, and Axiall announced a $3 billion plan for an ethane cracker and monoethylene glycol facility in Westlake in early August. This adds another $12billion to southwest Louisiana’s coffers, where Cheniere Energy ignited it all with what has now become a planned $20 billion LNG terminal at Sabine Pass, in the far southwest corner of Cameron Parish.
To build these mammoth plants, the area will need thousands of workers. Over the next year, Lake Charles expects a jump from about 6,500 new workers in August 2014 to 10,000-plus in August 2015. “So, in a one-year time period, that’s an increase of 4,000 people—and that’s just on the projects which are definitely underway,” notes economist Loren Scott. For Sasol alone, more than 5,000 construction jobs are projected, as well as 1,200 full-time permanent positions.
Adding to Lake Charles’ economic boom is the 740-room Golden Nugget casino, featuring a golf course, 30,000 square feet of meeting and convention space, retail corridor, pool, beach and marina, and nine restaurants and bars. Compared to the incoming plants, the casino’s investment in the project is small change—approximately $600 million. But the Golden Nugget, scheduled to open in December, is expected to create about another 2,000 jobs. “Golden Nugget is going to be open at just the right time,” Scott observes. “You are going to have all these people coming in, and they probably want to have a good time.”
“No other Metropolitan Statistical Area in the state is expected to come close to this growth rate,” Scott says.
George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance, says the city is preparing for some 25,000 temporary workers in the short term and then another 20,000 permanent workers after facilities are constructed. He works from a corner office in The Seed Center, a business incubator located next to McNeese University’s campus on Ryan Street.
“It’s a great opportunity for local people and Louisiana people to get the skills necessary to get those jobs, but it also is going to take workers from around the nation and around the world to fill all of them,” he says. According to Swift, all crafts are in demand, from carpenters to electricians, from sheet metal workers to pipefitters.
The parish will be tasked with housing this huge influx of people. Officials and private enterprises are currently working on both temporary and permanent options. Worker villages, or “man camps” as they’ve become known in North Dakota and other places experiencing construction booms, are a modular solution that can be deconstructed after workers leave.
Lake Charles-based Greenfield Logistical Solutions is constructing a $70 million worker village called Pelican Lodge on 200 acres of land owned by the Port of Lake Charles. It will be able to accommodate up to 4,000 beds. Living spaces will be dorm-style, with amenities like an on-site clinic, 24-hour dining area, fitness center, swimming pool and retail shopping. The facility will also provide daily transportation to and from job sites. Another solution called Moss Lake Village has been announced by First Flight Holdings LLC that would provide temporary housing for 2,500 construction workers in Carlyss, south of Sulphur.
Do the math: That’s only housing for 6,500 people, and with a possible peak of 25,000, Swift says that mobile home parks, RV parks, apartments and another village or two will be needed to fill the gap. Private developers like Jack Lawton Jr.—responsible for the city’s first traditional neighborhood development, named Walnut Grove—are expected to take care of permanent housing solutions in the form of single-family homes, apartments and condominiums. River Ranch Development Co. of Lafayette is also working on four neighborhoods in the Lake Charles area that will offer a range of options to appeal to the new workforce.
But more worker villages will be key, even if there is resistance to having them nearby from permanent residents and homeowners. The alliance’s vice president of economic development and international commerce, David Conner, told the American Press in August it would be “a catastrophe” for the community to build permanent housing for temporary workers.
“During that time of construction when construction numbers rise, you satisfy a need,” said Conner, who also sits on the Calcasieu Parish Planning and Zoning Board. “But when those numbers come down, you’ve created a 10- to 20-year skewing of the market with an overbuilding of permanent homes. So you end up with a lot of empty apartments, empty hotels and empty permanent structures that have no market.”
Shelley Johnson with the Lake Charles Convention & Visitors Bureau would like to leave the existing hotel rooms for the tourists, but occupancy and daily room rates are already rising. “We will begin to see the occupancy go up to 100% when the boom is in full swing,” she says. She has started encouraging large groups wanting to visit the area to block off rooms as soon as possible.
Johnson sits on the housing committee of the Growth Opportunity Group—or “GO Group”—which is coordinating community efforts to plan for the growth across five parishes in southwest Louisiana. Made up of 10 task forces tackling areas from transportation to education and public safety—as well as housing—the group was formed in the spring of 2013 after Sasol made its investment announcement.
“I don’t think any region is prepared for the kind of boom we expect to be coming, and a lot of this is new. But it’s exciting at the same time,” says Calcasieu Parish Administrator Bryan Beam, whose office was instrumental in creating the GO Group. “I know everyone is laser-focused on trying to having this boom occur with as little pain as possible in terms of day-to-day impacts. We see this as a very positive thing where we can make southwest Louisiana a place where new people want to work.”
One of the largest impacts will be on traffic, but Swift says water and sewer capacity and the prospect of an increase in crime are other areas the task force is looking into. He seems unfazed by the myriad issues involved in preparing for something so huge. In fact, positivity is the overarching emotion exhibited by most city and parish officials, and the alliance has the honor of being named one of the Top 10 Economic Development Organizations in the country by Site Selection magazine the past three years in a row.
“That’s getting us a lot of attention from other developers, from retailers, from mixed-use development firms, residential contractors, apartment and project management firms,” says Swift. “They’re all coming to take a look.”
Lori Marinovich, executive director of downtown/lakefront development, sees exciting opportunities for developing the lakefront and improving the quality of life in the downtown district. “We plan to offer a different urban lifestyle, because we know some of the people coming to the area are looking for that,” she says. Plans for downtown include a mixed-use development of 170 apartments and ground floor retail taking up almost a whole city block that could break ground in early 2015 and another loft conversion for housing that’s at the permit stage. She is also working to attract more developers to the lakefront.
“We’re starting to see more interest in food trucks, jet ski and pontoon boat rentals, and street performers,” Marinovich says. “There’s a lot of stuff bubbling up, and it’s an indicator that people are trying to respond and continue to draw attention to the vibe of downtown.”
Over on Pujo Street heading toward the water, Botsky’s gourmet hot dogs just completed a renovation that doubled the dining area and added an open kitchen. Owner Mike Krajicek is a native who moved back to town two years ago and opened his restaurant last summer. “I want to contribute to the renaissance in Lake Charles,” the 27-year-old says. “It was an opportunity to be a part of the greater Lake Charles expansion that everybody is foreshadowing. Moving back here has everything to do with the economic climate of Lake Charles. I want cool things to happen.”
Krajiceck makes the point that change in the city is imminent, even though residents like himself don’t quite know what the boom will look or feel like yet. Swift and officials like Beam admit they’re preparing for something they can’t quite picture, but three studies currently in the works should shed more light on what the Lake Charles of the future will look like.
The CVB has contracted a perception study from North Carolina firm Young Industries that is expected to highlight areas of opportunity in terms of what visitors enjoy most and what they’d like to see. It won’t be ready until the end of the year, but results from a comprehensive Regional Impact Study funded by Sasol and the release of a Housing Strategic Plan conducted by the economic development alliance were expected by the end of August.
Until then, Swift is taking note of small changes around town, from the sounds of construction on Ryan Drive to increased interest in the SEED Center’s business incubator. Originally from Alabama, he moved to Lake Charles in 1987 and has personally seen the city evolve after the oil bust.
“I think we always knew this area had much more potential than it had exhibited in the past,” he says. “This is home and land of opportunity right now.”
Additional reporting by Lisa Hanchey.
