Lost in translation
There is a great divide among East Baton Rouge Parish residents on the topic of public education. In crumbling school auditoriums throughout the city, parents, teachers, school board members and state officials have gathered again and again to discuss solutions to poor performance. While engaging, the debate has done little to build consensus around the state’s actions [click here to see “Takeover Makeover”].
Listening to leadership on either side of the debate is like listening to an argument in different languages. Neither is able to fully understand the other, but both are derivatives of the same root. Each says the same thing about improving student performance, but they cannot comprehend one another through the rasp of fervent frustration or patronizing assurances. So while they might have the same concern at heart—providing the best possible education to thousands of students—they are nowhere near agreement on how to achieve it.
Over the past few weeks, what was once a civil discussion has turned into a battle between people who support the state takeover, an “anyone but” solution, and people who insist the current administration should be allowed to do business as usual. What is most interesting about the two sides is that they, for the most part, are divided between the business community, which supports the state, and a number of local teachers and public school parents, who have faith in the status quo. “A large group of people who are opposed to it,” says Paul Pastorek, state superintendent of education, “are employed by it.”
And that divide is illustrated in the Baton Rouge Area Chamber’s 2004 and 2005 campaign principals, 2006 system factors series and recent news releases that demand drastic education reform versus parents and teachers who protested the school takeover by wearing “Save Our Children” T-shirts at forums leading up to the Board of Elementary and Secondary Education vote.
To an outsider, the divide might even seem racially motivated. A number of people who support the state takeover are from the white community and a number of those in opposition are from the black community—a division that stems from systemic racial gaps per the desegregation case and the court’s unpopular busing decision of the 1980s.
But it is neither racism nor classism that divides people on opposite sides of the debate. Rather it is a result of institutional gaps. Those people who have actively participated for years in the school system see the recent improvements as signs of progress. And those who look in from the outside know that they should expect more than modest improvement.
BRAC has been a fervent supporter of the “anyone but” philosophy. Failing schools do little to help recruit new businesses or professionals to the region. High dropout rates mean fewer educated workers. And a never-ending cycle of poor performance from students means a less productive community, shackled with the burden of high poverty levels for generations to come.
“Education is a platform for change in the region,” BRAC President/CEO Adam Knapp says. So a professional community, which for the most part has its own children in private and parochial schools, has taken a stand to encourage the state takeover. “We’ve lost sight of the primary goal,” Knapp adds, “which is the education of the those children.”
School administrators contest they are doing their best to correct the ills accumulated over roughly three decades. Some community leaders like Eric Lewis, president of Ephod Business Solutions and board president of the Baton Rouge Black Chamber of Commerce, agree that “it is kind of unrealistic to fix something in a few years that took 30 or so years to break.”
But their institutional changes began only after the restrictions of the desegregation case ended. Chris Trahan, a spokesman for the EBR school system, says, “That was not their focus; their focus was attendance.” Of the programs that were instituted to improve literacy and overall performance, less improvement was made in EBR schools than on the state level. The state’s improvement rate is 3.2%, compared to 2.5% in EBR.
Rather than blasting one another over who is in power and how achievement is measured, consensus can only come from listening carefully. The goal on both sides is the same although the methods are different. But the final bell has already rung, the state already has control of eight more schools. Both sides will now be tasked with learning how to translate their concerns into a universal format—bridging the great divide.—Olivia Watkins
Brains before beauty
There’s at least one chink in Baton Rouge’s recession-proof armor: the bond market.
The madness of the market during these days of economic turmoil was responsible for Woman’s Hospital’s dramatic decision to curtail construction on its new campus at Airline Highway and Pecue Lane (right). To finance the project, the hospital had planned to sell at least $310 million in a bond issue, anticipating an interest rate of 7% or less.
When it became obvious no willing buyers existed at anything less than 8% to 8.5%, which would have meant a significantly higher debt service for Woman’s, the hospital’s leadership decided to temporarily pull the plug on construction until the market regains its sanity.
John Matessino, president and CEO of the Louisiana Hospital Association, says it makes more sense to “stop and take a deep breath and get the deal you can afford” rather than concede to a higher rate and risk damaging the hospital’s profitable base.
“I think was a gutsy thing for Woman’s, and I think it’s smart,” he says.
The hospital depends heavily on Medicaid dollars since nearly half of its patients are enrolled in the program for low-income, disabled and the elderly. With a $2 billion state budget shortfall and possible deep cuts to Medicaid looming, the idea of shelling out another $5 million or so in debt service probably wasn’t an appealing prospect, Matessino says.
He notes that several hospitals around the state that were considering renovations also are putting those plans on hold and waiting to see what the bond market does. Hospitals around the country, meanwhile, are having to shelve construction projects which require bond issues—the usual source of financing for nonprofit institutions’ major purchases or construction projects.
“The bond market is not a wonderful vehicle right now,” Matessino says.
Anything that inhibits construction in the Baton Rouge market is detrimental to the economy since it means fewer jobs being performed and less money being spent—yet another way the global crisis is being blown into Baton Rouge’s backyard. Neither is cramping health care expansion a good thing, Matessino says.
“We continually try to make the point about business implications of health care and hospitals in the state,” he says. “When you think about health care being the largest employer in the state, hospitals make up half that. That’s huge in a state like this.”
“Louisiana has been pretty much skipped over in this mess,” he says. “It doesn’t mean that we’ll always be skipped over in this mess.”—Steve Clark
Though some area banks are reporting shrinking profits or loan losses as the recession impacts the Southeast, they’re still anticipating growth in 2009.
Even with fourth-quarter earnings falling by $7.7 million from the previous quarter at Hancock Bank, CFO Mike Achary forecasts modest growth this year in the bank’s footprint, which is mainly in Louisiana and Mississippi. Achary attributes much of this growth to “flight to quality,” or confidence in the bank’s 110-year-old experience in weathering recessions.
“The growth is consumer and commercial loans, and deposits of all sorts,” Achary says. “Our balance sheet is growing. Deposits are still growing even with higher chargeoffs and squeezed margins. We’re still growing pretty dramatically in Louisiana and Mississippi, and that’s a big positive story for us.”
But there are still economic concerns on the Gulf Coast.
Loan losses increased from $2.4 million in fourth-quarter 2007 to $12.6 million in fourth-quarter 2008. Achary says higher loan write-offs in residential construction and land development mainly contributed to the increase, but he also says the bank is more proactive in clearing bad debt from its books to strengthen the loan portfolio. Loan losses are expected to continue through the year.
The Bank of Zachary’s $70 million in assets are holding firm, but President Preston Kennedy anticipates a tight year.
“We budgeted a small amount of growth. It’s really a downgrade for us,” Kennedy. “We don’t see any double-digit growth like we’ve had for several years.”—A.T.
It’s not official yet, but the five-parish Baton Rouge area has hit an environmental milestone.
After years of steadily chipping away at the problem, the area consisting of Ascension, East Baton Rouge, Iberville, Livingston and West Baton Rouge parishes met federal ozone standards. Air monitor readings proved it with the once-only-dreamed-of number of 83 parts per billion. This means the area met the 120 ppb ozone per one-hour standard from the 1970s and eight-hour standard of 85 ppb implemented in 1997.
“We’re extremely excited,” says Michael Bince, air quality assessment division administrator with the state Department of Environmental Quality. “Some said Baton Rouge would never make it to where it is now.”
DEQ has initiated the paperwork with the EPA to recognize Louisiana’s compliance, which Bince says isn’t a paper tiger. By complying, the area will avoid being bumped to a tougher designation and future fines.
Bince said the new standard of 75 ppb in an eight-hour period was implemented last year. If it survives several lawsuits, many Louisianans can get ready for an ozone-friendly lifestyle.
But if an estimated 20 to 24 parishes join the Baton Rouge area, it could become even more difficult to keep up with the latest standard. “Every day will become an ozone action day,” Bince says. “We need people to get in the mind set that every little bit I do helps with this.”—Anna Thibodeaux
Executive Spotlight: F.J. “Jim” Greely Jr.
Regional president, MidSouth Bank
The financial world can be a frightening place to make a living these days, but Jim Greely isn’t discouraged by today’s work environment. In fact, he thrives on the challenge. As the regional president at MidSouth bank, his greatest accomplishment has been the “rehabilitation of a distressed bank,” Greely says.
But despite his success in corporate America, Greely isn’t all numbers and trade publications. He takes distinct pleasure in his high-performance computerized fishing reel during his time off, his wife and children and daydreams of flying high as an Air Force pilot.
Want to find out more about Greely? Read the rest of his profile Q&A here.
Book Review: Rich Like Them
Author: Ryan D’Agostino
Publisher: Little, Brown
The sign said “Open Today!” and you couldn’t resist. So what possessed you to go to an open house way out of your price range?
Maybe it was a little bit of what-iffing that led you to peek into cavernous closets and run your fingers over rare-wood mantles and imported countertops.
What would it be like to live there? To have money like that?
Author Ryan D’Agostino wondered the same thing, and in his new book Rich Like Them, he knocked on a few doors, literally, and asked.
One day, curiosity got the better of D’Agostino, an editor at Esquire magazine. He purchased a list of the 100 wealthiest Zip codes in the U.S. Then, with his reporter’s notebook in his pocket, and comfortable shoes on his feet, he stepped into some of the richest enclaves in America.
Not everyone agreed to speak to him. D’Agostino says he was sometimes met with silence, and security guards often turned him aside. But when he found people who would talk, he learned lessons of a lifetime.
D’Agostino took a simple concept [find people with money and ask them how they got it] and created something that seems like a blueprint for wealth. He often steps aside to let stories speak for themselves. The titles of the mini-chapters practically beg you to read further, and D’Agostino is quick to refresh your memory if he refers to someone from another chapter.
Rich Like Them is filled with a wealth of great motivation; ideal for starting out the new year.—Terri Schlichenmeyer
Fast Forward: Caution: roadwork ahead
East Baton Rouge Parish voters approved the Green Light Plan in 2005, extending a half-cent sales tax through 2030 and permitting the sale of bonds backed by that revenue. As a result, CSRS got moving on several road projects at once rather than waiting for money to pile up under the old pay-as-you-go system. Business Report covered this issue in “Green Light means GO!” in the May 6, 2008 issue.
Last year, program manager Brad Ponder told Business Report to expect 26 of the 36 projects to be completed or under construction by the end of 2010, and CSRS principal Michael Songy stood by that prediction this month. The Metro Council approved a second bond sale of $110 million on Jan. 14. CSRS estimates the entire Green Light Plan will cost a bit more than $500 million.
Burbank Drive [Segment 2]
Veterans Memorial Boulevard
Projects where work has begun:
Burbank Drive [Segment 1]
Central Thruway [Phase 1]
Coursey Boulevard/South Sherwood Forest Boulevard intersection improvements
Downtown signalization and synchronization
North Harrell’s Ferry Road
Groundbreakings scheduled for early February:
Jones Creek Road improvements
Staring Lane extension
Siegen Lane [from Highland Road to Perkins Road] was bid this month, and improvements to the intersection of Foster Drive and Government Street will be bid out next month. Details about each project can be found at greenlight.csrsonline.com.—David Jacobs
It won’t be available until later in 2009, but that doesn’t mean you can’t start drooling over it now. Pre, Palm’s attempt to bring its phones into the 21st century, has a number of impressive features that take it beyond the BlackBerry and, yes, the iPhone.
This tiny black device, which curves to sit comfortably against the side of your face, is just slightly larger than the iPhone. It also has a full slide-out QWERTY keyboard for users who hate the touchpad of the new BlackBerry and the iPhone, but still has a multi-touch screen.
The list of features is almost too long to list, but includes a new operating system [with Linux at its heart], Web OS, a 3-megapixel camera with a built-in flash and a magnetic, cordless charger called the Touchstone.
And for iPhone lovers that fall back on the claim that Apple is the only software and hardware developer that understands style, the Pre challenges them again. There is a sparse, understated beauty to the home screen layout and the “deck of card” interface—users can flick between applications without having to close them, and throw them away [flick up] to close them altogether.
That being said, the Pre isn’t on the market yet [the phone will be available to Sprint customers], meaning the real test is yet to come. Analysts hope the cost will be $199 or $249 with a two-year contract. But with all of the fancy features and simple design work, the Pre just might challenge the devotion of iPhone and BlackBerry lovers for good.
And it also cuts and pastes.—O.W.
Fortnight January 28 – February 10
January 28 – On this day in 1991 – The Public Service Commission heard recommendations from a South Central Bell consultant about the state’s failure to encourage the advancement of high-tech telecommunications. Bell’s consultant cautioned that failure to do so would discourage the attraction of capital and local development of new technologies.
January 28 – Maria Luisa Palumbo, an Italian architect, director of the Master in Digital Architecture program at the National Institute of Architecture in Rome and author of New Wombs, Electronic Bodies and Architectural Disorder, will speak at the LSU College of Art & Design. Sponsored by HKS Employees, she will discuss the role of digital technology in architectural design. For more information, visit design.lsu.edu.
January 29 – The second Ernest J. Gaines Awards, created to honor the literary achievements of Gaines, a Louisiana native, will be held at the Manship Theatre at the Shaw Center for the Arts. Ravi Howard will be receiving the 2008 award for his novel Like Trees, Walking. More information can be found at braf.org.
January 30 – On this day in 2008 – State education officials announced the possible takeover of 15 schools in East Baton Rouge Parish, in addition to the four schools already in consideration. The State Board of Elementary and Secondary Education voted the following month to take control of Prescott Middle, Glen Oaks Middle and both Capitol Pre-College academies.
January 30 – On this day in 1991 – Community Coffee announced it had purchased the assets of Lotts Coffee Service of Jackson, Miss., for an undisclosed amount. Pat Pettijohn, then-chief financial officer and acting chief executive officer for Community Coffee, said, “There is a lot of synergy between office coffee service and grocery store presence,” and increasing a presence in Jackson was the perfect location to do so.
January 31 – In an effort to “focus on large-scale citizen engagement through face-to-face, small group dialogue,” the Baton Rouge Black Chamber of Commerce will hold a Community Town Hall Meeting from 9 a.m. to noon at the Living Faith Christian Center on Winbourne Avenue. Feedback will be used to help create the 2009 policy agenda and action plan for the BRBCC.
Business of Politics
Wanted: new image So, you’re a junior senator up for re-election, but a porn publisher reveals you’re linked to a prostitution ring. Don’t want to throw in the towel? What do you do? If you’re David Vitter, the Metairie Republican facing a similar situation, you develop a strategy based on diversionary tactics to overshadow the obvious and rebrand yourself.
Vitter has taken a guerilla-style approach to resurrecting his public image—and it’s hard to ignore. When the auto bailout vote raged last year, he described it as “ass-backwards” from the Senate floor and threatened to filibuster, grabbing national headlines in the process. During the confirmation hearings of Secretary of State nominee Hillary Clinton earlier this month, Vitter stole the spotlight again with tough questions about conflicts of interest.
Then there’s his legislative package for 2009, the last full year before his fall 2010 re-election. Based on bills Vitter has in the hopper for this year, he’s going to protect the American flag, end abortion, further public prayer, advance home schooling, curb illegal immigration, enforce the death penalty and get rid of drugs. If only Vitter didn’t have a history of indulging in the same evils he publicly fought, it just might work.
D.C.-bound Christopher Ingram managed the campaign of new Baton Rouge Congressman Bill Cassidy, but he’ll be working in another GOP lawmaker’s office on the Hill. Ingram, who still was serving as a Cassidy spokesperson a few weeks ago, has been hired as the legislative director for fellow freshman Rep. Anh “Joseph” Cao of New Orleans.
Ingram has long been a part of Red Stick’s Republican scene, managing legislative campaigns and working for the state party. A native of Troy, Ala., Ingram made Baton Rouge his home while at LSU and is presently writing his dissertation on freedom and international conflict.
He should get around D.C. pretty easily—he previously worked for the House Ways and Means Committee and was briefly an adviser to Republican Sen. Olympia Snowe of Maine.—Jeremy Alford
Reduce, reuse, recycle
A drop in the value of recycled electronics has caused the Capital Area Corporate Recycling Council to begin charging fees for some items. “We wanted to keep it lower than a Starbucks coffee,” says Nancy Jo Craig, executive director of the CACRC, a 10-year-old nonprofit organization.
The organization now charges $4 for every monitor it recycles [$5 if the device has a cracked casing] and $3 for each printer, fax machine or scanner. CACRC accepts cell phones, servers, laptops and computers for free. The new fees have been in effect since Jan. 1.
Craig says most customers “haven’t blinked an eye about it.” “It would cost twice as much to recycle electronics through a private company,” she says.
The economic downturn has caused the value of recycled material to drop sharply. “The value was the highest it had ever been last summer, then it quickly went to the lowest it’s ever been,” Craig says. “We’re having to try and make ends meet.”—Timothy Boone
The Baton Rouge Area Chamber’s 2009 agenda is out. Geared for Innovation, BRAC’s to-do list for the coming year, identifies priorities it believes are essential to the Capital Region’s long-term prosperity. They are:
• Execute an aggressive regional business recruitment, retention and expansion program to secure 800 jobs at competitive wages;
• Support key public education reforms to increase student achievement;
• Pursue further development of the digital media strategy;
• Encourage the establishment of local and regional business incentives;
• Support and promote LSU’s development of the next phase of its national flagship agenda;
• Pursue opportunities to support the institutional advancement of Southern University as an economic driver;
• Champion a state and regional innovation strategy;
• Pursue regional transportation solutions to increase mobility;
• Nurture and develop regional workforce solutions;
• Advocate for targeted tax and incentive reforms that spur growth, remove unorthodox business taxes and provide small business relief.— S.C.
Shuttered: Kadair’s, the longtime camera and electronics retailer, has closed its Florida Boulevard location and consolidated most of its operations on Essen Lane. “The city has moved away from the Florida Boulevard area, and we’re just following the demographics,” owner Howard Kadair says.
Lower ed: Even before the state budget shortfall forced mid-year cuts in higher education funding, growth in taxpayer funding for Louisiana’s public colleges and universities was anemic compared to recent history. State appropriations from 2007-08 to 2008-09 for higher education in Louisiana grew by less than 1% according to a study reported in the Chronicle of Higher Education.
More from Moret: Although the national recession is expected to continue well into 2009, Louisiana Economic Development Secretary Stephen Moret says his department will aggressively focus on expansion strategies that include retaining and assisting existing high-growth companies through tougher economic times. Moret told the Baton Rouge Press Club that LED would identify and target high-growth industries that Louisiana could realistically lure into the state.
Turning Japanese: The Shaw Group posted a loss for its first quarter as the Japanese yen strengthened against the U.S. dollar, eroding the engineering and construction company’s returns on its stake in nuclear power plant builder Westinghouse. The company took a noncash loss of $161.2 million because of appreciation of the Japanese yen against the U.S. dollar.
Cashing in: Average weekly wages in East Baton Rouge Parish increased by 7.8% in the second quarter of 2008, putting the parish fifth on a national ranking of county-level wage growth. The average weekly wage in the parish was $790, according to the report from the U.S. Department of Labor’s Bureau of Labor Statistics.
On the job: IEM has been selected by the Greater Lafourche Port Commission to assess risks and develop emergency management strategies for Port Fourchon, a major hub for the U.S. oil industry. The Baton Rouge-based company will look at several things, including how to bring operations back after a hurricane.
Copycats: New Orleans economic development officials set up a partnership modeled after the Baton Rouge Area Digital Industries Consortium, 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.” DMA will look at policy and providing capital for startup businesses.
Got gas? Albemarle Corp. signed a collaboration agreement with OptiFuel Technology Group to commercialize a new additive designed to improve gasoline and diesel fuel yields from refineries. OptiFuel is a proprietary technology that works with any refinery in order to increase the amount of fuel that can be produced from crude oil.
No free meals: Members and staff at the Louisiana Public Service Commission cannot accept free meals and drinks from the utility companies they regulate, the panel decided Jan. 14 in a vote that gives it tougher ethics rules than those governing other elected officials.
Capital Region home sales plunged by nearly 23% in 2008, falling to their lowest level since 2001. GBRAR President Sandy Daly blamed the decrease 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 one 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, D.C., to kick-start the housing market with tax credits. “In the last two weeks, there has been tremendous interest, with phones ringing,” she says. “Things can’t get much worse than last year.”—T.B.
He said, he said
Two of the developers of a Zachary TND are involved in a power struggle that has spilled into the courtroom. J. David Matthews and
Shearwater Communities filed suit against Chris Mestayer in May over the proposed Americana development, a 414-acre development along La.
64. Matthews and Mestayer are members of Shearwater, which created a company called New Towne to develop Americana. The suit charges
Mestayer of taking corporate documents and refusing to go along with decisions passed by the majority. The suit says Mestayer was acting outside of his scope as a minority member and hurting the development. Matthews is seeking to remove Mestayer as a Shearwater developer.
Mestayer responded in court documents by saying that he’s a co-manager and not a minority member of Shearwater. He charges Matthews with engaging in questionable business deals and having liens and/or suits filed against him. It was those dealings that led the New Towne managers to terminate Matthews’ development services. Mestayer says New Towne managers were concerned Matthews’ background could taint Americana. Matthews arranged for New Towne to pay $200,000 in management fees to Shearwater Group, a company he wholly controlled. Mestayer says he was supposed to get half of that money. The case is pending before 19th Judicial District Court.—T.B.
Baton Rouge had the lowest percentage of foreclosures than any of the 100 largest cities in the U.S., according to RealtyTrac.com; 0.35% of the homes in the market were foreclosed in 2008. The foreclosure rate in the Capital Region was slightly better than the state average of 0.39%. Foreclosures were up 81% nationally compared with 2007, but Baton Rouge saw a 34.5% increase. Low home prices and stable employment helped Baton Rouge stave off the wave of foreclosures that hit much of the United States.—T.B.