Think of it as Anderson Silva meeting Cain Velasquez in the Octagon. Sugar Ray Leonard facing Mike Tyson in the ring. LSU’s baseball team playing against the New York Yankees. Or for people not so keen on sports metaphors: Justin Bieber starring on the big screen opposite Robert De Niro and Al Pacino.
The Capital Region is in the big leagues now, squaring off against the likes of Austin, Texas; Birmingham, Ala.; Charlotte, N.C.; Kansas City, Mo.-Kan.; Louisville, Ky.; Memphis, Tenn.; Nashville, Tenn.; Oklahoma City; Raleigh, N.C.; Richmond, Va.; and a whole host of other major-market metropolitan areas.
The region has been one of the top dogs in the mid-market category for decades. As if on cue, on March 1, Site Selection magazine ranked the Capital Region No. 1 for new and expanded corporate facilities in 2010 among cities with a population between 200,000 and 1 million. Southern Business & Development magazine has thrice named the region Mid-Market of the Year for its performance in attracting industry.
But then came word last month that 100,000 people have moved into the Capital Region in the past decade, forcing our population over the magic 800,000 mark and bumping us into a whole new economic-development weight class. No Southern regions have crossed that line since El Paso, Texas, in 1999 and Tulsa, Okla., some 15 years before that.
In a sense, the Capital Region is ahead of its time, thanks to an expedited schedule brought on largely by hurricanes Katrina and Rita in 2005. Relying on extensive demographic research, the Baton Rouge Area Chamber wasn’t expecting the community to make the leap for another three years.
The upgrade to a bigger market opens the door to greater opportunities. Market size is a factor when business and industry determine whether workforce will be adequate to support new locations and expansions. Airlines take it into account when deciding whether to add service or flights. Young professionals seeking an urban setting, and all the accompanying amenities, consider it when looking for a place to set down roots. Professional organizations look for the same when scheduling conferences and conventions.
But the upgrade also means the region now will be competing against areas that have been at this higher-stakes game a whole lot longer than it has. And in many cases, those cities have a bigger—and better—arsenal.
“This makes us much more attractive in an economic-development sense in that we open up a new door to conventions and businesses,” says Walter Monsour, president/CEO of the East Baton Rouge Redevelopment Authority. “[Major market] in and of itself sends a significant message. We still have a lot to do to support that tag, but when people see in writing that this is a major market, it automatically creates a mind-set that’s very positive.”
So the question is this: Is the Capital Region ready to become a major market? And perhaps more important, is it capable of competing like one?
To get a sense of where we stand, Business Report asked community leaders to compare the Capital Region to five of our new peer cities and competitors: Birmingham, Ala.; Charlotte, N.C.; Kansas City, Mo.-Kan.; Raleigh, N.C.; and Richmond, Va. What emerged from that analysis are many strengths and assets that make us a strong contender in winning over prospective businesses, visitors and other people: a research university, emerging film and digital industries, Mississippi River and the Port of Greater Baton Rouge, Pennington Biomedical Research Center, an international petrochemical industry, the headquarters of two Fortune 1000 firms, Shaw Center for the Arts and other efforts to make downtown Baton Rouge shine.
But predictably, there also is much that needs to be done to make the region more competitive with its peers.
“In addition to all the good things that come with being named a major market, I also see a lot of responsibility now,” says Mark Goodson, vice president of the East Baton Rouge Redevelopment Authority. “We’re officially a major market; we’ve got to fill the gaps and do the things we need to do to live up to that tag.”
Seven primary challenges emerged from that analysis. Here they are, in no particular order:
Think and act like a major market
A person need look no further than the lack of support outside Baton Rouge for a proposed loop and the lack of support inside Baton Rouge for projects like Juban Crossing in Livingston Parish to see that the Capital Region doesn’t behave like a true metropolitan area.
It’s the same urban vs. suburban battle that’s played out in major markets across the country. Perhaps nowhere is it more of a war zone among Baton Rouge’s new peer cities than Kansas City.
Consider that over the past decade, that city itself gained only 150 new businesses, while the surrounding metropolitan area gained more than 20,000 of them. Kansas City now is home to less than one-fourth of the region’s employed residents and less than one-third of the jobs. The only thing the region shares is the fallout: As a whole, it grew more slowly than the rest of the United States.
“Rather than a homogenous community pulling together for mutual success, the metropolitan area that surrounds Kansas City has devolved into dozens of disjointed cities and towns more interested in economically and physically distancing themselves from Kansas City than working together to build a stronger regional economy,” Kansas City, Mo., Mayor Mark Funkhouser says. “The results of this community dysfunction are just plain ugly.”
The most successful metropolitan regions, analysts say, are those that can sell themselves as the total package, where geographic boundaries don’t seem to matter much.
Monsour says there’s nothing wrong with each parish in the Capital Region growing their own assets for the bene-fit of their communities. Indeed, every community in the region plays a critical role, he says, but there has to be some acknowledgment that the city of Baton Rouge is the hub. That said, it’s important that Baton Rouge doesn’t condescend or look down on the neighboring parishes, where the bulk of the growth actually is occurring, and that neighboring parishes aren’t expected to look up to Baton Rouge.
“The reality is that in order for us to be a region, there has to be a center of activity,” he says. “It cannot be a confederacy. It behooves all three parish presidents to get together and take this region to its heights. A rising tide floats all boats.”
Phillip LaFargue, communications director for the Center for Planning Excellence, adds that in successful regions like Charlotte, Raleigh and Richmond, that cooperative spirit also extends to governmental and community agencies.
“We’re reaching a level of self-awareness in Baton Rouge that some of these other communities might have reached a long time ago,” LaFargue says. “One of the most important pieces we see is intergovernmental coordination. We will have the ability to compete with these other regions if we can pull that off.”
Downtown Development District Executive Director Davis Rhorer points to the Shaw Center for the Arts as an example of what can happen if competing interests put aside their differences.
“Look what we could be if we act as one,” Rhorer says. “On a much smaller scale, we saw what could happen when we pulled together all the partnerships for the Shaw Center for the Arts. With the support of LSU, the city, and private interests, we created a great venue—something much bigger and greater than if any of us had tried it on our own.”
One emerging effort is BRAC’s recently launched Creative Capital of the South campaign, which aims to promote the entire region as a place that celebrates innovation, research and development, entrepreneurship, arts and culture. Its website hawks regional assets from LSU to the Iberville Parish Library.
“If we all just back up 30,000 feet and look at the palette we have to paint with, it’s pretty darn good,” Goodson says. “If we can work out the kinks between ourselves, the potential is just that much greater.”
Nurture a diverse economy
It’s always about the jobs. Indeed, one common characteristic among successful major markets, analysts note, is that they all offer creative, challenging, good-paying career opportunities.
Nowhere is this more apparent than Raleigh, home of the Research Triangle Park. Some of the most innovative and cutting-edge research-based companies in the world are based there, and the critical mass of global R&D companies and the region’s strong workforce are two of the main drivers in attracting young professionals.
Our Lady of the Lake Regional Medical Center President/CEO Scott Wester thinks the Capital Region has an appealing diversity of business and has made significant strides in attracting new up-and-coming industries, like digital media.
In recent years, the region has attracted some impressive new businesses and industry, not the least of which was snagging Albemarle’s headquarters from Richmond and luring EA Sports’ North American testing site. In 2010 alone, BRAC, which serves all nine parishes in the metropolitan region, has overseen a record 20 project wins, securing 782 jobs, $831 million in capital investment and $30 million in payroll.
“Personally, I think we’re extremely well positioned,” says Wester, who now serves as chairman of BRAC’s board of directors. “We have a vast array, whether it’s state government, the flagship university, the major petrochemical industry, manufacturing, great health care—the list just goes on and on. We also have an excellent small-business environment and up-and-coming growth industries. That’s very attractive for future companies to come in, and it also positions us to make sure we’re able to grow collectively.”
BRAC President/CEO Adam Knapp says the challenge now is to help connect people who might want to move to the Capital Region with available positions. The chamber is launching a program later this year to address this issue.
Fight poverty, fight crime
When the Capital Region is compared to its new peer cities, one distressing statistic stands out: its poverty rate. Some 17% of its residents live below the poverty line, while most of its peer cities in this analysis hover around 10%, less than the national average of 13.2%.
John Fregonese, the urban planner who is leading FuturEBR, a comprehensive land-use plan for Baton Rouge, notes that the key to many of the region’s problems is moving people out of deep poverty through education and job opportunity.
It’s particularly acute within the city of Baton Rouge, where some of the most prosperous and some of the poorest neighborhoods are but a few miles apart.
“This should give the community just one more motivation to get serious about improving education in Baton Rouge,” Fregonese says. “This is not just an African-American thing. You have a population that is very much left behind, and you have young people with very few options. That means they tend toward violence. Unless you address the overall underlying causes—hopelessness, a lack of education, a lack of opportunity—then stepping up police presence and filling jails is going to be a futile act.”
Better education and workforce training
When it comes to education, the Capital Region is a mixed bag. Public school systems in Zachary, Ascension Parish and Livingston Parish receive among the highest marks in Louisiana, while the East Baton Rouge system continues to struggle.
“Clearly we have to do something about our education system, at least in East Baton Rouge and certainly in the state,” Monsour says. “The state has to address a system that’s broken.”
Louisiana Economic Development now offers FastStart, a customized workforce program that ranks No. 1 in the nation and has helped the Capital Region and other areas around the state meet the workforce needs of newly recruited firms.
“From a competitive standpoint, we have to have a strong and committed workforce, and that really gets established in the local education system,” Wester says. “We have to make sure we have a high-performing educational system. We have great universities and great community colleges. We still need to work on trade opportunities in education, but we’re doing extremely well.”
Birmingham has its convention complex and golf trail. Charlotte has its EpiCentre and high-end boutiques. Kansas City has its Country Club Plaza. Raleigh has its museums and entertainment districts. Richmond has its Carytown Mile of Style shopping and entertainment district and loads of American history.
Every successful major market has a thriving cultural scene, a place where young singles and families alike can find entertainment and culture.
The Capital Region has the State Capitol, Third Street, Perkins Rowe, plenty of waterways for outdoor recreation and other attractions. More is on the way, including Pinnacle Entertainment’s $357 million River Road casino and hotel and, perhaps, a minor-league baseball team in Livingston Parish.
But perhaps the region’s greatest cultural asset is its hospitality.
“We have a unique culture here that people really come to appreciate once they’ve experienced it,” says Paul Arrigo, president/CEO of the Baton Rouge Area Convention & Visitors Bureau. “And they help spread the word about what we have to offer. Tourism and economic development go hand in hand.”
Have a plan
Almost all of the parishes and major communities in the Capital Region are in the process of creating, or have recently completed, comprehensive long-range plans. The city of Baton Rouge has just received the draft vision for FuturEBR, which will help shape growth over the next 30 years.
And that’s critical, Center for Planning Excellence Executive Director Elizabeth “Boo” Thomas says, noting that its peer cities—Charlotte and Raleigh, especially—are decades ahead of the Capital Region in this regard.
“It’s important to have a comprehensive plan as a blueprint for growth and development,” says Troy Bunch, director of the East Baton Rouge Parish Planning Commission. “This plan we’re working on now will identify strategies for enhancing economic development in our community.”
Indeed, the vast majority of quality-of-life components that businesses and people look for in a community come under planning: green space, the character of residential neighborhoods, and transportation, including everything from bicycle paths to public transit.
Consider that Charlotte spent 20 years planning its light-rail system. Voters approved a half-cent referendum to fund light rail in 1998. The 9.6-mile line was estimated to cost $426.8 million but finished at $462.7 million.
The return has been enormous: The system has exceeded 20-year ridership projections in its first three years of operation while adding to the region’s economic-development arsenal.
Since light rail opened in late 2007, $288.2 million in development near light-rail stations has been completed and $522 million is under construction, despite the recession. The Charlotte Area Transit System projects that private investment development stations will reach $1.45 billion by 2013, depending on the economic recovery.
“These progressive and forward-thinking communities have tried to invest in infrastructure to reflect a modern global region,” Knapp says. “The challenge is for the Capital Region to begin to think about that. Some of these larger cities are often shaped by metro planning that is more thoughtful and forward-thinking than we as a region historically have done.”
The No. 1 advantage that the competition has over the Capital Region, Knapp says, is international development.
Charlotte has aggressively, and successfully, recruited investment from the Asian markets, and Richmond has a very successful international recruitment strategy, particularly in the German market.
The challenge, though, is that global recruiting can be an expensive exercise, and many of the peer economic-development entities have between $1 million and $3 million more to spend than the Capital Region’s chamber.
“We have to begin to think globally as a market,” Knapp says. “Almost all of these places have been thinking about global competitiveness for quite some time.”
Since 2003, the Baton Rouge Area Chamber has been leading canvass trips annually to peer cities across the nation. The first was to Austin, Texas, in 2003. Other stops have included Nashville; Raleigh; Portland, Ore.; Richmond; and, most recently, Pittsburgh.
It was calculated, Knapp says, to get community leaders thinking about what it means to be a major market.
“The idea is to infect business and community leaders with the importance of effecting change. And it has worked in seeding ideas that make us more competitive,” he says. “We still have a long way to go before we think as a major market, but that’s literally because we just became a major market. The challenge is to rise up and act as a nine-parish area in the best interest of our overall growth.”
The fortunate part is that the Capital Region can simply learn from the lessons of its peers, Goodson says, borrowing on their successes and avoiding their failures.
“We like to say around here that we don’t have to come up with anything new,” he says. “We can just look at best practices elsewhere and just borrow from what they’ve done.”
Monsour and others believe the region is up to the challenge. While resistance to change admittedly remains strong, the region is more open to the concept that there are alternatives to consider than it was, say, a decade ago.
“We’re a lot bolder in our thinking now,” he says. “We’re a lot more willing to accept the challenge of, ‘Yes, we can do it.’ I think more people are embracing change. The next step is to actually pull the trigger.”