THE BIG STORY
What’s the future of Turner Industries?
For several weeks, sources have been whispering that Turner Industries, one of the Capital Region’s largest employers, is for sale. On Dec. 17, after some prodding from Business Report, the company issued a five-paragraph statement that didn’t exactly squash the rumor.
According to the statement, the Turner family is “considering estate planning options,” and has directed the company’s board to “begin a limited process of exploring strategic alternatives.” The process could lead to maintaining the status quo, creating an employee stock ownership plan or “any of a variety of other alternatives,” the statement says.
“This is simply a normal evolution in the life of a 50-year-old private company,” CEO Roland Toups says in the release.
The statement doesn’t specifically mention the possibility of a sale, but it doesn’t deny the rumor, either. The release also shows the Turner family and company officials are weighing their options. Sources say at least nine companies have shown interest.
Turner has been down this road before. In summer 2002, The Shaw Group reached a tentative agreement to buy Turner for between $250 million and $350 million. According to reports at the time, some of Turner’s leading customers and executives balked, and the company backed out of the deal a little more than a month later. Presumably, the company is worth significantly more now, and some sources have discussed a possible asking price of $1 billion.
While Toups says the company ultimately could decide to stand pat, he is letting the statement speak for itself. That means several questions will have to wait for definitive answers. What is Turner Industries worth in a soft economy, and who might be willing to pay that amount? Is there an internal timeline for making a decision? And if the company does decide to sell, is price the only consideration?
The statement says the board wants to ensure “the long-term legacy of the Turner name” and “a continuing dedication” to the company’s clients, employees and the community.
Engineer Bert Turner founded Turner Industries in 1961 after buying Nichols Construction Company out of bankruptcy. The company reported more than $1.7 billion in revenue last year, the most of any private company in the Capital Region except Blue Cross and Blue Shield of Louisiana.
Bert Turner died in 2008, passing company ownership to his wife, Suzanne “Sue” Turner, and his children. Sue Turner now sits on a five-person executive management board, along with her daughters, Suzanne L. Turner and Mary Svendson, son Thomas Turner, who is also the company’s vice chairman and chief operating officer, and Toups.
The company is based in Baton Rouge and has several locations in Louisiana, Texas and Alabama. Turner serves the chemical, energy, refining, paper and related industries. —David Jacobs
IN SHORT
Charge countercharge
KeyBank National Association alleges that developer Tommy Spinosa withheld information from the bank in order to make his Perkins Rowe mixed-use development look more financially attractive, doctored loan documents, used loan proceeds to pay his own construction company for work done by a previous contractor and used loan proceeds to pay a company affiliated with his Rouzan TND project.
The allegations are just the latest in a flurry of charges and counterchanges in a $170 million foreclosure lawsuit, which was filed in summer 2009. Each side claims the other failed to live up to the terms of the 2006 loan agreement, thereby causing the problems that led to the foreclosure. Recent court rulings have heavily favored the lenders, most notably a ruling last month ordering Spinosa to comply with a KeyBank subpoena of his bank records.
Spinosa’s attorney, Mark Beebe of Adams and Reese, denies the allegations and blames the bank for improperly administering the loan. Beebe says Perkins Rowe defendants, including Spinosa, “deny unequivocally and without reservation KeyBank’s claims of fraud and further maintain that KeyBank simply cannot support its allegation that it was misled. Importantly, KeyBank cannot revise history to cover up its negligent and inappropriate loan administration.”
Beebe says KeyBank’s allegations were to be addressed individually in a response to the court, which was due Dec. 27.—Stephanie Riegel
Giving up a seat
Louisiana will lose a seat in Congress and one of its nine electoral votes as a result of its low growth rate over the past decade, as shown in 2010 Census data released Dec. 21.
Louisiana experienced the lowest growth rate in the South since the 2000 census, and the third lowest nationwide. Its population is 4,533,372, an increase of 1.4%, or about 64,400 residents.
Nationwide, population figures increased 9.7% to 308,745,538. A dozen congressional seats will shift as a result, Census Bureau Director Robert Groves says. Louisiana will lose one of its seven House seats; it lost one seat following the 1990 Census.
New York and Ohio are losing two seats, while Illinois, Iowa, Massachusetts, Michigan, Missouri, New Jersey and Pennsylvania are losing one each. Texas, meanwhile, is the biggest census winner, with four new seats gained as a result of a 20.6% population increase over the past 10 years. Florida is adding two seats, and Arizona, Georgia, Nevada, South Carolina, Utah and Washington are gaining one each.
The Legislature will be in charge of redrafting district maps for Louisiana’s congressional and legislative districts, as well as other state offices required to represent an equal share of voters. The redistricting session will begin in March, once the Census Bureau has issued detailed population numbers.
Only population numbers for the nation, each state and the subsequent congressional apportionment numbers have been released. More detailed results, including the populations for parishes, counties and cities in each state, will be released early next year.—Steve Sanoski
Crossing the bar
Juban Crossing developer Stephen Keller says the first phase of Livingston Parish’s largest retail and residential development will break ground within three months, and will include up to 450,000 square feet of retail space, a 16-screen movie theater, a minimum of four national chain restaurants, the first of four 120-room hotels, a drugstore, two banks and a gas station.
Keller, of Creekstone Companies, also says two national retailers have signed letters of intent to anchor the development. “We are in various stages of negotiations on letters of intent with several others at this time,” says Keller, who declined to name the retailers.
The Livingston Parish Council breathed new life into the long-stalled project on Dec. 20, when it voted 7-2 to increase the sales tax in the development area by another 1%. Keller’s attorney, Scott Crawford, had said rejection of the additional tax could kill the project.
In 2007, the council approved a 1% sales tax in the 470-acre development area to help fund infrastructure. The extra 1% approved will also go toward those costs, which are estimated at $150 million.
Keller says the first Juban Crossing stores will open in the fall of 2012. When they do, shoppers in the district will pay 10.5% in sales taxes. Elsewhere in the parish, sales taxes range from 8% to 9.5%.
Juban Crossing was first announced in 2006 with an expected 2007 opening, but the economy has delayed progress. —S.S.
BUSINESS OF POLITICS
How to make voters disappear
Interim Secretary of State Tom Scheduler has made 120,000 voters vanish into thin air. Was it a bit of holiday magic? Not really. The voters were deemed “inactive” because they have neither voted nor confirmed their addresses with their registrar of voters during the past two years. The head count, however, is out of the ordinary.
“This year’s total is significantly higher than usual since the Legislature appropriately suspended the canvass in 2006,” Schedler says, referring to the law that was passed following the 2005 hurricanes to give voters more time to return to the state. “Many of these voters would have ordinarily been canceled in 2008, but they’ve had an extra two years to verify their addresses and vote in any election. This leads me to believe the vast majority of the voters to be canceled simply aren’t here anymore.”
The secretary of state’s office canceled 44,739 voters in 2008, 83,702 in 2006 and 108,850 in 2004. A parish-by-parish breakdown shows most of the losses this year occurred in Orleans Parish, where 45,830 voters were stripped from the rolls. About 7,200 from East Baton Rouge Parish also were removed.
New blood droplets not required
The state has a new design for its flag and seal. It’s basically the same image of a brown pelican feeding its young with droplets of blood; just now it’s three drops, plus several other minor enhancements.
Lawmakers approved the swap in 2007 and the secretary of state’s office released the updated design this winter. [The entire effort was inspired by research conducted by Joseph Louviere, a student at Vandebilt Catholic High School in Houma.]
The updated design raises a few questions: How much did it cost? Do all state agencies need to buy new flags and update all seals? Who is making the flags? Jacques Berry, press secretary for the secretary of state’s office, said two philanthropic Louisianans, a historian and a wildlife artist, donated their time to the research and redesign.
“The only costs associated with this project so far have been a few hours of work on my part and the wholesale cost of a new flag for Joseph Louviere, though we haven’t been able to present it to him yet,” Berry says.
As for the law, there is no mandate that agencies use the updated design; it’s more of a policy decision on the part of each agency. “Our recommendation was to replace old designs by attrition, so to speak,” Berry says. “For example, when it’s time to reorder stationery, they could then replace the seal. That way it wouldn’t cost anything. And there are some usages that could be switched immediately, such as images on websites.”
New Jersey-based Annin & Co., among the world’s oldest flag manufacturers, is making the new flags, he said, and several vendors are selling them, ranging from the House and Senate to the Pennant Shop in Metairie.—Jeremy Alford
EXECUTIVE SPOTLIGHT
Karen Profita
President/CEO
Capital Area United Way
Hometown: Baton Rouge
Karen Profita took a class in making career decisions while at LSU, where she was told combining her interests in health care and business could be her path to happiness. Today, as head of Capital Area United Way, she leads an organization that supports health, education, income and basic needs for the 10-parish Baton Rouge region. She says the area has too many dropouts and too little confidence in the local school system, which is why education will be a major focus for CAUW in 2011. To unwind, she enjoys cooking and having dinner with friends, along with reading and the occasional needlepoint project.
To read more of Profita’s Q&A, click here.
BOOK REVIEW: What Women Want: The Global Market Turns Female Friendly
Author: Paco Underhill
Year: 2010
Publisher: Simon & Schuster
Pages: 214
Seventy percent of American women work outside the home, and many women control their own finances. As author Paco Underhill writes in his new book, What Women Want: The Global Market Turns Female Friendly, if your business doesn’t acknowledge women, then it’s “bad business.”
A woman, for instance, remembers if there’s dirt on the floor or on the shelves. If the bathroom isn’t spotless, she’ll remember that, too.
Smart hoteliers accommodate women by not loudly broadcasting their name, room number and lack of traveling companion at check-in. Smart retailers add cashiers so that women aren’t rushed when checkout is complete [watch a woman rearrange her purse sometime]. Smart banks do the same with tellers.
It’s easy to see the influences that women have on homes [more storage, big bathrooms], home offices [multitasking equipment], web design [the biggest online sites lack the industrial look for a reason], home repair [brightly colored tools in the tool department] and technology [women hate “even the merest whiff that a male employee is in any way talking down his nose to them.”].
Underhill is the founder and CEO of Envirosell, a business that studies human behavior in retail, service, online and home environments. He’s made it his job to know how and why we buy, and what he’s discovered is fascinating. By his book’s end, you’ll know which three little words sum up the female shopper’s wants.—Terri Schlichenmeyer
NONPROFIT SPOTLIGHT
BATON ROUGE AREA ALCOHOL & DRUG CENTER
Mission: The Baton Rouge Area Alcohol & Drug Center offers a lifeline to adult men and women suffering from substance abuse/addiction through nonmedical detoxification services to anyone entering voluntarily.
Impact: In 2007, 1,325 persons were admitted to the center, providing 7,707 days of care.
Ruling year: 1973
Total assets: $517,443
Income: $916,986
Expenses: $747,366
Executive director: Joseph Munson
Salary: $68,900
ON THE BEAT
Head of the class
Baton Rouge is the nation’s strongest metro area for new jobs in the first quarter of 2011, according to a survey released by Manpower, the global staffing services company. The net employment outlook for the city is 18%, ahead of Seattle, which ranked second at 15%. That’s well ahead of the national average of 4%. Manpower surveyed 18,000 employers in the 100 biggest U.S. cities.
The high life
Baton Rouge continues to rank among the top-performing cities in the U.S., according to a Brookings Institute report that measures the effects of the recession on the country’s largest metro areas. Baton Rouge is ranked as one of the top 20 performing areas during the third quarter, based on such factors as changes in employment, gross metropolitan product and housing price index.
Lettuce serve you
Saladworks, a Pennsylvania-based restaurant chain, plans to open three locations in Baton Rouge and New Orleans by 2013. The company announced it has reached a franchise agreement with Scott Douget and Shane Bryant. No locations have been selected. Saladworks specializes in made-to-order, entrée-sized salads, sandwiches and soups.
Sundance kids
Flypaper, a heist comedy starring Patrick Dempsey and Ashley Judd that was shot in Baton Rouge this summer, will make its world premiere next month at the Sundance Film Festival. Flypaper, directed by Rob Minkoff, will join another locally shot movie at the prestigious festival, The Ledge. Sundance has served as a springboard for independent movies and filmmakers for decades.
Cups runneth over
Lighthouse for the Blind plans to invest $5.7 million on a North Flannery Road building that will be converted into a paper cup manufacturing plant. Lighthouse, which relocated from New Orleans to Crystal Springs, Miss., after Hurricane Katrina, sells paper products to the U.S. military. By 2013, the company will be producing about 500 million paper cups per year.
Fighting cancer
BioFluidica Microtechnologies, a company in LSU’s Louisiana Business and Technology Center, has been awarded a $200,000 federal contract to bring to market an instrument that can collect circulating tumor cells. The instrument will go directly into doctor’s offices and allow physicians to treat cancer and monitor the return of the disease.
Legal ease
Rep. Franklin Foil, a Republican from Baton Rouge, has been selected to join the Judicial Commission, which assists the state’s legal branch. He replaces Rep. Cedric Richmond, a New Orleans Democrat who recently was elected to Congress. The 17-member commission is headed by the chief justice of the Louisiana Supreme Court.
Win some, lose some
Hawker Beechcraft officials ended their dalliance with Louisiana, reaching an agreement on Dec. 21 with Kansas, Wichita and Sedgwick County on a $45 million incentive package to keep the company in Wichita through at least 2020.
According to a news release, the package requires Hawker to maintain its current product lines—propeller planes, jets and defense aircraft—and keep 4,000 jobs in Wichita for the next decade.
The deal includes a $40 million incentive package from the state, including $10 million over three years for tuition reimbursement and training. Hawker receives $10 million in the first year and $5 million in each of the next four years as part of the Kansas Department of Commerce’s IMPACT Program. In addition, Wichita and Sedgwick County agreed to provide $2.5 million over five years.
“I’m not sure we have ever given incentives for a company to stay,” Kansas Gov.-elect Sam Brownback says. “We’ve given incentives to recruit companies into the state, but I think this is the first time we’ve given incentives for a company to stay.”
Hawker Beechcraft’s future in Wichita had been uncertain since the summer, when Louisiana began courting the aircraft manufacturer to relocate to Baton Rouge’s Metro Airport. The offer reportedly included hundreds of millions of dollars in incentives.
Louisiana Economic Development Secretary Stephen Moret didn’t dwell on the loss, focusing instead on more than 38,000 new direct and indirect jobs in the state, as well as more than $7 billion in new capital investment over the past three years.
Still, he acknowledged the effect of the economic downturn on the general aviation market.
“When the market recovers,” he said in a news release, “we look forward to reengaging with Hawker Beechcraft’s leadership about potential expansion opportunities in Baton Rouge.”
All square
The first Downtown Development District meeting since funding for the new River Center library survived the Metro Council was held earlier this month. DDD Executive Director Davis Rhorer says the state-of-the-art library will be the “perfect civic component” for the improved North Boulevard Town Square.
While the library issue caused the greatest stir at the Dec. 8 meeting, the council also awarded a $5.7 million contract to Arrighi Construction for the first phase of the Town Square redesign and authorized a contract with Reed Hilderbrand for the design of Repentance Park. About $3.4 million is secured for implementation of the latter project, Rhorer says.
Work converting St. Louis and St. Ferdinand streets to two-way, also part of the Town Square plan, is expected to go out for bid by spring. The Town Square and two-way conversion should be completed by the end of 2011.—D.J.
Behind the numbers
The number of houses sold in the Capital Region during November decreased 35%, when compared with the same period in 2009. There were 377 homes sold last month, according to the Greater Baton Rouge Association of Realtors Multiple Listing Service. That compares with 582 MLS sales in November 2009. The average sale price was up significantly, from $180,046 in 2009 to $209,528.
The size of the decrease in sales is largely attributable to Livingston Parish, where sales dropped from 146 homes to 49 in a year. Darren James of Keller Williams Realty Livingston Partners, who is a former president of Livingston Parish Board of Realtors, blames the sharp drop on three large subdivisions’ selling out of homes. The Lakes at Gray’s Creek, Pine Meadows and Livingston Trace all recently had their supply of properties sold, and no new subdivisions have come on to replace them. The average sale price in Livingston dropped from $157,833 in 2009 to $148,159.
There has been some speculation that the decrease in Livingston home sales was offset in late 2009 by the tax credit for first-time homebuyers. But Aaron Goolsby, an agent with Covington & Associates in Denham Springs and a member of the Livingston Board of Realtors, disagrees. He says homeowners are opting to renovate their houses or to refinance and take advantage of the low interest rates.
“People are cutting back,” Goolsby says. “Three or four years ago, if people had been in a home for a while, they would want to upgrade and go and put the house on the market.”
Hal Walker of McCall Montgomery Real Estate in Denham Springs says the drop in home sales was caused by an overpriced market.
“Post-Katrina land prices went out of sight,” he says. “We’re seeing things getting down to where they were pre-Katrina.” Walker adds that sellers who were asking $110 per square foot on a home are now “taking it and running” when someone offers $95 per square foot.
East Baton Rouge Parish posted a drop in sales, from 309 to 220, but the average sale price was up sharply, from $185,253 to $225,677. Sales in Ascension Parish dropped from 93 to 77, while the average sale price also increased, from $189,237 to $211,700. The other category, which includes MLS sales in parishes such as West Baton Rouge and the Felicianas, saw sales remain stable, from 34 to 31. Through the first 11 months of the year, the number of homes sold in the Capital Region is down 7.6%, from 6,384 to 5,899.—Timothy Boone
Play time
Marge Mackey, who operates one of the largest real estate firms in the Capital Region, is closing her Coldwell Banker Mackey firm and rejoining C.J. Brown.
“I decided, instead of staying on as an owner/broker, to go back to my passion, which is listing and selling houses,” she says, adding that she’s been working for a long time and wants “time to play a little bit.”
Mackey, 80, who started with C.J. Brown in 1971 as an assistant to her husband Ralph, opened her own company in 1975. The office became a Coldwell Banker franchise in 1983 and has grown to 160 licensed agents.
Another factor in her decision is the franchise agreement with Coldwell Banker is ending, and renewal would mean a 10-year commitment. “It was a good time to make a change,” she says.
C.J. Brown is not purchasing Mackey’s business, but it is inviting agents from her firm to join the company. A number of agents have accepted C.J. Brown’s offer. Coldwell Banker Mackey agents in Ascension and Livingston parishes have decided to open independent offices.
“We’re thrilled to have Marge and many of her fine agents join C.J. Brown,” says Rick Haase, president of C.J. Brown/Latter & Blum. “After [her] 35 years of delivering great service to Greater Baton Rouge, we’re happy to be a part of helping Marge move to the next phase in her career.”—T.B.
