Turnabout is fair play
Sometimes an about-face is better than fighting to the bitter end. That’s the message Mayor Kip Holden sent earlier this month when he dissolved a special taxing district for which he had argued passionately in previous weeks.
Holden and his administration were adamant that a special taxing district that excluded Baker, Central and Zachary was the will of those municipalities as well as the best way for voters to pass an $867.5 million capital improvements package.
With the addition of those cities to the taxing district, the price tag of the bond issue has climbed to $901 million. The new total includes $33 million in drainage projects that had been included for the three cities in the 2008 plan that was rejected by East Baton Rouge Parish voters.
What accounts for the turnaround? Holden says a unanimous vote on a resolution asking for inclusion from the City Council of Baker and a conversation with Zachary Mayor Henry Martinez changed his mind. That made it more difficult for Holden to argue for exclusion.
“When you have a community that unanimously states, ‘We want to be included in the bond issue,’ that’s a major statement,” Holden says. “You cannot take that lightly.”
The vocal public outcry against the special taxing district seemed to be much larger for which the administration had prepared. If you include a motion by Metro Council member Joel Boé calling for the district to be dissolved—and having the votes to back it up—then the sum is that Holden was forced to make a decision in line with the perceived will of the people.
Holden should have no problems getting the bond issue on the Nov. 14 ballot. Almost every member of the Metro Council says parish voters should decide the issue. But there’s still a question of which form of the proposal voters will see.
Holden contends the entire bond issue should be presented as one package—infrastructure, drainage and economic development. But the opposition that Holden faced on the Metro Council about the special taxing district might foreshadow opposition for the take-it-or-leave-it approach, political consultant Roy Fletcher says.
“Then again, he might say, ‘I gave you an out on the special taxing district, and now I want to get the whole package on the ballot,’” Fletcher says. “That wouldn’t necessarily be a bad trade to make.”
Splitting the bond issue into parts likely would mean victory for the infrastructure and drainage items and defeat for the economic development. Holden’s administration, which touts the Alive project as the economic driver of the package, does not want to see a split occur.
“I think the public sentiment is that they would rather have a menu option,” Fletcher says. “But leadership sometimes goes beyond public sentiment.”—Emma James
Happy hour
Do you have a stiff drink just before you open your 401[k] statement? If so, you’re probably not drinking alone. While the alcohol business isn’t recession-proof, package booze still sells when the economy is tanking.
During every recession since 1970, the rate of growth of the liquor business has slowed significantly, says David Ozgo, chief economist for the Distilled Spirits Council of the United States, which represents suppliers. Sales volume drops, and so does value as customers trade down to cheaper products.
Going out is one of the easiest things for people to cut. So when consumers are dining out less, revenue for the booze business takes a hit. At the same time, sales of package alcohol at stores tend to increase a little, as consumers don’t want to quit drinking entirely.
“But unfortunately, it’s not a one-to-one tradeoff, so that’s what leads to the slowdown in our growth rate,” Ozgo says. “That’s what makes us recession-resistant, not recession-proof.”
He says revenue for his industry grew 2.8% in 2008. That’s down from 6% the year before, but still not bad when the rest of the economy is shrinking. Liquor has been gaining market share from beer over the last several years, Ozgo says, although that could be a function of changing consumer tastes.
Ron Lewis (above), owner of Maxwell’s Market, which sells beer and wine but no liquor, says his sales have been steady. “I haven’t noticed any big change,” he says.
Charles Calandro, who handles alcohol purchases for Calandro’s Supermarket on Government Street, has noticed a shift. Liquor and red wine sales are always a little slow during the summer, when people tend to drink more beer and white wines. But sales of more specialized items, like wines that are more than $30 a bottle, are unusually slow.
Paul Riley, general manager of Martin Wine Cellar in Baton Rouge and Mandeville, says sales slipped a little recently but have rebounded since the spring.
“People were consuming just as much, but buying less expensive wines,” Riley says. And to some extent, that trend continues. Riley says he’s moving a lot of cases, however, and after some slow months business has picked back up since March.
“People were cautious,” he says. “They didn’t know what was happening [in the economy]. There was so much uncertainty. I think now they realize, ‘Hey, it’s not as bad as we thought it was going to be.’”—David Jacobs
Head of the class
Now in its 25th year, the Baton Rouge Area Chamber Leadership program has ?announced its next class of community leaders and innovators. The 2009 class will focus on developing future leaders through innovative problem-solving and teamwork training.
• Melissa Lewis Anderson, Our Lady of the Lake Foundation
• Jeffrey Barbin, Phelps Dunbar
• Judy Bethly, Volunteers in Public Schools
• Deidria Bolden, Louisiana Workforce Commission
• Renee Peggy Craft, United Methodist Hope Ministries
• Diane Craig, Southern University
• Lori Adams Denstel, Woman’s Hospital
• Julia Dickinson, Junior League of Baton Rouge
• Barbara Anne Eaton, Burns & Co. Realtors
• Vicki Ellis, Heritage Ranch
• Jori Ann Erdman, LSU School of Architecture
• Cornelia Fabre, Greater Baton Rouge Industry Alliance
• Richard Flanagan, Wright & Percy Insurance
• Carol Gordon, Capital One Bank
• Bridgette Hardy, Louisiana Department of Culture, Recreation & Tourism
• Greg Hodges, Hancock Bank
• Lael Holton, City-Parish Planning Commission
• Dwayne Honoré, D. Honoré Construction
• Verni Howard, Hancock Bank
• Fairleigh Jackson, Boys & Girls Club of Greater Baton Rouge
• Clara Joseph, East Baton Rouge School System
• Laura Larkin, Arts Council of Greater Baton Rouge
• Mark Lubbock, Louisiana Data Systems
• Meg Mahoney, Baton Rouge Area Chamber
• Erica Malone, Boys Hope Girls Hope of Baton Rouge
• Camille Manning-Broome, Center for Planning Excellence
• Kirk Maynard, United Community Bank
• John Montalbano, Hannis T. Bourgeois
• Dena Morrison, Family Road of Greater Baton Rouge
• Clinton Prescott, Blue Cross and Blue Shield of Louisiana
• Karen Profita, Capital Area United Way
• David Roberts, Louisiana Office of Student Financial Assistance
• Andy St. Romain, Jones Walker
• Donald Shaw, Baton Rouge General Hospital
• Michael Spaulding, Ochsner Health System
• René Taylor, Family Service of Greater Baton Rouge
• Allison Traxler, Volunteers of America Greater Baton Rouge
• Joseph Wild, Domain Design Architecture
• Anne Marie Zima, Capital One Bank
40something
No, it’s not a mid-life crisis. It is Business Report’s annual Forty Under 40 awards to the young men and women who are making the Capital Region a better place to live, work and play. They might be doctors and lawyers, educators and entrepreneurs, community leaders and government leaders, architects and accountants or environmentalists and engineers.
More than 180 of the Capital Region’s best and brightest professionals under 40 years old were nominated last year. You can nominate someone or submit your own application. Nominations/applications will be accepted online only through 5 p.m. on Sept. 25. Click here for a nomination form.
ExecutiveSpotlight
Garret Graves
Director
Governor’s Office of Coastal Activities
Hometown: Baton Rouge
The Graves family doesn’t ride for 30 miles when Ralston is on his bike and Calla is in the seat on her dad’s bike. Instead, Garret Graves, the director of the Governor’s Office of Coastal Activities, saves those rides for when the children are in the bike trailer. “We talk and laugh for 30 miles,” he says. “I could do it all day.” But it’s no wonder that Graves enjoys spending so much time outside with his children, no matter if the activity is biking, hiking, climbing, paddling or running. He’s been working to preserve and protect Louisiana, especially the coastal regions, for the last several years, securing as much as $24 billion in authorizations and appropriations for recreation and hurricane preparation.
Want to read more from Graves’ Q&A? Click here.
BookReview: The Green Business Guide
Author: Glenn Bachman
Publisher: Career Press
Year: 2009
Pages: 287
One night last week, you saw something you’d never noticed before.
You happened to stay after work for an hour, and the office cleaning crew came in before you left. You watched, dumbfounded, as they hauled away bag after bag of trash. Paper, cups, soda cans and printer cartridges, all to the Dumpster.
You’ve been doing all you can at home to be greener. So why can’t you do the same at work? You can—and it won’t be easy—but with The Green Business Guide by Glenn Bachman, corporate greening is at least possible.
Bachman says there are three trends that affect going green in your business: a global economy defined by “relatively free exchange of goods,” a change in the health of the planet and a growing worldwide population. Within the next 20 years, it’s projected that there will be 8 billion people on Earth.
Looking for a lighthearted, fun way to go green at work? You won’t find it here. The Green Business Guide means business, in more ways than one.
There’s no “dumbing down” in this book. Bachman uses technical terms and [gasp!] advanced math-based concepts to help you find the best and most efficient ways to make your corporation greener.
Some of the ideas are new but common sense [let shareholders know what’s in it for them], some seem annoying [if someone sends you a document, single-sided, call and request that they not do it again] and some feel nitpicky [use only narrow-ruled notebooks]. Still, there’s nothing saying you can’t pick and choose your ideas to do what feels right for your business.
If you’re a greenthusiast, a greenback or a sprout just starting out in business, pick up a copy—just don’t think about how “green” it is to purchase a 287-page book.—Terri Schlichenmeyer
FastForward
A faulty setting
When Business Report took an in-depth look at LSU’s Pennington Biomedical Research Center in “Baton Rouge’s Hidden Gem” [Sept. 9, 2008], concern over adequate funding was evident. The center, according to Dr. Claude Bouchard, Pennington’s executive director since 1999 who announced earlier this year that he would be stepping down as soon as a replacement could be found, was receiving about $17 million in state funding, with a one-time infusion of cash from state coffers, to pay for a major expansion.
But, Bouchard said, Pennington remained grossly underfunded in comparison to competition institutions around the country, including Research Triangle Park in North Carolina and a campus of the Scripps Research Institute in Florida. “We did not have many competitors way back. Now we do, and they are well funded,” he said. “And they are coming to be predators, even here. They want our people.”
One year later, the state’s financial crisis and Gov. Bobby Jindal’s budget cuts mean Pennington is facing an even tougher battle to remain among the best of the best. Bouchard’s revised 2009-10 budget includes cuts to administrative services—which he says are vital to retaining the center’s top talent. Cutting essential services, he says, “will ultimately impact the center’s research productivity and success.” Pennington also eliminated unfilled research and professorial positions, and closed five of the 53 laboratories currently in use.
The cuts to Pennington’s funding, like most other cuts made across higher education, will be detrimental to the long-term capacity of the facility, Bouchard says. “If PBRC is to be the economic engine that many advocate, flexible funds for scientists to explore innovative ideas must be increased,” he says, “not decreased.”
Budget cuts aside, Pennington hasn’t slowed down. A recent Time magazine article highlighted the work of three researchers, Timothy Church, Hans-Rudolf Berthoud and Eric Ravussin. The trio’s research and conclusions on the relationship between exercise and weight loss are stirring up controversy and energizing Pennington’s place in the research community.
Still, the center will have to address the funding issue again later this year as the clinic expansions currently under construction near completion. “[Fuel] consumption will increase significantly,” Bouchard says.
That means the center will need to find more places to cut its budget or will need to seek additional funding from alternative sources.—Olivia Watkins
Fortnight Aug 26 – Sep 8
August 26 – Thanks to a $675,000 grant from NeighborWorks America, a nonprofit organization that provides financial and logistical assistance to community revitalization and affordable housing, the Baton Rouge Area Foundation is investing more in clearing home titles and underwriting predevelopment work in Old South Baton Rouge. BRAF, along with the Center for Planning Excellence and the Old South Baton Rouge Partnership Board will speak to the community from 9:30 to 10:30 a.m. at the McKinley Alumni Center about the project. For more information, visit braf.org.
August 26 – On this day in 2008 – Business Report covered Mayor-President Kip Holden’s pursuit of re-election in “An immovable force.” George Kennedy, a local consultant, said the only way Holden’s re-election bid would be derailed was “if the world [came] to an end.” One year later, Holden won the election, but is still fighting to push through his bond issue. Read more about the mayor and the capital improvements package above.
August 26 – The Louisiana Tech Park will be holding a “Digital Interactive Media Tax Credit” seminar at 11:30 a.m. The discussion, featuring Kean Miller attorneys Erich Rapp and Phyllis Sims, will explain benefits and qualifications for the tax credits. For more information, e-mail gen@latechpark.com.
August 26 – The three-day 2009 Smart Growth Summit will be held at the Old State Capitol and the Manship Theatre at the Shaw Center for the Arts. Topics include international water planning, transportation, food policy and Smart Growth as a part of the global economy. For more information, visit planningexcellence.org.
August 28 – On this day in 2008 – Business Report reported on preparations for Hurricane Gustav. At the time, a research associate with LSU’s Hurricane Center, Dane Dartez, said that “a direct hit or near hit on Baton Rouge from a powerful Hurricane Gustav would not be catastrophic, though it would be a mess.” Gustav did cause widespread damage and extended power outages throughout the Capital Region. To read more about Gustav one year later, click here.
September 7 – On this day in 2007 – A meeting for elected officials in the five-parish region was held for the Baton Rouge Loop project. Then expected to cost about $4 billion, the loop has been a contentious issue for the past two years. Officials now say they are considering making the loop a toll road operated by a private entity.
Business of Politics
Silver lining
First, the bad news: According to estimates offered by the state, the next three fiscal years, through 2012, will result in an unprecedented, collective $5 billion shortfall.
Unbelievably, there is good news as well: A study recently released by the American Legislative Exchange Council ranks Louisiana’s economic outlook 18th out of 50 states. The ranking is up from 21st in last year’s study.
In its 2009 report, the American Legislative Exchange Council ranked Louisiana No. 1 or tied for No. 1 in categories that included Recently Legislated Tax Changes, Right-to-Work” laws and Estate/Inheritance Tax Levied. The state finished in the top 10 for Property Tax Burden rates and Number of Tax or Expenditure Limits, 11th for Top Marginal Personal Income Tax Rate and 12th in Top Marginal Corporate Income Tax Rate.
The report, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, offers a bright spot in an otherwise rotten economy. “The top performing states keep taxes, spending and regulatory burdens low, while the biggest losers in the book tend to share similar policies of high tax rates, unsustainable spending and regulation,” said Jonathan Williams, co-author of the council’s publication. “State governments that believe they can bring about economic recovery by growing government and increasing taxes are sadly mistaken.”
On the attack
Rep. Steve Carter, a Baton Rouge Republican, recently was recognized as Legislator of the Year by the Southwest Chamber for his efforts to pass a package of school board reform bills aimed at improving the quality of Louisiana’s public education system. Among the more controversial pieces of that legislative package was a micromanagement school board measure that fell six votes short of passing the House. Carter says it was a bitter defeat, but it will be reintroduced next year. “We weren’t successful this year, but we will be back,” he says. “I’d ask those legislators who weren’t with us last time to consider supporting us next time.”—Jeremy Alford
Hot Inc.
For the second year in a row, 14 Capital Region companies have made Inc. magazine’s list of the 5,000 fastest-growing businesses in the country. Garcia Roofing and Sheet Metal, owned by Gabriel Garcia (right) was the highest-ranking local business at No. 844 after recording 353% revenue growth from 2005-08. Louisiana Roofing Supply, a separate company that serves as a supplier to Garcia Roofing, was No. 845 with 353% revenue growth.
Other local businesses that made the list are: Arkel International at No. 1,024, Edgen Murray at No. 1,057, General Informatics at No. 1,179, Medical Management Options at No. 1,710, ShoppersChoice.com at No. 1,796, The Newtron Group at No. 2,418, Raising Cane’s Chicken Fingers at No. 2,616, SRI Telecom at No. 2,823, Turner Industries Group at No. 2,913, D. Honoré Construction at No. 3,901, Starmount Life Insurance at No. 4,316 and Environmental Waste Solutions, which was tied for No. 5,000. Overall, 36 Louisiana companies made the list, led by iSeatz of New Orleans, which was No. 67 after experiencing 1,984% growth.—Timothy Boone
Battle rage
The battle between opposing parties in the alleged Stanford Financial Group Ponzi scheme is heating up. Stanford Receiver Ralph Janvey wants to claw back funds from innocent investors, interest payments and principal they might have taken out. The Securities and Exchange Commission, on the other hand, completely disagrees. This has left the two sides [the SEC is joined by many attorneys representing Stanford investors] in a sparring match.
While U.S. District Court Judge David Godbey sided with the SEC on one matter by not allowing Janvey to go after principal investments, he left the door open for Janvey to pursue cash equal to interest payments investors received.
Phil Preis, an attorney with Preis Gordon, also has been pushing to stop Janvey, particularly when it comes to net losers, investors who lost more money than they were able to take out. Preis filed a cross appeal in response to Janvey’s appeal and in support of a supporting motion filed by the SEC, which was comprised of the strongest negative comments about Janvey to come out of the debate since February.
The court is scheduled to hear oral arguments on the matter on Nov. 2. At that time, Janvey will again claim that he has the right to take back principal investments from innocent Stanford investors, as well as any interest payments.—O.W.
ONTHEBEAT
Kickoff: Regular bus service between LSU and downtown has started. The Tiger Trails Transit make six regular stops downtown: Third Street and North Boulevard, Third and Florida streets, Third and North streets, State Capitol, Shaw Center and Pastime Lounge. The buses run from 7 a.m. to 5:30 p.m. on weekdays, making stops every 20 to 30 minutes at the pickup locations. Downtown officials are looking to add special routes, such as night or LSU football game-day shuttles.
Get low: A new report finds that Baton Rouge and Lafayette rank low for small business bankruptcies. The cities were included in an Equifax report that listed the 15 metro areas with the fewest small business bankruptcies. The report was based on comparing small business data and bankruptcy filings from June 2008-June 2009.
On the back burner: Plans for a Perkins Rowe location of Camellia Grill have been postponed for the time being, say officials with the New Orleans landmark. The Baton Rouge location was scheduled to open by the end of the year and would have been the mirror image of Camellia Grill on Carrollton Avenue. Perkins Rowe faces foreclosure after the development failed to make payments on its $170 million loan.
Tampa-bound? The college football season doesn’t kick off for another week, but that hasn’t prevented ESPN.com from predicting bowl matchups. Writers Mark Schlabach and Bruce Feldman are in agreement that LSU will play Illinois in the Outback Bowl on Jan. 1. If the prediction comes to pass, it would be the Tigers’ first appearance in the Tampa, Fla., game since a 23-10 loss to Syracuse in what was then called the Hall of Fame Bowl in 1989.
Hold up: Developer David Slaughter has decided to “briefly delay” bringing his controversial Capitol Lofts apartment development to the Historic Preservation Commission “until further agreements may be reached,” according to an e-mail sent to various city-parish officials and activists. The commission, which must approve any new development or demolitions within the Spanish Town historic district, had been scheduled to discuss the proposal this month.
Ticket to ride: Parking on the streets of Spanish Town between 6 a.m. and 6 p.m. will be a traffic violation without a pass once the neighborhood’s new parking district gets off the ground later this year. Residents who show vehicle registration and proof of residency will be able to buy a one-year pass for $5 from the city-parish Inspection and Permit Office. Temporary four-month passes will be available for $2.50 for residents or their guests.
Milking it for all it’s worth: Kleinpeter Farms Dairy now is selling its milk and ice cream in grocery stores in Alexandria and Marksville, the first time the dairy has left the Interstate 10/12 corridor. Kleinpeter plans to set up a central Louisiana substation to improve delivery of fresh dairy products and will hire six employees in the area over the next six months.
Symbolism: The Shaw Group has changed its ticker symbol on the New York Stock Exchange. The Baton Rouge-based company will be listed as “SHAW,” replacing the “SGR” symbol. J.M. “Jim” Bernhard Jr., Shaw’s president and CEO, says in a statement the change will link the stock listing with the company’s identity and help clients better identify the business. Bernhard and Shaw officials rang the opening bell at the stock exchange on Aug. 21 to mark the change.
