Au revoir, Louisiana
If ever the need for Blue Ocean strategies and an Innovation Summit is evident, it is in a new study from the Louisiana State Data Center.
The bad news: Louisiana continues to lose its better-educated residents to other states. The good news: The pace is slowing.
In 2007-08, the state suffered a net loss of 1,147 people over the age of 25 with graduate or professional degrees and another 1,433 people over the age of 25 with a bachelor’s degree. At the same time, the state gained 5,392 people of that age group with some college or an associate’s degree and 3,916 people with a high-school diploma or less.
The biggest losers, in this regard, were New Orleans and Baton Rouge. The Crescent City bid farewell to 3,580 people with graduate or professional degrees and 4,218 with bachelor’s degrees. Even with an influx of well-educated newcomers, that left New Orleans with high net losses [1,235 advanced degrees; 235 bachelor’s degrees]. Baton Rouge, meanwhile, lost 2,172 people with advanced degrees and 3,034 with bachelor’s degrees. When all was said and done, it, too, had net losses of about 1,000 in both categories.
The biggest winners were Lake Charles, whose oil industry likely contributed to the net gain of 183 of those with advanced degrees and 941 of those with bachelor’s degrees, and Lafayette, which had a whopping net gain of 518 people with advanced degrees.
Even so, the outmigration is slowing. LSU Sociologist Troy Blanchard, who crunched the numbers and produced the report, says the losses are about half what they were in the non-Katrina peak years of 2001-02 and 2004-05. What it comes down to, he surmises, is that Louisiana lacks the kinds of jobs that college graduates seek. Says Blanchard: “We’re putting out a good supply of college graduates. We just don’t have enough jobs that require a college degree.”
The demographer credits community leaders with making an earnest effort in dealing with the problem. Louisiana Economic Development, for example, has this year adopted a Blue Ocean strategy, which means going after emerging markets rather than trying to compete for existing ones. Possible target industries include digital media, manufacturing for the nuclear industry and value-added agribusiness. LED Secretary Stephen Moret calls it “the most important economic development strategy project we’ll do while we’re in office.”
And later this month, entrepreneurs, investors and others dedicated to creating an innovation economy in Louisiana will get together for the first Innovation Summit. Participants will consider commercialization of university research, entrepreneurial development, risk capital for new ventures, developing high-growth industries and workforce.
“When I look at the kinds of activities that economic development people are involved in, they are going after high-tech industries,” he says. “So this isn’t just a matter of neglect. They are going after it. I think it’s just going to take time to build enough momentum to stop the losses.”
But he admits that Louisiana also needs to take a hard look at the noneconomic reasons why the highly educated move away; what it is about communities in other parts of the country that make them more attractive.
“Lafayette, for example, has a net increase among people with graduate or professional degrees,” he says. “There may be some noneconomic aspects of Lafayette that make it more attractive. It may be the creative culture; it may be something else. We just have to spend some time getting our heads around the issue and trying to identify specifics.”—Penny Font
Statewide migration
Less than high school graduate
Moved out 9,293
Moved in 11,034
High school graduate
Moved out 16,805
Moved in 18,980
Some college or associate’s degree
Moved out 17,239
Moved in 22,631
Bachelor’s degree
Moved out 12,929
Moved in 11,496
Graduate or professional degree
Moved out 7,815
Moved in 6,668
Bottleneck caps brewers’ dreams
California is truly a Golden State when it comes to microbrews, with more than 200 craft brewers cooking up effervescent suds. In Louisiana, though, you can count small and independent brewers on one hand. Several are in the planning stage, but some of those have been on the backburner for years.
Most regional craft beers come from New Orleans; none are produced in the Capital Region. Why the bottleneck? One issue is distribution; California allows self-distributing, so a brewer can drive around kegs or cases of beer to sell to retailers. In Louisiana, brewers must go through one of a handful of mass distributors—Glazer’s, Crescent Crown, Schilling, Southern Eagle—that deal in precious few local brews.
“It’s really hard for a brewery to get going in a state that does not allow self-distribution but instead forces brewers to go through a wholesale tier,” says Paul Gatza with the Brewers Association in Boulder, Colo., which tracks craft brewing worldwide.
About the closest Baton Rouge has come lately to landing a craft brewer seems to be through Will Lampton, whose self-titled company is listed as in the planning stage on beertown.org, the Brewers Association Web site. Yet Lampton, an attorney in Zachary, says his own personal brewery was really just a nice idea a couple years ago that will never bear fruit.
“We were just very concerned about the initial capital that it would take to start the thing,” he says. “I do have experience in home brewing. People like the idea of owning their own brewery. But when you get to actually looking at really doing it, it’s just too hard.”
His wife, Meredith, chuckles at the memory and says: “That was more of my husband and friend talking. I think life just got in the way.”
Karlos Knott of Arnaudville hopes his Bayou Teche Brewery is cleared for takeoff in November; he awaits a federal brewing license and is negotiating to distribute his Biere Pale, a Belgian-style pale ale, in the Lafayette area and, eventually, Baton Rouge. “We have one that really complements the Cajun and Creole cuisine,” he says.
Knott says he got a serious taste for beer while serving in the Army in the 1980s in Germany; he started home brewing in the mid-90s. “We’re one of the hardest states to do business in,” he says, noting that Texas allows self-distribution and is “booming” with craft brewers.
Kirk Coco, owner of startup NOLA Brewing Co. in New Orleans, knows well the pitfalls of dealing with wholesalers. Disappointed with one distributor, he tried to jump ship and wound up in a battle between two beer sellers.
With Crescent Crown allied with microbrewer-turned-regional powerhouse Abita and Southern Eagle allied with Covington-based Heiner Brau, he decided to try Glazer’s, but now hopes his new deal with Southern Eagle will withstand a legal challenge.
“I had to open a million-dollar brewery right off the bat,” he says. “Most breweries start small. You don’t have to have a distributor until you make 22,000 barrels in California.”
Also listed on beertown.org in the planning stage are Lafitte Brewing in New Orleans, which a spokesman says might open “soon;” and Red River Brewing in Shreveport, which seems to be in limbo. Things could be worse here, though. Mississippi is even more watered down when it comes to full-bodied beers. Gatza says the state has just one microbrewery.— Todd R. Brown
Tried and true
The Better Business Bureau of South Central Louisiana has named Business Report a business ethics award winner. The company will receive the 2009 Douglas Manship Sr. Torch Award for Ethics in Business in the category of companies with 11 to 99 employees. The Manship Awards are presented to businesses that exhibit the highest ethical standards of behavior toward customers, suppliers, users, shareholders, employees and the community. An independent panel of judges selected Business Report from a field of outstanding businesses. Other winners this year are: Ashco Exteriors Inc., 10 employees or less; Wright & Percy Insurance, 100 to 300 employees; and Capital One Bank, 300 employees.
Tell it like it is
After a chaotic year in the global market, Business Report is bringing together regional leaders for its 27th annual BizTech Expo on Oct. 7-8 at the River Center Exhibition Hall. Economist Loren Scott will give his 2010-11 economic-model predictions at the Top 100 Luncheon. The BizTechnology Symposium on Oct. 7 will feature a panel discussion of experts from Microsoft, Sage and Venyu. And the Louisiana CEO Forum on Oct. 8 will feature guest speakers Marty Mayer of Stirling Properties, Nanette Noland of The Powell Group, Dennis Stine of Stine Lumber, David Voelker of Frantzen, Voelker & Conway Investments and Richard Zuschlag of Acadian Ambulance. For more information, go to businessreportexpo.com.
ExecutiveSpotlight
Chuck Sanchez
Owner/creative director
STUN Design and Advertising
Hometown: Baton Rouge
Chuck Sanchez is the human embodiment of fun. He’s a free-spirited, Guitar Hero-dominating, soccer-wielding dad, husband, entrepreneur and former Piggly Wiggly mascot. And when Business Report sought out Sanchez to be its next Executive Spotlight, he was hunting moose in Colorado. It seems there is very little that Sanchez can’t do. Of course, he’ll tell you that everything he has accomplished, every skateboard he has conquered and every client he serves well is because of the support of his family. “I wouldn’t be anywhere right now without them,” he says. If that’s true, Baton Rouge might need to watch out for the next generation of Sanchez children. With a passion similar to their father’s, they are sure to carry on his master-of-all-trades ability.
To read more of Sanchez’s Q&A, click here.
BookReview
We Were Merchants
Author: Hans J. Sternberg with James E. Shelledy
Publisher: LSU Press
Year: 2009
Pages: 141
Within the pages of We Were Merchants, by Hans J. Sternberg with James E. Shelledy, is the subtle creak of hardwood floors, the bustle of footsteps heard from a second-story office and the cold, crisp bubbles of a glass-bottle Coca-Cola. It’s the history of the Sternberg family’s immigration to America and the rise to prominence in Louisiana’s retail industry through the Goudchaux’s and Maison Blanche department stores.
It’s also a history of Baton Rouge and its people. To native Baton Rougeans, Goudchaux’s was a fixture in the community. Residents shopped the Main Street location for suits, winter coats, wedding gowns and sterling silver serving sets. It was a “near-magical wonderland in the retailing landscape,” Sternberg says in the book’s account of the birth and death of his family’s business.
In the foreword, Gov. Bobby Jindal recalls going as a student going with his mother to the store for winter clothes and as an adult to pick out his wedding china. But the store was more than a place to shop, Sternberg says, it was a place where history played out.
Sternberg details how Goudchaux’s played a role in the local civil-rights movement, how his father’s own persecution and escape from Nazi Germany made him a man who didn’t believe in treating people as less than human because of their skin color or religion. That belief, though, didn’t always prove to be profitable for the family business as Ku Klux Klan sentiments ran deep at times.
More than anything, Sternberg reveals how his father fulfilled his own piece of the American dream through a strong business ethic and respect for his customers. They were not, as Sternberg says, “faceless charge cards.” His book also explains the painful decisions that must be made as a changing economy becomes too much for a family-owned business to handle. The story, he says, is his declaration of love to a “period when browsers and buyers alike were greeted and remembered, when they were treated like visiting royalty.”—Olivia Watkins
FastForward
Forethought
Three years ago, Thinkstream CEO Barry Bellue told Business Report he wanted to build a global high tech company from Baton Rouge [“I want to build a damn empire,” May 23, 2006] that provided software allowing various databases to work together. But, he said, Louisiana politics kept getting in the way. “The people who can give it visibility will not get near me,” Bellue said at the time.
Thinkstream, founded in the late 1990s, was dogged by investigations and controversy throughout its early years. In 2004, Bellue went after a $1.5 million state contract put out by the Louisiana Integrated Criminal Justice Information System board. A committee gave the highest score to competitor Templar Corp., but the full board gave the contract to Thinkstream, although that decision was later nullified. Bellue sued Templar and several board members, including chairwoman and state Supreme Court Justice [now Chief Justice] Catherine Kimball, alleging they conspired to defame him, derail the contract award and prevent him from getting future state contracts. The suit eventually was dismissed.
“It really should have been the death knell for my company,” Bellue says. “If I had it to do again, I certainly would have tried not to antagonize anyone in the process of doing good.”
Though its momentum might have been slowed by controversy, Thinkstream has dealt successfully with the state since the new administration took over, including a $6.5 million contract with the Department of Safety and Corrections to replace the agency’s computerized criminal history system. Already, more than 300 criminal justice agencies statewide are connected by Thinkstream, including every sheriff’s office and most city police departments, he says.
“You might have asked me this a year ago, and I’d have said, ‘Hell, I don’t know,’” he says. “Now I’m making money, so I’d have to say, ‘Heck, it was a great idea.’”
Bellue hopes to take the company public next year.—David Jacobs
Fortnight Oct. 7-Oct 20
On this day in 2008? – October 8 – A Daily Report poll revealed that the majority of respondents did not believe the national economic crisis would affect the bond-issue vote. The split in opinions among readers was almost equally divided in support of and against the then $989 million bond issue—only nine more respondents planned to vote against it than for it. As the modified bond issue, now with a price tag of $901 million, approaches a possible Nov. 14 vote, the debate is laden with unanswered questions. To read more about the bond issue, click here.
On this day in 2007? – October 9 – A report from Corporate Crime Reporter revealed that Louisiana was the most corrupt state in the nation, according to government data. For every 100,000 Louisiana residents, there were 7.67 public-corruption convictions. Two years later, the state has undergone an intense set of ethics changes trumpeted by Gov. Bobby Jindal as vastly improving the state’s national perception.
October 12 – The state’s ?largest ?lobbying ?firm, Louisi?ana Association of ?Business & Industry, is hosting a benefit golf tournament for adopted-school partner Northdale Magnet Academy and Teach for America at the University Club. There is a $500 entry fee per team. More information is available at ?LABI.org.
October 12 – Cloud computing, social networking and green computing will be among topics at the two-day Council of Information Service Directors Technology Conference and Expo at the Crowne Plaza Hotel. Representatives from higher education, state agencies and the private sector attend the event, which is sponsored by the Council of Information Services Directors. More information is available from Danny Ragan at 925-4308.
October 16 – In a year burdened with budget cuts for state agencies and nonprofit organizations, the Louisiana Association of Nonprofit Organizations has themed its annual conference “Mission Possible.” The one-day gathering will focus on issues such as fund development, risk management, volunteerism and civic-engagement cancellations. Details about the conference are available by calling 925-2711.
On this day in 2007? – October 17 – Economist Loren Scott (above) predicted a “solid” outlook for the Baton Rouge metro area. He also predicted that the nation would undergo a soft landing as the housing bubble burst and energy costs rose. While the national and international economy came crashing down in 2008, Baton Rouge remained relatively insulated. Scott will again be giving his economic predictions at the BizTech Expo Top 100 luncheon on Oct. 7 at the River Center.? For more information, visit ?businessreportexpo.com.
BusinessOfPolitics
Watchdogs
Do you want to know who is the most pro-business lawmaker in East Baton Rouge Parish? New rankings from the Louisiana Association of Business and Industry might help. LABI compiles a legislative scorecard each year that shows how often lawmakers stand with them on key business issues. “Many legislators talk the talk, but when it comes time to vote, we sometimes find they are less concerned about your business than they claim,” LABI expressed in its latest annual tally. The group also offers a caveat to mull over when viewing this year’s scorecard: “Because voting records do fluctuate from session to session, no single year’s voting record should be considered in isolation.”
When it comes to the 2009 regular session, which adjourned in June, Sen. Dan Claitor, Sen. Dale M. Erdey and Rep. Clifton R. Richardson each scored 100%. The EBR lawmakers who were the most independent of LABI’s influence were Reps. Avon Honey and Michael Jackson, who both notched 25% tallies. Specifically, LABI checked to see if lawmakers voted against a bill that would have righted alleged acts of pay discrimination and in favor of other bills regarding substantiating lawsuit claims.
Crustacean crisis
Since Gov. Bobby Jindal created the Louisiana Shrimp Task Force in July, two subcommittees representing harvesters and processors have endorsed a list of ideas that could result in legislation during next year’s regular session. Commercial fishermen have been protesting and lobbying elected officials to do something about the low price of shrimp, which is chiefly being driven by imported product.
Processors, for instance, have voted to request legislation that would increase the shrimp excise tax by 25 cents a barrel to go toward marketing efforts and to require restaurants to disclose where the shrimp on their menus comes from. Harvesters, meanwhile, want the state to increase funding for testing imports for health reasons, a well-known argument mounted against foreign shrimp producers, and some have even suggested that the shrimping industry be moved from the Department of Wildlife and Fisheries to the Department of Agriculture, which oversees the crawfish industry.
“That’s just not going to happen,” Rep. Gordon Dove, R-Houma, says of the transfer. Dove, who chairs the House Natural Resources Committee, would be directly involved in any such legislation. He predicts the 2010 session will be a busy one for shrimp interests. “You’re going to see us doing everything we can do on a state level,” Dove says. “And I’m pretty sure you’re going to see a proposal to raise the excise tax from 15 cents to 40 cents to help out the industry, if the industry wants it.”—Jeremy Alford
Movin’ on up
Louisiana ranks No. 44 on the Forbes magazine list of the “Best States for Business,” up from No. 49 the past two years. “Louisiana is making a comeback from the damage inflicted during hurricanes Katrina and Rita in 2005,” the magazine says. “Louisiana launched a workforce development reform plan last year that borrows heavily from labor programs in Texas and Georgia, both among our top 10.” This is the highest ranking for Louisiana in the Forbes survey, which was launched in 2006. Ranking factors include business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life.
Gov. Bobby Jindal and Stephen Moret, Louisiana Economic Development secretary, were pleased with the state’s progress. “Improving Louisiana’s business climate has been one of our top priorities since taking office last year,” Jindal says. Moody’s Economy.com provided much of the data.—D.J.
Out of this world
The Louisiana Art & Science Museum will play host to the International Planetarium Society’s biennial conference in 2012. The conference will take place from July 22-26 at LASM, River Center and other downtown venues. The IPS is a global association of planetarium professionals with nearly 700 members from 35 countries, LASM says. Baton Rouge was selected over San Francisco and Saint-Etienne, France.
The Irene W. Pennington Planetarium was able to compete to host the conference because its technology ranks among the best in the world, while the convenience of its downtown location helped seal the deal, officials say. The conference is expected to have an economic impact to Baton Rouge of nearly $500,000. More than 400 international delegates and their families are expected to attend.—D.J.
ONTHEBEAT
Going down? East Baton Rouge Parish sales tax collections were down for the fourth consecutive month in July. Businesses across the parish collected nearly $12.2 million in sales taxes in July, down 4.45% from the $12.7 million collected in July 2008, according to figures from the city-parish revenue department. Vehicle sales taxes were down even further, coming in at nearly $931,000, almost 17% lower than the $1.1 million collected in July 2008.
New neighbors: A new report by a moving company found the percentage of people moving into Louisiana increased during the first eight months of the year. The Mayflower Customer Relocation Survey found that 56.9% of the moves through the end of August were people coming into Louisiana, as opposed to 43.1% moving out of the state.
Better than you: Economic activity in Baton Rouge continued to increase in 2008, while growth of the U.S. gross domestic product slowed down. The value of all goods and services produced in metro Baton Rouge was $27.7 billion in 2008, a 1.1% increase over the year before, according to figures from the U.S. Bureau of Economic Analysis. That’s better than the 0.8% increase reported in Capital Region GDP in 2007. At the same time, the GDP in U.S. metro areas was up 0.8% in 2008, down from the 3% growth in 2006 and the 2% increase in 2007.
Excellent! The Louisiana Business & Technology Center at LSU has received an award for excellence in economic development from the U.S. Commerce Department. LBTC, LSU’s business incubator, was presented with the 2009 Excellence in Economic Development Award for Excellence in Rural Economic Development.
Up, up and away: Louisiana was one of five states where real median household incomes went up in 2008, according to a report from the U.S. Census Bureau. The median income was $43,733 in 2008, compared with $42,135 in 2007. Despite the increase, Louisiana had the 10th-lowest income of any state, below the national average of $52,029. The other states to see an increase in median household incomes were Kansas, New Jersey, New York and Texas.
Live from Louisiana: Louisiana FastStart, which provides customized worker recruitment and training, should be able to start accepting applications from companies by January at the latest, executive director Jeff Lynn says. The program is currently working on 11 pilot projects, but might do as many as 150 to 200 projects per year once fully ramped up. “This program is turning workforce from a concern many companies have, to a top selling point that we have as a state,” LED Secretary Stephen Moret says.
New territory
Keller Williams is one of the biggest residential real estate firms in Baton Rouge and the U.S., with 190 agents in the Capital Region and more than 80,000 agents across the country. KW Commercial had a soft launch nationwide in November 2008 and opened locally in the spring. David Vercher, a director with the local KW Commercial office, says the company plans to leverage its successful residential business by swapping leads between residential and commercial agents. KW will work on things such as multifamily, industrial, office and investment properties. The firm has six agents locally and plans are to build up on the retail side. The collaboration between residential and commercial agents, along with KW’s “bottom-up” business model, which stresses education, led Steve Legendre to join the company. Legendre has been a commercial real estate agent in Baton Rouge for 14 years, the last 11 with Sealy & Falgoust. “I like the emphasis on education,” he says, adding that he’s noticed the local market has been thawing out a bit. Vercher says he’s received more calls about activity in the past month, but noted he had been busy for several months trying to launch the commercial division locally.—Timothy Boone
Hey bidder, bidder …
Bob Dean is putting some of his holdings, including Dean Tower and the Commerce Building (below), on the auction block. Dean says he is working with Williams & Williams, an international firm, to sell the properties during an auction in mid-November. He says the time is right to sell because the Baton Rouge market is one of the best in the U.S. “This will bring in people who [wouldn’t] normally come into the Baton Rouge area,” Dean says.
The 180,000-square-foot Commerce Building on Laurel Street will be up for auction, along with Dean Tower, an 83,000-square-foot office building on Florida Boulevard, and an eight-story building at 339 Florida Street. Two warehouses on Choctaw Street also are up for auction.
Dean will put 55 acres of undeveloped land at Plank Road and Main Street in Zachary on the market, along with a 55,000-square-foot tract bordered by Eighth, Ninth and Laurel streets. Three Natchez, Miss., properties will be listed, including a hotel and a bed and breakfast. Dean says he might still add two or three properties before the auction date. Several of the properties will be sold at absolute auction, meaning they’ll change hands regardless of price.—T.B.
