Mixed signals
There is a dull light seeping through the floor-to-ceiling window in this corporate office. Though the skyline of Baton Rouge is visible—a crane filling in floors for the new 19th Judicial District Courthouse on North Boulevard, scaffolding strapped to the side of St. James Episcopal Church, construction still in the infantile stages at the soon-to-be renovated Hotel Indigo—the city’s future is hazy.
Maybe it’s just a breeze blowing south from the chemical facilities on downtown’s northern edges. Maybe it’s the beginning of the city’s own economic downturn. But no matter how the picture of the Capital Region might look, there are mixed signals as to how it is faring.
Baton Rouge has been a favorite in many national polls on economic activity throughout 2009. Forbes, Brookings Institution and economists have praised the region for holding strong while the rest of the nation plunged into dark periods with increasing unemployment and foreclosures, and plummeting real-estate values. But for all the cooing at Baton Rouge’s positive signals, there are just as many negative ones popping up in the facts and figures of the third and fourth quarters that 2010 will have to sort out.
Forbes praised the city in April 2009, ranking it 27th on the list of 30 best places in the country for jobs. Then came kudos for one of the city’s biggest sectors, education, with LSU’s E.J. Ourso College of Business ranking 55th overall for based on graduates’ return on investment. And in the past month, the magazine had more good news about the Capital City, saying it has the 10th-fastest-recovering economy of the 100 largest metro areas the country, and that it was 16th on a list of “best-bang-for-the-buck cities.”
All that praise prompted Baton Rouge Area Chamber President/CEO Adam Knapp to say the recognition told “a story about a strong competitive position nationally.”
But for all the praise Baton Rouge has received in 2009, there have been some disconcerting signs. The biggest is IEM’s decision to relocate its headquarters to Research Triangle Park near Raleigh, Durham and Chapel Hill, N.C. Though the move seemed to surprise the business community, city and state officials acknowledged they’d been working for some time to keep the disaster-management consulting firm.
“This highlights the need for us to aggressively market Baton Rouge,” said Mike Futrell, the city-parish’s chief administrative officer. “It’s disappointing to lose a home-grown company that started with one employee that owes a lot of success to the Baton Rouge community.”
Another negative indicator is the dramatic decline is sales-tax collections in East Baton Rouge Parish. According to figures released in mid-December, collections were down 22.4% in October when compared to collections the year before. And while Mayor Kip Holden blames that decline on the aftermath of Hurricane Gustav—with extra spending on construction and supplies—there remains roughly a 5% decline in collections in a 10-month comparison from 2008 [pre-Gustav] to 2009.
The Louisiana Retailers Association isn’t too worried, either, saying Black Friday sales last month exceeded their expectations. Still, LRA Executive Director Dawn Johnson says, “I’m concerned and not going to say everything’s great until March of next year.”
Another troubling sign is the fate of the region’s largest employers, the chemical industry. In a recent Business Report cover story, “Chemical dependency,” experts explained that even without being largely impacted by the overall national recession, “employment has declined and likely will continue to do so. Industry leaders fear a critical workforce shortage. … And possible federal legislation to curb greenhouse gases could spur companies to shift production, and still more jobs, overseas for good.”
And then there’s the completion of Marathon Ashland Petroleum’s $3.3 billion expansion of its Garyville refinery, which could mean industrial-construction layoffs if workers aren’t picked up by any other projects on the horizon, such as Shintech’s expansion or the SNF Polymer plant scheduled to come online by 2011. Any additional layoffs in the manufacturing sector would only add to the 8,000 jobs lost in Baton Rouge for the year, ending November 2008, from the service-providing sector, according to the Louisiana Workforce Commission.
Ultimately, Baton Rouge might be playing out its recession role the same way it did during the 1980s. Economist Jim Richardson recently told the Times-Picayune the recession is “gradually catching up with us.” Whether he is on mark will be a conclusion for 2010.
For now, however, the view from the top—with positive praise contradicting declining economic indicators—is hazy.—Olivia Watkins
BusinessOfPolitics
A sporting chance
It’s being billed as the “1st Annual Jindal Fun Hunt,” and it’s as unique as it is rare. For starters, it’s an overnight fundraiser for Gov. Bobby Jindal that begins on Jan. 3. What makes it exceptional is that it’s in Louisiana, at Grosse Savanne Lodge in Cameron Parish. Jindal traveled outside the state more than 40 times this year to raise money for his upcoming reelection campaign and likely will post record numbers when campaign finance reports are due in the coming weeks.
The $5,000-per-head dine-and-hunt fundraiser, however, will take place in 2010, meaning details about who paid what won’t be made available to the public until early 2011 [the state has annual reporting rules]. Also of note is the fundraiser’s host—Natural Resources Secretary Scott Angelle (left), who also serves as Jindal’s legislative liaison. Angelle has expressed interest in making a bid for 3rd Congressional District, but he’s considering switching parties from Democrat to Republican. Raising money for the state’s top GOP official could be a sign that the fix already is in.
Conservative controversy
Prominent Christian activist and Baton Rouge native Tony Perkins (right) is being taken to task by other social conservatives for allegedly misleading his donor base at the Washington, D.C.-based Family Research Council. In particular, former radio host Gregg Jackson and fellow Christian author David Jeffers recently sent out a news release condemning Perkins for urging his supporters to vote for a health-care amendment by U.S. Sen. Ben Nelson, D-Nebraska, because it would ensure that abortion is not funded by government dollars. Jackson and Jeffers argue the Nelson amendment actually included numerous “gaping holes that allowed publicly funded abortion.”
The accusations, which don’t seem to be resonating with FRC’s base, come after similar outrage by other conservative factions that Perkins watered down his own moral message by supposedly supporting presidential candidate Mitt Romney, who some voters didn’t see as conservative enough. In a related e-mail campaign to pro-life leaders around the country, Jackson and Jeffers added, “Millions of Americans with deep moral values are tired of being fleeced by the money-driven organizations such as FRC that seem to be more interested in fundraising and securing a seat at the Republican table than they are in ending abortion or achieving their other stated objectives.” They cap it off by calling on Perkins to resign.
Vitter drafting bill for shrimp industry
U.S. Sen. David Vitter says his office is working on the early version of a bill that would strengthen national shrimp inspection laws, ban tainted imports and create stiffer penalties for improper labeling. Vitter, R-Metairie, announced his plans recently to the Louisiana Shrimp Task Force, which was created earlier this year by Gov. Bobby Jindal to help the industry overcome challenges such as low dockside prices and foreign competition. Up until now, the task force has been focused on pushing state-level legislation, which includes making the task force permanent, increasing the shrimp excise tax for marketing efforts and creating a new program that would certify Louisiana shrimp.
Such ideas could be up for debate when the state Legislature convenes its regular session next spring. But federal matters are an entirely different topic altogether. “We stand ready with the rest of the delegation to consider all of your ideas about federal options,” Vitter told the task force. The first item up to bat will be a standalone bill, Vitter says, that would:
• Increase inspections on all foreign-shipped seafood and hold importers to the same standards that domestic suppliers have to face;
• Ban countries with histories of supplying tainted shrimp from selling their goods in the U.S.;
• Strengthen penalties for mislabeling—that is, those fishing operations that might mark their product as being from Louisiana when it’s really from a foreign country.
Vitter says the legislation is only in the “conceptual stages” and he isn’t sure how successful it might be on its own, but his underlying goal is to have the sections added to a larger food safety bill the Senate is expected to take up next year. “We want to beef it up in regards to shrimp issues,” Vitter says.—Jeremy Alford
BookReview GenBuY
Authors: Kit Yarrow and Jayne O’Donnell
Publisher: Jossey-Bass
Year: 2009
Pages: 250
You’re not an old fogey.
You try to market to teens and 20-somethings, but they walk in packs past your door without a glance, and it doesn’t make sense. But when you read GenBuY by Kit Yarrow and Jayne O’Donnell, it will.
No doubt, you’ve already noticed a dearth of youth in the aisles of your store, and that’s a problem. According to Yarrow and O’Donnell, your “problem” is deeper than you think: Generation Y [everyone born between 1978 and 2000] is positioned to revolutionize the way shopping is done.
Unlike their parents and grandparents, Gen Yers are confident, the authors say, perhaps because they’ve been doted on by those same elders. They’ve never known a world without computers, so they’re incredibly “connected” and global. And because they’ve rarely had to wait for anything, they’re easily bored. “New” isn’t new enough.
These factors mean that Gen Yers don’t shop like anyone else in history. Shopping, for a tween, teen or 20-something, is a way of relaxation, a “vacation of the mind.” Gen Yers rarely shop alone. And because they’ve grown up with brands, they’re fiercely loyal to their favorite ones.
This book is a shout to retailers wanting to stay in business. If that means you, then you need a copy of it. GenBuY will make you want to pull up your sleeves and make a change.—Terri Schlichenmeyer
ExecutiveSpotlight
Jason ?Andreasen
Director
Baton Rouge ?Gallery-Center for Contemporary Arts
Hometown: Miami
A little Black Keys on the record player, maybe some Bob Dylan to take it down a notch, and Jason Andreasen unwinds from his sometimes-hectic, always-enjoyable job as the director of the Baton Rouge Gallery. He may be a high-tech TV fan, but Andreasen appreciates the finer—also known as vinyl—things in life. That’s why it’s no surprise that he pushes hard for Baton Rouge to realize just how much talent [musical, visual and cultural art] it has to offer. “Since I moved to Baton Rouge, I have been overwhelmed by the amount of growth the cultural sector of our city has undergone,” he says. “My greatest hope for Baton Rouge is that this trend continues. … The talent is certainly here.”
Want to read more of Andreasen’s Q&A? Click here.
More unkind cuts
Gov. Bobby Jindal on Dec. 22 announced $248 million in cuts to close the budget deficit, with health-care services and public education taking the biggest hits. The Department of Health and Hospitals takes a $108 million cut; higher education will lose $84 million. These cuts are in addition to those made at the start of the 2009-10 fiscal year in July.
The state’s joint House and Senate budget committee voted in mid-December to formally accept the deficit figure for the $29 million budget and notify the governor, a move that gave Jindal 30 days to rebalance his budget. The gap for the fiscal year, which ends June 30, 2010 stems, from two problems: a shortage of more than $50 million in what the state owes public schools to cover unexpected student growth and a $197 million drop in state-tax forecasts, tied to falling sales-tax collections.
The move by Jindal largely was expected. Health care and colleges are the two largest areas of discretionary spending in the budget and traditionally take the heaviest cuts. “Now consumers are beginning to understandably reduce their spending, and so I think that … it’s our responsibility to do the same thing,” says Commissioner of Administration Angele Davis, the governor’s top budget architect.
The heat is on
A new poll suggests that U.S. Sen. Mary Landrieu is experiencing some backlash from her support of the Obama administration’s health-care reform bill. According to the poll by Southern Media and Opinion Research, Landrieu’s favorable ratings dropped from nearly 61% last March to less than 46% earlier this week, when the survey of 800 likely voters was taken. The poll also shows her negative approval ratings have increased from 18.5% in March to nearly 30% in December. The poll was conducted between Dec. 12-14 and was sponsored by businessman and political activist Lane Grigsby.—Stephanie Riegel
ONTHEBEAT
Liquid(ating): Marcello’s Wine Warehouse is closing, but owner Gene Todaro isn’t wine-ing about the sale of his Perkins Road property. He sold it once before, and he says he’ll be back in the retail business in 2010.Todaro plans to liquidate his warehouse holdings and be out by the end of 2009.
Banking ties: A startup Lake Charles bank has started installing its temporary branch after raising more than one-third of its initial $12 million capital campaign. Lakeside CEO Hartie Spence was president and chairman of Hancock Bank Louisiana from the late 1990s to the early part of this decade. Chief Lending Officer Mike Anderson was the former CEO of Omni Bank of Baton Rouge.
Mall madness: Cortana Mall has hired Wright Feigley Communications to lead its advertising and marketing efforts. Wright Feigley will take over the mall’s ad strategy effective Jan. 1. Monique Hester, Cortana’s marketing director, says the mall went with the local firm after years of working with out-of-state companies that didn’t understand the Baton Rouge market.
Strongest city: Baton Rouge was ranked as one of the 20 strongest economically performing cities during the third quarter, according to a report released by the Brookings Institution. The quarterly report, which looks at factors such as changes in unemployment, gross metro product and housing prices in the 100 largest cities, put Baton Rouge in the same category as metro areas such as Austin, Texas; Dallas; Jackson, Miss.; and Washington, D.C.
Redialing jobs: Convergys, which operates a call center on Florida Boulevard, plans to hire 120 people. The firm, which laid off 176 employees in June 2008, says it is boosting staffing now that the national economy is beginning to come out of the recession. Convergys, which has had operations in Baton Rouge for 10 years, has about 600 local employees.
Owning Galatoire’s: New Orleans businessman and mayoral candidate John Georges announced the “completion of his investment” in the Galatoire’s restaurants in Baton Rouge and New Orleans. Galatoire family members Leon Galatoire, Michele Galatoire, Duane Galatoire Attaway, Ashley Attaway and Craighten Attaway and businessman Todd Trosclair are part of the new ownership group, according to a separate announcement.
Naming solution: Louisiana Health Care Review announced the company has changed its name to eQHealth Solutions. The new name supports the Baton Rouge-based company’s growth into other markets, as well as underscores its key strength of providing effective and high quality health care solutions.
Animating changes: The 2010 Red Stick International Animation Festival has been moved from the spring to Nov. 10-13, which puts the festival in a “strategic window” for studios, distributors and filmmakers to preview Christmas films, festival director Stacey Simmons says.
New year, new leader: Robert Burgess, the president and COO of EATEL, has been named as chairman of the Baton Rouge Area Chamber’s board of directors for 2010. Burgess is the first BRAC board chair from a company located outside East Baton Rouge Parish. He will begin his one-year term Jan. 1.
A piece of history
The Bellemont Hotel, on Airline Highway between Greenwell Springs Road and Winbourne Avenue, has sold for $525,000, according to representatives of Stirling Properties and Coldwell Banker One. The hotel had 305 guest rooms, while the Great Hall conference center comprised 32,000 square feet, according to a sales listing. The site is about 18 acres, says Pam Coxe, the selling agent along with Debbie Accardo of Coldwell Banker One.
T. Joe Calloway, who bought the hotel, says he hasn’t decided yet what to do with his purchase. Calloway, who owns four local hotels, says the Great Hall conference center still is in good shape, but he’s unsure of the condition of the guest rooms, which have not been used in some time.
“It could be a good deal. I don’t know,” he says. “You never know how it turns out.”—Todd R. Brown and David Jacobs
Additional credit
Neighbors Federal Credit Union has purchased a 1.58-acre tract of land at Coursey and Hickory Ridge boulevards (below) and plans to start building a new branch there by the middle of 2010. The credit union paid $722,600 for the land in a deal that was filed in mid-December.
Steve Webb, chief operating officer for Neighbors, says the plan is to build a 4,000-square-foot branch on the site. The new prototype, which will feature drive-through service and an ATM, will have about eight employees. Neighbors currently has seven branches, and an eighth location is set to open on Airline Highway in Prairieville by July 1.
Meanwhile, KeyPoint Federal Credit Union is set to start construction on an expanded Prairieville branch. The 3,000-square-foot branch on La. Highway 73 is set to open by the end of March. This will replace an existing branch in the Oak Plaza Shopping Center.—Timothy Boone
Conversion trick
Construction is scheduled to begin within a month on the first townhomes in Madison Square, a development at Goodwood Boulevard and Lobdell Avenue that previously had been called Madison Park (below). Jerry Del Rio, who is marketing the property, says the townhomes will sell for between $445,000 and $525,000. “This is going to be an upscale complex,” Del Rio says. “It will be a winner because of the location.”
The townhomes will range in size from about 2,000 square feet to 2,343 square feet and feature amenities such as high ceilings, ceramic tile and crown molding.
Rick Cappo bought the 3.8-acre tract in August 2007, one of the few prime undeveloped areas of land in the middle of Baton Rouge. But Cappo’s plans to build condos on the site ran into trouble with financing, Del Rio says. The key to getting financing was converting the project to townhomes so people could own the property.
Plans are to eventually build 43 units in Madison Square. “We’re working on presales now,” Del Rio says.—T.B.
Capital gains
There was a 38% increase in the number of homes sold in the Capital Region during November, compared with the year before. According to the Greater Baton Rouge Association of Realtors Multiple Listing Service, there were 576 houses sold in November compared with 417 in November 2008. Average sale prices were down 3.4%, from $185,622 in November 2008, to $179,272.
Livingston Parish saw the biggest improvement in sales, with 145 homes sold in November at an average price of $157,954. That’s nearly double the 76 sales that happened last year, at an average price of $144,558. East Baton Rouge also saw a jump in home sales, from 232 in November 2008, to 307. The average sale price was down slightly, from $190,527 to $185,036. Ascension Parish saw the smallest increase in home sales, up from 76 in November 2008, to 90.
Through the first 11 months of the year, Capital Region home sales are down 7%, from 6,879 in 2008 to 6,385. The average sale price is down 5.4%, from $202,627 in 2008, to $191,586.
