It has been a long, strange year in the place where economic development and state government cross paths. For all the talk about Louisiana's immunity to the national recession, the state started losing $1 billion in revenue and lots of jobs in the piney north. Nonetheless, there were a number of economic development wins for state government in 2009. Some argue a few of these wins are really losses for taxpayers, but economic development cheerleaders contend each is proof that Louisiana can compete even in the harshest of climates.
Just last month, Portfolio.com conducted an analysis of how all 50 states and the District of Columbia fared during the recession, and Louisiana ranked second best overall. But that figure alone does not tell the whole story. While the administration has a few business deals of note to tout in its year-end roundup, state officials recognize that more than 30,000 households have been added to Louisiana's food stamp rolls since July. Other jobless benefits doled out by the state have doubled since this time last year. Personal income tax collections are in a record decline and north Louisiana continues to lose a significant number of jobs.
Louisiana Economic Development Secretary Stephen Moret says he expects LED to post a 25 percent increase in new jobs created in 2009 compared to 2008. Here's a look at 10 of those deals, both local and statewide, that may have helped the state position itself in such a way.
Underwriting the Who Dat Nation
Saints owner Tom Benson probably wishes he could have held off on negotiating with the state until now, when the miracle season is making believers out of practically everyone. Instead, hands were shaken during the spring and summer to seal a deal that keeps the club in Louisiana through 2025. Benson also got a new sports development district and help for a couple of the buildings contained within. The cost to taxpayers: $280 million over the next 17 years. According to a recent study by UNO, the Saints generate $22 million annually in direct state revenue, but that stat — along with a winning season — still isn't enough to quiet some critics. "I know I'm going against the popular tide, but I haven't changed my mind," says state Rep. Sam Jones, D-Franklin. "It was a welfare check for one of the richest men in Louisiana."
Saving Cold Storage
In September, the Port of New Orleans approved plans to construct a new 147,000-square-foot refrigerated terminal for New Orleans Cold Storage. It was a move that was backed up with more than $23 million from the Louisiana Recovery Authority (LRA). New Orleans Cold Storage, which currently operates a refrigerated terminal at Jourdan Road, will construct a new terminal at the Uptown riverfront cargo complex in the city that is expected to be complete within 15 months. NOCS's current facility provides hundreds of direct and indirect jobs, and job numbers are expected to increase with the construction of the new terminal, which will now stay in the city instead of moving to another area or another state. The Port of New Orleans' board of commissioners approved the new location after one of the port's terminal operators, Ports America, agreed to reduce the size of its leased area. This will provide sufficient space for the new refrigerated terminal. "We simply could not stand idly by while the cold storage facility located to another state, taking with it many jobs. Now that the Port of New Orleans has secured its final location for the project, we will work to speed funding to the port so that this important project can begin," says LRA executive director Paul Rainwater.
Another controversy that had lawmakers throwing around claims of corporate welfare was the state's $50 million sweetener that enticed Foster Farms of California to buy a fledgling poultry plant in Farmerville. At full capacity, Foster Farms will employ at least 1,100 plant employees with a corresponding payroll of $24 million. Jindal says it could have been a major loss, but the Legislature backed his ambitious plan. "It would have been easier to just throw in the towel here," Jindal says. "We knew we faced an uphill climb." That plan, however, allowed the poultry plant to choose its own farmers to buy from, with no preference for Louisiana farmers. That decision is just now beginning to stir resentment back in Farmerville, because Foster Farms has decided to contract with one farmer from Arkansas. Jeff Foster (no relation to Foster Farms) of Spearsville told the Monroe News-Star earlier this month that he's on the verge of losing his farm because he couldn't contract with Foster Farms, and now he's circulating a petition protesting the decision. "All we're asking for is an opportunity," Foster told the newspaper.
Look, Up in the Air!
One win in particular this year helped position Louisiana near the forefront of our nation's security efforts. The U.S. Air Force announced last spring that Barksdale Air Force Base in Shreveport would serve as the permanent location for the new Air Force Global Strike Command, creating roughly 1,000 jobs. In 2008, Jindal directed $57 million to the site to get the Air Force's attention.
The V Deal
Moret says his No. 1 economic development win for 2009 was unquestionably the launch of a communications portal for V-Vehicle Co., a new American car company that is locating its first automotive assembly site in Monroe. In addition to adding 1,400 more jobs to the region, it brings to Louisiana's table Kleiner Perkins, among the best known venture capitalists in the nation and an early investor in companies like Google and Amazon. The vehicle the company has supposedly designed has yet to see the light of day, which has prompted some bloggers and editorial letter writers to ponder exactly what's going on at V-Vehicle Co. Adding to the growing concern is the company's lofty $67 million state incentive.
Siding With Slidell
Didn't know that 2009 was a bumper year for Slidell? Consider the following: Northrop Grumman, Louisiana's top private-sector employer, initiated an expansion this year that will retain 35 jobs, create 40 new high-tech jobs and generate 31 indirect jobs. Using the state's Quality Jobs Program as a lure, LED worked closely with the St. Tammany Economic Development Foundation to ensure that Northrop Grumman selected Slidell for this project.
Lights, Camera, Pixel!
It's only been about a month since Pixel Magic, a leading digital effects company, announced it would open a Lafayette-based studio over at LITE. The company plans to create 12 jobs within a year, ramping up to a total of 40 jobs in three years. Pixel has done work on major films such as Marley & Me, Get Smart, 300, Mr. and Mrs. Smith and The Last Samurai. Here's the carrot, and it's a big one: The company will utilize the state's recently revamped film-production tax credits and the new digital-interactive media tax credits. Pixel Magic also will receive one free year of office space from the Lafayette Economic Development Authority.
How Sweet It Is
Only in the world of sugar could the Lone Star State and the North Star State find profitable venture with the Bayou State. In the most significant sugar news of the year, Sugar Growers and Refiners Inc. of Breaux Bridge, known simply as Sugar, announced it would partner with Imperial Sugar Company of Texas and Minneapolis-based Cargill to construct a new refinery in Gramercy. It will be adjacent to Imperial's existing facility and is expected to be the largest sugar refinery in the United States. The construction project, which already is underway, will have about 500 contractor employees. When complete in early 2011, the new refinery will have an additional 145 permanent employees.
Queen of the Wins
In April, Ochsner Health System announced a unique partnership with the University of Queensland School of Medicine in Australia. Together, they will launch the University of Queensland School of Medicine Clinical School, which will bring an additional 240 students to the New Orleans area. Not only will this new program provide U.S. and Australian medical students with a unique training experience, but it will alleviate the physician shortages in Louisiana. U.S. medical students enrolled in the program will spend their first two years of medical school studying in Brisbane, Australia, and their final two years of clinical education in the New Orleans area. Australian medical students also will have the opportunity to spend part of their third and fourth years at Ochsner.
The Taxman Cuts Some Slack
This year's state tax amnesty program not only saved many small businesses and entrepreneurs from paying certain penalties on back taxes, it also pulled in more than $450 million in new revenues for state government. Some of the cash has already been directed to hurricane costs and higher education, and Gov. Bobby Jindal has plans to use a large chunk to help stave off reductions in federal health care financing that are expected in 2010.
Jeremy Alford can be reached at firstname.lastname@example.org.