Councilman Jay Castille calls for mayor to investigate Bruno loan

Acting on conflict-of-interest and influence peddling allegations first reported by The Acadiana Advocate, Councilman Jay Castille called on the mayor-president to investigate a suspect loan to one of his assistants.

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Lafayette ranks near bottom on nationwide city performance index

The gist: Lafayette lags far behind other American cities in job creation and retention and economic growth. The city ranked 196 out of 200 cities measured in the Best-Performing Cities index created by the Milken Institute, a California-based think tank.

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Louisiana falling behind. No large city in Louisiana faired well on the list. Baton Rouge ranked 145 and New Orleans 189 overall. The study parses data for job and wage growth through 2018, and takes a pulse of gains in the technology sector. Here are Lafayette’s individual performance rankings:

200: 5-year job growth from 2012 to 2017.

189: 1-year job growth from 2016 to 2017.

200: 5-year wages and salaries growth from 2011-2016.

200: 1-year wages and salaries growth from 2015-2016.

186: Short-term job growth from August 2017 to August 2018.

Lafayette ranked among the top 25 on this same list in 2015, before the bottom dropped out.

The tech sector may not be able to save us. Milken ranks Lafayette 136th on 5-year high-tech growth from 2012 to 2017, and the city’s relative concentration of high-tech businesses ranked 166th. These figures predate the latest big announcements from CGI and Waitr, but those will likely only foster modest gains in next year’s rankings.

Who’s the Milken Institute?  It’s an independent economic think tank that’s been publishing the Best-Performing Cities Index annually since 1999. The group is legit, and the data used in this analysis comes from the federal government. These aren’t results that can be ignored.

Not all bad news. This week saw the release of data showing that Lafayette Parish’s unemployment rate dropped to 3.9 percent, the same as the national U.S. rate. Lafayette Parish taxable retail sales for 2018 were also released bringing more good news as they topped $6 billion, which is the second highest year on record.

What’s really going on? The news that retail sales are up and unemployment is down give hope that the economy is on the rebound. But data from rankings like Milken’s show just how deep the hole we’re in is. Yet within these rankings is also proof that Lafayette has the potential to get back to the top, where it was once. The question now is, can we build the kind of momentum needed to fully recover the ground lost despite the potentially permanent decline of the oil and gas industry?

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Waitr’s preliminary 2018 financials show explosive growth after acquisitions

The gist: Preliminary 2018 financials show incredible growth both in Waitr’s existing operations and those associated with Bite Squad, a midwestern competitor the food delivery company bought last year.

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On Waitr’s existing business alone, it showed significant growth:

$279 million in food sales
$69 million in revenue to Waitr
200 percent revenue growth
($35 million) net loss
($14 million) adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)

Waitr’s losses aren’t necessarily a bad thing. Startups tend to run on investment capital, operate at a loss and focus on growth rather than profit. Waitr’s losses are trending in the right direction: The ratio of losses to revenue is dropping. Waitr management has told some investors the company could break even if it slowed its aggressive expansion strategy. At some point, the company will need to post profits, but so long as it has investment capital to fund growth that point might not come for a while.

Acquisition is a key strategy for the company. The addition of Bite Squad’s business to Waitr’s books doubled the company’s revenue and footprint:

$255 million in food sales
$83 million in revenue to Bite Squad

The two companies combined to produce the following results in 2018:

$534 million in combined food sales
$152 million in combined revenue
Serving 500 cities

On March 7 at 4 p.m., Waitr will release its final audited financial results on an investor call.

$11.95 is the price of Waitr’s stock at noon today. That’s down from $12.21 at close on Monday when these results were released. So far Waitr’s growth appears to be having a limited impact on its stock price.

Waitr also announced six new executives. Four are coming from Bite Squad — one to replace Waitr’s retiring CFO and three to fill the positions of chief legal officer, chief of corporate development and head of growth. Two others were poached from Homer Logistics, a New York City-based company that optimizes last-mile delivery. These two fill new positions, chief logistics officer and chief analytics officer.

Celebrate Waitr’s new Downtown headquarters in the old Lemoine building at the Waitr Day Block Party Friday, Feb. 15, from 3-6 p.m. at the 200 block of Jefferson St. Put on by Louisiana Economic Development, Lafayette Economic Development Authority, Downtown Development Authority and Waitr, this free event will feature music by Geno Delafose, gift card giveaways, food, kid games and more.

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Former Community Development head says Bruno’s loan warrants an investigation. The council is mulling one.

Former Community Development Director Phil Lank says a HUD-backed small business loan to mayoral assistant Marcus Bruno represents a conflict of interest.

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Primo’s peppers will torch Tennessee on new Popeyes dish

As it turns out, Primo’s peppers didn’t need to hold the Guinness World Record to attract the attention of Popeyes.

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Downtown hires first-ever DLU director, taking aim at community engagement

The gist: Designer and community organizer Maureen Foster will run Downtown Lafayette Unlimited, the nonprofit responsible for fundraising and programming for Downtown. Foster’s role is a new position created to professionalize DLU and energize a sometimes fragmented community.

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DLU and DDA are one but not the same. That’s a common mistake; we all make it. I’ve covered Downtown for a few years and the distinction isn’t exactly clear. DDA, the Downtown Development Authority, is a public agency in charge of Downtown development. It’s funded by a property tax assessed in the Downtown area that generates around $450,000 each year. Downtown Lafayette Unlimited is a nonprofit org, under DDA’s organizational umbrella, that’s most visibly in charge of programs like Downtown Alive! — I’m adding this phrase so I can end this sentence with a period, instead of the exclamation point part of the DTA! brand. DDA’s CEO, in this case Anita Begnaud, is in charge of both organizations.

The goal here is social and community activation. A 2018 Women Who Mean Business honoree, Foster was the brains behind Designing Women of Acadiana, a professional association and social club that connects women in the architecture, planning and design fields. DWA programmed panels and community conversations around the arts, design and social services, in essence glueing a previously disconnected community together.

“She found a pocket of people within her industry that were not coming together and having conversations and not advocating for themselves and created the mechanism for that to occur,” Begnaud tells me.

Downtown has long struggled to get stakeholders on the same page. And now it appears the district is poised for a major breakthrough with critical employers and residential projects converging. Getting Downtowners on the same page will be key to taking full advantage of the momentum. Foster tells me her goal is to energize community conversations, expanding the role of DLU beyond major social activities like DTA! and Movies in the Parc. Look for more networking events, daytime activities and information sessions.

“Anita has lit a big fire for renewed enthusiasm,” Foster says. “I’m planning on building on that fire.”

A born campaigner. “I think they wrote the job description for me,” Foster tells me of the DLU job. Begnaud says Foster’s tenacity caught her attention. Supporters stopped her in public to advocate for Foster’s hiring, spurred by a campaign of sorts that Foster sparked to get out the “vote” on her appointment. A Sterling Grove resident, Foster has taken an active role in urban core issues, serving on the Evangeline Thruway Redevelopment Team, the LCG committee charged with redevelopment projects in the I-49 Connector corridor.

“If she wasn’t doing this job, she’d be doing this in a volunteer capacity,” Begnaud says. “Now I get to pay her to do that.”

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Ready or not, we’re talking about 5G now

The gist: For the past year or so, LCG has honed policy for the dawn of 5G networks. Tired of waiting, Councilman Kenneth Boudreaux short-circuited the deliberation, introducing his own policy ahead of the administration’s schedule.

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Stop. What’s 5G? A quick oversimplification: 5G is the next (fifth) generation of cellular networks projected to supplant 4G and LTE service in the coming years. 5G networks use dense clusters of small wireless transmitter boxes, attached to existing utility poles or mounted on short towers, to broadcast connections comparable to fiber speeds and reliability. Phones have not yet been developed to use 5G — AT&T’s 5G E is not 5G; it’s LTE plus marketing — but the event horizon is only a couple of years away. Cities are now grappling with policies to deal with fleets of transmitter boxes — i.e. “small wireless facilities”  — in public rights of way. It’s progress, but also a nuisance.

Boudreaux compiled a policy to regulate deployment of 5G transmitters in the city and unincorporated areas of the parish. He introduced it as an ordinance, which governs “small wireless facilities,” at Tuesday’s City-Parish Council meeting. It defines things like fees and permitting and defines aesthetic restrictions. Over the past year or so, Boudreaux tells me, he talked with some of the major telecoms developing the technology — like Cox, Verizon and AT&T — but pulled from policies adopted in other Louisiana cities to craft his ordinance. His draft resembles one passed in Baton Rouge in 2017 and shares some of the same exact language. He says the administration should have acted a while ago.

He forced the administration to move. Boudreaux allowed LCG’s legal team to sub in its own draft ordinance as an amendment to his. The legal department and administration worked for the last year or so on the policy with a D.C. law firm specializing in communications. The administration’s draft policy is more detailed and applies stricter guidelines for how the boxes look and where they can be placed. Fees are different too: Boudreaux’s ordinance charges $270 annually per device to add them to city-owned utility poles; while the administration's policy bills $220. You can view Boudreaux’s original ordinance here. And the administration’s ordinance here.

“My God, Crowley has adopted theirs already,” Boudreaux tells me. His decision to put forth an ordinance ahead of legal was spurred by watching small communities like Carencro adopt policies while Lafayette had yet to do so. (My family is from Crowley, for the record.) In pushing an ordinance, one he admits was not quite ready for prime time, Boudreaux intended to force a public conversation and position himself to lead it. “I gotta govern in a way other people don’t have to,” he explains. One primary concern, he expressed Tuesday night, is that poles could clutter the neighborhoods in his district. He showed the council a picture of a squat, unsightly tower pimpled with grey boxes in McComb-Veazey. It’s not clear where the tower came from. (Maybe it’s a ghost tower.)

Rapidly adopted policies have caused problems in other markets. Baton Rouge rushed an industry-friendly ordinance in July 2017 only to circle back to close loopholes later that year. Still, downtowners there fussed when AT&T began planting 80 5G towers, sometimes in the middle of sidewalks.

5G could pressure LUS Fiber. Some observers say the technology could one day challenge fiber-to-the-home internet service. 5G networks are cheaper to build in neighborhoods that don’t currently have fiber-to-the-home in place (like many of the areas Boudreaux represents) and can be used to add fixed internet service wirelessly. Others say it’s not likely to supplant fiber service altogether, but it could muscle fiber-based internet providers around in the market.

What to watch for: How the council approaches the policy discussion going forward. Boudreaux’s move appears to have pushed the administration into the conversation ahead of schedule, and the draft ordinance swapped in is now subject to council debate at final adoption in a couple of weeks. Other communities have haggled over how much to charge telecoms for the use of public space. Baton Rouge charges $250 per device. Other cities charge thousands. Money will play a big factor in the discussion here.

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Mark Knight, ex-deputy get off easy

The gist: Leaving the courthouse Wednesday, the consensus among observers was that former Knight Oil Tools CEO Mark Knight would trade in his affluent lifestyle for the confines of the Lafayette Parish Correctional Center. But there’s a catch.

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If Knight qualifies for the sheriff’s Alternative Sentencing Program, he’s likely to return to the comforts of his luxurious home with an ankle monitor after reporting to the jail on Feb. 15 to begin his sentence.

15th Judicial District Judge David Smith sentenced the wealthy businessman to a year in the parish jail on a corrupt influence conviction for the critical role he played in the 2014 conspiracy to plant illegal drugs on his brother, Bryan, and have him arrested in an ill-fated attempt to wrestle control of the family company.

In August, Mark Knight, 61, pleaded no contest (which has the same implications of a guilty plea) to public bribery and corrupt influence. On the former, he was sentenced Wednesday to four years hard labor, suspended, three years of active supervised probation, a $1,000 fine, court costs and 300 hours of community service. He also must forfeit $87,000, the amount prosecutors say he paid to his three co-conspirators — then-Knight Oil employee Russell Manuel, former Lafayette Parish Sheriff’s Deputy Jason Kinch and former State Trooper Corey Jackson. Manuel, Kinch and Jackson pleaded guilty. Manuel got no jail time, and Kinch was sentenced Wednesday to three years hard labor, suspended, two years of active supervised probation, a $500 fine, 150 hours of community service and court costs for public bribery. He got a year of home incarceration for corrupt influence. In early December, a prescient Kinch boasted to a sheriff’s deputy that he would only get probation, saying a deal had “already been worked out,” according to a media source who overheard the conversation.

Jackson will be sentenced in April.

Wednesday’s sentencing brings closure to the years-long saga that has forever tainted the Knight legacy and hastened the downfall of one of Acadiana’s largest privately held companies. Had Mark’s case gone to trial, Assistant District Attorney Alan Haney promised to introduce evidence from a March 2015 Knight Oil Tools internal investigation showing that Mark laundered money, used corporate funds for personal expenses and stole $2.4 million from the company through the sale of scrap pipe and tubing.

Haney implored the judge to put both Knight and Kinch behind bars, arguing this specific crime was a distortion of the entire criminal justice system because it manipulated police officers who arrested Bryan, and then attempted to hoodwink prosecutors and the courts to convict him.

Haney singled out the prosecutorial instincts of the late ADA Richard Weimer, who immediately recognized there was “something fishy” about the arrest and declined to prosecute Bryan Knight. “They used me as a weapon,” Haney maintained, urging the judge to send a message to the wealthy and powerful Mark Knights of the world that they “can’t use me and they can’t use you.”

“It calls into question everything we do,” the prosecutor told the judge. “Anything less than jail time is not appropriate,” Haney said, making special note of federal judges who have been sentencing to more than a year in jail first offenders who violated the public trust, specifically naming Barna Haynes, who used to work in the district attorney's office. “Everyone is watching,” Haney emphasized.

Mark Knight’s criminal defense attorney, Mike Skinner, asked for leniency, calling his client a “good, kind and generous man” and a “loving husband and son.” Skinner talked of how Knight had worked his way up in his father’s company and built it into the largest of its kind in the world. He also spoke of Knight’s charitable work, stressing the amount of good deeds he did “mostly anonymously,” and said that “the circumstances surrounding this case are extremely unlikely to occur again.”

Judge Smith spoke of the numerous letters that had been written to the court on Mark’s behalf, including one from his victim, Bryan. Bryan’s letter will remain under seal, Smith noted.

What has not been previously reported is the extent to which the lead investigator believed much of the Knight family was involved in the scheme to clear Bryan out of Mark’s way. The 32-page arrest affidavit for Russell Manuel, written by then-Lafayette Parish Sheriff’s Captain Kip Judice and obtained by The Current, includes shocking accusations by Manuel that numerous family members were aware of the plan to set Bryan up, though the extent of their alleged involvement remains unknown.

From the affidavit:
“According to Manuel Mark Knight was 100% aware that the plan had changed from just catching Bryan with illegal drugs … to plant[ing] the dope on him. Manuel stated that this all started after a meeting with Manuel, Trish Knight (Mark’s wife), Pam Nagota (sic) (Trish’s twin sister), and Heather Knight (Mark’s daughter). Heather told Manuel that [her brother] Zack’s wedding was coming up and the family did not want Bryan arrested near the wedding date and that they wanted Bryan in jail for the wedding.”

At the sentencing, Judice told me the family members named by Manuel refused to be interviewed during his investigation. “My thoughts are it was common knowledge in the Knight family that these officers were targeting Bryan,” Judice said. “Each individual’s level of knowledge varies. I do think that both Mark Knight’s wife and Heather had specific knowledge that there were added benefits to make [the arrest] happen, the payments.”

After the verdict. A stoic Mark Knight ignored this reporter’s questions. His attorney, Skinner, called Manuel’s allegations of family involvement “ridiculous.” Skinner declined any additional comment, citing the ongoing civil suit filed in federal court by Bryan Knight against his brother, Manuel and the two former law enforcement officers.

District Attorney Keith Stutes declined to comment on Manuel’s claims of family involvement.

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Looks like Terry Huval was a bargain

The gist: Lafayette’s future utilities director could make $250,000, close to the salary retired LUS Director Terry Huval earned to run both LUS and LUS Fiber. The council introduced a measure to bump the budgeted salary to that figure for the newly independent position.

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It was originally budgeted at $150,000 when Robideaux moved to split LUS and LUS Fiber into separate departments during last fall’s budget process. He pegged the Fiber director’s salary then at $115,000. Huval was far and away the highest paid public employee in Lafayette Consolidated Government, a distinction that drew some criticism from budget hawks like Robideaux. (Robideaux, according to some, once bragged that no one in his administration would make $250,000.) Some council members pushed back on Robideaux’s original budget, saying good talent couldn’t be had at those prices.

“If we know these numbers are too low, what are we doing?” Kenneth Boudreaux pressed Robideaux at the time.

“I don’t think it’s enough if that’s what you’re asking me,” Robideaux replied.

So why $250,000 and why now? By law, Robideaux must get approval from a contract engineer to fill the position. That consultant, NewGen Strategies & Solutions (no affiliation with NextGEN Utility Systems, the failed LUS suitor), advised the administration that a new director for a utility the size of LUS (a $300 million enterprise) should cost around $250,000.  

We still don’t know how much a Fiber director will cost. That’s a separate issue, not managed by NewGen. Boudreaux, who clamored Tuesday night about the new salary, produced an estimate from 2013 that a Fiber director should cost $200,000. If that figure is close to right, new directors of LUS and LUS Fiber combined would cost $450,000.

“That’s $450,000 without even blinking,” Boudreaux told me ahead of the meeting, frustrated with the hurdles jumped to raise LCG employee salaries 2 percent last year, including an override of Robideaux’s veto.

What to watch for: How quickly a new director is recruited and installed. Current interim Director Jeff Stewart, a Huval lieutenant, says he’s interested in the gig. Stewart is already spearheading a public process for the electric system’s integrated resource plan — essentially a long-term planning process that determines how much power is needed and where it will come from — a first for LUS. Stewart tells me that process should be underway in June and could take a year or more. That means the new director could come on board in the middle of a transformative time.

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Lafayette General dives into Opportunity Funds

The gist: Lafayette General Health will use a new federal tax advantage program, created by the 2017 tax overhaul, to develop near the Oil Center and invest in healthcare startups. The hospital announced the move at an information session about federal Opportunity Funds, held Wednesday.

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Opportunity Funds are a new form of investment vehicle that provides tax advantages meant to spur investment in Opportunity Zones.

Opportunity Zones are low-income census tracts that were nominated by local governments, selected by governors, and approved by the federal government last summer.

Lafayette’s Opportunity Zones include the Oil Center, UL’s main campus, downtown, and the University Avenue corridor from downtown up past I-10 almost to Carencro.

LGH has already been investing in real estate. Over the last few years, through the Lafayette General Foundation LGH has established a Real Estate Investment Fund (REIF), which acquires, finances, or develops real estate that LGH leases.

Now it has plans for developing Hospital Drive. Big plans, in fact, including a 3 to 5 story medical office building that will be a new home for the Cancer Center of Acadiana and LGH’s neuroscience work. This development will also include housing for LGH’s medical residents and retail space.

The project could breath new life into the Oil Center. The Oil Center could have been River Ranch, LGH CEO David Callecod told conference-goers, because it’s a safe walkable community with retail and restaurants; it just never had much housing. The Hospital Drive development project will create a live/work/play experience for LGH’s medical residents, with the longview of encouraging them to start their practices in Lafayette once they graduate medical school.

Opportunity Funds are ideal for enabling LGH’s aspirations. While LGH was already investing in real estate, because the Oil Center was selected as an Opportunity Zone LGH can create an Opportunity Fund to provide additional tax advantages to recruit investors to help fund the development project.

And real estate may only be the beginning. Opportunity Funds can also be used to invest in companies. For some time, LGH has been investing in health care startups through its Healthcare Innovation Fund. And it’s currently looking at making an investment in a company that may be relocating its headquarters to the Oil Center. If that company is successful, then in the future LGH’s Opportunity Fund could provide additional investment capital to fuel further growth of this as-of-yet-unnamed startup.

LGH is already reaping rewards for investing in startups. At the event, Cian Robinson, executive director of innovation, research, and real estate investments at LGH, announced that the fund had its first successful exit. Start-up HealthLoop was purchased last fall for $200 million. LGH invested around $1.5 million into the company, clearing $4 million in just a few years with the sale. LGH is currently raising funds for its second Health Innovation Fund.

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When dedicated taxes lock up options

Voters demand flexibility and quick responses, but representatives are hamstrung in their ability to divert dedicated funds.

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Drag Queen Story Time (sort of) happened with no flare up

The gist: Supporters held two private drag queen readings at a public library branch Sunday to muted protest and little else. Threats of violence and heavy protesting didn't materialize.

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The scene was relatively uneventful. A few dozen families showed up for the readings, held in two sessions at the South Regional Branch of the Lafayette Public Library. Kids got their faces painted, held balloons, did the hokey pokey and listened to three drag queens read stories about tolerance. Outside, Catholic protestors prayed the rosary and sang hymns over bagpipes, holding signs with slogans like "Drag Queens = Childhood's End."

"If we allow the corruption of children to happen, then we are corrupted as well," Thomas Drake, a protest organizer, told KLFY.

All bark and no bite is how Story Time organizer Aimee Robinson described the threats of violence that harried the event, most of which were on social media threads posted by local news outlets and Facebook page Lafayette Citizens Against Taxes. The library paid for several LPD officers to provide security. The three drag queens were escorted to and from their cars by the officers.

"They went above and beyond," Robinson says of the officers assigned, describing them as kind, courteous and understanding. "I couldn't be happier. My hat's off to them."

https://vimeo.com/315331614

Supporters are calling it a victory. Sunday's readings were not directly related to last fall's library-sponsored event, organized in collaboration with an LBGTQ+ fraternity at UL Lafayette, that ignited controversy and drew a failed and spurious federal law suit. Robinson says it nevertheless took a lot to pull the readings off, which were originally scheduled in December.

"We had to get the ACLU involved," she says. After the original library-sponsored event was canceled (crowd control/safety being the purported reason), Robinson and fellow supporters booked a room for a private, Christmas-themed reading. That effort was blocked at the last minute when attorneys representing the library and Lafayette Consolidated Government produced a room reservation form that effectively banned any drag queen-related events until the federal suit was complete. (The suit was dismissed last week.) The ACLU intervened and the library and city officials agreed to strike the reservation form, a clear First Amendment violation, paving the way for Sunday's readings.

What to watch for: More readings and if the library ever officially hosts Drag Queen Story Time. Robinson says she intends to hold more private readings, potentially in Breaux Bridge. Many opponents say their issue wasn't with DQST itself, but that the library sponsored and promoted the event last fall. The library had attempted to move that event from its Downtown branch to the South Louisiana Community College, where it was ultimately postponed amid security concerns. In a press release at the time, library officials committed to hosting DQST with the fraternity in the future.

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