It’s old news that Lafayette’s economy has met a sea change. As I wrote last week, a new economic guard is stepping in where the oil and gas industry has retreated. Since The Current launched in April, I’ve tracked the ebbs and flows of a local economy chasing a $10 billion economic slump. With big news at Waitr bookending our first year publishing, beginning with its blockbuster sale to a Texas billionaire and ending with CEO Chris Meaux ringing the Nasdaq bell, 2018 has been a year of extremes.
In May we had what was perhaps the best week of all time in Lafayette’s emerging tech economy. Waitr kicked it off with the announcement of a $308 million merger on May 16 that set the stage for its IPO earlier this fall. Seven days later, CGI announced plans to double its workforce in Lafayette, creating 400 more jobs and adding a second facility.
These two developments are some of the biggest wins our tech economy has ever realized. They represent millions of dollars in local investment in a desirable sector. Both companies are rumored to be sniffing around Downtown for workspaces. CGI already operates an annex presence on Jefferson Street.
On that note, 2018 was also the year we finally saw some real momentum build Downtown.
In particular, the intersection of Lee Avenue and Jefferson Street has seen a significant transformation. On one corner, the Juliet Hotel reopened in April. On another, Rock ’n’ Bowl opened in August. Spoonbill restaurant renovated and took over the old Filling Station in November. Also last month, and perhaps the biggest domino to fall yet, a deal was approved by the council to sell the old Federal Courthouse to developers to bring it back into commerce after sitting vacant for almost two decades.
The 15-year-old moratorium on Downtown bars was lifted, and LCG issued conditional use permits to Artmosphere and The Wurst Biergarten. Now venues that have become part of the cultural fabric of Downtown are on the right side of the law with their futures no longer threatened by bureaucracy. The conditional permitting process could help unlock Downtown’s development quagmire and right-size inflated real estate prices held hostage by a de facto monopoly on liquor licenses.
Another Downtown related story was its selection as a federal Opportunity Zone, one among several in Lafayette Parish. Opportunity Zones are census tracts, designated under President Trump’s Tax Cuts and Jobs Act, that can attract investments through special funds, called Opportunity Funds, which provide tax advantages to investors on capital gains. Lafayette’s Opportunity Zones effectively encompass Downtown, the Oil Center, and the University Avenue Corridor from UL’s campus to just above Interstate 10. Once the IRS finalizes rules for how these Opportunity Funds can operate, we could see a flood of investment dollars into real estate development and startup companies in Lafayette’s urban core.
As someone who supports efforts to grow Lafayette’s cultural and digital economies, I was glad to see Mayor-President Joel Robideaux pursue initiatives in these directions in 2018. It was the first year his CREATE initiative was funded and operational. In April, he announced his ambition to create a municipal cryptocurrency and become a testbed for blockchain technologies. To that end, he created the Lafayette Public Innovation Alliance, a trust intended to see to the development of Lafayette Parish’s tech economy.
Most of Robideaux’s efforts are more aspirational than operational at the moment. CREATE has not yet completed any significant projects, and the innovation alliance only held its first meeting this week. But they do represent the kinds of efforts needed to evolve our local economy and make up for ground lost in the oil and gas industry.
If you’re someone who believes taxes take money out of the economy, then 2018 was a banner year. Proposed taxes were slaughtered at the ballot box this year across the board. Millages for the parish court system, Lafayette Parish Correctional Center, a new rural fire district, the public library system and a sales tax for the sheriff’s office failed dismally. That signals an entrenched anti-tax sentiment in our politics.
It’s hard to say if rejecting these taxes will ultimately help or hurt Lafayette’s economy. We may be paying less in taxes, but the parish side is still broke, the jail and courthouse are still inadequate and falling apart, the cost of property insurance could go up in unincorporated Lafayette and the sheriff’s financials are still underwater. On balance, significant loss of services and crumbling public infrastructure could offset the economic gains for private enterprise. Only time will tell.
UL chipped in big economic news, announcing earlier this year that for the first time in its history the university’s total research enterprise topped $100 million. Research could realize big economic momentum and spark the creation and growth of innovative companies here in Lafayette.
To be sure, Lafayette continues to face sobering challenges. Our sluggish rebound from 2014’s oil crash has not prevented mounting casualties. Job losses continued year over year in July. The flagship LAGCOE oil and gas convention will leave for New Orleans in 2019 after 65 years in Lafayette — yet another canary in our economic coal mine, to say nothing of the millions in lost revenue.
Despite a slight uptick on the price of oil — although recently it’s dipped precariously once again — we’ve had to come to grips with the fact that our oil and gas industry is a shell. While some parts of it have recovered, the slowdown in drilling on the shelf in the Gulf appears to have become the new normal rather than a temporary setback.
But like it or not those challenges aren’t going anywhere. Even with the good news we’ve seen, our economy is still missing billions of dollars in GDP with no clear path to filling that gap. Yet after a few years of seemingly nothing but bad news piling on, it’s refreshing to be able to look back and see numerous reasons for hope. It could well be our economy has finally hit bottom with nowhere to go from here but up.