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.
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?
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.
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.
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.
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.
The gist: Year-to-date sales in Lafayette Parish approached $5.5 billion through November 2018, according to a release from LEDA, on pace to surpass $6 billion. That puts local commerce in shouting distance of 2014’s $6.4 billion peak with a month of reports to go.
Total taxable sales in the parish were up 4.4 percent from 2017 and 5.6 percent from 2016 in that time period.
But the city’s lagging behind: The city of Lafayette performed the worst among municipalities, up only 1.4 percent, compared with 28.2 percent in Duson, 19.3 percent in Youngsville, 17.3 percent in Scott, and 9.2 percent in Carencro. Even unincorporated Lafayette Parish beat the city with a 3.7 percent uptick.
More than 70 percent of the total retail sales in the parish happen in the city of Lafayette. It’s still the region’s shopping anchor. In the city, apparel, general merchandise and building material sales are all down from last year. LEDA CEO Gregg Gothreaux says that’s in part due to belt-tightening and a correction from flood-related boosts in construction.
“The downturn forced people to curtail spending,” Gothreaux says. “Apparel is something that can easily be put off, and the sales numbers over the past four years reflect that. People focused on purchasing necessities — looking for the best bargains — or may have occasionally splurged at the hot, new store. The 2016 flood spurred a modest increase in building materials sales that has since returned to pre-flood levels.”
Up but still down: While the parish’s performance might be up from last year, sales through November were off more than $300 million from 2014. The cities of Lafayette and Broussard and the unincorporated parts of the parish are all down more than $100 million each from where they were back then.
Up and up and up: But some parts of the parish have seen a steady rise in retail sales despite the economic downturn in the parish the last few years. Youngsville‘s up about $60 million since 2014, Scott about $40 million and Carencro more than $50 million.
Duson‘s all over the place: If you compare 2018 to 2014, Duson’s down about $1 million. But if you compare it to 2013, it’s up almost $11 million. But then if you compare it to 2012, it’s down more than $24 million. What’s going on in Duson?
More sales = more revenue for government, but in a good way: When total taxable sales go up, so too do sales tax revenues for schools, city governments, and economic development districts. That means more money for government without having to raise taxes. Modest increases in sales tax receipts in the unincorporated area helped patch a temporary budget hole when a plan to sell a parish-owned parking garage to the city fell through. Unincorporated Lafayette parish has been routinely raided of its sales tax revenue through annexations by nearby towns and cities.
Good news, but ... Rising retail sales is an indisputably good thing. But Lafayette still has a ways to grow to recover lost ground. So while we celebrate finally getting some good economic news, let’s not forget that this just suggests the bleeding has stopped. There is still a lot of healing left to do.
The mayor-president has accused the library system of defrauding taxpayers to the tune of $21 million dollars. Unfortunately for his credibility, the facts don’t back up his claims.
Mayor-President Robideaux wants to rededicate $18 million from the library’s fund balance to pave roads and clean coulees, but there are hidden costs that must be accounted for.
At a job fair tomorrow at South Louisiana Community College IBM will try to recruit people to move from Lafayette to Baton Rouge with the help with LED.
The gist: Jobs of the future require degrees or certifications, but Acadiana’s workforce isn’t educated enough, according to business leaders. At a summit last week, One Acadiana launched 55 by 25, a community-wide effort to boost the number of workers holding post-secondary certificates or diplomas to 55 percent of the population by 2025.
About 40 percent of the working age population in Acadiana has a degree or certificate. The region ranks fifth in the state. Louisiana ranks 48th in the nation. By 2025 regional attainment is projected to rise organically to 44 percent, meaning there’s an 11-point gap the initiative aims to close. That’s about 44,000 people to credential.
“We’re going to wage war on allowing our citizens to be uneducated,” says Dr. Natalie Harder, chancellor of South Louisiana Community College, a speaker at the summit.
It ends with diplomas but starts with childhood. The initiative aims to improve readiness for kindergarten. Louisiana lags in early childhood education, a key indicator of post-secondary success. Harder says there’s low-hanging fruit too: adults who have left college degrees incomplete but have enough credits to get an associate’s degree.
Lafayette’s already on track; it’s the rest of Acadiana that’s lagging. When you combine college degrees, associate’s degrees, and certifications, Lafayette Parish’s workforce is already at 52 percent. Given a projected organic increase of 5-6 percent across Acadiana, that means Lafayette’s on track already. But the rest of the parish is much further behind, bringing the region’s average down to only at about 40 percent. Lafayette still has a lot to gain, because when employers consider moving here, they look at the quality of the workforce across the region.
The state announced a goal of 60 percent by 2030. Dr. Kim Hunter Reed, commissioner of higher education for the Louisiana Board of Regents and the summit’s keynote speaker, announced that state goal in her remarks.
“Let’s all just agree that a smarter workforce is better,” says Jim Bourgeois, One Acadiana’s VP for economic development. Companies have increasingly emphasized workforce education in site selection, meaning as Acadiana fails to educate, it fails to compete for more jobs. Still, there’s a growing recognition that, site selectors be damned, education is intrinsically important, even when it’s not linked to employer recruitment.
New county-level economic data from the federal government paints a scary and precise picture of Lafayette’s economic decline.
The gist: After months of silence, the Lafayette Public Innovation Alliance finally held its first public meeting. The alliance will function as a trust for investing in innovation projects in Lafayette Parish and could serve as a vehicle for the mayor-president’s cryptocurrency and blockchain aspirations.
ICYMI: Earlier this year Mayor-President Robideaux proposed that LCG create a new public trust focused on developing Lafayette’s digital economy. The idea is to build a chest of cash that can help finance projects in the tech space and attract entrepreneurs to the area. It was approved by the City-Parish Council in July, but the first meeting wasn’t held until today.
LPIA elected its officers. Joel Robideaux (who appointed himself to the board) was elected chairman, Louisiana Economic Development VP Mandi Mitchell vice chairman, and UL professor Ramesh Kolluru secretary/treasurer. The other trustee in attendance was Bruce Greenstein, an LHC Group executive and former U.S. Department of Health and Hospitals CTO. The fifth and final trustee, Waitr CEO Chris Meaux, was unable to attend.
Robideaux floated exploring contracts with other entities to help manage the LPIA until the trust is able to afford to hire its own dedicated staff. (It’s got $100 of Robideaux’s own cash for seed money.) One potential partner here is UL. Kolluru indicated UL is open to such an arrangement, possibly paving the way for a cooperative endeavor agreement with the university.
Crypteaux figures in as a possible financial fuel for the trust. Robideaux recruited his campaign consultant Hilary “Joe” Castille, known for his role in City Marshal Brian Pope’s infamous press conference, and UL’s Matt Delcambre to discuss the use of cryptocurrencies issued by public entities. Castille is the architect of the “crypteaux” concept Robideaux announced earlier this year and runs with attorney Clay Burgess a company called CryptoResearch LLC, which has no formal relationship with LCG.
Castille believes private equity and VC investors are looking for safe ways to invest in cryptocurrencies and other blockchain technologies, given the crypto market’s recent trouble with scofflaws and emerging SEC scrutiny. Greenstein challenged Castille’s notion that many investors are looking to make “patient,” long-term investments like that represented in the innovation trust.
What to watch for: Where the LPIA goes from here and whether Robideaux’s crypto play has any legs. Coming out the gate, the group will look at traditional funding sources like economic development grants and think through issuing a municipal cryptocurrency. The trust will likely meet again in March.
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.
The gist: Waitr announced this morning that it acquired Bite Squad, an online ordering and on-demand food delivery platform for restaurants, for $321.3 million.
Wasn’t Waitr just bought for $308 million? Yep, that was announced back in May and the deal was only finalized on Nov. 16. So less than a month into being a publicly traded company, Waitr has effectively doubled in size. Bite Squad has more than 11,000 active restaurants, compared with Waitr’s 7,700 restaurant partners as of Sept. 30 of this year.
Waitr gets swoll. With this deal, Waitr’s operations will expand to cover a total footprint of 500 cities in 22 states.
Where’d they get all that cash? Landcadia Holdings acquired Waitr for $308 million, but only $50 million of that was guaranteed cash. At that time, Landcadia Holdings was a special purpose acquisition company — a type of entity set for the sole purpose of buying another company — that had raised $300 million. So when Landcadia Holdings became Waitr Holdings, it still had about $250 million left to fund growth. While this deal for Bite Squad was for $328 million, only $202.1 million of that was in cash with the rest paid with 10.6 million shares of Waitr stock. Plus, to help finance a portion of this deal, Waitr has taken on $42.1 million in debt.
This may only be the beginning. Tilman Fertitta — the billionaire co-owner of Landcadia Holdings, the Houston Rockets and Landry’s Inc. — has a track record of growing his businesses through acquisitions. And Chris Meaux — the CEO and cofounder of Waitr — wants to build Waitr into a billion dollar business. So if I were a betting man, I’d say that this won’t be the last major acquisition they make. And that’s potentially great news for Lafayette.
Am I rich yet? Not unless you were one of the original shareholders. The news hasn’t had much of a net impact on the stock price yet, for those of us who have only been able to buy in more recently. (Disclosure, I own some stock in Waitr.) Yesterday, Waitr Holdings' stock (listed as WTRH on the Nasdaq) ended the day at $11.44. While shares spiked to $12 first thing this morning, they settled back down to $11.48 as of 2 p.m. So I’d hold off on buying that ticket to the moon.