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Community Agenda 2019

Calculate the increase to your tax bill from proposed library and airport millage increases

Property tax rates for the airport commission and the library system would be increased to voter-approved ceilings if the council passes a pair of ordinances introduced this week.

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Lafayette General launches second startup fund with local health care heavy-hitters

The gist: Lafayette General Health announced the launch of a new $10 million innovation fund with investments from Acadian Companies, LHC Group, Ochsner and the Schumacher Family Foundation. The goal of this fund is to make investments in health care startups that can deliver good return and improve services for the system and its partners. 

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This is Healthcare Innovation Fund II. Was there a Healthcare Innovation Fund I? Yes, it deployed $3 million of LGH’s investment capital along with a match from the state into seven companies. All of those companies are still operating, and one of them, HealthLoop, was purchased by GetWell last year. 

The investments have been successful. LGH is actively using products from five of the companies and working on the other two. The funds provide LGH an opportunity to earn income as an investor, supporting the organization as a whole, but also gives the system access to new concepts and innovations in health care. 

Now LGH is taking its investing to a whole new level. For the new fund, LGH is increasing the size of its investment pool to $10 million and is bringing along some heavy hitter investment partners in Acadian, LHC, Ochsner and Schumacher.

“You’ve got a billion dollar not-for-profit health system in Lafayette General, a publicly traded home health company worth almost four billion dollars, one of the largest employee-owned company and ambulance service providers in the country, the guy who started one of the largest emergency room management companies in the country, and another $3 billion statewide not-for-profit health system in Ochsner,” says Cian Robinson, LGH’s executive director of innovation, research, and real estate investments. “So you’ve got some really smart people, subject matter experts, sitting around the table that are very quickly able to vet if this is good for their company,” he adds. “For me what that does is lessen risk, in particular execution risk.”

This fund will make investments ranging from $250,000 to $1 million per startup. LGH is looking for startups that offer solutions that drastically improve patient care/experience, accelerate the move toward value-based payments, innovate backend automation/productivity, or use data or deep learning to affect health care delivery.

But LGH and its investment partners aren’t just providing cash. “All of the folks mentioned as investors have agreed to open up their ecosystems,” says Robinson. “So the startups we invest in get to work with our CIOs and senior VPs to help them with product-market fit. And we help them with going into the market. It’s truly a sandbox for health care startups to thrive in.”

LGH is also looking for additional investors. Robinson says they’ve raised $6 million of the fund’s $10 million target, so there’s still $4 million available. Minimum buy in is $250,000 with the maximum investment being $2 million. LGH charges no management fees, as it’s covering the cost of operating the fund. Interested investors can reach Robinson at cirobinson@lgh.org, as can startups seeking investment.

The system is also running a real estate fund that’s actively investing and in the coming months is planning to launch a $50 million Opportunity Zone Fund, which will primarily focus on developing real estate on LGH’s campuses located in Opportunity Zones, like the Oil Center. 

Why this matters: LGH is Acadiana’s largest not-for-profit health system, so these funds are important just from the perspective of strengthening its bottom line while providing access to innovations that improve operations. But it’s also important because it’s an opportunity for Lafayette to leverage its economic strengths by combining the efforts of some of its most significant employers. And all this energy is focused on health care, one of Lafayette’s industries with the greatest potential to make up for the billions in GDP lost in the oil and gas industry.

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It’s not your imagination; Lafayette’s real estate market is struggling

Lafayette’s real estate market is ice cold, and it may get worse before it gets better.

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Latest job numbers show Lafayette’s oil economy is still shrinking

The gist: Recent employment numbers from the state workforce commission show an increase in jobs in the Lafayette area. But those same numbers show continued job losses in Lafayette’s oil and gas industry. It doesn’t appear to have bottomed out yet. 

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2,400 is the number of jobs added in June 2019. The biggest gainer was Leisure and Hospitality jobs — the service industry, essentially — which added 1,100 jobs. Education and Health Services added 500, the next biggest growth sector.

200 is the number of jobs lost in Mining and Logging, the segment that accounts for the oil industry. Construction took the most losses with a reduction of 300.

Roughly 12,000 mining jobs have been lost since 2014 — a 50% decline. That means Lafayette has lost more than 10,000 oil and gas jobs in the last five years. The oil and gas industry used to directly account for 10.6% of all jobs in Lafayette, but now that total is down to 6.6%.

The national oil and gas industry is growing while Lafayette’s is shrinking. While nationally the industry still hasn’t recovered all the jobs lost during the crash, oil and gas employment nationally has increased every year since 2016. Even though the losses have slowed, Lafayette’s oil and gas industry has shrunk every year since 2014. 

Jobs are growing in Lafayette, but employees are making less money. High paying oil and gas jobs are often replaced by lower paying jobs in restaurants, hotels and schools — exactly where recent growth sectors are. Per capita personal income in Lafayette Parish has fallen from approximately $51,000 in 2014 to under $46,000 in 2017. During that same period, per capita personal income in the state rose from $41,811 to $43,660.

Why this matters: Clearly, Lafayette’s oil and gas industry hasn’t hit bottom. Just because the crash has slowed doesn’t mean it’s over. What we’re seeing is further evidence of the establishment of a new normal, not just a downturn based on temporary market conditions.

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It’s been a rough first half of 2019 for Waitr

The gist: Waitr started the year on a high, buying up equal-sized competitor Bite Squad and hitting $14 a share in March. Since then, the nascent public company hit the rocks, facing lawsuits, potential restaurant strikes and a stock that’s fallen below $7.

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Waitr trims workforce in thorny transition from startup to corporate player

The gist: Since going public, Waitr has faced legal attacks from disgruntled drivers. This week, citing efficiencies, the food delivery app company terminated several dozen employees in a move that took its workforce by surprise. 

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Approximately 80 employees are said to have been let go. Waitr has not confirmed that number officially, but the figure has circulated among current and former Waitr employees. A staff segment that worked to onboard new restaurants took the brunt of the reduction. In a statement, Waitr said the layoffs were a “difficult decision” and asserted that no jobs would be outsourced as a result. The company will focus workforce development on technology, customer success, sales and accounting, which remain “areas of growth.”

Growing pains. A blog post written by one former employee based in Florida laments Waitr’s transition from scrappy startup to corporate monolith. His wife, who worked remotely, was among those fired Thursday. His post portrays a callous and sudden dismissal:

They had a mandatory “integration meeting” in which they summarily terminated 80 people. They gave them 5 minutes to collect their things. They had police on site to escort them from the building. … It didn’t matter what these people did for the company. Some of them having been there since day one.

Asked to respond to the blog account, Waitr referred to its general statement. 

Lake Charles, Lafayette and Bite Squad employees were impacted. Lake Charles’ NBC affiliate KPLC is reporting 25 let go. Employees at both Lafayette offices were also terminated, but the number and distribution are unclear. Earlier this year, Waitr struck a development deal with the state, receiving $1.5 million to outfit its new Downtown Lafayette HQ, along with a performance-based retention grant that caps at $1 million over five years. Waitr is expected to deliver 200 direct jobs to the Lafayette market. 

Waitr says the layoffs were a necessary result of its Bite Squad acquisition. Waitr bought the Minneapolis-based competitor last year for $321 million and has since been in the process of integrating the two workforces. Waitr has reiterated the company’s pledge to grow in the state of Louisiana.

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Lafayette’s healthcare economy is heating up

The gist: Oil and gas may still be down, but Lafayette’s healthcare economy has realized a series of wins over the last few weeks with good news from companies like VieMed, NeuroRescue and ThinkGenetic.

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The future of work can still be human, if coding camps like this can make it more female

Encouraging more girls to get into computer science and robotics can help fill a growing employment gap. This summer camp is part of that effort.

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The parish can’t afford to fix drainage without more money

Some want to claim that the only thing preventing us from fixing our flooding issues is a shift in priorities. But the reality is that the parish can’t afford to fix its drainage system without more revenue.

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Millions in state dollars likely headed for Moncus Park, Lafayette airport, I-49 South and more

The gist: In an election year breakthrough, nearly 20 Lafayette Parish projects have survived into the final days of the state legislative session. Pending a signature from the governor, the area is set to pull more than $40 million in priority funding for some long-suffering projects, as well as $150 million in transportation dollars for I-49 South.

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“It’s a small victory, but it’s not the end of the process,” state Rep. Jean-Paul Coussan tells me. Coussan credits an areawide push to sell Acadiana projects to key figures like Gov. John Bel Edwards and state Sen. JP Morrell, the chair of the Senate’s Revenue and Fiscal Affairs Committee. Both Morrell and Edwards visited priority projects — Moncus Park and the airport, respectively — in the last year. Big budget capacity greased the skids as the political stars aligned.

Making it rain across South Louisiana. Here’s a list of some of the Priority 1 and 2 dollars (more on that in a minute) earmarked for Acadiana in HB2, the state’s infrastructure budget bill.

  • Lafayette Airport – $10 million (P1)
  • Moncus Park – $2 million (P2)
  • Lafayette Parish Courthouse – $3 million (P1)
  • Opportunity Machine Renovation – $5.6 million (P2)
  • Lafayette Metropolitan Expressway – $4 million (P2)
  • Apollo Road Extension – $5.5 million (P2)
  • University Avenue Corridor – $3 million (P2)
  • Holy Rosary Institute – $500,000 (P2)

Top priority dollars aren’t the entire outlay. HB2 includes more projects than the state can actually fund. Priority 1 dollars are typically paid outright. Priority 2 is for new projects paid by bonds. Other dollars are parked in Priority 5, which is essentially a queue for future allocations.

I-49 South got $150 million in BP oil spill money in a bonanza of riders to a transportation bill that ballooned the item to $700 million in total allocations, statewide. The I-49 money is cash for “shovel-ready” components of the project, not the Lafayette Connector, which alone is expected to cost half a billion dollars or more and will likely need federal funding to move forward.

This marks something of a breakthrough for the Acadiana delegation. Legislators have grumbled for several years that the region has been left out in the cold on state allocations. Some of the items in HB2 are outlays previously killed by Edwards, like funding for Moncus Park and Apollo Road. Insiders say the starve-out was a direct result of clashes between Acadiana’s largely Republican delegation and a Democratic governor.

You gotta commend the legislative delegation,” LEDA CEO Gregg Gothreaux tells me of the haul. “It’s impressive.”  

What to watch for: Whether HB2 makes it to the end of session unchanged. And then, whether Edwards vetoes any of the projects, as he has in the past. Edwards has a lot of incentive to pass these projects through in an election year. Meanwhile, last year’s sales tax compromise gives the governor little reason to be punitive, some state political insiders tell me. There’s optimism that much of the outlay will make it.

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New era but same consultant for LUS on long-term planning process

The gist: LUS will contract Burns & McDonnell to run its integrated resource plan, the process the utility uses to determine its future energy needs and how it will power them. The choice of consultant met immediate criticism among local green energy advocates. The contract is worth $500,000 and was approved Tuesday by the professional services committee.

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Burns & Mac guided LUS on two controversial decisions. In 2011, the company recommended LUS continue burning coal in central Louisiana, instead of switching to natural gas, a decision critics maintain was a costly mistake in hindsight. And in 2016, LUS developed a $100 million plan to build new natural gas generators, at the consultant’s suggestion, even raising electric rates to finance the plan. That decision triggered a backlash that ultimately shelved the plan and in part led to last year’s privatization controversy.

“Half a million dollars is a lot of money,” renewable energy advocate Simon Mahan tells me. Mahan developed a lengthy document criticizing the 2016 plan but has since departed Lafayette. “To use the same firm that got it wrong twice before is eyebrow raising.”  

Interim Director Jeff Stewart says this contract is different. The 2011 and 2016 plans did not involve robust public engagement, and Stewart says that engagement is baked into this upcoming process.

“That’s why we shelved [the 2016 plan],” Stewart tells me. “I want as many people who want to get involved to get involved.” He expects to time the public facing process to PlanLafayette activities, with outreach beginning in September.

LUS’s open approach seems to be working. Mahan tells me he believes that Burns & Mac is capable of delivering. And he gives a lot of credit to Stewart’s leadership style.

“Frankly, I’ve been really impressed with what he’s been saying and the actions he’s taken. There’s a new wind at LUS to listen to the public a little bit more,” Mahan says. “That makes me feel good.”  

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Vision 2020: Lafayette has the chance to lead a state lagging on climate change action

Fighting climate change takes a global effort — one that we are simply choosing not to participate in.

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