Lafayette’s retail sales are on the rise after a string of bad years. But we still have a long way to go.
The gist: Still in its infancy, the Lafayette Public Innovation Alliance, created by the mayor-president to kickstart Lafayette’s pivot to technology, is working to find its way. Opportunity Zones could figure prominently in the trust’s work.
Get caught up, quickly: LPIA is a public trust created by M-P Joel Robideaux and voted into existence by the City-Parish Council last summer to nurture the growth of software development and innovation in Lafayette Parish. It had its first meeting in January and held its second last month. The mayor-president has embraced the technology sector as an economic driver for the region. The LPIA is his vehicle for pursuing these aspirations.
LPIA aims to drive adoption and use of federal Opportunity Zones. Opportunity Zones are part of a new federal tax incentive program that provides preferential capital gains tax treatment to money invested in “Opportunity Funds” that invest in these zones. Lafayette’s zones include the Oil Center, Downtown and portions of the University Avenue corridor. It’s not clear yet what specific role LPIA will take in achieving the goal, but at a minimum Robideaux wants the organization to be a champion for these efforts.
Lafayette (sort of) has an innovation district now. While there’s been no formal proclamation, Robideaux has positioned LPIA to create an innovation district that overlays those opportunity zones. An innovation district is an urban development strategy to regenerate underperforming areas to be more desirable to innovation companies and workers. The thinking here is to stack incentives and programming by adding an innovation district over the same footprint. It’s not clear yet what this designation actually changes other than reinforcing the intent of Robideaux’s focus on catalyzing growth in these areas through technology.
No discussion of Crypteaux. Since its inception, the LPIA has been connected to Crypteaux, the mayor-president’s pitch to create a municipal cryptocurrency for Lafayette and transform our community into a living lab for blockchain technologies. Crypteaux figured heavily into the LPIA’s first meeting agenda, which included an at-length discussion of using cryptocurrency as an investment vehicle of sorts to fund LPIA ambitions. Notably, Crypteaux was not part of the March meeting’s agenda.
No plans for staffing, yet. There was at one time talk of a potential agreement with UL (Ramesh Kolluru, UL’s VP of Research, sits on the LPIA) to provide staffing until LPIA could pay for its own. But members decided to postpone discussing a staffing plan until funding is secured.
Starting work on a mission. One major discussion item was working to define LPIA’s mission in a way that helps the public really understand what the organization does. LPIA is eyeing an event this fall to tie together a variety of other innovation and technology-centric events like the Opportunity Machine’s Innovation Conference and CajunCodeFest.
Why this matters? Lafayette has to replace the billions of dollars and thousands of jobs lost in its economy since 2014. Technology and software businesses offer some of the greatest potential to do that. Given that LPIA has set out to help attract and grow those businesses, there’s a lot riding on the success of this venture.
The gist: On Saturday, March 30, from 9 a.m.-2 p.m., Louisiana Economic Development is hosting a career fair in Baton Rouge to help CGI fill the 400 new jobs the consulting giant is creating in Lafayette.
An improving unemployment rate offers an incomplete picture. Fewer people aren’t unemployed. Fewer people are working.
The gist: Downtown and UL are only a mile away from each other but worlds apart. LCG has been testing a transit route to connect them and is now looking for dollars to buy vehicles to run it.
All about them millennials. The theory behind the loop is that Downtown needs youth to thrive, and UL’s got youth to give. At one time, we called youth “millennials.” I guess at this point it should be Generation Z, right? I’m a millennial, technically, and I’m 34. Anyway, here’s the m-p:
“In order for us to ultimately have a thriving Downtown environment, we need a lot of things to happen,” Mayor-President Joel Robideaux told me back in 2017, when the idea first materialized publicly. “A residential component. We need all of those things. But you also want the millennial connection to Downtown that doesn’t currently exist, except very late at night on the weekends. This is an easy first step to the connection between the millennials and the Downtown environment.”
Buses already in the Lafayette Transit System fleet have been used in a test route. Planning Director Danielle Breaux says a city bus isn’t quite the ideal fit, suggesting a shuttle is probably the right size for the ridership and route of narrow urban streets. Robideaux said in 2017 that an electric vehicle was a possibility, arguing something small and innovative may appeal to student riders. The “proof of concept” provided by the LTS route, Breaux says, allows LCG to avoid spending money on a more extensive study and direct the dollars to buying vehicles.
“Pilot programs in transportation such as this one not only help to take unnecessary car trips off of the road, but also improve connectivity, transportation options, and lower cost for citizens, students and visitors to better access jobs, services, and education,” Breaux tells me in an email.
Bus transfer. Robideaux is pursuing dormant transportation dollars to buy whatever vehicle(s) get used. The administration put in a request to the Metropolitan Planning Organization, the agency in charge of federal transportation dollars in the Acadiana region, to move just under $380,000 from funds originally set aside to pay for a roundabout and a study on West Congress Street. The budget and scope of the project are unclear. Breaux says LCG will have more info on the project available in mid-April, when the transfer applications are turned into the MPO.
What to watch for: Whether the transfer request gets OK’d when the MPO votes in May and July. Robideaux took some heat for other MPO transfer requests on the slate, most pointedly from Downtown representatives and Councilman Bruce Conque on a move to zero out a $6.8 million streetscape project in Downtown to pay for improvements on the University Avenue corridor, a priority project for the mayor-president. Robideaux and four council members, including Conque, have committee seats on the MPO, along with officials from other parishes in the MPO’s footprint.
The gist: This is the second collective action suit against Waitr filed by delivery drivers alleging the Lafayette-based food delivery platform doesn’t pay minimum wage.
New Orleans driver Autumn Montgomery says she earned $1.97/ hour when driving expenses were factored in. Her federal complaint claims she drove 279 miles on less than 30 hours of work each week. Using the IRS benchmark of 54.5 cents per mile, it cost her an average $5.28 per hour to drive for Watir. Montgomery retained Lafayette attorney Chris Zaunbrecher to sue, filing a collective action claim in Louisiana’s Eastern District on March 8. The suit also brings state claims.
Another Lafayette-based attorney, Kevin Duck, is trawling to attract drivers for a suit.
Montgomery’s claims mirror those filed by two drivers in February. The crux is that Waitr drivers are paid $5 or $6 an hour plus tips but aren’t reimbursed mileage. Waitr drivers have big delivery zones in secondary markets, so when the pay dips and the drives are long, their earnings drop below minimum wage, a violation of federal law. Or as Gizmodo put it. “Waitr delivery drivers say they’re being screwed, too.”
“Some of these people are essentially paying Waitr to work for them,” said Carter Hastings, one of the attorneys representing Jualeia Halley and Heather Montgomery in the February suit. “But since it’s wear and tear, they don’t typically realize it.”
At issue is the Fair Labor Standards Act, which sets the federal minimum wage at $7.25 an hour and requires employers to pay workers “free and clear” of their costs of working. This is also called the “kickback” rule.
Gig economy companies like Waitr are targeted for labor violations all the time, although Waitr’s case is somewhat unique. Virtually all of Waitr’s drivers are W2 employees, not contractors, which exposes the company to the kickback rule. Its competitors, like GrubHub and DoorDash, have more commonly been sued for “misclassification,” essentially, treating independent contractors like employees. Both of these suits make misclassificaiton charges against Waitr, also.
Domino’s franchises have paid out millions on kickback violations. A rash of cases against Domino’s have been filed. Around 100 drivers in Cincinnati were awarded $1 million last year.
Collective action means opt in. That tends to limit the number of claims that would affect Waitr, should the suits go forward. Waitr employs approximately 8,000 active drivers, but the prevailing suit would capture former drivers as far back as 2016, too. The benchmark opt-in average is around 20 percent of a class, but the numbers vary wildly by industry or employer. Some 40 drivers in Texas, Louisiana and Alabama have opted into the Halley suit, many from Lafayette.
Two Waitr drivers say the fast-growing food delivery app company paid them and potentially thousands of other drivers less than minimum wage in a collective action suit.
Walmart’s decision shines a light on serious issues with no easy answers.
Recent headlines indicate 2018 might be the year our economy started recovering. But there’s ample evidence that any optimism should be guarded given the situation our economy’s in.
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.
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.
The Advocate has pounced on The Daily Advertiser’s newsroom, snatching up several reporters and a senior staffer in a coup that could cripple Lafayette’s flailing daily.
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.