While one economist may be projecting the end of Lafayette’s recession, more context is needed to understand the situation our economy is in
The day started with the news that LAGCOE was leaving for New Orleans and ended with a pitch competition that’s a symbol for a future where Lafayette is a hub for healthtech startups.
The gist: Lafayette Parish Tax Assessor Conrad Comeaux has just finished up the latest tax roll, confirming that Lafayette lost hundreds of millions of dollars in movable property since 2015.
$559 million: That’s the total decrease in movable property in Lafayette from 2015 to 2017.
What does “movable property” mean? Movable property refers to the property owned by businesses other than real estate, things like equipment and inventory.
How big of a deal is this? Compared to the overall value of real and movable property in Lafayette Parish of more than $20 billion, we’re only talking about a loss of a couple of percentage points. But when you look at movable property on its own, the decrease is more like 10 percent. What this means is 10 percent less tax revenue generated by movable property, which adds up to millions of dollars of lost income for Lafayette Consolidated Government, the Lafayette Parish School System, the Lafayette Parish Courthouse, and every other organization that relies on property tax millages to fund their operations.
$10 million: That’s the amount the total assessable value of the property tax roll increased from 2016-2017. The reason for this is that real estate values have continued to hold steady or go up, which has offset the losses in movable property. But even here the numbers don’t look great as the total value of real estate in the parish rose more than $400 million to about $18 billion in total. That means the total residential and commercial real estate values in Lafayette Parish only increased a bit more than 2 percent. On average nationally, commercial property values increased more than 7 percent and residential property values more than 5 percent. Put another way, if real estate values in Lafayette Parish had increased 5 percent instead of 2 percent and if movable property values had just held even, the market value of our property tax roll would be about a billion dollars higher and generating more than $10 million in additional tax revenue for the aforementioned entities.
But this is all just about oil and gas, right? While these trends may have started in oil and gas, they’ve spread throughout Lafayette’s economy as retailers are stocking less inventory and banks are seeing deposits go down. And while the value of real estate has been keeping our heads above water, we’re likely to start seeing that area get hit as well, as vacancy rates are higher in apartment buildings and occupancy rates are lower in hotels, both of which can negatively impact the value of those buildings and therefore put downward pressure on property tax revenues for LCG.
▸ The gist: Councilwoman Liz Hebert launched an effort earlier this year to raise money to cover some of the city’s 600 uncovered bus stops. The council approved a budget line item to receive donations going forward, officially activating the effort.
▸ 21 bus stops. That’s the number of stops Hebert’s initiative can cover with sponsor money already committed, stacking on top of the LCG dollars budgeted to cover 11 stops each year. The adopt-a-stop effort targets low-hanging fruit, for the most part, stops that can be covered at a cost of $6,000. Individual donors, companies and nonprofits can contribute to a fund housed at the Community Foundation of Acadiana. That money is used to reimburse LCG’s costs to build a shelter on an as-raised basis.
▸ Eight major donors have come forward so far. Islamic Center of Lafayette (the first group to sign up), Unitech Training Academy, CGI, the Pinhook Foundation and the Lafayette Public School System have each sponsored single stops. McDonald’s of Lafayette sponsored three, UL sponsored five and Lafayette General sponsored eight.
▸ 60 top stops are on Hebert’s target list. Again, that’s the number of stops that can be covered for $6,000, still a small portion of the 600 uncovered stops along Lafayette Transit System bus routes.
“So many of our team members come from all areas of the city and had to wait in the rain or the sun,” said Lourdes Foundation Executive Director Jeigh Stipe, addressing the council in support of Hebert’s initiative. Lourdes is not yet participating directly in the program, but it connected with a manufacturer through Hebert to cover a stop on Lourdes’ campus.
The Drag Queen Story Time episode’s impact is bigger than drag queens and literacy.
As part of its plan to take over management of LUS’s electric division, Bernhard Capital Partners is presenting a vision of creating a Fortune 500 company headquartered in Lafayette.
▸ The gist: Longtime Cajundome Director Greg Davis didn’t think it was right that he hold onto his $160,000 a year job while having to deliver news to seven other employees that their positions were being eliminated. So the 63-year-old, who has worked for the Cajundome since it opened in 1985 — 25 years as director — announced he’ll retire at the end of October, three years earlier than he’d planned.
▸ His second in command, Pam Deville, was elevated to director, a move that alone will cut $120,000 in salary expenses. In all, Davis’ plan will save the struggling venue half a million dollars, a figure that represents a 13 percent reduction from the $3.8 million it spent on payroll (including taxes and benefits) in 2018. The venue’s annual operating budget is $7.8 million.
The drastic steps were prompted by a $400,000 deficit for the current fiscal year, a number that for the first time exceeds the operating subsidy paid by Lafayette Consolidated Government to prop up the entertainment venue. That subsidy, $392,000, was cut to $376,000 for next fiscal year; in recent years it was as much as $500,000, and at times — like at the height of the IceGators’ popularity— has been zero (another $100,000 LCG provides annually can’t be used for operations). Davis says a study by LEDA concluded that the the subsidy averaged $358,000 annually for the first 30 years of the Cajundome’s existence.
“I’d been looking at this [financial situation] for at least four to six months,” Davis says, explaining that he was holding out hope a couple more concerts would be booked in the current year. That didn’t happen. And concerts are where the money is.
▸ It’s the economy, stupid. While Lafayette’s economy may be showing signs of stabilization in the aftermath of the hit it took from low oil prices and resulting job losses, concert promoters seem to think we’re still suffering too much to take a chance on us, Davis suggests. “I think we’re going to overcome it. We’re going to book more concerts. You book the right concert in this market, and it will do well.” Case in point: the Garth Brooks series, which accounted for five of the eight concerts the Cajundome hosted last fiscal year. Brooks alone sent $217,400 directly to the Cajundome’s bottom line from ticket and suite sales, concessions and merchandise. Eight concerts, which is the Cajundome’s average, were enough to finish last year in the black, the six booked this fiscal year were not. In past years, the venue has hosted as many as 10-12 concerts.
Davis is leaving the Cajundome in competent hands and in great physical condition, the result of a $21 million renovation completed in December 2016. That capital improvement (and the construction of the convention center) was funded by a bond sale backed by the Lafayette Parish hotel-motel tax the state rebates to the venue, money that can be used for capital improvements and maintenance but not for operations.
▸ What’s next for Davis? The community activist and lifelong North Lafayette resident plans to continue devoting much of his attention to education reform, specifically reversing the mindset that black children, especially poor black children, are incapable of excelling academically. He’s on the board of TM Landry College Prep, which is moving from Breaux Bridge to Lafayette in September, taking over the former call center at Northgate Mall. “TM Landry is … a walking contradiction to that belief,” Davis says. “It’s going to provide outstanding examples of black children who are achieving at high academic levels to overcome this myth that because of the color of your skin and because you are poor, that you are not capable of high achievement.”
▸ The gist: On Tuesday, the Lafayette City-Parish Council voted to approve the creation of a new public trust, called the Lafayette Public Innovation Alliance, and seat its first trustees. They were approved to serve five-year terms by the City-Parish Council. Future trustees will be nominated by the mayor-president and approved either by the city-parish council or, if the proposed charter amendments pass, by the parish council. Robideaux named Lafayette Parish the beneficiary of the trust.
▸ The trustees are:
- Chris Meaux – CEO of Waitr
- Bruce Greenstein – EVP, chief innovation and technology officer at LHC Group
- Mandi Mitchell – assistant secretary of Louisiana Economic Development
- Ramesh Kolluru – VP for research, innovation and economic development at UL Lafayette
- Joel Robideaux
▸ Uh, what do they do, exactly? The primary goal of this trust is to produce and attract more technology and software development talent in Lafayette. There are no local public dollars being invested into the trust at this time — although Robideaux did offer to throw in the first $100 if that was required to make it kosher. The intent is to leverage the trustees’ contacts nationwide to find grants and get the trust funded and off the ground.
“Certainly any effort regarding a Lafayette-based cryptocurrency would naturally fit within the goals of the trust as I see them,” Robideaux wrote in an email. “More specific, if Lafayette develops a digital token and that token can generate seed money for the trust, then I would be elated.”
▸ What to watch for: Innovation districts. Robideaux indicated the fund could finance innovation districts that would help the region attract new talent. “We need to produce more talent locally, or implement a strategy to attract talent from other places…specifically technology talent,” he said at the meeting. While there was nothing specific about what that might entail, the idea resembles similar efforts underway in Chattanooga, which claims to be the first mid-sized city to establish an innovation district.
Lauren Bercier of Something Borrowed Blossoms says Lafayette is a great place to launch tech-based businesses that can reach a national market.
Robideaux administration considering sale of LUS’s electric division Mayor in ongoing discussions with private equity firm to purchase or manage the division
Talks between the Robideaux administration and Bernhard Capital Partners over the potential purchase of Lafayette Utilities System have been ongoing since at least the beginning of the year.
Lafayette needs less uncertainty from local government not more. But that’s not the direction we’re going.
The gist: A major real estate developer has reportedly moved to purchase the Less Pay Motel and the adjacent former Coca-Cola building, together comprising a whole block of the beleaguered Four Corners area.
What we know: Two separately owned properties are under contract for an undisclosed redevelopment project: the Less Pay Motel at 120 N. University Ave. and the former Coca-Cola bottling facility at 1506 Cameron St. Representatives of both properties have confirmed independently that the buildings are pending sale, but would not disclose terms or the buyer.
UPDATE: A public notice for a $15 million artist loft development called Bottle Art Lofts, located at the bottling facility, links HRI Properties, a New Orleans-based development outfit with extensive experience in historic rehabilitation, to the sale of that property. The development would include 40 units with a “leasing preference” for artists and would be primarily financed with the equity sale of low income housing tax credits. State records list HRI’s New Orleans address for Lafayette Bottle Art Lofts, LLC, the company issuing the public notice.
HRI also submitted qualifications to redevelop the old federal courthouse, a project that was ultimately awarded to a team helmed by Jim Poché of Southwest Group.
It’s unclear if HRI is also the buyer of the Less Pay Motel.
“A number of things we have wanted to see are coming to fruition,” says Greg Dugan, who has owned the Coca-Cola facility with his wife, Stephanie Cornay Dugan, since 2001. The Dugans currently use the building for fabrication and storage for their company ASCO Window Coverings, located a few blocks away in the La Place neighborhood. Dugan declined to comment further but says more information on the deal will be available by early next week.
Dewitt “Zeen” David of NAI Latter & Blum confirms that a sale is pending on the Less Pay property but also declined further comment, citing a confidentiality agreement. David is the listing agent for the Less Pay Motel, which is owned by M&L International LLC, according to Louisiana secretary of state records.
Why this matters: The Less Pay Motel has been an albatross of sorts for Four Corners, a historic intersection that once was a bustling city center. Plans for redevelopment of the site, which at one time envisioned a police precinct under former Mayor Joey Durel, have faltered over the last decade. Mayor Joel Robideaux quashed Durel’s plan upon taking office, saying he preferred to see the property moved into private commerce. A successful redevelopment could be transformative for Four Corners and the University Avenue corridor. Robideaux has made University Avenue a signature development project for his administration, although Dugan notes that he and his wife have been working to redevelop the Coca Cola building since before the Robideaux administration’s initiative began. Dugan says he believes they’ve found the right buyer to realize a revitalizing vision for the neighborhood.
“We’d be very enthusiastic to see that site moved in commerce,” says Robideaux.
Additional reporting by Leslie Turk