The committee charged with finding Gregg Gothreaux’s replacement repeatedly broke the state’s Open Meetings Law, leaving the public in the dark about the entire process.
The Lafayette Economic Development Authority has turned over the full list of applicants who met the July 14 application deadline for the agency’s top job, by far the highest paid position for a public official — potentially worth an estimated $450,000 in salary and benefits.
The Current has filed a public records lawsuit against the Lafayette Economic Development Authority and its president and CEO, Gregg Gothreaux, to compel the agency to turn over the more than 30 applications/résumés of candidates seeking to replace Gothreaux.
Included in the bill are three capital outlay projects for the University of Louisiana at Lafayette: $18 million for the Madison Hall renovations; $13.8 million for planning and construction of an engineering classroom building; and $13,350,000 for planning and construction of a health care education and training facility.
The gist: After months of resisting calls to do more to keep vulnerable families housed, the Guillory administration will carve out a small portion of coronavirus relief money for rent and utility assistance. LCG committed Tuesday to shift $100,000 out of emergency funds currently dedicated to its business relief program and repurpose another $300,000 in regular housing program money to rent relief.
Most of the money LCG put toward emergency rent assistance has come from shuffling around housing dollars it already manages. The $100,000 reallocation will be cut from the $850,000 federal coronavirus relief grant the Guillory administration and LEDA used to set up, over the objections of housing advocates, the Lafayette Business Recovery Program, which has come up short of its initial promise to help hundreds of small businesses. Another $300,000 would be allocated to rent and utility assistance from the Community Development Department’s regular housing program budget.
“It’s been difficult to get the funding to these businesses,” Community Development Director Hollis Conway told council members Tuesday night, reiterating that his staff is overtasked in administering the program.
Altogether, LCG has committed $660,000 to direct housing support, including $260,000 the administration offered up as a compromise to housing advocates earlier this year. Leigh Rachal, who heads the Acadiana Regional Coalition on Housing and Homelessness, says that money is only just now hitting the street, and it’s moving quickly.
Lafayette’s business grant program has struggled to get money into the hands of the businesses it was sold to help. Called the Lafayette Business Recovery Program, it combined the $850,000 in coronavirus relief funds from the U.S. Department of Housing and Urban Development and a $200,000 matching grant from LEDA, which has managed the public-facing portal for applications. Approximately 1,000 businesses applied.
To date, 33 businesses have been approved for funding. Sixteen businesses qualified for the more restrictive HUD reimbursements managed by LCG, accounting for $119,000 in grants. Another 17 businesses were funded by LEDA’s funding pool, not burdened by federal red tape, totalling $118,000. Three more applications are pending approval for LEDA funds. Conway said another dozen or so applicants are in the pipeline on the LCG side. It has more than $600,000 remaining to spend.
Regulatory snags have slowed the program. Faced with onerous documentation requirements, the vast majority of applicants have washed out of the multi-tiered process. As of mid-August, the program had moved just $26,000 of the federal award. LEDA CEO Gregg Gothreaux forged ahead to quickly disburse the portion put up by his agency. LEDA’s dollars do not come up with the thorny restrictions that complicate the HUD-funded reimbursements.
“In the end, many businesses will get the help they need to continue operations through the BRP,” Gothreaux said in a statement announcing the latest awards this week. “We won’t have enough funds to help everyone, but we want to assist as many businesses as we can that were forced to close or limit operations due to government orders.”
Council members are pressing the administration to get things moving. City Councilwoman Nanette Cook and Parish Councilman Kevin Naquin both pushed for Conway to get the $100,000 out as soon as possible, angling for an emergency meeting if necessary.
“It failed to get the money out quickly; meanwhile, we’ve got people losing their homes,” Naquin told Conway.
HUD added more flexibility to the relief funds. But it’s unclear that substantially more businesses will benefit. Under new guidance issued in early August, up to 30% of the award can be spent to benefit workers earning above low to moderate incomes, and businesses that received other federal help can now qualify. A key selling point pushed hard by Mayor-President Josh Guillory, Gothreaux and others was the program would target businesses who had nowhere else to go. HUD’s updated guidance also set a long deadline to spend the money, giving LCG three years to spend at least 80% of its award and six years to spend all of it.
From the jump, housing advocates argued the HUD funds were better used for housing, given added flexibility included in the block grant program, a creature of the CARES Act, intended to get money into renters’ hands and avoid widespread homelessness. A wave of evictions, feared for months by housing advocates in the wake of rising unemployment, has yet to materialize. And this week, the federal government issued a sweeping moratorium on evictions through the end of the year. How that order works in practice is still unclear, and advocates call it a stay of execution — not a solution — on rising housing instability nationally.
“We haven’t seen the evictions, but we have seen people call for assistance. People are really struggling to make ends meet,” says Rachal.
Touted as help for hundreds, Lafayette’s business relief program has approved help for only a handful so far
The gist: Hatched as a plan to quickly inject cash to local businesses in need, the Lafayette Business Recovery Plan approved its first eight grant awards last week. The program is off to a slow start as the collaboration between LEDA and LCG wrangles with how to manage the onerous regulations that tether most of the $1 million grant pool sourced from federal housing money. The glacial pace means the program could fall well short of its ambitions, while housing needs, another use of the funding, continue to worsen.
Eight applicants have been approved so far for grants pulled from two different funding sources. That’s out of 944 applications received to date, according to numbers provided by LEDA. Many applicants dropped off when faced with large reporting and documentation requirements that come along with grant awards from the U.S. Department of Housing and Urban Development. Trouble with thorny regulations and pace jibe with early critiques voiced by housing advocates who opposed using the HUD dollars for grants to local businesses hurt by coronavirus. Awardees have not yet been notified, so LCG and LEDA would not identify them.
Only four applications totalling $26,000 were approved for HUD funding so far. The total pool from HUD is $852,000 in block grant funds aimed directly at the pandemic. LCG’s Community Development Department, understaffed and inexperienced with directly overseeing HUD business grants, has struggled to move applicants through. Staffers and Director Hollis Conway tell The Current most applications are lingering incomplete. A key problem is the HUD funds are reimbursements, not upfront awards, and they must cover historical expenses. That means many who answered the open call have asked for help on expenses HUD won’t cover, including the artists and low-income business owners the program was touted to help.
LCG formally contracted the HUD grant in July after some delays. Programs in other cities have been similarly delayed, waiting for HUD approval. Applications opened June 22, behind the original start date of June 1, but the money wasn’t technically available until the contract award was signed in July. The approval committee, which includes several prominent business and community leaders and council members, met Tuesday to approve the eight applications, which now await signoff from LCG’s lawyers.
Four of the applicants will receive money from LEDA. The total $1 million pool set up for the Lafayette Business Recovery Program includes $200,000 put up by the parish economic development agency. Those funds are not governed by the same restrictions that come along with the bulk of the award funds from HUD. And LEDA CEO Gregg Gothreaux says his organization will now move ahead of LCG’s meticulous pace to get more funds out the door.
“We will distribute all of LEDA’s funds for the Business Recovery Program in the next couple of weeks to businesses that are desperately in need of a lifeline,” Gothreaux says. “Then help LCG distribute its share with any info they need to work toward a successful distribution of their funds.”
LCG hopes to put a few more applicants before the approval committee in coming weeks. Around 100 made it through the first few steps, getting close enough for real consideration. Twenty-three were rejected outright, leaving 70 in the active pool, according to data provided by LCG. But even the eligibility of the handful most likely to be in front of that approval committee, projected to be eight or nine at this point, is unclear.
One of those applicants is a woman who received an SBA disaster loan and still hasn’t exhausted it, meaning accepting money from the HUD portion of the Business Recovery Program could be a duplication of benefits and require her to pay HUD money back, Community Development Planner Belle LeBlanc says. (LCG is ultimately on the hook for funds spent out of HUD’s designated scope.) Some small enterprises simply don’t have the kind of operational expenses the program is designed to cover.
“They don’t have operational expenses; there’s nothing for us to assist [them with],” LeBlanc says.
Staff members hesitate to say they won’t be able to spend all the money. They describe a “fluid” situation with most applicants, working over the phone or by email and combing through reams of required documents like bank statements, lease agreements and receipts for covered expenses. Applicants are given a soft, five-day deadline to turn around completed applications, and the staff tries to work with them, often finding some likely to qualify ultimately don’t. One applicant, Conway says, was hospitalized with coronavirus and went silent.
“We don’t want to predetermine [that we won’t be able to spend the money] and miss people. My very limited staff is having to go above and beyond to make that happen,” Conway adds. “We’re going 110%.” The application portal is still open. Applicants are also directed to the state’s business recovery program. Authorized with $275 million in funds awarded to Louisiana in the CARES Act, the state program overlaps with the local scope but has fewer hoops for small businesses to jump through.
Housing advocates criticized this very problem in how LCG planned to use the HUD funds. They argued in May that HUD regulations would severely limit the number of businesses that could ultimately be helped by the full $850,000 grant and lobbied for LCG to put the money toward rent and utility assistance. To expedite funding, HUD waived many of the typical requirements for housing programs, clearing an easier path for that use. Documents submitted to HUD to approve the program estimated between 250 and 350 businesses would be helped. Rhetoric from the mayor-president and program supporters made the case that the program could help hundreds of businesses and in turn hundreds more workers. Of the four businesses approved for HUD funding, 1.65 jobs — a HUD calculation based on full-time equivalent salary of $35,000 — have been retained.
Funding for emergency shelters appears to be running out. Louisiana Housing Corporation has asked housing agencies not to take on any more households in temporary shelter housing. In Acadiana, 341 households, including some with children, have been put up in a network of hotels. Acadiana has the largest population of families in emergency housing in the state. Louisiana is still sorting out the details of accepting extended and expanded unemployment benefits from the federal government, following a murky executive order from President Donald Trump. Temporary federal bans on evictions expired at the end of July. Trump has directed federal authorities to pursue extending the evictions without Congressional authorization, but, in practice, evictions have resumed.
There is regulatory urgency to move the HUD funds. HUD holds back funding allocations to ensure its program recipients are spending the money received. Community Development staff say HUD is unlikely to take the money away, but the funds do need to be moved before the end of the year.
Community Development is looking at other “options.” Making note of the dire housing need, Conway offered that one option is to redirect the funds to that purpose, in which case the money would be awarded in a chunk to an agency partner like Catholic Charities of Acadiana, which received $200,000 in assistance funds last month. He did not specify other options and could not commit to using unspent funds on housing.
“Those are conversations I would have with my boss,” Conway said, noting the need to move the money quickly both for the sake of emergency and to meet HUD requirements. “We would want to be part of the solution. I think there’s a way we can do that.”
The administration did not respond to a request for comment before press.
The gist: Mayor-President Josh Guillory’s plan to allocate $850,000 to a small business grant program in partnership with LEDA is on hold as it awaits approval from the U.S. Department of Housing and Urban Development. Originally, the goal was for LCG and LEDA to start accepting applications by June 1, but that timeline has been delayed.
The gist: Last week, Congress hurried through an unprecedented $2 trillion stimulus to prop up the U.S. economy, unlocking billions in cash to patch the nation’s businesses and workers through weeks more of the social distancing guidelines freezing commerce. Everyone expected dollars would start flowing at the stroke of a pen, but the size and scope of the bill means there’s more to iron out, even as the federal government works to turn on the taps this week.
Yes, the CARES Act is now law, but the rules aren’t really in place yet. The president enacted the stimulus when he signed it last Friday. But, for all of the bill’s provisions, the federal government still has to issue guidance on how the money flows. Some of this stuff is pretty straightforward, and the basic building blocks — who qualifies for what and for how much — are pretty well established. As disaster packages go, this one is expected to kick in pretty fast. The U.S. Treasury announced today that it expects to have the program up and running by April 3.
In the meantime, we’ve been in something of an info vacuum. Many local banks, which will be the vanguard of the billions in cash available to small businesses, have been flooded with calls and are telling customers to gather info while they wait for federal guidance. IberiaBank recently sent out a notice to customers, offering a rundown of what it knows and prepping clients to hit the ground running once the rules are ironed out and the cash is available.
“Information is changing by the minute and although we want to be helpful, we cannot be held responsible for any changes in the information going forward,” IberiaBank wrote to its customers, pointing to the fluidity of the bill’s finer points. In the meantime, IberiaBank suggests businesses gather the following info while queueing up.
- Payroll tax reports for the previous 12 months
- Historical tax returns for three years
- Organizational documents
- A list of all entities owned by any 20% or more owner of the business
Business groups have spun up webinars and one-pager resources. Some went up before the bill was even passed and as Capitol Hill continued to bandy the legislation around. Most of the dust has settled, but some key details are still in motion until the rules are formally promulgated and updated on the Federal Register. Beyond that, the longer term impact of the bill on Acadiana’s economy remains unclear. For instance, we’re not exactly sure how the stimulus will perform in propping up the region’s oil and gas industry besieged on two sides by an international price war and flatlined demand.
“I’d give you $20 to answer that question,” LEDA President and CEO Gregg Gothreaux quipped when asked about that during a taping of the radio program Out to Lunch Louisiana this week. (The episode airs on KRVS Wednesday and Saturday.) Gothreaux commended the bevy of experts and business leaders pounding the pavement to pin down how the stimulus works and what it will do for the local economy.
Around 35% of Acadiana businesses expect they’ll lay people off, Gothreaux said in the interview, relaying some returns from a regional survey of roughly 1,000 businesses. Figuring out which CARES Act provision works best for those businesses is essential to making the bill work, and the federal guidance is the last piece of the puzzle. Once that’s in place, CPAs and attorneys can point employers in the right direction.
“Hang tight” is the best advice at this point. Stephen Waguespack of the Louisiana Association of Business and Industry has urged businesses to wait on the CARES Act’s Payroll Protection Program to activate before making any big decisions; that should happen this week, kicking in billions in forgivable loans for small employers. By government standards, this is moving at warp speed. Businesses are hurting now, but making the wrong decision could be costlier.
Over a month ago, I went on KPEL to make the case that the Lafayette Economic Development Authority and the Lafayette Public Trust Financing Authority should use the $30 million they have in combined cash to rebuild the Buchanan Street parking garage — currently set for redevelopment — instead of using public money to build new office space for the […]
Lafayette’s real estate market is ice cold, and it may get worse before it gets better.
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.
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.
When the Buchanan Street parking garage was condemned last October, it caused a series of problems Downtown. There have been complaints on social media of courthouse employees feeling unsafe walking longer distances to their cars at night, of defendants being late for trials because it takes so much time to find parking, and of businesses losing patrons who don’t have […]