• By TED GRIGGS
• Advocate business writer
• Published: Dec 15, 2009 - Page: 1A

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The Baton Rouge-based risk management consulting firm that gained national attention by predicting many of Hurricane Katrina catastrophic effects will move its headquarters to Research Triangle Park in North Carolina.

IEM will get more than $9 million in state tax breaks and grants from North Carolina if it meets its goals of creating 430 jobs over the next six years, according to North Carolina Gov. Beverly Perdue’s office. Those will pay an average of $63,000 a year.

It’s unclear how many of those jobs will come from the nearly 200 positions IEM has in Baton Rouge.

Ted Lemcke, IEM’s vice president of technology, said 50 of the corporate support and overhead positions will move by the end of September.

All of the Baton Rouge workers will be offered the opportunity to relocate, Lemcke said, but it’s too early to tell how many will do so.

Adam Knapp, president and chief executive officer of the Baton Rouge Area Chamber, could not be reached for comment Monday but issued a statement calling IEM’s decision “disappointing.”

The chamber and the state had been working closely with IEM for more than a year on an “unprecedented” incentive package to make sure the company’s headquarters in Baton Rouge, the statement said.

The deal included financial incentives and “aggressive plans” to address IEM’s concerns regarding its work force needs as well as public-private collaboration on innovation, Knapp said in the statement. Gov. Bobby Jindal, Mayor-president Kip Holden, LSU Chancellor Mike Martin and the heads of many state agencies met with IEM officials during the process.

Knapp said that some of IEM’s needs could not be addressed in the short term, such as access to federal contracts.

But chamber spokesman Mike Odom said the details of Louisiana’s incentive package were confidential. Louisiana Economic Development officials could not be reached for comment.

Lemcke said IEM wouldn’t say which state’s incentive package was superior.

Lemcke said there were a number of advantages to the Research Triangle, such as a larger pool of people with advanced degrees in professional services; a culture of innovation; and North Carolina’s decision to target U.S. Department of Defense and Homeland Security contracts, the core business for IEM.

IEM has an aggressive growth strategy, but the company has been hampered the last four years by the struggle to fill positions, particularly in the information technology specialties, Lemcke said. Having three universities nearby should help with that.

Being closer to the federal government, which saves travel time and expenses, and the lower cost of office space in North Carolina also weighed in that state’s favor, Lemcke said.

To those disappointed at IEM’s decision to move, Lemcke said the decision was not made lightly.

IEM has deep roots in Louisiana and was founded here 25 years ago, he said. But ultimately, the company had to look at what it had to do to succeed as a business.

Knapp reminded residents that Louisiana and the region have enjoyed some successes recruiting other corporate headquarters to the area, such as Albemarle Corp. and chemical company Bercen Inc. in 2008. Louisiana and the area have also convinced The Shaw Group Inc. to remain here, he said.

However, IEM’s decision should reinforce the Baton Rouge region and the state’s goal to foster “a culture built on innovation,” Knapp said.

“We must see greater attention paid to growth-oriented businesses companies driven by innovation, who require access to a competitive, knowledge-based workforce,” Knapp said. “As you can see from today’s announcement, our ability to retain and recruit the growth companies of tomorrow depends on it.”

IEM’s move is bad news on a number of levels, economist Loren Scott said. It’s never good to lose a headquarters firm, especially high-paying jobs, which generate at least two additional jobs in the community. “That’s a net loss of (at least) 150 jobs,” Scott said.

In addition, Beriwal has been a significant civic leader in the community, Scott said, and her loss is serious.

Scott said he hopes that the jobs losses are limited to the 50 corporate support positions. The loss of all 200 positions, and the additional jobs they create, would be a serious blow to the area’s economy, he said.

IEM found itself in the national spotlight after Hurricane Katrina, when it came to light that the company had provided disaster training for the Federal Emergency Management Agency. IEM’s mock hurricane modeling showed that although New Orleans and the surrounding area had plans and FEMA had a national plan, none were capable of dealing with a large-scale disaster.

Critics of the federal government’s response to Katrina cited the IEM work, saying the report showed officials failed to prepare for a disaster they knew would eventually come. Though FEMA spent nearly $1 million on training, the agency never got to the major problems Katrina generated: search and rescue, law and order, and communications.

“I am quite distraught,” IEM chief executive Madhu Beriwal said at the time. “There are so many people who worked so hard to make sure this day would never come. It’s a major catastrophe.”

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