State’s economic efforts praised
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Louisiana landed atop a regional magazine’s ranking of top Southern economic development states for the second time in three years, and the state is showing signs of improving its standing nationally.
Southern Business & Development magazine named Louisiana its 2009 Co-State of the Year, along with Tennessee, based on jobs and capital investment attracted in 2008.
On the national scene, Chicago-based Pollina Corporate Real Estate Inc. has rated Louisiana in the middle of the pack for business climate — but with a decided improvement from 40th in 2008 to 27th in 2009.
Gov. Bobby Jindal touted the Co-State of the Year honor while on his Louisiana Working Tour in the state Tuesday.
“Southern Business & Development ranking us in the top slot in the region is further proof that our efforts to grow our economy are working,” Jindal said in a statement. “And we are only getting started.”
The magazine awards points for jobs and capital investment generated by economic development deals. Louisiana’s 310 points topped Tennessee’s 290 points, but the publication also looks at intangibles, such as the magnitude of the economic development projects and their potential for economic impact.
Louisiana’s top projects in 2008 included The Shaw Group Inc. nuclear manufacturing plant in Lake Charles and headquarters retention in Baton Rouge, a deal that will generate 2,900 jobs in the next decade and $100 million in capital investment in Lake Charles.
Other key Louisiana deals were the Edison Chouest LaShip shipyard in Houma, which could generate 1,000 jobs and $100 million in investment; and a Federal City project for government offices and related services in Algiers, estimated at 749 jobs and $110 million invested.
Also in the Southern Business & Development report, Baton Rouge won the Mid-Market of the Year category with 70 points, led by the Albemarle Corp. headquarters relocation, the $500 million Exxon Mobil diesel fuel expansion and a $300 million Westlake Chemical expansion. New Orleans won the Major Market of the Year honor with 90 points, led by the Federal City project and Monsanto and Southern Recycling expansions.
Tennessee’s top deals were a 2,000-job Volkswagen assembly plant ($1 billion investment); a 500-job Hemlock Semiconductor facility ($1.2 billion investment); and a $1 billion solar power manufacturing project by Wacker Chemie AG (500 jobs).
“Louisiana led all Southern states in the all-important, points-per-million-residents average, and its 310 points topped Georgia, Florida, North Carolina, Alabama and Virginia straight up,” Southern Business & Development wrote. “That’s a pretty good year.”
In that category, Louisiana scored 71 points per million people, better than second-place South Carolina at 56 points. Louisiana last won the award in 2007, the final year of former Gov. Kathleen Blanco’s administration.
Louisiana, more than most states, began to transform itself in 2008, with improvements on the ethics, work-force development and corporate tax fronts, said Brent Pollina, vice president of Pollina Corporate Real Estate Inc., a site selection company that in late June completed its Top 10 Pro-Business States for 2009.
Since 2006, Pollina’s firm has ranked all 50 states, with Louisiana moving from 44th in 2006 to 37th, 40th and 27th in succeeding years. Virginia ranks No. 1, followed by Utah and North Carolina. South Carolina (No. 5), Georgia (No. 8) and Florida (No. 9) are the other Southern states in the Top 10, with Alabama 11th and Tennessee 14th.
Pollina said his company seeks an unbiased ranking using 33 factors from human resources to energy costs to state economic development efforts that are most important to corporate site selectors. Some national economic studies have skewed rankings too far in the direction of quality of life and crime statistics, he said.
“Louisiana has tried to reinvent themselves lately,” Pollina said. “The Southeast is an incredibly competitive place for economic development, with North Carolina, Virginia, Alabama, Georgia — they’re all extremely competitive and Louisiana has lagged behind those states previously.”
Pollina said the economic downturn placed greater pressure on Louisiana lawmakers to break away from traditional tax and incentive policies “and made them realize they need to follow the examples of these other states.”
If Louisiana is smart, he said, the state will invest heavily in retaining and expanding existing businesses for long-term job growth.
Economic development Secretary Stephen Moret said his department has been focusing more heavily on existing companies, creating a Business Expansion and Retention Group that led to keeping a Gardner Denver Inc. plant open in Monroe in competition with a bigger facility in Wisconsin.
In 2008, Moret’s department identified major rankings of the state’s economy and found Louisiana had scored annual gains in 10 while going down in one, which was the Pollina Corporate ranking that reversed itself this year.
A State Economic Competitiveness Group in the department continues to identify changes needed to improve Louisiana’s business climate, Moret said.
“We’ve made good, solid progress in the last year, yet we know we have a lot of work left to do to position Louisiana to outperform the South on a regular basis,” he said.
Reduced business taxes, the creation of a market-driven work-force development system, the positioning of Louisiana’s higher education system to better meet research and vocational needs, more funding for project incentives, and Jindal’s personal lobbying of corporate executives have helped the state most, Moret said, with Louisiana’s FastStart program for customized job screening and hiring likely making the biggest difference in winning recent projects, such as V-Vehicle Co. in Monroe.
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