Daily Report

This Afternoon's Headlines / Tue, July 09, 2013

CATS committee's choice for program manager raises concerns

A CATS committee today recommended Baton Rouge-based SJB Group for an 18-month contract to manage and oversee the public transit system's route changes and service upgrades—a move that is raising eyebrows and causing concern among some CATS board members and community leaders. "It's a well known fact that CATS has been overpromising and underdelivering," says Metro Councilman Ryan Heck, who is also a member of the CATS board but was not on the selection committee. At this point, I think we need the best company we can possibly get." Heck was not prepared to say SJB is not the best firm for the job, but he shares the concerns of others, who say the committee's selection process was riddled with problems. SJB Group was the top scorer among a secret committee of six evaluators who reviewed four applications for the contract. The second highest-scoring firm, internationally renowned Veolia Transportation, scored just four points below SJB, a number some say is not statistically significant. Committee member Deborah Roe argued that scores in three categories should be thrown out because applicants were given scores of zero by some evaluators, while other evaluators gave top scores in the same categories. "To put a zero is a refusal to score," she said at today's meeting. "Scoring a zero is way out of whack with the consensus. I would have gone to the evaluators and asked why did you score them that low." Given those concerns, some community leaders say they want more information before the full board votes on the $1.5 million contract July 16. "I hope, between now and next week, the CATS staff has a chance to review this process and these scores, as they would any RFP," says David Aguillard, executive director of Catholic Charities, which has closely followed the travails of the city bus system. "It is unclear whether that has occurred."—April Castro and Stephanie Riegel Read the full story here.

Energy department dragging feet on LNG projects, economist says

The U.S. Department of Energy is "dragging its feet" on approval of projects that would export liquefied natural gas, says Raymond Keating, chief economist for the national Small Business & Entrepreneurship Council, which supports LNG exports. A facility in Sabine has been approved for expanded exports, while some 20 applications are being reviewed, including for two projects in Louisiana, the council says. Environmental groups have raised concerns about increased fracking and excessive reliance on fossil fuels as opposed to renewable sources. There's also been opposition from some players in the domestic chemical industry such as Dow Chemical, who fear that exporting too much natural gas will drive up the price and hurt the competitiveness of their plants. "Most trade issues, it's the opposite: We want to eliminate imports to protect our industry," Keating says. "This is turning everything on its head." He argues that, while increased demand from overseas would increase the price for natural gas, at least in the short term, that demand would be met over time by increased production, which could be a boost to energy companies that sell natural gas. Keating says the United States ought to be the worldwide leader in developing its natural gas resources, and not risk falling behind China or Australia. Keating is in Baton Rouge today, in part to meet with Louisiana Chemical Association officials. —David Jacobs

'Real Estate Weekly': Spinosa office properties face uncertain future

What is Tommy Spinosa up to? It's a question many in commercial real estate are asking, as the developer attempts to sell his portfolio of office buildings. As Daily Report reported Monday, Spinosa has listed for sale six office properties in Baton Rouge and one in Metairie for an undisclosed price. He says in a written statement only that, "The sale of these buildings is part of a larger strategic repositioning of our companies." On the surface, it might appear Spinosa is trying to raise money to help buy back Perkins Rowe out of foreclosure. But sources familiar with the four-year lawsuit between Spinosa and KeyBank National Associates—the Ohio bank that is the agent for the consortium of lenders on the project—say the developer is no longer interested in taking back the mixed-use development. Instead, they say, Spinosa would like to settle with the lenders, which have a $200 million judgment against him. He may also want the cash for Rouzan, the traditional neighborhood development he has been working on for the past seven years in Southdowns. Given the possibilities, the more relevant question might be how much Spinosa stands to gain from the sale of the buildings—provided they sell. The six Baton Rouge buildings have a total assessed value of $19.2 million, according to property tax records from the East Baton Rouge Parish Assessor's office. —Stephanie Riegel Read the full story, from the new Real Estate Weekly e-newsletter here.

Tanger expansion to be completed with Polo Ralph Lauren opening

All of the final touches of the $8 million expansion and renovation of Tanger Outlets in Gonzales should be complete by the time Polo Ralph Lauren opens in August, says general manager John Taylor. "The beginning of August is all we know at this time. We still don't have a definitive date," says Taylor of the store's exact opening. The rest of the additional stores included in the 50,000-square-foot addition opened earlier this spring, with just an approximately 12,000-square-foot space for Polo Ralph Lauren remaining under construction. Demolition of the former Liz Claiborne store to make room for additional parking is also wrapping up. "Other than that, there's just some landscaping and other beautification work that's still going on," Taylor says. "We're hoping to have all of that done by the end of July." The expansion not only brought new stores such as J. Crew, Talbots, Under Armour, Brooks Brothers, American Eagle and Loft to the outlet mall, but also resulted in new and larger spaces for some existing tenants. The project broke ground one year ago this month. It brings the total square footage at the shopping center to more than 322,000, with more than 60 stores. —Steve Sanoski

Landrieu leading Cassidy in fundraising

Democratic Sen. Mary Landrieu has outpaced her Republican challenger, Rep. Bill Cassidy, in the latest fundraising cycle for the 2014 Senate race, according to information released today by their campaigns. Both candidates raised more than $1 million in the fundraising period from April through June 30, and they framed themselves as ahead of—or at least on track with—where candidates stood at this point during the most recent Senate elections in Louisiana. Landrieu's campaign says the three-term senator from New Orleans brought in nearly $1.7 million during the quarter and has $4.9 million in her campaign account. Cassidy's campaign reports the congressman from Baton Rouge brought in nearly $1.1 million during the same period, bringing his campaign account to $3.2 million. The election is more than a year away, set for November 2014, and both candidates could be on track for heftier spending than in past Senate races. Landrieu's campaign says the senator has $2 million more than she had in her campaign coffers at the same point in her last re-election cycle. Meanwhile, Cassidy's campaign says the congressman has raised a similar amount of money and has an equal amount of cash on hand as Louisiana's other U.S. senator, David Vitter, reported at the same period in his 2010 re-election bid. A second GOP contender has announced his candidacy: Rob Maness, a retired Air Force colonel and tea party supporter from Madisonville. A request for Maness' fundraising figures from The Associated Press wasn't immediately returned today.

Jindal weighs in with immigration reform ideas

Calling himself an "unapologetic advocate for immigration," Gov. Bobby Jindal says the so-called Senate Gang of Eight's proposal on immigration reform has "bad motives" and is just "another thousand-page bill full of pork, regulations, and new powers for bureaucrats to manage the economy." In a guest column penned for the National Review Online today, Jindal lays out his own ideas on how immigration reform should be handled. He says it should be done in stages, as an "all-or-nothing approach will likely yield what it usually yields—nothing." Jindal says effective immigration reform "just takes three simple steps." The first step is securing the border. "We should consider the border secure only when the properly elected representatives of the people agree it is secured," he says. The second step, which should only be taken once the border is secure, Jindal emphasizes, is to provide an opportunity for those who came to America illegally to gain legal status "rather quickly." As for a pathway to citizenship, Jindal says, "for folks who came here illegally but are willing to gain proficiency in English, pay a fine, and demonstrate a willingness to assimilate, we should require them to work here and pay taxes for a substantial period of time after obtaining legal status before they have the opportunity to begin the process of applying for U.S. citizenship." The third step, he says, is to "increase legal immigration, by a lot." Read the full column here.

News roundup: Vitter won't delay Senate vote on EPA pick … Jindal urges Obama not to furlough Louisianans … Fire burns 295 acres at Sabine wildlife refuge

A compromised position: Republican Sen. David Vitter says he won't delay a Senate vote on President Barack Obama's pick to lead the Environmental Protection Agency after securing a deal to boost transparency at the agency. Vitter, the top Republican on the Senate environment panel, has been one of the biggest obstacles to Gina McCarthy's nomination. In May, he led a GOP boycott that delayed a critical vote to advance her bid. She eventually cleared the panel solely on votes from Democrats.

Seeking an exception: In a letter sent to President Barack Obama on Monday, Gov. Bobby Jindal and two other Republican Gulf Coast governors called on the White House to exempt their states' National Guards from furloughs caused by sequestration, noting that it's hurricane season. Gannett reports Jindal and Govs. Phil Bryant of Mississippi and Rick Scott of Florida say they are "deeply concerned" that furloughs this week will affect the readiness of the National Guard in their states to respond to emergencies. You can find the full story here.

Smoldering: Sabine National Wildlife Refuge Manager Terry Delaine says a grass fire burned about 295 acres but was essentially out today. He says Monday's weather was good, so the fire was probably started by a person—perhaps by a driver flipping a cigarette out of the window on La. 27. The American Press reports that the fire was so smoky Monday night that fire trucks escorted drivers through the smoke.

Editor's note: John Maginnis is on vacation. His column will return to Daily Report on Tuesday, July 16.

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