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Tax machines at work

On June 11, the Metro Council deferred action for the second time on a proposal that would give local firms a tax break on purchases of new equipment and machinery for manufacturing. If eventually approved, the measure might give a slight competitive edge to East Baton Rouge Parish businesses, and perhaps soften the blow from new environmental regulations, supporters say.

In a 2004 special session, then-Gov. Kathleen Blanco backed, and the Legislature passed, a six-year phaseout of the state’s 4% sales tax on such purchases. Gov. Bobby Jindal and the current Legislature decided to speed up the process, so the tax will disappear completely next year. The state’s action has no effect on local taxes on such equipment, and a handful of other parishes and municipalities have repealed their own versions of the tax. In East Baton Rouge, the tax is 2%; District 11 councilman David Boneno has proposed phasing out the tax over several years.

Boneno admits it’s hard to quantify the benefits of repealing the tax to the local business climate, and says he has not been asked to push for the tax’s elimination by local businesspeople. But he says the symbolic value alone might cause a new business to look at East Baton Rouge, and could set a trend for the region.

“The state has already demonstrated that it’s good policy,” he says. Boneno says the city-parish took in about $277 million into its general fund in 2007; the tax contributes about $6.3 million annually. So the impact would be minute, he says, especially with tax receipts coming in well above what was budgeted.

Dan Borné, president of the Louisiana Chemical Association, says parish businesses might have to buy equipment and machinery to comply with new ozone emissions standards. Theoretically, the parish could lessen the budget impact of the tax repeal by only exempting equipment purchased for environmental purposes. The state already has such an exemption, which is certified by the Department of Environmental Quality. The city-parish could rely on DEQ’s certification to grant its own exemption, Borné suggests.

“Any time you can reduce a company’s operating expense, and free up money for other things, that tends to have a positive impact on the competitiveness of that company,” Borné says.

“We take the same position that Governor Jindal does,” says Walter Monsour, the city-parish’s chief administrative officer. “If you’re going to cut taxes, then you need to come up with a comparable cut in expenses.”

Monsour says only a few local businesses are significantly affected by the tax. In the three-and-a-half years of Mayor Kip Holden’s administration, exactly one business that was looking to locate here asked about the possibility of eliminating the tax, he says. That business decided not to come for a variety of other reasons—not the tax—but Monsour says he was prompted to bring up the issue with the Baton Rouge Area Chamber, which did not make a case for eliminating the tax.

BRAC CEO Adam Knapp could not be reached for comment.

Monsour acknowledged sales tax receipts are up, but says the city-parish can’t assume the trend will continue. He says he would like to see evidence that the budget impact of repealing the tax would be offset by the expansion of existing businesses or new ones coming in. Short of that, the idea doesn’t make good fiscal sense, he says.

“Our product is services, and [taxes are] the charge for them,” Monsour says. —David Jacobs

Retiring Waters

S. Kyle Waters, a leader in Baton Rouge banking for nearly 16 years before returning to New Orleans three years ago, retired on June 13. Waters, a senior vice president for Capitol One Bank, fulfilled a goal by leaving with 35 years in the business.

The New Orleans native moved to the area in 1985 as part of the Hibernia [now Capital One] and Fidelity National banks merger, marking what he considers the beginning of his professional career even though he’d been in banking nearly 13 years. “I feel like I grew up professionally in the city,” Waters says. “I raised my children in Baton Rouge and now my daughter lives there with her husband and son.” He and his wife also have a condominium here, so they consider Baton Rouge their second home.

Waters called it a privilege to have served on many boards, including Woman’s Hospital, Baton Rouge Area Chamber and United Way. Of his time in Baton Rouge, he considers working with local business people to form community development corporations that built affordable housing to be his biggest achievement.

“A banker is supposed to help people achieve financial goals and dreams, and people who have a house is the ultimate,” he says. “I’m proud that we put people in houses.” —Anna Thibodeaux

Two of a kind

Depending on where you place your money, video bingo machines are either a gracious gift to charities or the reincarnation of video poker. Either way, the burgeoning industry is here to stay.

To hear some tell it, video bingo was never intended to gain as big a foothold as it has in Louisiana. Some form of video bingo machines has been around—legally—since the 1980s, but recently the state has seen an onslaught of machines that closely resemble video poker. The difference between the two video games is that bingo is tied—officially, at least—to charity.

According to state law, video bingo distributors negotiate contracts with charities looking to use the machines as a source of revenue, and then the charities negotiate separate contracts with bingo parlors to rent space for the games.

Rep. Ernest Wooton, a Republican from Belle Chasse, sponsored legislation that bans any new video bingo machines that resemble slots or video poker machines from being introduced in Louisiana after Aug. 15.

The poker-versus-bingo war was eminently predictable. Just as video poker revenues have skyrocketed, the number of video bingo machines under state control has risen from less than 300 in 2005 to more than 1,000 as of this month. —Jeremy Alford

BUSINESSofPOLITICS

Piggybacking on earmarks: While it was conservative commentator Rush Limbaugh who first labeled Gov. Bobby Jindal as the “next Ronald Reagan,” the Louisiana chapter of Americans for Prosperity is now extending the comparison to state Treasurer John Kennedy. AFP, a Washington, D.C.-based nonprofit that preaches fiscal restraint, has sent out direct mail that places that late president and newly packaged Republican side by side. Kennedy, of course, is opposing incumbent U.S. Sen. Mary Landrieu, a Democrat, this fall. For its part, AFP is putting serious resources behind Kennedy. In addition to the direct mail, AFP has also spent $200,000 on a statewide radio buy pushing thinly veiled campaign commercials trumpeting the benefits of Senate Bill 106 by Sen. Dan “Blade” Morrish, a Jennings Republican. The proposal would force lawmakers to reveal every detail about their “earmarks.” In the radio spot, Kennedy is cheered for endorsing S.B.106 and is held up as a champion of conservatism. What the spot doesn’t tell listeners is that Kennedy, notwithstanding his long record of being a self-proclaimed fiscal hawk, has next to nothing to do with the earmark legislation. Morrish says he drafted the bill himself more than three years ago and has brought it up every session despite successive defeats. Kennedy came into the picture because Morrish says the state treasurer is charged with gathering the appropriate information for earmarks, and Kennedy has voiced support for Morrish’s bill in the past. But it’s not as if the treasurer is a co-author or is working committee rooms to lock up votes. “I haven’t even heard from [Kennedy] this entire session,” Morrish says.

Deal struck on local judgeships: Before the recent session ended, regional lawmakers agreed to a compromise over how a judicial split in surrounding parishes should move forward. House Bill 854 by Rep. Eddie Lambert, a Republican from Gonzales, specifically addresses the first district of the First Circuit Court of Appeals. The dustup started when officials in the northernmost parishes—Ascension, Assumption, Iberville, Pointe Coupee and West Baton Rouge—complained they were unable to obtain representation in the district’s four at-large judgeships because Terrebonne and Lafourche parishes have a voting bloc that holds firm to all of the seats. The bill would replace four at-large judgeships with two at-large seats for the whole district beginning in 2012.

Buzz around coast weakening? Citing the dwindling hours of the recent session and an unsteady economy, members of the budget-drafting House Appropriations Committee deferred two votes earlier this month on a constitutional amendment to steer more oil and gas money toward coastal restoration and protection efforts. Rep. Jim Fannin, a Jonesboro Democrat and chairman of the House Appropriations Committee, argued the money is already tied up by ongoing expenses and cannot be moved. But he did promise to look at the issue again next year. “We know there’s never going to be enough, but it serves this state well to know that we are trying to make such an effort,” he says. “And if there are dollars we can move to this area, it’s a good idea that we try to do it.” —J.A.

Box seats

The year was 1938. Orson Welles’ radio dramatization of The War of the Worlds set off panic. A giant hurricane slammed into the east coast with little or no warning, killing more than 700 people and leaving more than 60,000 people homeless. Germany continued to persecute Jews as well as occupy Czechoslovakia.

That same year, LSU’s baseball team began play in a 2,500-seat stadium that would later become known as Alex Box Stadium. The Tigers played their final game in the 70-year-old stadium on

June 9, advancing to their 14th College World Series with a 21-7 victory over UC Irvine in the deciding game of the best-of-three super regional.

Here is a comparison of how much things cost in 1938, when the stadium opened, to how much things cost today.

Channeling the numbers

Here is a comparison of how much things cost in 1938, when the stadium opened, to how much things cost today.

On Feb. 17, 2009, all full-power TV stations will cease to broadcast analog programming. This transition to digital television will enable more efficient use of the nation’s airwaves, providing new advanced wireless services and increased public safety services.

To mark this transition, the Census Bureau has assembled a sampling of statistics from its publications and other federal government sources about television and the television industry:

110 million - Households with a television set in 2006, compared with 76 million households in 1980.

98.2% - Percentage of all households with a television set in 2005, which is unchanged since 1999.

2.6 - Average television sets per home in 2005. In 1980, the average was 1.7.

$273 million - Estimated sales for analog televisions in 2007, down from $5.8 billion in 2003.

$26.3 billion - Estimated sales for digital TV sets and displays in 2007, up from $8.7 billion in 2003.

73.2 million - The number of households with cable television in 2006; two-thirds of households with a TV have cable.

ONTHEBEAT

Fitting the bill: State Sen. Bill Cassidy says he will run against Rep. Don Cazayoux this fall for the 6th Congressional District seat. Cassidy, a Republican, says he was not prepared to make a formal statement but intends to run for the seat, which had long been in GOP hands.

No Shows: East Baton Rouge Parish Attorney Wade Shows announced his resignation effective July 7, reportedly stepping down to devote more time to his private practice. Mary Roper, first assistant parish attorney, will take over until the council selects a permanent replacement.

Good health: Amedisys has acquired five home-health agencies from Health Management Associates Incorporated, a hospital owner and operator. Financial terms were undisclosed, but Amedisys expects to gain $4 million in revenue annually from the deal. The agencies are located in Mississippi, Missouri and South Carolina.

Bar food: A new restaurant, Brent Anthony’s Bistro, is scheduled to open in Duvic’s by July 1. It will take over half the space in the bar, located near the Perkins Road overpass. Scott Dardenne, who is opening the restaurant with his brother, Mike, says the plan is to serve healthy food, upscale appetizers and daily lunch specials.

Good eats: BJ’s Restaurant & Brewhouse is now open in The Boulevard at the Mall of Louisiana. This is the first Louisiana location for the California-based chain, which sells bar food, such as deep-dish pizzas, ribs and sandwiches, along with handcrafted beer.

Lower rates: State Farm insurance says it’s lowering auto coverage rates in Louisiana by an average of 2.5% effective June 30. State Farm insures about one in every three cars in Louisiana. Company vice president Rob Stewart says the reduction is due to a better claims experience in the state.

Live from Third Street: Three downtown clubs are teaming up for “Louisiana Saturday Night,” a package of Saturday night concerts aimed at letting the public know about live music that can be heard on Third Street. Boudreaux & Thibodeaux, The Roux House and M Bar will also participate in the event, which will be held every Saturday in July.

Wine library: The new wine bar/retail store that will go into Southdowns Shopping Center will be called Enoteca Marcello, and Tricia Screen will be the partner and general manager, says owner Gene Todaro. “Enoteca” is Italian for “wine library.”

Fine wine: The Southern Breeze Wine + Culinary Festival, which stops in Baton Rouge and several other Gulf Coast cities, has been named one of the best wine festivals by Forbes Traveler. The event includes a chef’s challenge and grand wine tasting.

Staking his claim

A deal for Florida-based Ruth’s Hospitality Group to purchase Ruth’s Chris Steak House on Constitution Avenue has fallen through, clearing the way for an estimated $400,000 facelift scheduled to begin in July, local owner T.J. Moran says. “I wanted to keep it because it meant something emotionally. So now we’ll undertake the planned renovations. It will be a beautification, but not so dramatic,” he says, Plans call for interior and exterior improvements and a long-desired upgrade for valet parking.

One of the city’s renowned restaurateurs, Moran says he didn’t want to sell. The parent company pressed to include the Baton Rouge facility in an eight-restaurant buyout negotiated in 2006, so the parties settled on an option to buy. Ruth’s Hospitality exercised the option last year, but recently said it couldn’t fulfill the $8 million purchase. Moran says he was told it was because of higher beef prices and a struggling investment in a seafood business in Ohio.

Moran will maintain control of Ruth’s Chris and his Italian-themed Ruffino’s on Highland Road. Moran recently announced his son, Burke, had become sole owner of the other two restaurants in his chain, TJ Ribs and Ninfa’s. —Anna Thibodeaux

Not by default

The Baton Rouge Area Chamber’s political action committee is looking for candidates to run in seven Metro Council districts. But that doesn’t mean incumbents Ulysses “Bones” Addison, Martha Jane Tassin, Byron Sharper, Mike Walker and David Boneno can count on FuturePAC’s support, even though the organization isn’t recruiting people to run against them.

FuturePAC has decided to only encourage people to run in districts where the seats are open because of term limits or if the incumbents are not seeking re-election, says Mike Odom, BRAC spokesman. Odom says FuturePAC has had the same policy for Legislative and East Baton Rouge Parish School Board seats.

“In no way is this a default endorsement,” Odom says. “We’re still going to go through the same process before we make endorsements.” FuturePAC isn’t the only group looking for people to qualify for Metro Council seats when candidates can sign up July 9-11. —Timothy Boone

On the move

Louisiana Business Inc., which publishes Business Report, 225, 10/12 and Daily Report, plans to leave its downtown office at the end of the year and move into Cardinal Hill, an office building currently under construction on Jefferson Highway just east of Interstate 12 and Drusilla Lane.

Louisiana Business will take up about 12,000 square feet on the top floor of the three-story development, which also will be occupied by Evans-Graves Engineers, and temporarily sublease 3,000 square feet. The office building will be finished by the end of the year, and the move should take place in early 2009.

Louisiana Business CEO Rolfe McCollister says the move will not impact the magazines’ support of downtown redevelopment or sponsorship of events such as Live After Five and Sundays in the Park. “It was a very tough decision we had to make regarding our needs for the future,” he says. “One we made with the head, not the heart.”

McCollister says relocating to Cardinal Hill and owning part of the building instead of paying rent is the best long-term decision for the 26-year-old company. Louisiana Business has been in the City Plaza building on North Boulevard since the end of 2001. “We have loved being in downtown in City Plaza and have the greatest landlord in Mike Wampold,” McCollister says. —T.B.

Rolling along

Local real estate insiders are heaping praise on community banks for stepping up to provide financing for a number of projects after bigger national lenders tightened their standards in the wake of the subprime mortgage meltdown. “We have a niche, and we know who we are lending to,” says Dennis Shill, president and chief lending officer for Business First Bank. “We’re dealing with people who have banked with us over the years, and we know they have liquidity.”

Dave Petro, president of the Independent Community Bankers of America’s Mortgage subsidiary, says his members report a 16% increase in the dollar volumes of loans. ICBA Mortgage is comprised of more than 1,000 community banks with assets ranging from $100 million to $10 billion. “We’ve got a good solid growing business, and we’re still closing loans,” he says.

That increase is impressive in light of a recent report from the U.S. Office of Thrift Supervision showing the value of all mortgage loans nationally dropped by 21% in the first quarter when compared to 2007. Petro says the growth is because of good, stable practices.

Now that bigger lenders are tightening requirements, he says community loans “make loans on things that make sense,” he says. —T.B.

Sky’s the limit

A recent Wall Street Journal article cited the decline of rooms with cathedral ceilings, a victim of rising utility prices. But local architects and interior designers say demand for vaulted ceilings hasn’t changed much in the Capital Region.

“We do cathedral ceilings every once in a while,” says Al Jones, an architect who specializes in residential building across the Gulf Coast. “There’s been no remarkable change.” Mark LeFeaux, an interior designer with Stoma’s Furniture and Interiors, says the biggest trend locally is 10- or 12-foot ceilings, not vaulted ceilings. “People want things a little more spacious,” he says.

The trend to higher ceilings isn’t going to go away because of utility costs, says Ashley Sullivan Hawthorne, an interior designer with Tipton Associates. She doesn’t foresee ceiling heights dropping no matter how much it costs to heat or cool a house. “A house is like a car. It’s a symbol of who people are,” she says. “Getting the type of building they want is more important than saving dollars.” —T.B.