BusinessReport.com

The Capital Region’s top 10 business deals of 2008 read more like a Who’s Who of big business, with names like Albemarle, Bass Pro Shops, Coca-Cola and ExxonMobil.

The deals also represent billions of dollars in investments as well as lending a highly desired economic bedrock and diversification to the region.

“2008 could ultimately be recognized as one of the most significant years in the history of the Baton Rouge area’s economy,” Baton Rouge Area Chamber CEO/President Adam Knapp says, pointing to major expansions—especially in industry—as well as landmark deals that also advanced Louisiana’s economic footprint in high-growth markets such as digital media and biotechnology.

Louisiana Economic Development Secretary Stephen Moret says the state enjoyed a record year for business development despite the economic challenges of a national recession.

“Dozens of companies announced expansion in or relocations in Louisiana, kicking off projects that will create over 17,000 new jobs, $2.5 billion in new capital investment, and billions in new sales for small businesses,” Moret says. “In 2008, Louisiana attracted investments in our traditional industries such as shipbuilding and petrochemicals, as well as newer growth industries like nuclear energy, valued-added agribusiness, alternative energy and digital media.”

The Capital Region’s expansions were so numerous, the growth could be measured by sector.

Nearly a dozen industrial projects—most of them petrochemical-related—account for more than $4 billion in construction. A hotel boom will result in more than 1,000 new rooms in East Baton Rouge Parish alone. Perkins Rowe celebrated its grand opening, the Mall of Louisiana remerchandised with the opening of The Boulevard lifestyle center and a power center, and Bass Pro Shops lived up to its much-anticipated arrival in Denham Springs.

Public sector projects also measured in the millions, ranging from construction of the John James Audubon Bridge across the Mississippi River in West Feliciana and Pointe Coupee parishes, continuing work on the 19th Judicial District Courthouse in downtown Baton Rouge and several athletic-related jobs at LSU, including new stadiums for the baseball and softball teams and an addition to the Pete Maravich Assembly Center.

Although Moret anticipates the recession will continue well into the year, he also says these expansions have positioned the state for significant business investment in the year ahead.

Estimating the area’s new construction projects at $6.5 billion, economist Loren Scott agrees the Capital Region’s numerous business deals have helped buffer the economy from recession, while also setting the stage for future growth.

“We are very fortunate in Louisiana that these companies are expanding in our state,” Scott says. “Not only have we avoided job losses in 2008, while the country lost employment throughout that year, but we also are laying the foundation for good, solid growth in the future. Few states can make that claim.”

With that as the backdrop, Business Report lists the 10 biggest deals that occurred last year in the Capital Region by alphabetical order.

1 Project Albemarle Corp.

Cost: $26 million

Description: Albemarle, a global developer, manufacturer and marketer of engineered specialty chemicals, relocated its headquarters from Richmond, Va.

Impact: An estimated 30 executives and support staff with an annual $7 million payroll came to Baton Rouge. The move was projected to generate an additional $24 million in yearly sales, $10.7 million more in earnings and 161 direct and indirect jobs in the first year. Albemarle became Louisiana’s fifth Fortune 1000 company. The estimated $3.2 billion company also initiated a $15 million expansion of its catalyst manufacturing plant, invested $6 million in a new polymer R&D lab and completed its $6 million office renovation in Chase Tower South downtown.

What they’re saying: “We were particularly impressed with the level of collaboration between the state administration, the city-parish and the local business community to meet our needs and drive the process. Ultimately, the combination of the new administration’s ability to drive progressive initiatives for the state, our confidence in the direction of the city of Baton Rouge and the close proximity to many of our key customers and suppliers made it clear that Louisiana is the right choice for Albemarle.”—Albemarle President and CEO Mark C. Rohr

Timetable: The relocation was announced April 30, 2008, and the Richmond office was close by the end of 2008.

Player[s]: Albemarle Corp.; the state of Louisiana, which allocated a $6.9 million benefits package to the company that includes moving costs and a jobs incentive program; and the East Baton Rouge city-parish government, which committed $1 million.

2 Project Bass Pro Shops

Cost: $60 million

Description: 150,000-square-foot outdoors superstore at Interstate 12 and La. Highway 3002 in Denham Springs.

Impact: 350 jobs, a $7 million annual payroll, projected $65 million in annual sales and 2 million visitors a year. Sought for being a destination location for outdoor enthusiasts, the store anchors a 75-acre, 200,000-square-foot retail development.

What they’re saying: Livingston Parish President Mike Grimmer says the store is 35% ahead of sales projections. As of Jan. 1, the store ranked No. 1 in boat sales, the fishing department and fudge. Grimmer also says the location will be recognized as the chain’s store of the year at the company’s corporate meeting. Sherry Mealy, chairwoman of the Livingston Parish Chamber of Commerce, says the store is drawing new growth to the area, including Hooter’s, Longhorn Steakhouse, Ashley Furniture and Super Sam’s.

Timetable: The store was announced in 2003, triggering a three-year legal battle over the issue of sales tax incentives. The Louisiana Supreme Court, in a 5-2 vote, rejected hearing the request, clearing the way for the project by October 2006. The store opened in February 2008.

Player[s]: Springfield, Mo.-based Bass Pro Shops, a privately held corporation; the Livingston Economic Development Council; and the Livingston Parish Council.

3 Project Baton Rouge Coca-Cola

Cost: $178 million

Description: 797,500-square-foot distribution and production facility on Plank Road just east of Metro Airport.

Impact: 113 new jobs with an average yearly salary of $45,000 created over a four-year period. The additional jobs will bring the company’s total jobs at the plant to 600.

What they’re saying: “This is another great signal East Baton Rouge Parish is sending to businesses that have us on their radar for expansion or location. We’re not just working together as a team, we’re on a winning streak.”—Mayor Kip Holden

Timetable: Phase I construction was completed by late 2008, opening three operational lines producing Coca-Cola, Diet Coke, Sprite and other carbonated beverages, as well as Dasani water. Phase II was to bring three additional lines and the new jobs, and Phase III was to begin with the production of Powerade and Vitamin Water, followed by additional lines in 2010-12.

Player[s]: Baton Rouge Coca-Cola Bottling Co., which has been in business more than 100 years.

4 Project Electronic Arts

Cost: Not available

Description: An EA-LSU partnership at LSU’s South Campus on GSRI Road.

Impact: EA’s lone test center in the U.S. to primarily test EA Sports’ software titles. The center will create 20 full-time jobs and more than 200 part-time jobs for students at LSU, Southern University and Baton Rouge Community College within two years with a projected annual $5.7 million payroll. It also will help cultivate LSU’s new AVATAR [Arts, Visualization, Advanced Technologies and Research] program.

What they’re saying: “We are extremely excited about collaborating with EA, which will not only provide outstanding job opportunities for our digital media students, but will greatly enhance our ability to attract global leaders in digital media including scientists, artists, and engineers to LSU. Together, EA and LSU will ensure that Baton Rouge, and indeed the entire state of Louisiana, will become a global leader in the field of digital media and entertainment development.”—Brooks Keel, LSU vice chancellor for Research and Economic Development

Timetable: Announced in August 2008.

Player[s]: Redwood City, Calif.-based Electronic Arts Inc., LSU and the state of Louisiana.

5 Project ExxonMobil

Cost: $554 million

Description: A $1 billion project to upgrade diesel production at refineries in Baton Rouge, Baytown, Texas and Antwerp, Belgium.

Impact: Boosting daily production of cleaner-burning, low-sulfur diesel by 15% to 140,000 barrels a day at the Baton Rouge plant, which is the company’s second-largest producing refinery at 503,000 barrels of fuel a day.

What they’re saying: “We believe this project will be good for our local economy, good for our local environment and better for the environment of the entire United States where this fuel is used.”—Refinery Manager Steve Blume

Timetable: Announced in mid-December 2008. The upgrade is under construction, and the targeted completion is 2010.

Player[s]: ExxonMobil Refining and Supply.

6 Project Our Lady of the Lake Regional Medical Center

Cost: More than $31 million

Description: Since September 2007, OLOL has been involved in at least six transactions, beginning with the $9.6 million purchase of 192 acres at Interstate 12 and La. Highway 447 to expand services in Walker. In July 2008, the Lake paid $8.3 million for 4.7 acres on Perkins Road to expand its primary care network; bought the Surgical Specialty Center on Bluebonnet Boulevard in September for an undisclosed amount; and paid $8.37 million for a 43,000 square-foot office building on Perkins Road near Kenilworth Parkway to centralize the Franciscan Missionaries of Our Lady Health System IT functions and other centralized Health System services in December. Already this year, OLOL has purchased two office buildings on Brittany Drive for $4.7 million as part of the medical center’s “long-term strategy” as well as 58 acres for $15.2 million along the south side of Interstate 10 between Essen Lane and Bluebonnet Boulevard.

Impact: Medical center expansion.

What they’re saying: “These transactions summarize two and a half years of strategic purchases in the marketplace by Our Lady of the Lake. They are a direct response to the growing needs of the community and our own planning for the future to meet those needs.”—Our Lady of the Lake CEO Scott Wester

Timetable: Wester says mitigation is under way in Walker, and construction is tentatively scheduled to begin by summer 2009. Construction continues at OLOL’s Essen Lane campus as part of a facilities improvement plan, including upgrades to the St. Mary’s Tower lobby, five state-of-the-art operating rooms and a new patient pick-up and drop-off area. Plans for the I-10 site between Essen and Bluebonnet have not been announced.

Player[s]: Our Lady of the Lake Regional Medical Center.

7 Project Pennington Biomedical Research Center

Cost: $25 million [includes a portion of $50 million in state funding]

Description: Addition of the 90,000-square-foot clinical research facility on Perkins Road and Kenilworth Parkway will bring Pennington’s total research space to 635,000 square feet when completed.

Impact: Continuing growth of Louisiana’s biotech industry, as well as Pennington’s nationally recognized research in nutrition and preventive medicine; 1,100 new direct and indirect jobs; more than $40 million in earnings a year; and economic impact of more than $110 million a year. Each researcher averages $500,000 a year in external research funding.

What they’re saying: “This groundbreaking represents a monumental step in Pennington’s continued expansion and ongoing efforts to attract top research talent and clinical research funding to our state. In essence, this is a new cylinder in the economic engine that is Pennington.”—Gov. Bobby Jindal

Timetable: The project was announced in 2008. Ground was broken Jan. 14, with construction immediately following. The targeted completion is July 2010.

Player[s]: Pennington Biomedical Research Center and the state of Louisiana.

8 Project Perkins Rowe

Cost: $300 million

Description: A “downtown district” mixed-use development at Perkins Road and Bluebonnet Boulevard.

Impact: More than 600,000 square feet of retail space and eateries on the first floor, with three or four stories of apartments and condominiums above. Space for a hotel, parking and medical services is planned on the perimeter of the development. Phase I of the two-phase project encompasses 25 acres and features 833,700 square feet, including 317 residential units, 373,000 square feet of retail space and 137,800 square feet of office space.

What they’re saying: “The Baton Rouge retail trade area encompasses a larger area than Baton Rouge, with more people coming from all over the state to shop here because we have better shopping than New Orleans. When people come to Baton Rouge they go to Perkins Rowe, Mall of Louisiana and Towne Center.”—Dottie Tarleton, senior broker associate with Stirling Properties

Timetable: The project was announced in 2006, and the grand opening was held on Nov. 29, 2008. Work will be completed this year on Phase I.

Player[s]: JTS Interests.

9 Project II City Plaza

Cost: $75 million

Description: A 12-story, 260,000-square-foot office building at Convention and Fourth streets.

Impact: The first new Class A commercial construction in downtown Baton Rouge in nearly 25 years.

What they’re saying: “It definitely brings a lot of new excitement and focus to the downtown [area]. It also brings some challenges with a lot of space to fill with a rate we’ve not seen anywhere else in town at $28 a square foot, but it’s also a unique opportunity for Baton Rouge to see if we can fill that space at that level.”—Branon Pesnell, associate broker with Beau Box Commercial Real Estate

Timetable: Construction began in August 2007; the parking garage opened in mid-2008 and the first tenants are scheduled to move into the building this month.

Player[s]: Wampold Companies, which received GO Zone funding.

10 Project Woman’s Hospital

Cost: $350 million

Description: A state-of-the-art, five-story, 520,000-square-foot medical facility at Airline Highway and Pecue Lane, five miles south of the hospital’s current campus. Plans also call for two medical office buildings totaling 260,000 square feet, two-story support services buildings totaling 69,000 square feet, a two-story central energy plant building totaling 23,000 square feet and a mixed-use development that includes 307 single-family homes and townhomes and 544 multi-family units, a hotel, 1.7 million square feet of commercial and office space and 54,600 square feet of restaurants.

Impact: A large replacement facility that will allow for future growth in services and employment.

What they’re saying: “The limitations we experience at our current location make it difficult for us to continue working to fulfill our mission to improve the health of women and infants. We are delighted with the opportunities the new campus will bring, enabling us to build a world-class health care facility for patients.”—Woman’s Hospital President/CEO Teri Fontenot

Timetable: Site work started in June 2008. Construction was under way this year, but was temporarily halted when hospital officials postponed the bond issue because of a soft credit market. Initial target completion date was late 2010 and occupancy by 2011.

Player[s]: Woman’s Hospital.

Growth by market sectors

Headquarters

• The Shaw Group agreed to keep its headquarters in Baton Rouge and add 150 new jobs or more every year until 2018.

• Bercen Chemicals announced it would relocate its headquarters and labs from Rhode Island to Denham Springs. The new location represents a $60 million investment and 20 new jobs. The chemical company also plans to expand its manufacturing operation in the area. The move was announced in 2007.

Health care

• The new North Oaks-Livingston Parish Medical Complex at Interstate 12 in Satsuma was announced last year. The $25 million project will create 55 jobs. Targeted completion is 2009.

Hospitality

• A Dallas-based hotel operator closed on a $2.1 million deal to build a 119-room Marriott SpringHill Suites in the Howell Place development. Construction started immediately. Targeted completion is 2010.

• Construction started on four mid-priced hotels—Holiday Inn Express, Microtel Inn, Hampton Inn and Candlewood Suites—also in Howell Place. The 78-room Microtel Inn and Suites opened in December. Candlewood Suites was scheduled to be completed this year.

• A 180-room Drury Inn & Suites opened in December at Interstate 10 and Essen Lane.

• A 104-room Holiday Inn Express under construction last year off Siegen Lane between Interstate 10 and Airline Highway opened in January.

• A 127-room Cambria Suites opened in December on Constitution Avenue.

• A 140-room Holiday Inn also opened in December on Constitution Avenue; the Holiday Inn-Select Executive Center on Constitution Avenue was rebranded as a Crowne Plaza in December.

• Construction continues on a 117-room Staybridge Suites on Nicholson Drive just south of LSU and a 97-room Homewood Suites by Hilton on Rieger Road.

Industry

• Shintech’s $1.9 billion expansion tops the list in collective dollar investment. The PVC producer’s three-phase expansion is under way on its integrated chlor-alkali facility in Plaquemine. Shintech announced it would create 150 full-time jobs. Targeted completion is 2010.

• Westlake Chemical’s $300 million chlor-alkali upgrade in Geismar should create 100 jobs.

• Placid Refinery will complete its $300 million in environmental upgrades by 2010. The project is expected to create 20 to 25 jobs.

• Formosa Plastics is investing $100 million to increase production of vinyl chloride and for environmental upgrades at its Baton Rouge facility. The project was announced in 2006 with a targeted completion by this year.

• Huntsman Corp. announced the $100 million expansion of its Geismar facility to add a maleic anhydride facility on the site. Maleic anhydride is the building block for unsaturated polyester resins used mainly in making fiberglass-reinforced resins for construction, automotive and marine products.

• Tyson Foods and Syntroleum Corp. will build and fund a $150 million Dynamic Fuels facility in Ascension Parish. The biofuels plant will turn animal waste and grease into biodiesel and jet fuel. The project was announced last year. Targeted completion is late 2009.

• St. Louis-based Stupp Corp. announced plans to build a steel pipe-making mill at its pipe-manufacturing campus in Baton Rouge. The $60 million project was to be completed by early 2009.

• Criterion Catalysts & Technologies is expanding its Port Allen facility to manufacture several types of alumina powder, as well as catalysts. The $250 million project will create 53 jobs. Targeted completion is 2009.

Public sector

• Construction of the $348 million John James Audubon Bridge continues although the state could run short on funds if it can’t sell municipal bonds in the near future. The four-lane bridge will especially benefit Pointe Coupee and West Feliciana parishes. Targeted project completion is summer 2010.

• Construction continues on the $112.9 million 19th Judicial District Courthouse on North Boulevard. The work started July 2007, and the targeted completion is June 2010.

• The widening of Interstate 12 from O’Neal Lane eastward into Livingston Parish is a $100 million project by the state Department of Transportation and Development. The project includes rebuilding portions of I-12, adding a third lane in each direction and replacing the bridges over the Amite River. James Construction is the main contractor. Construction is scheduled to begin by late February and end by late 2011.

• Projects totaling more than $150 million were announced or under way at LSU, including a renovation and expansion of the Union, a new National Guard Armory on the South Campus, new stadiums for the baseball and softball teams and an addition to the Pete Maravich Assembly Center that will include locker rooms and practice gym for the men’s and women’s basketball teams.

• Ground was broken last month to widen Interstate 10 from the I-10/I-12 split to 1,500 feet east of Siegen Lane. The project includes rebuilding the Essen Lane and Bluebonnet Boulevard overpasses and a bridge over Ward’s Creek.

Retail

• The $100 million remerchandising of Mall of Louisiana into a super-regional lifestyle power center was completed last year. The center is the first of its kind in the nation with the mall, The Boulevard lifestyle center and power center.