Daily Report

This Afternoon's Headlines / Tue, October 21, 2014

Area home sales relatively flat in September, but prices up

Eight fewer homes were sold in September this year than were sold during the month last year, a decline of about 1%, according to the latest monthly report released today by the Greater Baton Rouge Association of Realtors. A total of 725 homes were sold last month in the eight-parish region tracked by GBRAR.

Year-to-date, home sales through September are up 1.9%, with 7,391 closed sales this year, compared to 6,760 through the first nine months of 2013.

The September housing report shows there were significantly fewer homes on the market last month, while the average closing price was considerably higher. New listings were down nearly 16% last month, at 918, and the total number of homes for sale was 11% lower last month, at 4,025, compared to 4,527 last September. The average home sale price in September was $200,373, an increase of 3.7% over the $193,223 average price during the month last year.

At 5.3 months, the months supply inventory figure—that is, the number of months it would take to sell all of the homes on the market at the current sales pace—continues to reflect a seller's market in the eight-parish region. Most realtors say a reading below 6 months indicates a seller's market. Last September, the months inventory figure was 6.4 months.

At the parish level, East Baton Rouge saw its total sales slip 2.2% to 360 in September, while Ascension sales rose 4.2% to 149 and Livingston sales were up 3.6%. Access the complete GBRAR report.
—Steve Sanoski

Tigerland property owners meet with officials to work on neighborhood cleanup

A group of some two dozen business and property owners in Tigerland is meeting this afternoon with Metro Councilman John Delgado, State Rep. Pat Smith, representatives from the Baton Rouge Police Department and other city-parish leaders to come up with ways to address problems with crime and dilapidated properties that have plagued the neighborhood for years.

As detailed in a recent Business Report cover story, redevelopment efforts in the once-popular, off-campus neighborhood have been stymied because of absentee landlords, properties with multiple owners and pockets of crime.

Greg Codaro, a Tigerland investor and property owner, says property owners would like to see additional police presence in the area, particularly after home football games, including mounted patrols and a potential joint venture among bar owners to pay for additional police details on weekend nights.

Other items on the agenda for today's meeting include: improvements to sidewalks, extension of the Nicholson streetcar line and the location of dumpsters. Several property owners have also been working to generate support for the creation of a property owners association, which previously existed in the neighborhood but fell apart several years ago.

"I am hoping someone will direct us to volunteers to help us pull the [homeowners association] back together and help dedicate the time to declare the area a crime prevention district, if that is what is necessary," Codaro says. —Stephanie Riegel

Group of investors begins push to redevelop Mid City homes

Developer Derek Fitch has only just wrapped up his latest project downtown, the Jolie Pearl Oyster Bar across North Boulevard from Galvez Plaza, set to open on Friday, but he's already turning his eyes to the next endeavor and a new area of Baton Rouge.

Together with John Bugea, Jay Holinga and Ryan Juneau, Fitch hopes to target houses in Mid City for redevelopment, starting with the neighborhood north of Baton Rouge Magnet High School. The group, called Mid City Fund, closed last week on four houses, at 2901, 2911 and 2921 North Blvd. and 122 Gottlieb St., for $200,000 altogether.

Fitch says the group is taking guidance from the Mid City Redevelopment Alliance to select homes, and that they are working to keep current tenants in the spaces they lease. They are looking at other sites for purchase and are working with financiers, Fitch says, but it's too soon to tell the scope and timeline of the project.

"The success of the fund will dictate how aggressive we get," Fitch says.

Fitch hopes his group's work can mirror the redevelopment of Capital Heights. Fitch pointed to other redevelopment projects, including 1509 Government Street and the Model Block, as drivers of redevelopment that he hopes his group's work can complement.

Fitch cut his teeth working to redevelop downtown, with projects like Hotel Indigo and the Kress building, and says he hopes he can do something to better the community he lives in.

"We had the good fortune of being in the downtown area early on. I saw what it was and I see what it's become. I know it takes a lot of perseverance and passion," Fitch says. "We think that Mid City is the next area that needs some attention."
—Kelly Connelly

Cook: Benny's buys Siegen site for seventh car wash

Well-known carwash operator Benny Alford has purchased a tract on Siegen Lane just north of Perkins Road for the construction of his next automated tunnel car wash facility. Alford purchased the roughly 2.1-acre site on Oct. 8 for $775,345.20, or exactly $6 per square foot. The property was purchased from the estate of Jerome Winfield, with the deal brokered by Jim Walsh at Jim Walsh Real Estate.

The site includes about 170 feet of frontage on Siegen Lane, and it's zoned HC1 for heavy commercial development. Alford has been the leader in the automated tunnel carwash industry for several years, with six locations in the area.

"Benny recognized this as a high-traffic corner that would be advantageous for his automated car wash operation," says Walsh. Construction on the car wash is expected to begin within the next four months.

(Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or [email protected].)

Andrews: Changes to USDA single-family eligibility maps delayed

The U.S. Department of Agriculture has a popular rural development loan program that provides mortgage financing in rural areas around the country. Property eligibility is determined by the USDA and posted to the USDA website from time to time. Earlier this year we thought that certain areas would be deemed ineligible as of Sept. 30 because of population growth, including parts of Gonzales and Denham Springs.

Due to continued discussions on the matter in Congress, the current maps were continued for the time being and no currently eligible areas were changed to ineligible. These current eligibility maps can be viewed on the USDA's website.

An interesting development in the "future eligible areas" was pointed out to me by Paul Barranco of 1st Phase Mortgage, wherein it appears that areas within the Baton Rouge region will be considered eligible for the rural development loans in the future, despite the area exceeding the population maximums set by the USDA.

I spoke with Scott Pousson in the USDA's Alexandria office, who explained that the “future eligible” maps are based on current discussions and might ultimately be changed again before being approved by Congress. His suggestion was to base current mortgage decisions on the current maps and to sign up for updates on the Single Family Housing Guaranteed Underwriting System List.

(Brian Andrews is assistant director of the Real Estate Research Institute at LSU's E.J. Ourso College of Business. His private practice is Andrews Commercial Real Estate Services, and he can be reached at [email protected].)

JPMorgan Chase donates $1M to LCTCS for $5M WISE fund investment

The Louisiana Community and Technical College System expects to put another 2,200 students through its adult basic education program, described as a fast-track training path to a high-demand, high-wage career, after a total $5 million boost to its coffers was announced this afternoon.

A $1 million donation from JPMorgan Chase & Co. will be matched four-to-one by the state through the Workforce Initiative for Skills and Education fund, or WISE fund. That will help chip away at the 88,000 skilled workers the Louisiana Workforce Commission estimates the state will need in the next five to 10 years, LWC Executive Director Curt Eysink says.

Eysink says it's not only important whom the program will benefit—an often unemployed population with no skill set, sometimes receiving government assistance—but who made the donation. The fact that such a large sum came from JP Morgan Chase sends a signal to other businesses that investing in this program is beneficial, Eysink says.

"If their banker is putting money into this, it's viable," Eysink says.

This donation marks an alignment between government, schools and businesses working together, he noted, adding Board of Regents member and businessman Roy O. Martin is working to solicit donations from other business leaders.

Today's donation joins $400,000 from Praxair and another donation that will be announced in the coming days, according to LCTCS spokesman Quintin Taylor.

Gov. Bobby Jindal, who was on hand today at a press conference at Baton Rouge Community College, has more details on the JPMorgan Chase & Co. donation.
—Kelly Connelly

'Business Report': Quest to make south La. a destination for health care accelerates

By some measures, Louisiana already attracts a fair amount of medical tourism despite the absence of a big name-brand attraction like Houston's MD Anderson Cancer Center or the multistate Mayo Clinic. But as Business Report details in a feature from the current issue, officials touting the Louisiana Medifund want to further develop the "destination health care" business.

Lawmakers created the Medifund last year but didn't actually fund it. On paper, the Medifund is an independent grant-making body meant to create "medical centers of excellence" and boost the economic impact of the state's health care sector. But at the moment, the fund is basically an empty bucket.

"How do we fill it up?" Michael Hecht, president of GNO Inc. and an early champion of the concept, wondered aloud at the second Medifund board meeting in September. "And how do we distribute it, monitor its distribution, and measure what we've distributed?"

Hecht thinks $100 million is a pretty good number to shoot for to get the fund started. Individual grants likely would need to be in the $10 million to $20 million range to make a measurable difference.

"We can't do everything," notes Sidhir Sinha, CEO of InnoGenomics Technologies and a Medifund board member. "If you get scattered requests, we may do a little bit everywhere but not have a big impact." Read the full feature. Send your comments to [email protected].

More have jobs in La., but jobless rate rises in September

The number of Louisianans with jobs continued to set records in September, but the state's unemployment rate kept rising as new job seekers keep entering the market. The Associated Press reports the state's jobless rate rose to 6%, up for the fifth straight month. Louisiana's unemployment rate was 5.8% in August and 6% in September 2013. The labor force rose by 17,500 people in September, while a thousand more people reported having jobs.

The unemployment rate is calculated by a survey that asks how many people are looking for a job. A second survey each month asks employers how many people are on their payrolls, a measure many economists use as their top labor market indicator. That survey showed Louisiana employers added 4,700 jobs to their payrolls in September, with the total of 1.99 million payroll jobs setting a new all-time high for the fifth straight month. Both sets of figures—adjusted to cancel out seasonal changes—were released this morning by the U.S. Labor Department.

The contrast of continued job growth and a climbing unemployment rate reflects that the number of Louisiana job seekers has increased by nearly 54,000 this year, while those who tell surveyors they have jobs has risen by less than 27,000. People aren't counted as unemployed unless they're actively seeking work. That's driving up the number of unemployed people in the Louisiana. Almost 130,000 Louisianans were unemployed in September, up from about 123,000 in August and 126,000 in September 2013. Jobless rates fell in 31 states in September, rose in eight and were flat in 11.

News roundup: Circle K at College and Bennington sells for $392K … THRIVE emerges as top-graded charter school in BR in new report card … 'Times-Pic' eliminating 100 jobs in La. by moving printing operations to Ala.

Under new ownership: The Circle K at the corner of College Drive and Bennington Avenue has changed hands, according to records filed with the East Baton Rouge Clerk of Court. San Francisco-based DBNCH Circle LLC bought the store from Circle K Stores Inc. for $392,000. The gas station and convenience store is addressed at 2959 College Drive. Other recent transactions of note include the sale of offices at 719 E Airport Ave. for $476,300. Kenneth and Kathryn Wilkinson and Wilfred and Nancy Fontenot sold the offices to Twenty Four Eighty Properties LLC, represented by Tiffany P. Chevalier.

Thriving: THRIVE Baton Rouge, a charter boarding school that serves at-risk students from East Baton Rouge Parish, says it has achieved one of the fastest growth rates in state history by earning a B grade in just its second year in operation. The letter grades were released today by the Louisiana Department of Education. THRIVE, which last year closed on 7.5 acres at 2585 Brightside Drive for a new campus, says its score of 87.5 on this year's report card makes it the highest scoring charter school in Baton Rouge. On last year's report card, THRIVE had a score of 76.9 and was graded a C.

Pink slips: NOLA Media Group, which publishes The Times-Picayune/NOLA.com, announced today it will eliminate 100 employees in Louisiana as it moves its printing and packaging operations to Alabama. The company says the newspaper will be printed at a faster, more modernized facility in Mobile sometime in late 2015 or early 2016, which will result in the closure of the 46-year-old printing plant on Howard Avenue in New Orleans that the paper has been using for decades. There will be no cuts to editorial or advertising sales staff, NOLA Media Group says. Read the full story.
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