Daily Report

This Morning's Headlines / Wed, September 17, 2014

'Business Report': From humble beginnings in garage, PreSonus changing global music industry

"The sleek contoured interior of audio engineering company PreSonus Audio Electronics' office resembles the designs of the recording equipment, audio mixer boards, and speakers created within these walls. And although the company moved into its new 44,000-square-foot headquarters six months ago, the new-car smell has yet to wear off," reads the new Business Report cover story on the rapidly growing Baton Rouge company that got its start in a south Louisiana garage and has since gone global. PreSonus was launched by former high school and LSU classmates Jim Odom and Brian Smith in 1995. "Late into the night after their day jobs as engineers, they worked in a garage warehouse that was part of a sonar company owned by Odom's uncle," reads the cover story. It took about a year for Odom and Smith to create the first product that could digitally control the dynamics of an analog audio signal. At the time, the other options were in high-end equipment that cost more than $100,000. "That investment was out of reach for any musician, except for the really successful ones. We were making records and wanting the same equipment but couldn't afford it," Odom says. "From the beginning, our philosophy was to design products that people can afford." Last year, PreSonus had about $50 million in revenue, and it is on track to reach $58 million this year, CEO Jim Mack says. Read the complete cover story. Send your comments to editors@businessreport.com.

New senior living facility to break ground on Jones Creek Road

Construction is set to begin this week on a new assisted living facility for seniors on Jones Creek Road near Interstate 12. A group of Lafayette investors is developing the facility, which will be called The Garden View at Jones Creek and will be developed in phases. Phase one, which will cost about $15 million, will include a total of 72 units—48 one- and two-bedroom assisted living units and 24 memory care units, for tenants with Alzheimer's, dementia or other similar cognitive conditions. A second phase will include 24 additional memory care units and an anticipated third phase will include as many as 100 independent living apartments. "The strategy is to eventually attract younger seniors to the complex while they can still live on their own," says Randy Crochet, an investor in the project. "That way they can use our facilities and become familiar with them and, as needed, gradually transition to the assisted living units when the time comes." Crochet and his partners have developed two other Garden View facilities—one in Lafayette and one in New Iberia—and have been eyeing the Baton Rouge market for several years. Crochet believes the Capital Region is one of the strongest markets in the state for real estate development and is already studying the area for a second Garden View location. Phase one of the Jones Creek facility is scheduled to be complete and open next summer. So far 10% of the units are pre-leased. —Stephanie Riegel

Fernando's to remain in Coursey building bought by Lafayette-area brothers

Lafayette-area brothers John and Bobby Butcher have purchased the building at 10655 Coursey Blvd. that houses Fernando's Mexican Grill and Cantina for $839,350. Fred and Carolyn Lieux sold the nearly 1-acre property. The restaurant will remain in operation, but the building could see "a little facelift," Bobby Butcher says. Butcher says the bright turquoise and red building, which measures roughly 3,500 square feet, could see new paint colors in the next 30 days. The brothers, who purchased the property under Boyce Road Coursey Property LLC, own and manage Butcher Air Conditioning in Broussard and Butcher Distributors, which sells air conditioning equipment from locations throughout south Louisiana, including Baton Rouge. Other than their Baton Rouge warehouse, they don't own any other property in the Capital City. "We always liked Baton Rouge," Butcher says. "The Coursey area is a good area. It's not dependent on oil or the university or the state capitol." Butcher says he thinks the value of the building will climb as the area continues to grow. —Kelly Connelly

Southern Recycling buys Scenic Highway property for $1.3M

Southern Recycling LLC, a local subsidiary of the global metal recycling company EMR, has purchased land off Scenic Highway for $1.3 million from Noble Properties Inc. According to records filed with the East Baton Rouge Parish Clerk of Court, the transaction includes four separate tracts of land, but records do not indicate if the nearly 12 acres are contiguous. Noble Manufacturing Co., at 7001 Scenic Highway, currently sits on part of the land. The land deals indicate there are some buildings located on the property, but specific details are not included. Southern Recycling already has property in the area, both to the south on the same block at 6847 Scenic Highway and farther north at 1345 76th Ave. Southern Recycling is regionally headquartered in New Orleans and could not be reached for comment. —Kelly Connelly

Do endorsements really help candidates?

Candidates for public office often seek out endorsements from political or civic groups or even individuals viewed as having influence in a community. But as The Shreveport Times reports, political observers say whether those endorsements affect voter outcome depends on the race, the candidates involved and how voters were leaning in the first place. Endorsements have an impact on elections, most political scientists agree, but not in a way that most people might think. "An endorsement is not going to change someone's mind" if the voter was inclined to vote for one candidate over another, says Joshua Stockley, a political science professor at the University of Louisiana in Monroe. "They only serve to legitimize how people are already leaning." The best example, he said, is the so-called O Effect, as it is known in political science circles, when Oprah Winfrey endorsed President Barack Obama. "It legitimized how people were already feeling," Stockley says. "It made them feel better about voting for him." But don't count on an endorsement changing someone's mind, says Pearson Cross, a political science professor at UL Lafayette. If voters prefer one candidate over another, "people will continue to ignore the endorsements and vote for people they like. If you're going to vote for Bill Cassidy for Senate, you're not going to vote for Mary Landrieu because of an endorsement," she says. Read the full story.

Today's poll question: When deciding whom to vote for in major political races, how much do candidate endorsements factor in to how you cast your ballot?

As new House whip, Scalise at center of congressional debate over Syria

At the center of the swirling congressional debate over funding the government and arming rebels in Syria stands the new House majority whip, Rep. Steve Scalise of Louisiana, The Washington Post reports. Officially on the job as whip for less than two months, the 48-year-old Scalise is a tea party conservative learning on the fly as he tries to build support for a short-term spending bill that is likely to include authorization of President Obama's plans to train and equip moderate Syrian forces to combat the Islamic State. Scalise's rise to power reflects the challenge facing GOP leaders who are seeking to bring unity to a traditionally rancorous caucus, just weeks before the midterm elections. "The sudden turn by Scalise from outside voice to inside player has created an air of unease in the House about whether he can close the deal," The Post reports. "Leaders of both parties are sounding confident that they can pass both initiatives by the end of this week, but privately, Republicans are unsure whether they can convince enough conservatives to come along on the spending package, while some Democrats are worried that the doves in their caucus could splinter off because of the military engagement vote." As the GOP's chief vote counter in the House, Scalise largely bears responsibility for the outcome. Read the full story.

News roundup: Entergy, New York at odds over nuclear plant and related fish kill … Nucor expects 'profitable performance' at St. James Parish plant by end of year ... Landmark fracking study finds no water pollution

A fish tale: During the summer, New Orleans-based Entergy Corp.'s sprawling nuclear power plant known as Indian Point Energy Center in Buchanan, New York, draws up to 2.5 billion gallons of water each day from the Hudson River to operate. Over the course of a year, the plant sucks in about 1 billion tiny fish, including river herring, bay anchovy and striped bass, and their eggs. The water is discharged back into the river. The Wall Street Journal reports the plant's reliance on the Hudson River and its impact on aquatic life are at the center of a dispute between state regulators and Entergy. Read the full story.

Red and black ink: In a guidance statement for third-quarter earnings released this morning, Nucor Corp. says it expects its $750 million direct reduced iron plant in St. James Parish to begin turning a profit by the end of the year. Nucor reports an anticipated operating loss of $27 million from the new plant, which began production in January, for the third quarter. "The Louisiana DRI facility has continued to achieve excellent quality and volume levels. … As a result of the process improvements and lower iron ore costs, combined with a steady run-rate, we continue to anticipate profitable performance at the Louisiana DRI facility by the end of the year," the company says. Read the full statement.

The underground scene: The final report from a landmark federal study on hydraulic fracturing, or fracking, finds no evidence that chemicals or brine water from the gas drilling process moved upward to contaminate drinking water at a site in western Pennsylvania. The Department of Energy report marks the first time an energy company has allowed independent monitoring of a drilling site during the fracking process and for 18 months afterward. The Associated Press has the full story.

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