Daily Report

This Afternoon's Headlines / Wed, October 22, 2014

LSU Golf Course 'not being used as much as it needs to meet financial obligations'

Though LSU officials say a review of the best use of the 127 acres of land currently occupied by the LSU Golf Course isn't being driven by financial concerns, a look at the course's balance sheet from the past three fiscal years shows steadily declining revenues, rising expenses and dwindling net income.

Net income for the 18-hole course has plummeted from $123,221 in fiscal year 2012 to just $18,502 in the fiscal year that ended June 30. Over that same span, net operating revenues have decreased from $1,079,211 to $1,014,188, while operating expenditures have increased from $985,351 to $1,017,973.

The golf course has a target of 50,000 rounds played per year to remain financially viable, but "the course has not met that target and is not being used as much as it needs to meet financial obligations," says LSU Office of Facility Services Assistant Director Tammy Millican in an email to Daily Report. The course missed its goal by 5,000 visitors last year, she says.

No decisions have been made about the future of the course at this point and the possibilities are wide open. It could remain as is, it could become a smaller course, or the campus could find another use for the land. The review board met for the first time last month and will submit its recommendations to administrators in the next couple of months.

The LSU course is not the only one in Baton Rouge facing an ever-tightening financial picture. Several golf courses, including the Oaks at Sherwood, Briarwood Golf Course, Fairwood Country Club, Gonzales Country Club and Shenandoah Country Club, closed their doors in recent years. Check out a Business Report cover story from March on the health of the Baton Rouge-area golf industry. You can also see the breakdown of the LSU Golf Course finances over the past three fiscal years. —Kelly Connelly Read the full story here.

River Center parking garage shuttered due to severed tension cable

A contractor making modifications to the River Center West Garage on St. Louis Street, which provides 522 parking spaces downtown, accidentally severed a tension cable that runs through the pre-stressed concrete on the first floor of the garage, compromising the structural integrity of the slab and shutting down the facility for the time being.

Department of Public Works Interim Director Bryan Harmon says he doesn't yet know how long the garage will remain closed because engineers are still assessing the situation and trying to determine the best way to fix it.

The garage has been undergoing modifications in conjunction with a streets improvement project, which is turning St. Louis and St. Ferdinand streets from one-way to two-way thoroughfares.

Part of those modifications requires removing the raised concrete island at the garage entryway and relocating the ticket booth. To accomplish that, work crews sawcut the concrete pavement, which was not specifically prohibited in the garage building plans from which they were working. Those plans were incorrect, however, and did not indicate the location of the tension cable, Harmon says.

"The first thing we had to do was track down a copy of the original garage plans, which are over 40 years old … and seem to differ from the ones we were using," he says.

Downtown Development District Director Davis Rhorer says his office will work with DPW on a "parking alternative game plan" until the West Garage is back open. —Stephanie Riegel

Shreveport software development firm opening BR office at airport

EDgear, a Shreveport-based software development company, will open an office at the Baton Rouge Metro Airport, city officials announced this afternoon. The company is expected to create 33 new direct jobs in Baton Rouge providing an average salary of $64,000 by the end of next year, according to the Baton Rouge Area Chamber; 85 new direct jobs are projected by 2018.

Temporarily, EDgear will locate in an area where the airport police department is housed. The airport plans to construct the company's permanent office in a building on the north side of the airfield that is currently vacant. No timeline was provided today on when the new offices may open.

EDgear will make a $1.77 million capital investment in new equipment and building renovations at the terminal annex suite, BRAC says. The Metro Council is set to vote on a one-year lease arrangement between EDgear and the airport at its meeting this afternoon.

The company will make more than $27,000 in annual lease payments during the first year and have the option to renew the lease for four additional one-year terms. The 30-year-old company develops software programs to help schools collect and manage student information and to provide reporting solutions. BRAC says it worked in collaboration with Mayor Kip Holden's office, Louisiana Economic Development and airport officials to land the deal.
—Steve Sanoski

La. teachers retirement system defends private equity fund investment

The Teachers Retirement System of Louisiana, which manages the $17.5 billion investment portfolio of the state's 156,000 active and retired teachers, is responding to questions raised by a recent article in The New York Times about one of the private equity funds in which TRSL has invested.

The investigative report, published Sunday, details a "code of secrecy" it says exists between many large private equity funds and the state pension systems that invest in them. According to the story, pension systems are often hit with fees and the tab for hefty legal settlements incurred by the funds, without the knowledge of system members.

The story cites TRSL's investment in the Carlyle V fund as one such example. It points to provisions in TRSL's contract with Carlyle V that protects the fund's partners from certain liabilities that investors—TRSL members—could ultimately have to pay.

TRSL defends its investment in Carlyle V, saying TRSL managers evaluate all investment opportunities and recommend investment only in funds with the best track records, terms and risk/return profiles.

"For the past 10 years, private equity investments have been TRSL's highest performing asset class," says Philip Griffith, TRSL chief investment officer. "Carlyle has been one of the system's better-performing private equity funds."

Griffith notes that TRSL's total investment return in FY 2013 was 19.9%, the second-highest in the nation.

"Private equity returns were key to achieving this distinction," he says.

State Treasurer John Kennedy, who sits on the TRSL board, declines to comment. —Stephanie Riegel

Entergy official promises new industrial power demands can be met

Entergy can guarantee power for any new projects that are part of the expected industrial renaissance in Louisiana, says John Hurstell, the utility's vice president for system planning.

"We are adding generation as we speak," he says. "This is a once-in-a-lifetime opportunity for the state."

Hurstell was part of a panel discussion today at the LSU Center for Energy Studies' annual Energy Summit, where concerns were raised about potential new EPA regulations on power plant carbon emissions. Hurstell says that while it doesn't appear that EPA understands the energy business, he suggested stakeholders in government, industry and the environmental movement could hammer out a plan to reach carbon reduction goals that no one is happy with but that everyone can live with.

At the end of last year, Entergy handed management of its grid over to Indiana-based MISO, which operates across 15 states and a Canadian province. While there are concerns in Midwestern MISO states about shutting down aging coal plants, MISO Vice President Todd Hillman says a power shortage there, if it happened, wouldn't impact Louisiana's expected manufacturing expansion.

"[We] don't want to be in front of that train," he adds.

Jennifer Vosburg, president of Louisiana Generating, says promoting merchant generation and co-generation by industrial plants might help meet the growing need for power. For a power generator, she says it's important to meet with new or expanding companies as early as possible to discuss their expected energy needs. —David Jacobs Read the full story here.

Groups look to organize carpooling in BR area with new technology

The Baton Rouge Clean Air Coalition and Capital Region Planning Commission are looking to establish a new program that would connect Baton Rouge area commuters online and organize carpools. The CRPC recently awarded grant funds to Toronto-based Trapeze, a technology firm with a ridesharing software program called GreenRide.

The software uses an Internet-based registration and format to connect riders and drivers based on a variety of criteria. The software also allows users to calculate the money they're saving and air pollution they're reducing by carpooling. New Orleans currently offers a GreenRide program, as do other cities including Detroit and Tulsa.

The clean air coalition and CRPC hope to implement the GreenRide software in Baton Rouge by the end of this year. The groups say long-term goals of reducing the number of vehicles on Baton Rouge area roadways and lowering air pollution are within reach, especially if employers buy into the carpooling idea and promote it to their employees.

"This could radically change how people get to their jobs, driving down costs for the individuals as well as reducing emissions from the use of fewer vehicles," the groups say in a joint news release. For now, CRPC is collecting public input on the initiative via an online survey. Take the survey. —Steve Sanoski

La. called 'Cinderella state' on latest business climate ranking

Louisiana is ranked as the ninth-best state for business in a new survey of more than 500 CEOs of U.S. companies by Chief Executive magazine.

"Having jumped 31 positions from 40th in 2010 to No. 9 this year, Louisiana is the Cinderella state of Chief Executive's ranking, proving that a concerted effort to transform old habits and policies can truly pay off," says the magazine.

Chief Executive says it asked CEOs about tax and regulatory issues, as well as workforce quality and overall living standards in compiling its ranking. Texas is ranked as the top state for business in the ranking, followed by Tennessee, North Carolina, South Carolina, Indiana, Arizona, Nevada and Louisiana. See the complete rankings.

The positive ranking of Louisiana's business climate is the second this week. On Monday, a ranking released by location marketing firm Development Counsellors International placed Louisiana No. 10 nationally. DCI also ranked the state's economic development agency, Louisiana Economic Development, No. 2 nationally, trailing only the Georgia Department of Economic Development. —Steve Sanoski

'Business Report': How your company can win the talent war

"I'm not going to lie. It's rough right now." That's how Julie Laperouse, director of talent development for the Baton Rouge Area Chamber, sums up the current state of competition among Capital Region companies for the most qualified and experienced professionals.

As Business Report details in a feature from the current issue, those acutely in demand at the moment are engineers, IT professionals and programmers—especially those with experience. But many more fields than those are feeling the crunch. In other words, it's a battlefield for recruiters of top talent out there—and it's only going to get worse as the economy continues to thrive, particularly in the industrial and tech sectors.

Recruiting to Louisiana has an array of challenges—like overcoming the belief that it's all gator-infested swamps and Mardi Gras parties. But there's a unique difficulty in recruiting to the Capital Region in particular: no preconceived notions at all.

"One of the biggest challenges is that a lot of people have no perception of the Capital Region," Laperouse says. "They haven't really heard much about the Baton Rouge area. They don't really know what to think about it."

So what works? For one thing, getting out-of-state recruits here for a visit.

"We have found that if we can get them to come into the Capital Region to interview and we can personally show them around, we have a really good chance of recruiting them," Laperouse says. "People are very impressed with this area once they get boots on the ground and can see it for themselves." Read the full feature. Also, be sure to check out tips from six area human resource professionals on how to recruit top talent. Send your comments to [email protected].

News roundup: Audit questions $13 million in costs paid for by Katrina aid to Tulane University … $350,000 salary set for La. higher ed commissioner … Restraining order extended against disposal of ashes of Ebola victim's belongings in La.

Upon further review: The state of Louisiana should review $290 million in federal Hurricane Katrina recovery aid awarded to Tulane University in light of an audit that found $13 million in questionable costs on one $36 million project, says the inspector general for the U.S. Department of Homeland Security. "The small percentage of Tulane's massive aid package we examined in this audit identified an extraordinarily high level of questionable costs," Inspector General John Roth says in a news release. Tulane disagrees in a statement issued this afternoon. The Associated Press has the full story.

By the numbers: New Louisiana higher education commissioner Joseph Rallo will be paid more than his predecessor. The Associated Press reports Rallo's contract will pay him $350,000 annually, up from the $275,000 salary paid to Jim Purcell. The Board of Regents approved Rallo's contract today. It runs from Jan. 2 through Dec. 31, 2017. His appointment requires confirmation by the state Senate during the 2015 legislative session or the contract will be void. Rallo is currently vice chancellor of academic affairs at the Texas Tech University System. He was chosen by the Board of Regents earlier this month after a closed-door search for contenders to replace Purcell, who left the position in March.

To be continued: A temporary restraining order blocking disposal of ash from the incineration of a Texas Ebola victim's belongings in Louisiana will continue. The Associated Press reports State District Judge Bob Downing extended the order and delayed a planned hearing today about a permanent injunction while negotiations continue between Attorney General Buddy Caldwell and the waste disposal site operator. A new hearing date was set for Nov. 5. Caldwell is seeking to keep the soot from linen, bedding and carpet from the Dallas apartment where Thomas Eric Duncan got sick from being brought to a Calcasieu Parish facility run by Chemical Waste Management.
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