'Business Report': In wake of scandal, nonprofits raising money for LSU under intense scrutiny
In the fall 2010 issue of LSU Alumni Magazine, then-Alumni Association President and CEO Charlie Roberts penned an editorial entitled "Alumni Association: A Gift to LSU." A photo of a dapper-looking, tuxedo-clad Roberts accompanies the piece, in which he describes how unique and successful the independent, nonprofit association is and why it is so worthy of alumni support. "We receive no financial support from our campus or the state, and no one on our staff is an LSU employee," Roberts writes. "Indeed, the LSU Alumni Association is an asset provided to the University at no cost." Four years later, in the wake of a lawsuit and sex scandal that forced the 78-year-old Roberts to step down in disgrace from the position he held at the association for 30 years, the editorial seems more than a little ironic. As Business Report details in its new cover story, the episode has shone a spotlight on the way business is done over at the East Lakeshore Drive headquarters of the Alumni Association. It also brought to light Roberts' nearly $320,000 annual compensation package and threatened to indelibly tarnish the beloved LSU brand—not just on the flagship campus but around the state. The editorial exemplifies more than mere irony, though. It illustrates an attitude of institutional arrogance that has permeated the association and its sister organizations—the LSU Foundation and Tiger Athletic Foundation—since their creation as independent 501(c)(3) organizations nearly three decades ago. Because they raise their own money and report to no one but themselves, they have been able to carve out fiefdoms within the political culture of the LSU flagship campus, which is, itself, Byzantine by nature. Until recently, the three organizations resisted sharing data and failed to coordinate the way they call on potential donors. Over the past few years, aware of some troubling statistics, the foundation, association and TAF have begun working together more closely and collaboratively. Since President and Chancellor F. King Alexander came to LSU in 2013, those cooperative efforts have intensified. Alexander has given them little choice, and now he's upping the ante. Read the complete cover story, and check out a sidebar story on the Tiger Athletic Foundation and how it differs from the LSU Foundation and the LSU Alumni Association. Send your comments to email@example.com.
Today's poll question: LSU ranks at the bottom of the SEC in alumni contributions. LSU President F. King Alexander wants to create a new vice chancellor position to which all three donor organizations will be accountable. What do you think will happen?
New search fund looking for investment opportunities in Capital Region
A new search fund based in New Orleans is looking for investment opportunities along the Gulf Coast, including the Capital Region. The fund, called Gulf Search Capital, seeks out small and lower-middle market companies that it can acquire, manage and help grow. Gulf Search Capital is not an angel fund—like the recently announced South Coast Angel Fund II—which provides seed capital to startups and budding entrepreneurs. Rather, it's a search fund targeting well-established small businesses with annual revenues of between $1 million and $8 million; it acquires an ownership stake in them and helps run them. Patrick Mansfield, who started the firm with partners David Cusimano and Larry Oney, believes the market is rife with opportunities for the type of investing Gulf Search plans to do. "We think it's a great time to be getting into this because a lot of baby boomers have run their own small businesses and now they're ready to exit and their kids don't want to get involved or take over," he says. "These are companies that are not in the startup range, where angels would get involved, and they're not $10 million-a-year-plus businesses, where the more traditional equity firms would want to get involved. So that's really our niche." Several private investors have backed the fund, which is targeting investment opportunities along the Gulf Coast from Lafayette to Pensacola and as far north as Little Rock. —Stephanie Riegel
EBR commercial, residential permitting falls in July, August
The number of building permits issued for commercial and residential projects across East Baton Rouge Parish fell during July and August. According to a pair of monthly reports just released by the city-parish Department of Public Works, a total of 127 commercial permits were issued over the two months, down from 163 during the same months last year. The largest commercial project to receive a permit during those months was a new 14,750-square-foot ministry building at the St. Jude the Apostle Catholic Church on Highland Road, valued at $5.75 million. Year to date, 454 commercial permits have been issued through August, down from 542 during the first eight months of 2013. For residential projects during July and August, a total of 389 permits were issued, down from 416 during the months last year. Through August, residential permitting is up in EBR for the year, with 1,442 permits issued, compared to 1,270 through August last year. Most permits issued by DPW each month fall under the miscellaneous category, for things such as occupancies and reinspections, as well as electrical, plumbing and HVAC projects. The department has issued 15,328 permits through August this year, which is up 1.4% from total permitting through August a year ago. —Steve Sanoski
Independent insurers group buys offices near Highland and Perkins
Independent Insurance Agents and Brokers of Louisiana has purchased an office building near the Highland and Perkins road intersection for $815,000. IIABL bought the property, at 18153 East Petroleum Drive, from Gizmo Investments LLC, headed by Gary Johnson, whose human resources management company, Detlafs Johnson, a division of Gallagher Benefits Services, works out of the offices now. Johnson could not be reached for additional comment by this morning's deadline. IIABL's previous offices, near the intersection of Bluebonnet Boulevard and Burbank Drive, sold to an engineering firm last week for $1.05 million. Lisa Young-Crooks, who handles communications for IIABL, then told Daily Report the organization plans to complete its move in mid-November. Young-Crooks said IIABL sought a new location because it felt the market surrounding the Bluebonnet offices is growing increasingly retail oriented. —Kelly Connelly
La. personal income grew by 1.5% in Q2
The personal income of Louisianans grew by 1.5% in the second quarter of this year compared to the first quarter, matching the growth rate of the U.S. at large and placing the state No. 27 in the nation for quarterly income growth. According to new figures from the U.S. Bureau of Economic Analysis, personal income growth in Louisiana expanded by 1.1% in the first quarter of this year and by 0.2% in the final quarter of 2013. Personal income includes wages, rental income, and dividend and interest income, as measured before tax deductions. Every state posted growth in personal income in the second quarter as compared to the first, the data shows. "The acceleration in personal income growth was mostly attributable to property income (dividends, interest, and rent), which grew 1.8% in the second quarter after growing 0.2% in the first quarter," says the bureau in its analysis. U.S. personal income grew by 1.5% in the second quarter, following a 1.2% expansion in the first quarter and 0.4% growth in the final quarter of 2013. —Steve Sanoski
Entergy asks for permission to combine two companies into single utility
New Orleans-based Entergy Corp. says it's asking the Louisiana Public Service Commission for permission to combine Entergy Louisiana LLC and Entergy Gulf States Louisiana LLC into a single utility. Should the transaction be approved, Entergy says it would formally combine the companies in 2015, and it estimates the move could produce up to $128 million in customer benefits over the next 10 years. The figure includes $97 million in guaranteed savings to customers during the first nine years after the transaction closes, Entergy says. "The companies aren't combining as a way to increase revenue through rate adjustments. Rather, the proposed transaction is designed to be revenue-neutral," Entergy says in a press release issued this morning. "In order to minimize changes in customer bills, the companies will maintain separate base rates for existing customers. Going forward, as the combined company makes new investments, those new costs would be shared by all customers." Together, the two Entergy companies expect to invest more than $5 billion in Louisiana's electric infrastructure by 2019, with similar levels of investment expected in the future. "Combining these two companies will allow us to make the necessary investments in the state's utility infrastructure that will help us keep Louisiana's economy growing. And our customers will still enjoy some of the lowest rates in the nation," says Entergy Louisiana President and CEO Phillip May in a prepared statement. Entergy has more details on its proposal.
News roundup: Manor House Apartments on Florida sell for $900K … State workers' health insurance changes delayed until March … Private survey shows US companies added 213K jobs in September
Done deal: Gardere Capital Investments LLC has purchased a 40-unit apartment complex for $900,000 from Adams Rental Properties LLC. The Manor House Apartments sit at 9228 Florida Blvd., across from Cortana Mall. Justin Rider, a realtor with Paragon Properties, represented Dr. Brett Rabel, the sole member of Gardere Capital, in the sale. Rider says the apartments are an attractive purchase because the area does not see heavy foot traffic and it is already mostly occupied and in good condition. Rider says updates are planned for the apartments.
Tapping the brakes: Gov. Bobby Jindal's administration announced Tuesday afternoon that it was delaying heavily criticized changes to the state health insurance program by two months, but not backing off the rewrite to benefits. Most changes to the insurance offered through the Office of Group Benefits will begin on March 1, instead of Jan. 1. Also, members of the health insurance program will have an extra month to make decisions about what benefit plan they'll select. The enrollment period starts today and now will extend until Nov. 30. The Associated Press has the full story.
Fall rise: U.S. businesses added 213,000 jobs in September, stepping up hiring for the sixth straight month, according to a private survey. Payroll processor ADP says that the pace of hiring by private employers was up slightly from 202,000 in August. Job gains above 200,000 are usually enough to lower the unemployment rate. The figures suggest the government's official jobs report on Friday could reveal a rebound in hiring. The government said employers added only 142,000 jobs in August. The ADP numbers cover only private businesses and sometimes diverge from the government's more comprehensive report. The Associated Press has the full story.