Daily Report

This Afternoon's Headlines / Tue, September 23, 2014

Some council members ready to OK deal with BRAF on downtown parking garage

Going into Wednesday's Metro Council meeting, some council members still have questions about a deal the council has been asked to approve between the city-parish and the Baton Rouge Area Foundation over the downtown parking garage on Convention and Third streets. But other council members, who initially had concerns over the issue, say that after meeting with BRAF leaders recently they're satisfied the new agreement over the parking facility is in the city's best interest. "I'm going to vote for it,'' says Councilman Buddy Amoroso, who earlier this month raised concerns about the new cooperative endeavor agreement for the facility. "I think it's a good deal for the city. I'm not so sure it's a good deal for the state, but that's not what we're being asked to vote on." In July, BRAF signed a $2 million, 91-year lease with the state for the 466-space garage. But the city-parish is a part owner in the facility, so the council's approval of a separate agreement with BRAF is needed. Earlier this month, the council deferred voting on the agreement, saying there were too many unanswered questions. Councilmembers John Delgado and C. Denise Marcelle also now say they are ready to support the deal. "Unless something else jumps out I will vote for it," Marcelle says. Councilman Ryan Heck is among those who still has questions and is awaiting information from the Mayor Kip Holden's administration on what the new deal will mean for the city-parish financially and how that compares to what it has been getting under the existing arrangement. "I need to see the numbers and to date I haven't seen good numbers," Heck says. "Unless I get information I am going to seek another deferral." Councilmember Ronnie Edwards also is wary of the agreement, she says. However, she says she will not be able to attend the meeting. —Stephanie Riegel

Council to consider changes to bus bench contracts

The Metro Council is scheduled to take up a measure Wednesday that could relieve the long-unresolved headaches of the three advertising companies that are unhappy with limits on their contracts to provide benches at bus stops around the city. The city-parish doesn't have to spend money on benches because companies don't charge anything for them. The companies even give the city-parish a cut of the money they make from ads placed on bench backrests. But the advertising companies can no longer put up benches on state roads, sites that would draw more revenue. The state Department of Transportation and Development took down some of the benches on state roads because they weren't properly credentialed with the city-parish, which had no codified way to approve them. Councilman Joel Bo is sponsoring the item to direct the city-parish to approve the state road benches. Bo says the council needs to "get back to the original mission as to why these agreements were approved," which was to relieve city expense while providing a service. But he adds the measure being taken up Wednesday won't solve all of the problems that have arisen with the contracts. As more benches have gone up in recent years, some citizens have complained that the benches are not placed at bus stops and are little more than advertising eyesores. Bo says the companies can now only put up benches at bus stops, and they have to take them down if CATS moves the stop. —Kelly Connelly Read the full story here.

Chabill's Tire Center buys property at Bluebonnet and Burbank for $823K

Jerry Pearson of Pearson's Travel World is continuing to break up a 16-acre tract of land he owns at the corner of Bluebonnet Boulevard and Burbank Drive, most recently with the sale of 1 acre to Charles L Gowland Sr. Family LLC for the development of a Chabill's Tire Center. The land sold for $823,480, according to records filed with the East Baton Rouge Parish Clerk of Court's office. Pearson says there are 11 to 12 acres of land left in his tract, 4 acres of which front Bluebonnet Boulevard. Peason says his asking price for that section is $22 per square foot. The 7 acres in the rear of the property are priced at $12 per square foot. "We feel like the growth area of Baton Rouge is in that corridor, especially with all of the residential construction nearby," Pearson says. "We feel like it's a very valuable piece of property." Goodwill bought the first section of the property back in 2010 for $900,000. Racetrac bought another tract on the corner of the property in 2012 for $1.6 million. —Kelly Connelly

Cook: Shopping center in heart of Plaquemine sells for just under $4M

The Belleview Shopping Center in the heart of Plaquemine has been sold for $3,954,500. The property, which is 100% leased, is anchored by a 29,000-square-foot LeBlanc's Food Store, and also includes national tenants such as Dollar General, Little Caesar's, CitiTrends, Payless Shoesource, AT&T Wireless and Radio Shack. A total of 84,164 square feet of rental space is situated across 6.86 acres on the property's site off La. 75. Carmen Austin of Saurage Rotenberg Commercial Real Estate brokered the deal, representing both the purchaser, Ohio-based Carnegie Companies, and the seller, GLSK LLC.

(Appraiser Tom Cook owns Cook Moore and Associates. Reach him at 293-7006 or TCook@cookmoore.com.)

Andrews: Risky home mortgages may be getting easier to obtain

Fannie Mae's Third Quarter Sentiment Survey was released a few days ago and it indicates an expectation on the part of senior mortgage lenders that there will be lower purchase mortgage activity over the next three months. This slowdown on top of the already slow refinance market means slim pickings and increased competition for mortgage lenders as we close out 2014. Larger banks might try to combat this trend by pursuing demand for riskier mortgages and making those loans easier to get. According to Fannie Mae, "larger lenders continue to be more likely than their smaller counterparts to say they expect to ease their credit standards during the next three months, in particular for non-GSE-eligible and government loans, perhaps indicating an effort to boost purchase mortgage activity before the year comes to a close." Doug Duncan, senior vice president and chief economist at Fannie Mae, says that "historically, as lenders face a more competitive market for loan volume, it's not uncommon to see some loosening in the lending standards; however, this time, the easing will likely be around the edges." It will be interesting to see how bank regulators react to an increase in risky mortgage lending and how stock prices at large banks might react to the potential increase in legal liability associated with these nonqualified mortgages, since these loans have been given an almost protected class status by the Consumer Financial Protection Bureau. Home sales will benefit in the short run, but let's hope that we don't return to the risky lending practices that almost destroyed the market in 2008.

(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 brian.andrews@acresllc.com.)

Jindal's ex-health secretary indicted for perjury

Gov. Bobby Jindal's former health secretary was charged today by a state grand jury with lying about his involvement in the award of a now-canceled $200 million Medicaid contract. The Associated Press reports Bruce Greenstein was indicted on nine counts of perjury, tied to his sworn testimony during a confirmation hearing before a state Senate committee and to the grand jury reviewing the contract and the decision-making behind it. The indictment comes more than a year and a half after the Jindal administration scrapped the 10-year Medicaid claims processing contract with Maryland-based Client Network Services Inc., or CNSI. Since the contract cancellation, the administration has accused Greenstein, a former CNSI vice president, of inappropriate contact with the company throughout the bid process. Greenstein resigned a week after the contract was terminated but has denied any effort to steer the contract to his former employer. His lawyer John McLindon says Greenstein didn't lie in his testimony and will plead not guilty to the charges. "Obviously, he's very disappointed, but he is prepared to take this on, go to trial, explain everything to the jury and show them that what he said is not perjury," McLindon says. The Jindal administration severed its contract with CNSI in March 2013 after details emerged publicly about a federal subpoena seeking information about the contract award. Greenstein then stepped down as secretary of the Department of Health and Hospitals and moved back to Seattle, where he once lived. Read the full story.

La. hospitals have nearly $30B economic impact, report says

Louisiana's 207 hospitals are major economic engines in the state, generating more than $29.9 billion in economic activity annually and directly employing more than 98,000 people, according to a report released today by the Louisiana Hospital Association. The study, which LHA commissioned LSU economics professor Jim Richardson to conduct, says the state's total health care sector employs 285,950 people and has an annual payroll of $10.9 billion. While hospitals make up just 1.7% of all health care sector businesses, they account for 34% of total health care employment and 42.2% of total health care sector payroll in the state. "Over the past few years, the business community and the public have really begun to understand how hospitals are intrinsically linked to the state's economy," says LHA President and CEO Paul Salles in a prepared statement. "Our hospitals not only provide vital, life-saving services, but they also strengthen a community by providing well-paid, highly-skilled jobs." In the Baton Rouge metro area, the study says, there are "proportionately fewer workers in health care and hospitals" compared to the overall population. While the Capital Region accounts for 17.7% of the state's population, those working in local hospitals account for just 13.5% of total hospital employment in the state. The overall economic activity supported by the state's hospitals generates roughly $868 million in state tax collections annually and $714 million in local tax collections. See the complete report. —Steve Sanoski

News roundup: Great American Cookies and Marble Slab Creamery added to Juban Crossing lineup … HomeGoods set to enter BR market in early October … Louisiana fares poorly in new 'happiness' ranking

In the mix: A combination Great American Cookies and Marble Slab Creamery store has been added to the lineup of retail outlets expected to open this fall at the massive Juban Crossing mixed-use development. The store, which will be just one of 10 combination stores of the two national franchises in the country, will open Nov. 1, say franchise owners John Gremillion and Phillip Zimmerman of Baton Rouge. Other stores expected to open in the first phase of Juban Crossing this fall include dine-in movie theater Movie Tavern, Academy Sports, Lane Bryant, Old Navy, PetSmart, Ross, Shoe Carnival, T.J. Maxx and Ulta.

Opening soon: HomeGoods is entering the Baton Rouge market with just its second Louisiana location early next month. The Framingham, Massachusetts-based chain of home furnishing stores has announced a grand opening date of Oct. 5 on its website. The store is set to open in the Siegen Lane Marketplace location formerly occupied by Conn's Home Plus, which closed earlier this year. HomeGoods' parent company, TJX Companies, also owns the T.J. Maxx and Marshalls chains. HomeGoods has more than 400 locations nationwide, including one in Mandeville.

An emotional state: Is Louisiana happy or not? Apparently, there's some disagreement. According to a new ranking released today by financial website Wallethub.com, Louisiana is the 39th happiest state in the nation. The website says it compiled the rankings based on 26 metrics ranging from emotional health and income levels to sports participation rates. But earlier this year, a paper by a group of researchers from Harvard and the Vancouver School of Economics said Louisiana is not only the happiest state, but that it is home to five of the nation's 10 happiest cities—including Baton Rouge.
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