Daily Report

This Afternoon's Headlines / Tue, August 26, 2014

Apartment complexes in north BR sell for $3.6M

A Connecticut-based realty group has purchased three apartment complexes in north Baton Rouge for $3.6 million, according to land records filed with the East Baton Rouge Parish Clerk of Court today. Included in the sale are the Oak Village Apartments at 1616 North Harco Drive, as well as the La Belle Aire Apartments and Centurion Arms Apartments, both of which are listed at the address 1710 North Marque Ann Drive. The complexes are all located at adjoining properties, north of Florida Boulevard and between North Sherwood Forest Drive and North Flannery Road. They collectively include 329 apartments over roughly 14 acres, plus about 550 parking spaces. Doing business as 1500 Lorene LLC, the buyer is Kevin O'Brien, whose O'Brien Realty Group is based in Connecticut and has offices in North Carolina, Colorado and New Orleans. O'Brien could not be reached for comment on his plans for the apartment complexes in time for this afternoon’s publication deadline. According to its website, O'Brien Realty Group specializes in multifamily properties and has three apartment complex holdings in New Orleans. The seller was IBERIABANK, doing business as IB Holdings LC. —Steve Sanoski

Georges talks about decision to build new BR headquarters, newsroom

Several factors were behind publisher John Georges' decision to build a new corporate headquarters for The Advocate on the site of the newspaper's Reiger Road printing presses. “You can't ever put a single reason on a decision I make,” Georges tells Daily Report. “But one of the main factors is that I prefer always to own buildings rather than rent them, if possible. Call me old-fashioned.” Georges today announced his plans to build a three-story, 48,500-square-foot building that will house the newsroom for the Baton Rouge Advocate, as well as the business offices for all three editions of The Advocate. Georges declines to say what he plans to spend on the new building, but the market rate averages between $200- and $300-per-square-foot for new office building construction, which could put the price tag in the range of $10 million to $15 million. The high visibility of the site—which can easily be seen off Interstate 10 at the Siegen Lane exit—also factored into the decision to build a new headquarters there. Plus, Georges already owns the property. “The fact it happened to be on the interstate gives it more visibility and allows the public to have a connection to it,” he says. “Plus, it is next to our print facility, which makes our teams feel like they're not two separate teams, but are working together.” It's unclear what the future holds for the 150,000-square-foot building on Bluebonnet Boulevard, owned by Jimmy Swaggart Ministries, that has housed The Advocate since October 2005. Ty Gose of NAI/Latter & Blum, who represents The Advocate, says he will begin marketing the 100,000 square feet of available space in the building later this year for an estimated $18 per square foot, or about $1.8 million a year. The Advocate was paying far less than that because the previous owners spent several million dollars renovating the space before it moved in. —Stephanie Riegel

Cook: Geaux Clean car wash buys Prairieville site for new location

Geaux Clean Express Car Wash has purchased a 1.75-acre site in Prairieville to build its third automated car wash in the Capital Region. The property is located just off La. 73 near the Interstate 10 interchange, directly behind the Simpson Automotive facility that sits on the corner of La. 73 and C Braud Road. The deal closed on Aug. 14 at a total price of $727,495.56, or about $9.50 per square foot. "The new Express Wash will occupy about 50% of the site, and the other 50% will be offered for sale," says Will Adams with Property One, who brokered the transaction along with listing broker Macon Callicott. It will be Geaux Clean's third location in the Baton Rouge area. According to the company's website, it's other locations are on Wax Road in Central and on Highland Road in Baton Rouge. The property will be improved with a state-of-the-art automatic car wash. The proposed plan also calls for 20 self-service vacuum stations. Construction should begin within the next two months.

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

Andrews: Hurricane preparedness starts with planning

As we approach the ninth anniversary of Hurricane Katrina and having just avoided another tropical storm invading the Gulf, it is probably worthwhile to consider plans for how we would handle our real estate businesses if we were hit by another storm. There are several excellent resources for general preparedness, including the American Red Cross Ready Rating system, but real estate issues are more specific and require a bit of additional planning. For instance, how would you track and collect rent if computer systems were down? One manager I spoke with says that he now creates a manual listing for the upcoming month that does not rely on Internet access for recordkeeping. He's also created a manual procedure for the collection of rent as well as the handling of the cash and checks received. These were lessons learned from previous storms when he was not in a position to collect the rent in a secure or organized manner. Also, if your apartment complex lost power and tenants had to evacuate, how would you keep the spoiled or spoiling contents of the refrigerator from ruining that appliance? I recall many owners having to replace appliances that had survived the storm but had been ruined by rotting contents—and promising that they would not repeat that mistake. A Lake Charles apartment manager tells me that he unloaded each unit's contents into a contractor trash bag, labeled the bag and kept it on-site until the tenant returned. That seemed like overkill, until he told me that he had learned from previous storms that tenants sometimes claimed to have hidden cash or valuables in the refrigerators. In one case the tenant actually had hidden cash in a mayonnaise jar and was relieved to find the cash still in the bag weeks later. The biggest recommendation that experienced owners and managers share with me is that we need to think through the possibilities before the storm enters the Gulf and make arrangements far in advance.

(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.)

ExxonMobil contributed $84.4M to EBR in taxes last year, report says

ExxonMobil's five plants in the Baton Rouge area supported a payroll of $463 million last year and contributed $144 million in taxes to the state, as well as $84.4 million to East Baton Rouge Parish, according to a report by economist Loren Scott. Every three years Exxon commissions a report about its economic impact on the city and state. Scott, who was paid by Exxon to prepare the report, said at a public meeting this morning that Exxon's local activity and employment contributes $3.5 billion in sales tax at local businesses. The Exxon plant indirectly created more than 33,000 jobs in Louisiana over the past three years, Scott said. Angela Zeringue, site manager at the Polyolefins Plant off Scenic Highway, said Exxon prioritizes safety, the environment and plant efficiency. "Take care of those, and everything else takes care of itself," Zeringue said. The plant Zeringue helps oversee has gone accident free for 1,175 days, she said. The report also says ExxonMobil and its employees contributed more than $5 million to Baton Rouge area nonprofit organizations and schools in 2013. See the complete report. —Kelly Connelly

La. borrows to balance budget

The books on Louisiana's previous budget year have been closed, but it took a bit of borrowing from this year to make the numbers work. The Associated Press reports that to fill gaps in the budget that ended June 30, the treasury had to dip into dollars slated to pay for state agency operations this year. Treasurer John Kennedy says the state used $24 million from this year's budget to plug last year's holes. That's part of a continuing balancing act used by Gov. Bobby Jindal and state lawmakers, which relies on patchwork funding from items like property sales, legal settlements and hurricane recovery spending reimbursements to keep state programs and services operating. Jindal's top budget adviser, Commissioner of Administration Kristy Nichols, says the budget was balanced and the borrowing was only temporary. "We always knew that fiscal year 2014 was fully funded," she says in a statement to AP. But Kennedy says there's a "structural deficit" in the state's annual spending plans, relying too heavily on uncertain sources of cash and scrambling to fill gaps when the money doesn't arrive as expected. "At some point, the maneuvers and tricks are going to run out," he says. While the 2013-14 budget year closed June 30, the year didn't close for accounting purposes until Aug. 14, and number-crunching has been going on since then to determine how things wrapped up. Read the full story.

WBRZ hires anchor to replace Vann on '2une In'

WBRZ News 2 has hired Kylie Dixon as longtime anchor Whitney Vann's replacement on the station's 2une In show. Dixon, who is coming to Baton Rouge from KXII News in Sherman, Texas, will make a cameo appearance on the show Wednesday, and will begin co-anchoring the show with John Pastorek on Friday. Vann, who announced she is stepping away from the program in June, has co-anchored it for the past 17 years—the longest anyone has hosted a morning show in Baton Rouge, WBRZ says. “I've had an amazing 17 years hosting 2une In. But it is time to pass the baton in Baton Rouge to someone else,” Vann says in a prepared statement. “I know the station did a nationwide search for that special someone who would be the perfect fit on 2une In. Kylie is that person. I look forward to welcoming her on 2une In and introducing her to our loyal viewers.” Vann is staying on at WBRZ; the station says it will announce at a later date what her role will be. Dixon is a graduate of Oklahoma State University, and she was awarded the Texas Associated Press Broadcaster Award for Best Morning Newscast in 2012 and 2013. —Steve Sanoski

News roundup: Health benefit changes planned for state workers ... Ribbon-cutting ceremony set for new LSU Olinde Career Center … State officials watching disturbance in Gulf

In flux: State employees and retirees face increased out-of-pocket costs and higher deductibles as Gov. Bobby Jindal's administration reworks state health insurance plans to keep the program from financial disaster, The Associated Press reports. Financial analysts say those in the insurance program in many instances will be paying more and getting less. Critics of the changes say workers and retirees are being held responsible for the Jindal administration's mismanagement of their program. But the governor's top budget adviser, Kristy Nichols, says health care costs are simply going up.

Move-in ready: The LSU Olinde Career Center will hold a ribbon-cutting ceremony to celebrate the grand opening of its new location in the LSU Student Union on Tuesday, Sept. 2, at 2 p.m. in the Union's Live Oak Lounge. LSU Olinde Career Center Director Mary Feduccia will preside over the ceremony, which will include LSU President F. King Alexander and Louisiana Economic Development Secretary Stephen Moret, among others. LSU says the opening of the new 17,000-square-foot facility, spread over two floors, marks the first time in nearly 30 years that the career center staffs from employment services and student services have resided in the same building.

Eyes on the skies: The Governor's Office of Homeland Security and Emergency Preparedness is keeping watch on storms brewing in the northern Gulf due south of the Louisiana coast, The Shreveport Times reports. GOHSEP says the chance of tropical development remains low for the storms associated with a trough of low pressure in the Gulf, but there's a slight possibility for changes. The National Hurricane Center at 1 p.m. reported "upper level winds are not conducive for significant development over the next couple of days." Read the full story.
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