If You Build It…
Gulf South Commerce Park aims to attract advanced manufacturing to St. Tammany Parish in a move supporters say will benefit the entire region.
Innovation, high wage jobs (many of which boast an average pay almost double that of service sector jobs but don’t require a four-year degree), a significant tax base — the advanced manufacturing and logistics industry offers all of this and more. Critical to the American economy, the manufacturing industry accounts for 20% of the nation’s capital investment, 35% of productivity growth, 60% of exports, and 70% of business R&D spending.
As such, it’s not surprising that, according to research by McKinsey & Company, manufacturing is the main economic engine and primary employer in about 500 counties in the United States.
St. Tammany Parish, however, is not one of them.
But ground has broken on a project that aims to change that — a project that GNO, Inc., President and CEO Michael Hecht has proclaimed “a critical part of the future strategy for the Greater New Orleans Region.”
At the intersection of Interstate 12 and Louisiana Highway 1088 sits 919 acres of undeveloped land owned by Crosby Development that has been christened the Gulf South Commerce Park. The park’s goal is to attract local and global advanced manufacturing and logistics (AML) companies to call it home.
It’s an idea that Chris Masingill, CEO of St. Tammany Corporation — the economic development organization for the parish — thinks is a perfect fit for St. Tammany and critical enough to the parish’s growth to be among the goals of the organization’s five-year strategic economic development plan, THRIVE2023.
“The I-12 corridor is one of most highly recognized commerce corridors in the country,” said Masingill. “Particularly with the deep-water ports at capacity right now, companies are looking to get their products and operations to their customers and are finding our ports to be a prime entry.”
As stated on the project’s promotional brochure, Gulf South Commerce Park sits within reach of five major ports, six Class 1 railroads and 21 airports (including two that are international, New Orleans and Biloxi‚ Mississippi) all within 50 miles — all attractive points for companies looking to move their products.
Adding to the draw of the location, St. Tammany Parish has the most educated workforce in Louisiana. More than 40% of St. Tammany Parish residents have an associate degree or higher. Masingill said the parish is one of only a few in the state that has seen a growth in advanced manufacturing.
A public/private partnership, Gulf South Commerce Park is being supported by multiple different entities. In addition to St. Tammany Corporation, the St. Tammany Parish government, GNO, Inc., and Louisiana Economic Development are working to get the word out and provide information about available incentives. Cleco Power, the power company on the Northshore, is also supporting the project’s infrastructure.
Gulf South Commerce Park is an enormous undertaking that will be several years in the making, but this project — which aims to be a major catalyst for growth in the parish and region — actually began with a relatively small purchase of land by local developer John Crosby. Biz caught up with Crosby recently to learn more about how the project came together.
JC: This 92-acre property is actually something that we had looked at years and years ago, and we knew about the problems — it was tied up in a bankruptcy situation. I even looked at the top three creditors and thought about maybe trying to buy those mortgages and foreclose on the property. But it got a little bit too complicated, so I passed on it.
Then about a year after that, it comes up for public auction — May 2021 — because at that point the bankruptcy was going through, and the creditors just wanted their money.
We had to put up a bid deposit, which was $10,000, which I don’t think was enough, because it didn’t deter, I’d say, unqualified people from bidding. We were the second-place bidder, but the first-place bidder ended up defaulting on the deposit — 5% of $9 million — so they came to us with the deal.
Manufacturing Means Economic Growth According to the U.S. Department of Defense: Every dollar spent in manufacturing results in $2.79 added to the economy. Every manufacturing job creates 7 to 12 new jobs in other related industries. Manufacturing is responsible for 55% of all new patents and 70% of all research and development spending.
When you bought the property, what were your thoughts?
It was originally zoned residential. That had been changed about 10 years ago, but the parish recognized that they didn’t want residential there, so it was rezoned more like a shopping center type of commercial. We didn’t rule out going back to the residential, however. That still could have been a possibility. As a matter of fact, a lot of the infrastructure was already in place for the residential subdivision, which never got built. If you look at an aerial map of it, you can see lines that look like streets.
So, the ink’s not even dry on the agreement, and I get a call from (St. Tammany Parish President) Mike Cooper and Chris Masingill asking me what my plans were for the property. They started talking to me about AML (advanced manufacturing and logistics) zoning, which I think is a lot more appropriate for this site. Something like a River Chase shopping center would not work because there’s no population out there.
We also began getting calls from companies interested in moving to that site. So, with both of those things happening at the same time — and getting the strong support we had at President Cooper’s office, as well as from the council members — we went forward with the zoning change and then actually acquired more property around it because the 92 acres wasn’t really going to go too far for that type of development. We’ve acquired other pieces around it — some we’ve closed on and some we have options on contracts.
And that’s what makes up the 919 acres. So, you haven’t done any AML developments before, right?
No, but neither has the parish. That’s one of the problems around here: You go to other communities around the country, even small towns, and they have businesses in industry that produce a tax base for the community, which this parish doesn’t have.
This is the only parish in the state where residential property taxes are greater than commercial property taxes. Every other parish in Louisiana has been welcoming in these types of uses, and they’re benefiting from it. St Tammany needs to catch up.
You have just broken ground, but you say you’ve already had some interest?
Yeah. I think we’re in a little bit of a slowdown right now with the high interest rates and construction costs, but that’s all going to swing the other way soon and we’re ready to go. We’re hoping to have at least one building out of the ground by the end of the year.
This first phase is 189 acres. Is the infrastructure in place there?
Yes, it’s got basic, fundamental infrastructure, but we’re also working on infrastructure enhancements. We’re working with the parish on engineering and planning to tie it into a bigger system.
What are the challenges of creating a project like this?
Actually, it’s not any different from what we’ve been doing for 40 years. We’re talking about streets, drainage, water, sewer lines, things like that, that’s all the same. It’s actually simpler to do. For instance, we might end up with 20 sites total out there, instead of, like I mentioned, The Sanctuary of 430 individual house/home sites. To me, it’s easier. It’s just a larger scale. It just has greater demands on the infrastructure. I’m getting that put together, though. That’s what we’re working on right now.
When you did The Sanctuary, there was a real focus on environmentally sensitive development. Will that be the case here?
Absolutely. Before building environmentally sensitive was the cool thing to do, we were doing it. With The Sanctuary, we developed some techniques and drainage design and pervious surfaces — things that we employed in that project that we intend to do again here, just on a larger scale. We’re going to require pervious surfaces and truck parking areas. We’re also preserving a lot of wetlands. And I can tell you that these companies that are coming to look, they have their sustainability statement in on their website and they want to be part of developments like that.
What are your thoughts on the current high interest rates and building costs? Do you see things improving soon?
It’s going to, yes. I’ve been doing this long enough to see the cycles. When we started DeLimon Place (in Metairie) in 1980, the interest rates hit 16% and we owed multiple millions of dollars to the bank at that time. It was kind of scary. We were looking to sell off part of it or bring in a partner or something like that, but by the time we got through that thought process, things had changed, and rates went down.
Right now, the high interest rates are going to have an impact on construction costs, which is going to cause costs to go down, which is why they’re doing it. And then that will settle down and interest rates will come back down. Seven percent interest rates are not scary. That’s about what they are now.
As a business you always have to be looking forward. Will you be taking on any other projects in the near future?
(laughing) We have enough to “say grace over” for now, as they say. I mean, this is a monumental undertaking, and one that has not been done on the Northshore, or this part of the state, in a long, long time. There are a lot of moving pieces to this and a lot that we’ve got to get done in this first phase so that we can have long-term success. It’s a piecemeal approach that will be many years in the making.
The Crosby Story
Crosby Development was founded in 1954 by John L. Crosby Sr. as a residential building company in New Orleans. In 1970, the company expanded into multifamily construction, which later led to a move into office commercial. The company has constructed over 1,000 residential units and more than 100,000 square feet of commercial office space, with notable projects including The Sanctuary in Mandeville and DeLimon Place in Metairie. The company is currently run by the second generation of Crosbys, which includes five sons and two daughters.