TOP 10 BUSINESS STORIES OF THE YEAR
1. The Wait is Over!
Six years after plans were finalized, New Orleans’ new airport has arrived.
By Kim Singletary
Since we published our first “Top 10 Business Stories of the Year” in 2015, the airport has made the list every year as news of its progress over the past six years has continued to top headlines. It’s No. 4 spot in our 2015 ranking centered on that summer’s groundbreaking of the New North Terminal, the plans for which had been announced by the New Orleans Aviation Board in April 2013.
In that first writeup, the North Terminal was going to have 30 gates, cost $826 million and open in May 2018.
Then, in 2016, the airport grabbed the No. 1 spot when, after 34 years without a non-stop flight to Europe, the airport welcomed both Condor Airlines — offering non-stop flights to Germany — and the really big win, British Airways, offering non-stop service to London.
Earlier that year, then-New Orleans Mayor Mitch Landrieu was quoted in a Jan. 2016 article on BizNewOrleans.com stressing the importance of the new airport, noting the projected $1.7 billion in economic impact from construction and $3.2 billion in expected annual economic impact on tourism.
“As the most transformative project for New Orleans since the Superdome, the new North Terminal project will create new jobs and unmatched business opportunities for the people of New Orleans and southeast Louisiana,” he said. “For over 40 years, people talked about developing an airport that was reflective of our city, yet for decades there was little action and minimal collaboration.”
Action continued on the airport in 2017, when news of its expansion to 35 gates and now February 2019 opening date pushed it to our No. 2 story of the year.
In 2018, the now $1 billion North Terminal slid to the No. 7 spot as the “Terminal Waiting Game” continued. As of that December, the airport was about half finished and the opening date had been pushed, yet again, to now May 2019 due to the need to fix 2,000 feet of sinking sewer lines.
Instead of an opening, this past May marked the highest number of passengers the airport had ever served in a single month — a record-breaking 1.28 million (7.4 percent higher than May 2018). For the fourth consecutive year in 2019, the airport continued to post record-breaking passenger totals.
Then, it happened. Late on a Friday afternoon on Oct. 18, news came that the new airport would open in just two-and-a half weeks.
On Wednesday, November 6, measuring 972,000 square feet, with 35 gates and 40 food, beverage and retail locations, the airport finally opened to the world — making national headlines.
…And now the wait begins for the next addition — the $125.6 million I-10 flyover, currently anticipated for the end of 2022.
2. The Battle of the Papers Ends
Advocate owners John and Dathel Georges Purchase the Times-Picayune
By Kim Singletary
On May 2, 2019, after seven years spent as home to two local papers — the 182-year-old Times-Picayune and 177-year-old Advocate — New Orleans learned it would be returning to one paper, and it would serve as an amalgamation of both.
On that day, John and Dathel Georges, owners of The Advocate since 2013, announced they had purchased The Times-Picayune and its associated website, nola.com.
Serving as New Orleans’ newspaper since 1837, The Times-Picayune had a long and “storied” history. Early on, the paper broke ground as the only major newspaper in the United States run by a female owner — Eliza Jane Nicholson, who served as publisher from 1876 to her death 20 years later. In the early 1900s, the Times-Picayune counted William Faulkner as one of its writers: The paper published some of Faulkner’s first forays into fiction writing.
It was its coverage of Hurricane Katrina, however, that the Picayune’s work garnered the attention of the world, as well as 19 Pulitzer Prizes.
Just seven years later, in 2012, the paper celebrated its 175th birthday, but it was struggling financially enough that Samuel I. Newhouse — whose New York City-based company Advance Publications had owned the Times-Picayune since 1962 — decided to drop production of the daily paper to three days a week. Nearly half the newsroom, almost 200 workers, lost their jobs.
Seizing on an opportunity, that same year The Advocate expanded into New Orleans, snatching up many former Picayune writers and launching a bureau in the city to offer a home-delivered daily paper.
As the years followed, the T-P continued to suffer losses, while The Advocate expanded. In 2014, the T-P closed its production plant on Howard Avenue to begin printing in Mobile, Alabama. More than 100 jobs were lost. Meanwhile, in 2015 The Advocate opened a brand new 48,000-square-foot building in Baton Rouge to serve as its corporate headquarters. In 2017, The Advocate’s New Orleans team also received a new home on St. Charles Avenue. That same year The Advocate purchased St. Tammany Parish’s weekly paper, The Farmer. In April 2018, New Orleans weekly alternative paper The Gambit became the latest acquisition.
Less than a month after winning its first Pulitzer Prize, The Advocate reported news of the purchase. Sadly, the merging of the two papers left 161 people, including 65 journalists, without a job. Approximately 10 have since ended up with jobs at the new version of the paper.
3.Tragedy Strikes Canal Street
Three dead and dozens injured in collapse of anticipated Hard Rock Hotel
By Kim Singletary
On the morning of Saturday, Oct. 12, just after 9 a.m., tragedy struck on Canal Street when the top floors of the 18-story, half-built Hard Rock Hotel collapsed, killing three workers and injuring 30. More than 100 workers were on site at the $85 million job at the time of the collapse.
For the following eight days, streets and businesses surrounding the area were closed as workers searched for missing people below two precariously perched cranes hanging hundreds of feet above them.
After two delays, the cranes were toppled Oct. 20, allowing most businesses to return, with one notable exception: the adjacent Saenger Theatre.
On Nov. 5, New Orleans Mayor LaToya Cantrell announced that the site would be demolished with the bodies of two of the three workers still inside.
Reporting on the financial implications of the collapse, a Nov. 6 article on Nola.com reported that cleanup, infrastructure issues and emergency personnel had cost the city $6 million in just the first two weeks, with damage to Rampart Street estimated at $1.2 million and damage and lost revenue costing the Saenger, which is owned by the city, at close to $850,000.
On Oct. 21, Hard Rock International chairman Jim Allen was quoted on Fox Business that the tragedy could delay the hotel — which is also planned to feature 62 condos — for two years. The hotel was originally supposed to be completed in the spring of 2019, but was pushed to this coming spring.
Partners on the hotel project also include real estate development and management company Kailas Company, which owns the land; the project’s general contractor, Citadel Builders; and All-Star Electric. All three companies are based out of Metairie.
By the end of October, 11 lawsuits had been filed — all but one claiming negligence on the part of Citadel Builders and numerous subcontractors.
As surrounding businesses continue to deal with lost revenue from the disaster, the United States Small Business Association announced Nov. 5 that it would be offering low-interest federal disaster loans of up to $2 million to those affected. The Louisiana Greater New Orleans and Bayou Region Small Business Development Center also stepped in to offer free, personalized counseling.
4. New Orleans Continues to Battle Aging Infrastructure
Confidence in local infrastructure remained low amid street flooding and the discovery of a vehicle clogging a key drainage culvert.
By Jennifer Larino
Street flooding and clogged drainage canals. Potholes and power plants. New Orleans’ aging infrastructure continued to generate headlines in 2019 as officials worked out a deal to fund improvements.
Infrastructure funding talks among Gov. John Bel Edwards, Mayor LaToya Cantrell and tourism leaders lasted through the spring. A deal reached in May gave $50 million in immediate funding to the cash-strapped Sewerage & Water Board, money cobbled together from Ernest N. Morial Convention Center coffers and unspent state disaster funds. It also OK’d $26 million a year in new, recurring funding to be used to fund infrastructure needs. That part of the deal will be funded by higher hotel taxes among other sources.
Concern over the city’s drainage system colored an otherwise low-key hurricane season for the region. Residents in the Central Business District, Mid-City and Uptown waded through knee-high water after a July 10 deluge flooded streets citywide. In late August, locals watched as S&WB contractors pulled a whole vehicle from a watery pile of debris blocking a drainage culvert near the Lafitte Greenway in Mid-City. An Aug. 26 line of thunderstorms sparked another bout of citywide flooding just days after the car removal operation.
Debate over the future of the city’s electric grid is poised to continue. In February, the New Orleans City Council agreed to allow Entergy New Orleans to build a controversial $210 million natural gas-fired power plant in New Orleans East, a decision that was later challenged in court and remains in legal limbo. (Entergy was fined $5 million by the council for a 2018 scheme in which paid actors posed as plant supporters at public meetings.)
In July, the council inked a solar deal that green-lights a new $42 million solar power plant in New Orleans East and the purchase of power from solar plants in St. James and Washington parishes. Together the gas-fired plant and solar improvements are expected to add about $7.30 to the monthly bill for the average Entergy New Orleans customer.
In late 2019, the council sought to lower the profit Entergy is allowed to make from its activities, a move that would save customers $3 a month. Entergy CEO Leo Denault criticized the adjustment as unreasonable. It was still under negotiation as of mid-November.
5.There is a House in New Orleans
The Sazerac House becomes New Orleans’ latest one-of-a-kind attractions.
By Kim Singletary
Second only in terms of pomp and circumstance to the opening of the airport’s new North Terminal, which followed barely a month later, The Sazerac House threw open its doors on Oct. 2 at the corner of Canal and Magazine streets.
“With our origins dating back to 1850 here in New Orleans, the Sazerac Company has long wanted to create a homeplace here in this city,” said Sazerac House General Manager Miguel Solorzano in a feature in the October 2019 issue of Biz New Orleans. Solorzano was also recognized in the July 2019 issue as a Biz New Orleans “New & Notable.” “We have created similar homeplaces for several of our other distilleries, including our flagship Buffalo Trace Distillery in Frankfort, Kentucky. We were so pleased when the opportunity finally presented itself in such a fortuitous location, just 350 yards from the original Sazerac Coffeehouse.”
The six-floor, 48,000-square-foot building functions as an interactive museum that explores the history of New Orleans through its cocktails, as well as rye and bitters production, tasting rooms, 3,500 square feet of event space and office space.
The company held two job fairs — one in May and one in July — to fill 45 new positions within the company. The offices are home to 60 employees. Since construction began in 2016, the project has also employed hundreds of workers through local firms including Trapolin-Peer Architects, Ryan Gootee General Contractors and Solomon Group.
The Sazerac Company’s ever-expanding spirit portfolio includes Buffalo Trace, Pappy Van Winkle, Eagle Rare, Blanton’s, Southern Comfort, Fireball and of course, Sazerac Rye and Peychaud’s Bitters, among more than 300 others.
In 2016, Sazerac purchased Southern Comfort and Tuaca. This past summer, the company rolled the former out with a revamped look that declared it “The Spirit of New Orleans.”
The Sazerac House is already home to its own exclusive gin. Sold exclusively at The Sazerac House through spring 2020, Henry Ramos Gin — named for an 1870s New Orleans bartender — launched in early November with the goal of making the ideal gin for the Ramos Gin Fizz Cocktail.
While the private company does not share economic data, Sazerac is believed to employ roughly 2,000 people across 112 countries and generate annual revenues of around $1 billion.
6. Luxury Investments Lead Continued Hotel Growth
New Orleans added hotel rooms, from boutique historic renovations to trendy new builds.
By Jennifer Larino
Hotel openings in Downtown New Orleans seemed to occur every other day in 2019, and more are on the horizon. Hoteliers are bracing for a softening in hotel room rates, however, as they wait for the city’s next major event — Super Bowl 2024.
New properties ranged from historic renovations to new builds. Hotel Peter & Paul generated buzz with its renovation of the old Sts. Peter & Paul Catholic Church in the Marigny, earning the 71-room property a best new hotel nod from Travel + Leisure. The Art Deco-inspired Higgins Hotel & Conference Center opened in December, adding 230 rooms steps from The National World War II Museum’s downtown campus.
The luxury hotel market remained hot in 2019, with The Ritz-Carlton receiving a $40 million renovation, and the team behind the Ace Hotel introducing Maison de la Luz, a boutique guest house designed to appeal to well-heeled world travelers. The 67-room Maison de la Luz opened in the historic City Hall Annex building on Carondelet Street in May. Construction continues on the Four Seasons Hotel, which will bring 341 high-end hotel rooms and 81 luxury condos, as well as meeting space, dining and private gardens, to the former World Trade Center site. The property is set to open in 2020.
In the Warehouse District, billionaire Richard Branson and Mayor LaToya Cantrell broke ground in May on a new 14-story Virgin Hotel on Baronne Street. The 225-room property will open in 2021. In addition, a $557 million Omni Hotel at the Ernest N. Morial Convention Center was approved in June as part of an infrastructure deal for New Orleans. Convention Center leaders aim to start construction on the 1,200-room hotel in 2021.
7. Affordable Housing Remains a Top Concern
The tax exemption proposal flopped, but new rules for short-term rentals were approved.
By Jennifer Larino
The debate over how best to encourage affordable housing in New Orleans continued to simmer in 2019, with voters rejecting an October ballot measure that would have allowed the city to exempt small apartment buildings from property taxes. It was a step Mayor LaToya Cantrell and other supporters hoped would encourage investment in affordable units.
Opponents of Amendment 4 were concerned about giving the city unbridled tax exemption authority. They also questioned the wisdom of cutting or freezing taxes given the state of local infrastructure. Just 36% of votes were cast in favor of the measure.
Housing affordability remains a concern, however. The Data Center estimates that more than half of renters in New Orleans face unaffordable housing costs, spending more than a third of their income on housing. (The average apartment rent in New Orleans was $1,170 in September 2019, according to RentCafe.com, which tracks rents nationwide.)
The nonprofit HousingNOLA projects the city needs to add 33,600 affordable units by 2025 to keep pace with demand. In September, the group found the city had lost 183 affordable housing opportunities over the previous 12 months despite a goal of adding 1,500 per year. It attributed the bulk of the loss to fewer available Section 8 housing vouchers.
In August, the New Orleans City Council passed tougher rules on short-term rentals, which many blamed for crimping the local housing supply and inflating rents citywide. The rules, which took effect in December, limit short-term rentals to owner-occupied properties and ban them entirely in the Lower Garden District and much of the French Quarter. However, the council stopped short of requiring large-scale rental operators to include affordable housing in their developments.
Other long-term solutions have been elusive. In March, the New Orleans City Council approved an inclusionary zoning rule that will require developers to build affordable housing alongside market rate units in certain parts of the city. The move was precautionary, preempting the threat of statewide ban on similar policies.
8. Taxes funding teacher pay boost, parks get business support
Voters approved raises for Jefferson Parish public school teachers and city funding for New Orleans City Park.
By Jennifer Larino
Two tax ballot measures — one boosting teacher pay in Jefferson Parish and another divvying up recreation funds in New Orleans — became reality in 2019 thanks in part to widespread support from the local business community.
Voters in Jefferson Parish agreed in May to raise property taxes to generate another $28.8 million for its public school system. The district, which serves nearly 50,000 students, is the largest in the state, but its teacher pay was among the lowest in the region, a factor many blamed for its middling performance in state rankings.
Teachers received a $3,300 raise on average as a result of the property tax hike, which added $79 for every $100,000 in home value.
New Orleans voters approved a measure that will divert city funding to the 1,300-acre City Park for the first time ever. The vote centered on a millage the Audubon Commission has used to pay off bonds secured to update and expand its facilities, which include Audubon Zoo and the Audubon Aquarium of the Americas. Voters agreed to extend the tax another 20 years starting in 2021 and split it four ways.
The tax will now fund Audubon and City Park in addition to the New Orleans’ Parks and Parkways Department, and the New Orleans Recreation Development Commission.
The promise of funding comes as City Park prepares for a big bump in visitors. In mid-May, the New Orleans Museum of Art unveiled a 6-acre expansion of its Sydney and Walda Besthoff Sculpture Garden. The $15 million addition, which was privately funded, opened with 26 new works by contemporary artists. The new $47.5 million Louisiana Children’s Museum campus in City Park opened over Labor Day weekend. The 56,000-square-foot museum and Acorn, the museum’s kid-friendly cafe, are expected to draw 225,000 visitors a year.
9. Workforce Development Offerings Expand
This fall brought a wide array of new programs.
By Kim Singletary
In July, Business Facilities magazine ranked LED (Louisiana Economic Development) FastStart as the nation’s No. 1 state workforce training program for a record 10th consecutive year. As workforce development remains a top concern throughout almost every industry, local colleges and universities stepped up this year in a big way.
This past fall, Delgado Community College launched 23 “Minimester” or compressed classes that offer full credit, along with 55 online Minimester classes, including 21 courses in accounting, business administration, management and marketing.
The university also launched the only health coach certificate program in New Orleans, partnered with Café Reconcile to offer Café Reconcile participants and alumni a free College and Career Readiness class that started this fall at Café Reconcile, and began offering a new suite of internet technology courses designed to equip locals with the necessary skills to advance their careers.
On Oct. 1, the inaugural Jefferson Parish-based Manufacturing Summit took place — a partnership between the Jefferson Parish Economic Development Commission (JEDCO) and Delgado Community College River City Site & Advanced Manufacturing Center. The event offered training programs, educational resources and tax incentives at every level across the state to support manufacturing growth.
This year, Tulane University’s School of Professional Advancement (SoPA) saw a 50% increase in enrollment following the first year of its new, updated digital design program with concentrations in graphic design, interactive design and game art and animation, along with the launch of three new computer labs. The Tulane School of Architecture received a $2 million gift to establish the Saul A. Mintz Global Research Studios, a new program that will give students an opportunity to work internationally on critical global issues, and the A.B. Freeman School of Business at Tulane University teamed up with the National Venture Capital Association (NVCA) and UC Berkeley School of Law’s Startup@BerkeleyLaw initiative, to shine a spotlight on the South’s startup ecosystem with VC University LIVE in the South from September 19 through September 21.
A new Mechatronics Apprenticeship program opened this year as well, in which GNO, Inc., Nunez Community College, Delgado and Northshore Technical Community Colleges partnered with Elmer Chocolate, Laitram and Zatarain’s for a two-year commitment to enhance and prepare apprentices for careers in manufacturing technology.
10. U.S.-China Trade War Continues
to Squeeze Port of New Orleans
Port announces it will be increasing its tariff rates by 2% in 2020.
By Jennifer Larino
The Port of New Orleans spent 2019 coping with ongoing federal tariffs as the Trump administration’s trade war with China stretched into a second year. It’s not yet clear whether new federal tariff hikes will arrive in 2020, though the port announced it will be raising its own tariff rates in the new year.
The port ended 2018 with record-breaking container volume (up 12.3% from 2017), but break-bulk business has slowed considerably as tariffs squeezed steel and agricultural products like soybeans, a key export crop in Louisiana. The pressure continued this spring when President Donald Trump raised tariffs on $200 billion in goods.
In June, representatives with the port, which handles 60% of the export grain from the Midwest, joined hundreds of groups that headed to the nation’s capital to ask for tariff relief. Specifically, the port asked that tariffs be lifted for two 100-foot-tall gantry cranes it was set to receive from China.
This fall, the Port of New Orleans Board of Commissioners approved plans to raise the port’s tariff rates on container and breakbulk cargo by 2% in 2020. Separate from the federal tariffs, these taxes apply to the amount companies pay for specific services like wharf cleanings and terminal use. The port is also introducing several new fees, including a $2,500 charge on fuel distributed to ships and a new tariff for film and event permitting.
Port officials said the tariff increase is an effort to bring rates more in line with the rest of the market and are not related to the U.S.-China trade war, which appeared to be easing as 2019 came to a close. The new rates go into effect Jan. 1, 2020.