Top 10 Stories of the Year
A look at the headlines that changed business in Southeast Louisiana in 2018
Honoring the city’s 300th birthday became a theme incorporated into hundreds of events this year.
By Jennifer Gibson Schecter
This year New Orleans celebrated its 300th birthday, and the Tricentennial was a through line in official events, as well as informal ones such as Mardi Gras parades. The tourism and hospitality industry seized the opportunity to promote visitation to New Orleans and scored big wins with media coverage and international visits.
The year started with accolades from publications naming New Orleans as a “can’t miss” destination. The New York Times ranked New Orleans as the No. 1 place to visit in 2018 on its annual list of 52 destinations. Condé Nast Traveler gave New Orleans the No. 5 spot on its 18 best places to travel in 2018 list. Other media outlets to include New Orleans in their 2018 lists included The Los Angeles Times, Bloomberg, CNN Travel, Travel + Leisure, The Globe and Mail and The Irish Times.
The Tricentennial was recognized by international leaders as well. In January the mayor of Orleans, France, Olivier Carré, Maire d’Orléans et Président d’Orléans-Métropole, participated in the 10th annual Joan of Arc Parade, joined by French Consul General Vincent Sciama. More than two dozen countries were represented at a ceremony in March by ambassadors, consul generals and military leaders. France and Spain were included as two of the nations that governed colonial Louisiana, and three American Indian tribes were also among the nations represented at the ceremony. Then, in June, New Orleans welcomed Spain’s King Felipe VI and Queen Letizia for that country’s first royal visit in decades.
Major Tricentennial exhibitions were premiered throughout the year at The Historic New Orleans Collection, New Orleans Museum of Art, the Cabildo, The Old Ursuline Convent Museum and more. The restoration and reopening of historic Gallier Hall in March 2018 was also a milestone event.
The visitation and visitor spending numbers will not be tallied and available until Spring 2019, but tourism and hospitality leaders anticipate seeing a correlation between Tricentennial festivities and their impact on the sector.
Short-Term Rental Controversy Continues
One year after short-term rental ordinances went into effect in New Orleans, the debate wages on regarding regulations and impact.
By Jennifer Gibson Schecter
Before the zoning ordinances on short-term rentals in New Orleans became official on April 1, 2017, there were already demands to amend them. Those demands informed the community’s vote of City Council members that fall.
When the newly elected and re-elected councilmembers took office in 2018, one of their first major and unanimous actions taken in May was to put a nine-month moratorium on short-term rental licenses for whole-home rentals, including renewing existing licenses, in order to make time to conduct a study on the effects of short-term rentals.
This was in the wake of numbers released by Airbnb in April, when it announced approximately $6 million in tax revenue and fees generated for the city of New Orleans in the previous 14 months of operation. Working in accordance with the city’s regulations, Airbnb collected the Neighborhood Housing Improvement fee, as well as hotel and sales taxes, from its community of users.
Soon after City Council’s moratorium on whole-home rentals, Airbnb removed the registration system from its website that allowed hosts to apply for a New Orleans city license, making it harder for hosts to operate and more challenging for the city to regulate its ordinances.
In September, Jane Place Neighborhood Sustainability Initiative released its own ordinance to propose new rules for short-term rentals in New Orleans. The Residents for Ethical and Sustainable Tourism (REST) ordinance looks to increase operating requirements for short-term platforms like Airbnb and Homeaway, limit permits to one per operator, and increase the nightly fee from $1 to $20 to raise more funds for affordable housing.
On Oct. 3, the City Planning Commission voted to move a city planning staff study forward to City Council, voicing concern over some of its findings but without making any major revisions. The study proposes eliminating whole-home rentals where the owner doesn’t live on the property, lifting the ban on short-term rentals in the French Quarter, linking permits to New Orleans residency, and creating a ratio at commercial properties between short-term rental and affordable housing units.
Medical marijuana is budding, but no product yet.
Restrictions were removed and growth given the green light, but distribution got pushed back to 2019.
By Kim Singletary
Medical marijuana has actually been legal in Louisiana for some conditions since 1991, but it wasn’t until the spring of 2015 that legislators set out a framework for its growth and distribution. And it wasn’t until 2018 that things really began to pick up speed.
With the first crop originally estimated to be ready in the fall of 2018, lawmakers worked this year to make adjustments to how things will operate. This past April, that included adding another handful of medical conditions to the list of those approved for treatment with medical marijuana, including glaucoma, severe muscle spasms, intractable pain, post-traumatic stress disorder and Parkinson’s disease. The list also includes cancer, HIV/AIDS, wasting syndrome, seizure disorders, epilepsy, spasticity, multiple sclerosis, muscular dystrophy, Crohn’s disease and severe autism. Estimates are that this makes approximately 100,000 Louisianans eligible for medical marijuana.
In September, the patient cap of 100 patients for each licensed physician was removed, as was the requirement that patients must see their doctor every 90 days in order to continue receiving the drug.
Since marijuana is still a schedule 1 narcotic, it cannot legally be prescribed by a doctor. It can, however be “recommended,” but only by licensed medical providers with a therapeutic marijuana license. Currently, approximately 40 doctors have been approved to recommend medical marijuana in Louisiana. Louisiana will only require this recommendation. There is currently no state registry or medical marijuana card necessary for purchase.
Louisiana has licensed nine dispensaries. A 10th license could be granted based on need, but the Louisiana Board of Pharmacy limits are currently at 10. Each of the following areas will have a dispensary: Alexandria, Madisonville, Shreveport, West Monroe, Lafayette, Gentilly, Baton Rouge, Houma and Lake Charles. The drug will be available in medicinal oils, pills, liquids, sprays and topical applications, but cannot be sold in a form that can be smoked.
LSU AgCenter and Southern AgCenter are the only two locations in the state permitted to grow marijuana for medical distribution. Both facilities got the go-ahead to start planting mid-August with the idea that the first crop would be available for distribution in November. However, regulatory issues have now pushed that date to 2019, as late as May.
Terminal Waiting Game
New $1 billion terminal at the Louis Armstrong International Airport gets pushed back again, but announcement of vendors creates buzz.
By Chris Price
New Orleans is trumpeting its new Louis Armstrong International Airport. Construction of the $1 billion, 35-gate terminal and 2,100-space parking garage is more than halfway complete; however, its expected opening has been delayed a year due to construction issues to May 15, 2019.
When it opens, the new terminal, built on the north side of the airport’s property near Veterans Boulevard, will completely replace the existing New Orleans airport near Airline Highway.
The crescent-shaped building is expected to have an open, modern design with a glass facade that will let in natural light and give unobstructed views of the airfield. It will have one security checkpoint that will allow ticketed passengers access to three concourses, all of which will feature a mix of local and national food and retail outlets, including Starbucks, Chick-Fil-A, and Shake Shack alongside Ye Olde College Inn, Angelo Brocato’s, Fleurty Girl and Nola Couture. Vendors will be located in the center of the concourse so that views won’t be impeded.
When construction began in January 2016, the new facility was originally expected to open in May 2018. It was pushed back to October 2018, then to February 2019, and most recently to May 2019, after contractors discovered they needed to fix approximately 2,000 feet of 12-inch sewer line due to sinking land.
All flights to and from New Orleans will immediately switch to the new terminal once it is operational. While airport officials have not decided on a use for the current terminal, the rental car facility, which was completed in 2011, will remain and the existing parking garages will be converted to long-term parking. Shuttles will transport passengers between the parking garage and new terminal.
Moving the terminal from one side of the airfield to the other will require a new $90 million flyover ramp from Interstate 10 at Loyola Drive to accommodate vehicular traffic; however, its construction is not expected to begin until after the new facility opens. Until then, drivers will have to use Loyola Drive to access the airport.
The New Orleans hotel industry has undergone a year of renovation and rejuvenation as facilities both new and historic receive the modern treatment.
By Topher Balfer
This was a big year for hotels in New Orleans. The Windsor Court Hotel revealed its $15 million renovation this year, which included updates to its 316 rooms and suites. Most notable in this update was the addition of the Waterman Poolside Bar. The hotel’s ballroom, La Chinoiserie, also received architectural updates.
The Jung Hotel and Residences also reopened its doors after a renovation that spanned three years and $140 million. The massive project modernized not only the 171 guestrooms, but also included the addition of several floors of apartments.
The boutique hotel B on Canal also completed a multimillion-dollar overhaul to its 15-story building. The 155 guestrooms and suites were all updated with designer furnishings, with more than 1,750 square feet dedicated to ballrooms and meeting rooms. A new restaurant, Madam’s Modern Kitchen + Bar, was introduced during the renovation.
Also notable for the industry is the 125th anniversary of the Roosevelt New Orleans, a Waldorf Astoria Hotel, which underwent a full restoration following Hurricane Katrina. The Pontchartrain Hotel was also named the No. 1 hotel in New Orleans in Conde Naste Traveler’s 2018 Readers’ Choice Awards.
The 74-room SpringHill Suites by Marriott and the 105-room TownePlace Suites by Marriott both opened at 1600 Canal St. this past February.
This year also saw some exciting announcements of projects scheduled to open in 2019, including The National WWII Museum’s Higgins Hotel & Conference Center, a 230-room hotel that broke ground in December 2017 at the corner of Andrew Higgins Drive and Magazine Street. Hard Rock International also announced it is constructing an 18-story hotel at the site of the former historic Woolworth’s building in the French Quarter. The hotel will include 350 rooms and 62 one-, two-, and three-bedroom units for sale.
This year the cruise industry’s strong momentum continued with multiple huge announcements.
By Topher Balfer
Following on the heels of record-setting cruising numbers in 2017 that reached over 1.1 million passengers, on Sept. 27 it was officially announced that Disney Wonder, a 2,700-guest ship, will sail out of the Erato Street Cruise Terminal starting in 2020. With destinations like Cozumel, Jamaica, the Bahamas and Grand Cayman, the highly anticipated cruise sold out of all available itineraries just one hour after going on sale.
The arrival of the first Disney Cruise Line to sail out of New Orleans is just one of the achievements announced by the Port of New Orleans and the cruising industry this year, including the fact that this past November the Norwegian Breakaway became the largest cruise ship in length and occupancy to ever sail through the city.
Royal Caribbean also returned to the city with cruises to the Bahamas and Mexico.
On the riverboat side, American Cruise Lines launched the American Song, the first modern riverboat to sail in the United States, on Oct. 6.
At the 2018 State of the Port address, Port NOLA president and CEO Brandy D. Christian noted that the tourism industry has seen great benefit from cruises using the city as a homeport.
“Ninety percent of cruise passengers travel from out-of-state, 73 percent spend a day or two in New Orleans either before or after their cruise, and 75 percent report making a purchase in the Crescent City,” Christian explained. “These passengers generate over 306,000 rooms a night in New Orleans-area hotels.”
Benson Empire Loses Its Leader
With the passing of Tom Benson, the $3B Saints and Pelicans are now owned by his wife, Gayle.
By Chris Price
The eternal image of Tom Benson will be of him lifting the Vince Lombardi Trophy after his New Orleans Saints won Super Bowl XLIV in February 2010.
The sight of Benson holding the trophy aloft was seared into memories because so many fans thought it would never happen. When it did, it was because of Benson’s efforts to ensure his team was not only winning, but capable of competing with the NFL’s elite teams.
Benson, 90, passed in March at Ochsner Medical Center, after being hospitalized with the flu in mid-February. Born on July 12, 1927, in the Seventh Ward neighborhood of New Orleans, he became a household name across the Gulf South in 1985 when he bought the Saints for $70 million after learning that the team was on the verge of being sold to parties interested in moving it away from the Crescent City.
In 18 seasons under the team’s original ownership, the Saints were a perennial loser. They won just 30 percent of their games, lost almost 100 more games than they won, and posted a 78-176-5 overall record. During 33 years under Benson, the team won more often than they lost, going 271-256, and was transformed from a doormat into a contender and, ultimately, a champion.
Since purchased by Benson, the Saints have earned 11 playoff berths, six division titles and captured a Super Bowl title.
In 2012, Benson purchased the New Orleans Hornets from the National Basketball Association for $338 million. A year later, he rebranded the team as the New Orleans Pelicans.
Forbes now estimates the Saints to be worth an estimated $2.08 billion and the Pelicans $1 billion.
Benson originally planned to pass the teams to his daughter and grandchildren, but after a dispute with family, his wife, Gayle, inherited both teams. In addition to being the only woman to have a franchise in both the NFL and NBA, she owns GMB Racing, a stable that competes in the highest levels of horse racing. In July, Sports Illustrated called her “the most powerful woman in U.S. sports.”
The Sunshine Project
Formosa Petrochemical to build $9.4 billion plant in St. James Parish
By Chris Price
Formosa Petrochemical Corp. announced its decision in April to build a $9.4 billion chemical-manufacturing complex on a 2,400-acre site it purchased in St. James Parish. Dubbed “The Sunshine Project,” it is expected to create 1,200 new direct jobs with an average pay of $84,500 plus benefits, and 8,000 new indirect jobs, according to Louisiana Economic Development (LED), a public agency responsible for strengthening the state’s business environment and creating a more vibrant economy.
The state of Louisiana offered an incentive package that includes a $12 million performance-based grant to offset infrastructure costs. Following company performance in building the complex, Formosa will receive the grant in four annual installments of $3 million beginning in 2021, the projected first year for hiring permanent jobs, according to LED.
The complex, located just downriver from the Sunshine Bridge, will produce ethylene, propylene, ethylene glycol, and associated polymers that will support a host of plastic goods, ranging from sports equipment and food packaging, to clothing and healthcare and technology products. Pending the completion and approval of permits for the site, Formosa could begin construction as soon as 2019 in what projects to be a 10-year building and development process in two phases.
An economic impact study completed by LSU economist James Richardson forecasts the 10-year construction period will yield $362 million in new state and local tax receipts, with an additional yield of $313 million in new state and local taxes during the initial 10 years of operation, beginning in 2025. Through 2035, combining both periods, Richardson estimates the project will yield $4.7 billion in new personal earnings and $18.5 billion in new business transactions.
St. James Parish President Timmy Roussel said the plant “will almost double” the parish’s present tax base.
Formosa Plastics Group operates three existing Louisiana facilities with 410 employees in East Baton Rouge and Pointe Coupee parishes.
DXC Technology’s opening this year will be followed by multiple other tech companies.
By Kim Singletary
Awarded the No. 2 business deal of the year in America in 2017 by Business Facilities Magazine, DXC Technology’s choice to open its Digital Transformation Center in New Orleans was 18 months in the making. The project — estimated to create 2,000 jobs by 2025 with an average salary of $63,000, as well as 2,257 additional jobs to support operations — cemented Louisiana’s position as one of the fastest-growing software and IT destinations in the United States.
Formed in April 2017 by the merger of CSC and the Enterprise Services Division of Hewlett Packard Enterprise, the Virginia-based, $25 billion Fortune 250 firm officially dedicated its center in the Central Business District’s Freeport-McMoRan building in May.
The month before, Indian tech firm iMerit announced that it will be opening its first U.S. delivery center in downtown New Orleans, a project expected to create 100 jobs.
In June, Austin, Texas-based company Accruent announced that it was bringing its 250-job tech center to New Orleans. The international business specializes in software and IT products that enhance the real estate, construction, development and facilities management functions of major clients in the retail, corporate, consumer goods, higher education, food and beverage and other sectors. Louisiana Economic Development estimates the project will result in 350 new direct jobs and 338 indirect jobs, for a total of more than 680 new jobs in Louisiana’s Southeast Region.
Accruent will occupy approximately 20,000 square feet of office space in the New Orleans Central Business District, in a specific location to be announced at a later date. Commercial operations began in June. Plans are to reach full employment by 2020.
In early November, LM Wind Power announced that it will establish its Technology Center for the Americas at NASA’s Michoud Assembly Facility in New Orleans. A GE Renewable Energy company, LM Wind Power will retain 45 jobs and create 100 new direct jobs, with an average yearly salary of $52,000 plus benefits, along with 227 new indirect jobs.
Avondale Finally Has a Future
GNO, Inc., JEDCO and Jefferson Parish celebrate a big win for the region.
By Kim Singletary
On Oct. 3, Avondale Marine LLC, a newly formed joint venture between Virginia-based T.Parker Host and Illinois-based Hilco Redevelopment Partners, finalized the purchase of Avondale Shipyard from Huntington Ingalls Industries. The deal was praised as “one of the largest economic development announcements in Jefferson Parish history,” by Jefferson Parish president Mike Yenni.
Since before World War II until its closing in 2010, the 254-acre property served as one of the nation’s most significant shipbuilding assets and the largest private employer in Louisiana, boasting over 26,000 workers at its peak. Avondale Shipyard features 8,000 feet of deep-water riverfront access and connection to six Class I railroads. Following its closing, GNO, Inc. and JEDCO both worked on bringing the site back to life, which included JEDCO and the Jefferson Parish Council structuring a local incentive package.
“For over eight years, we have worked with political leaders, economic development partners and private developers to reimagine a new Avondale that would be as impactful and catalytic for our state and region as the shipyard had been for decades,” said Michael Hecht, president and CEO of GNO, Inc. at the announcement.
Avondale Marine envisions the development of a modern, world-class global logistics hub, with plans to redevelop the site’s crane, dock and terminal assets while connecting global waterborne commerce with manufacturing, fabrication and distribution facilities onshore.
“Our community has experienced tremendous growth on both the east and west banks of Jefferson Parish in recent years,” said Gov. John Bel. Edwards at the announcement. “The introduction of jobs and investment into this area will have a far-reaching impact on the west bank and across the region, further invigorating our growing economy.”