ABiz presents its annual feature on the top business stories of the year.
BP, LHC Group and Acadian Ambulance, Greg Gachassin and Daniel Stanford, Van Eaton & Romero and Frank's Casing Crew, UMC and I-49. Job growth.
These are the people and stories that defined the Acadiana business community in 2012 or have the potential to make an impact in the years to come. ABiz annually recalls the top headlines of the past 12 months, as well as the stories that failed to get the coverage they deserved. The Big Deals.
They aren't necessarily the transactions, or "deals," although the merger between home-grown Van Eaton & Romero and New Orleans-based Latter & Blum certainly made the cut, but more the people, the events, the numbers that say a lot about the local business environment. We strive for a diverse group of topics and stories representative of the business community when making the final selections. Some good, some bad and some plain ugly.
All in all, it's been a good year for the Lafayette economy and area companies. For starters, retail sales are poised to best the record set in 2008 (see "Third Quarter Economic Performance Index" on P. 13), and Coldwell Banker Pelican Real Estate Chief Operating Officer Steven Hebert tells ABiz 2012's residential real estate numbers will go down on the record books as the third best year in the history of the parish.
The local economy in one word? "Vibrant," says the Lafayette Economic Development Authority's Gregg Gothreaux.
It doesn't get much better than that.
1. More than two years later, BP remains in headlines
The 2010 Deepwater Horizon disaster stayed in the headlines throughout the year, in part when a proposed $7.8 billion civil settlement with fishermen and other individuals and businesses was reached in federal court in March (the Lafayette law firm of Domengeaux, Wright, Roy and Edwards served as co-liaison counsel to the plaintiffs' steering committee of 12-14 lawyers), and especially in mid-November when BP agreed to pay $4.5 billion in a settlement with the U.S. government over the Gulf of Mexico oil spill, and plead guilty to criminal charges in the deaths of 11 workers and to lying to Congress. The latter figure includes nearly $1.3 billion in criminal fines - the largest criminal penalty in U.S. history. Federal indictments made public within hours of that announcement alleged that BP well site leaders Donald Vidrine of Lafayette and Robert Kaluza acted negligently in their supervision of key safety tests performed on the Deepwater Horizon drilling rig before the explosion killed 11 workers. The indictment charging them with manslaughter says Vidrine and Kaluza failed to phone engineers onshore to alert them of problems in the drilling operation. Both pleaded not guilty. Both of the settlements were still awaiting final court approval at press time.
2. Acadian's legal woes
|Photo by Robin May|
The local company accustomed to generating great press was dealt a couple of big blows in 2012. Early in the year a district court judge in Avoyelles Parish granted class status to a group of plaintiffs challenging Acadian Ambulance's practice of filing liens against insurance settlements and civil awards paid to accident victims, despite that those victims are insured by companies that have negotiated contracts with Acadian specifying reduced rates for ambulance transport and emergency medical services. The judge's decision has nothing to do with the merits of the claims, Acadian was quick to point out, while also refusing to comment on the case. Then came the jaw dropper: The mother of Whitley Lacey, a pregnant Plaquemine woman left a triplegic after a 2010 accident in the ambulance transporting her to a hospital, sued on her daughter's behalf and won a $117 million award from an Iberville Parish jury - all for compensatory damages.
Though the appeals process is ongoing, Acadian, through general counsel Allyson Pharr, expressed deep sadness over the accident: "This was a horrible tragedy and our hearts and prayers remain with Ms. Lacey and her family. While it is extremely difficult to put a value on a case such as this or ponder the fairness of an award amount, we do hope that the damage amount ultimately awarded will be used to provide Ms. Lacey with quality care and ensure that her children will not forego any opportunities that they may otherwise have had were it not for the injuries their mother sustained in this accident." But the Lafayette company ended the year on a positive note, acquiring a north Texas company and expanding its operations in the state. The acquisition of StarPlus EMS in McKinney added 50 full-time employees, eight ambulances and three wheelchair vans. Acadian now serves 33 Texas counties.
3. Van Eaton & Romero merges with Latter & Blum
|Photo by Robin May|
VER's Bill Bacqué, Gail Romero and Nancy Van Eaton Broussard joined Latter & Blum
On the morning of Dec. 12, Van Eaton & Romero principals Bill Bacqué, Nancy Van Eaton Broussard and Gail Romero joined Latter & Blum executives Bob Merrick and Richard Haase in announcing that they have entered into a merger agreement that will increase the size and geographic coverage of the Latter & Blum group, already the largest real estate brokerage in the Gulf South. The merger will make Latter & Blum the 34th largest real estate company in the country and open up vast new opportunities for VER. As ABiz reported online two days before the announcement, speculation had been heating up that a deal was cooking between the two companies - VER appeared to be a good fit for the aggressively expanding New Orleans-based real estate entity. The largest real estate firm in the Crescent City, Latter & Blum in the past entered into similar agreements with C.J. Brown in Baton Rouge and Noles-Frye in Alexandria, both tops in their respective markets. Like those firms, the 35-year-old VER will retain its autonomy and brand, with the line "A Latter & Blum Company" added to all of its marketing and advertising. The value and terms of the merger were not disclosed. "There was no money that changed hands," Bacqué tells ABiz, explaining that the trio of owners are now stockholders in Latter & Blum Holding Company.' VER's principals said they will all remain with the firm; at this point there is no strategy for any of them to retire, according to Bacqué. "It's part of a succession plan but not one where we have any vision of walking away." He explains that the merger is the mechanism they chose to ensure VER has continuity for its agents long beyond his and his partners' work there.Latter & Blum's companies will finish 2012 with almost $1.8 billion in total sales volume, which includes 8,400 total units sold, the company reported."The technological, managerial and strategic support coupled with the regional, national and worldwide connections that we are gaining by becoming one of the Latter & Blum family of companies heightens our capabilities exponentially," Bacqué says."This alliance will lead to unprecedented financial strength, growth and breadth of offerings," says Merrick, Latter & Blum's chairman and chief executive officer. The combined entity will have a sales staff of 1,300 in the Louisiana. The deal marks a major expansion into the Acadiana market for Latter & Blum, which currently has only commercial property management and low-income housing property management operations here. Founded in 1916, the company also operates in southern Mississippi.
4. Jindal getting behind I-49?
In November, Gov. Bobby Jindal announced an approximately $100 million project to widen and construct a roughly two-mile segment of I-49 South from North of Ambassador Caffery Parkway to Albertsons Parkway in Lafayette Parish. The project, which will upgrade the current U.S. Hwy. 90 to interstate standards, will be paid for by bonding out the Unclaimed Property Fund. This latest investment augments the $5.4 million spent to construct frontage roads on U.S. 90 from La. 83 to Darnall Road and the $20 million widening of U.S. 90 from four to six lanes from Pinhook Road to Broussard. Combined, those projects will help improve hurricane evacuation along the corridor. The latest investment is terrific news for the more than 35,000 commuters using this segment of roadway every day and for commerce along the route - it should be completed by 2017 - but would be much more promising if it's a sign that the governor is ready to get creative and throw his weight behind completing I-49 South from Lafayette to New Orleans, an estimated $5 billion undertaking. Can you say toll roads?
5. Amid ethics problems, Gachassin pays EPA $60,000 fine
It was a bad year for low-income housing developer Greg Gachassin. In June the Louisiana Board of Ethics voted to charge him and his Cartesian Co. with violating the state's Code of Governmental Ethics while he was a member of the Lafayette Public Trust Financing Authority's board of trustees and again after he resigned from its board. The Ethics Board's action is much like filing a civil lawsuit against Gachassin, and it's now up to the Ethics Adjudicatory Board, a three-member panel of administrative law judges, to determine whether the charges should stick and assess a penalty based on the Ethics Board's recommendation. While he was dealing with the ethics investigation (a matter that is ongoing), Gachassin was also battling the EPA over alleged Clean Water Act violations at his Fountain View residential subdivision off Kaliste Saloom Road, a fight he lost and ended up paying a whopping $60,000 to settle (though he did not admit guilt). It certainly could have been much worse for his pocketbook, as he was also cited but not fined for Clean Water Act violations at Wingate by Wyndham, the hotel he developed in front of the subdivision, and for an adjoining storage business he no long owns (the statutory maximum penalty was $16,000 per violation per day). The alleged EPA violations dated back to 2008.
6. Another Stanford in the headlines
High-profile Lafayette criminal defense attorney Daniel Stanford says he did nothing wrong. He says he was only representing his client, Richard Buswell, in a federal securities fraud case - and claims he did such a good job that the feds are after him. U.S. Attorney Stephanie Finley tells a different story. In early October her office announced the indictment of Stanford, 54, and 52-year-old attorney Barry Domingue of Carencro, who practices personal injury and construction law. The two attorneys were among nine people indicted by a federal grand jury in an alleged multi-state illegal synthetic drug operation. The indictment claims Stanford received $156,921 and Domingue $91,319 for their role in a money laundering and drug trafficking ring involving $5 million in sales of synthetic marijuana. The 16-count indictment charges nine individuals and Buswell's company Curious Goods (Buswell was indicted again in this case) with conspiracy to distribute synthetic drugs, conspiracy to introduce misbranded drugs into interstate commerce, and conspiracy to commit money laundering. The drugs are often marketed as bath salts, Spice, incense, potpourri or plant food. At least at this point, it looks like Stanford may be the guy the feds really want - at press time four of the nine had pleaded guilty.
7. LGMC takes over UMC
| Photo by Robin May|
|LGMC CEO David Callecod announces merger during recent press conference.|
While we still don't have details of the agreement - they're being worked out behind closed doors (read: no transparency) - it's hard to view Lafayette General Medical Center's takeover of University Medical Center as anything but good news for the poor and uninsured in our community. The deal was announced in early December, a nice Christmas gift to the 173 UMC workers who were told earlier this year they would lose their jobs, and we'll know specifics about how the transaction is structured before July 1 when LGMC assumes control of the state facility. Hopefully, at that point we'll be able to analyze whether this is really the best move for our community. (Read more on this story and the jobs and services that are being saved on Page 4.)
8. SEC ends LHC Group probe
LHC Group Inc. announced Dec. 4 that the Securities and Exchange Commission's investigation into the local home health and hospice provider's participation in the Medicare billing practices was complete and that the SEC staff did not intend to recommend any enforcement action by the commission. The Lafayette-based company announced in July 2010 that the SEC asked it to preserve all documents related to its Medicare reimbursement policies after a Wall Street Journal investigative story earlier that year prompted the Senate Finance Committee to look into whether home health providers intentionally increased the number of therapy visits to trigger higher Medicare reimbursements.
9. Lafayette No. 1 city for job growth
How's this for ending the year? The Lafayette metro, which includes St. Martin Parish, had the largest increase in employment in the country in both September and October. Citing numbers from the Bureau of Labor Statistics, the Lafayette Economic Development Authority says the metro's September employed increased 8.7 percent from September a year ago, and October increased 8.5 percent from the previous October - adding 13,200 jobs that month alone. The entire state added 27,000 jobs for the October 2011 v. October 2012 period, which means roughly half of all jobs created were right here in Lafayette Parish. Guess that's why our seasonally-adjusted unemployment rate of 3.9 percent is the lowest in the state for the third quarter in a row.
|Photo by Robin May|
|Frank's Casing Crew's Keith Mosing and Robert Gilbert|
10. Frank's Casing moves to No. 1
The name most synonymous with Lafayette's oil patch, Frank's Casing Crew rose to the No. 1 spot on ABiz's list of Acadiana's Top 50 Privately Held Companies (published in the July-August issue). Nearly three quarters of a century in business, this family-owned operation generated $850 million in revenues in 2011, a 31 percent increase from 2010. Headed by a third-generation Mosing, with the fourth generation starting to make its mark, the Lafayette-based conglomerate has grown into the largest privately held oil and gas service company in the world. The move to No. 1 was a big jump for Frank's, which ranked 8th on the previous year's list because whoever was turning over the information to ABiz apparently only reported revenues from local operations. With the company now reporting worldwide revenues, it seems unlikely to be bumped from the top spot any time soon. But Frank's may not want to get too comfortable: No. 3 Schumacher Group predicts that its revenues will reach the $1 billion mark this decade (it had $550 million in revenues in 2011).