Acadiana Business takes its annual look back at the top 10 stories of 2009.
Some of the biggest stories in Acadiana got their due in 2009: the Stanford scandal, IberiaBank's rise to the No. 2 banking group in the state. Others, you barely heard about: the Shea family of New Iberia's multi-million-dollar sale of The Bayou Companies, for instance, early in the year. Each year we reflect on the big business happenings of the year, selecting a range of stories we think best sum up the year in rear view. In no particular order, below are our Top 10 "big deals" of 2009.
Some of the biggest stories in Acadiana got their due in 2009: the Stanford scandal, IberiaBank's rise to the No. 2 banking group in the state. Others, you barely heard about: the Shea family of New Iberia's multi-million-dollar sale of The Bayou Companies, for instance, early in the year. Each year we reflect on the big business happenings of the year, selecting a range of stories we think best sum up the year in rear view. In no particular order, below are our Top 10 "big deals" of 2009.
1. Fraud of Shocking Magnitude
Two thousand nine will be remembered as the year that brought persistent news of financial fraud, which reverberated in Lafayette in mid-February when the SEC raided the offices of flamboyant billionaire Sir Allen Stanford, alleging he was running an $8 billion Ponzi scheme, a "fraud of shocking magnitude that has spread its tentacles throughout the world." And just as Stanford's empire came crumbling down so did the lives of numerous south Louisiana residents, many of whom had put their life savings, by some estimates totaling upwards of a $1 billion, into Stanford's bogus CDs. The SEC's complaint came just two months after the investment operation of former Nasdaq Chairman Bernard Madoff collapsed. Numerous civil suits involving the Stanford matter have been filed in a number of states (including a defamation suit against Acadiana Business' sister publication The Independent Weekly by former Stanford Vice President Tiffany Angelle), and criminal investigations continue. In mid June, David Caldwell, head of the public corruption and special prosecutions unit with the Louisiana attorney general's office, announced a formal criminal investigation into the activities of Stanford Group Company. His office is aggressively seeking out victims and anyone else with information about how the company conducted its business in the state. "You can infer from the federal indictments there is a lot of smoke out there," Caldwell told Acadiana Business in June. Specifically, he wants to know how much the Stanford brokers knew about the scam. "Did these brokers know what was going on and help facilitate it?" he asked. "And it's not defensible to intentionally stick your head in the sand." Thankfully, by year's end, there was relief for a group of innocent investors, including Troy Lillie of Maurice, when the U.S. Fifth Circuit Court of Appeals released assets that had been frozen by the receiver. Those investors who kept their money in the CDs, however, have little hope of recovery.
2. Banking on Lafayette
Welcome to Lafayette: the hub of banking in the South. Lafayette's community banks remained strong throughout the year, so much so that several are in a unique position to acquire troubled banks in other parts of the state and region. But 2009 was IberiaBank's defining moment; virtually overnight it put Lafayette on the financial map. The bank's November announcement that it would purchase two failing Florida banks (34 locations in all) moved its assets to the $10 billion mark, making it the second biggest bank in Louisiana behind Whitney ($11.9 billion), and turning it into a major force in banking in the southeastern U.S. More astonishing about IberiaBank's acquisition of Naples-based Orion Bank and Century Bank in Sarasota was investors' reaction to it (financial reporters liked it, too). Within a few days of the announcement, the stock price had climbed from $44 per share to $55. With 20 million IberiaBank shares outstanding, that translates into more than $200 million in wealth created for its shareholders, many of whom are local. Without a doubt, solid management and sound banking principles have positioned IberiaBank for this buyers' market. More than 120 banks folded their tents in 2009, and there are some 400 banks nationwide listed as at-risk by the federal government - banks teetering on the edge of insolvency. The feds are desperate to find buyers for these banks, and they're willing to make a deal - but not with just anyone. That IberiaBank has been able to expand through acquisition during extraordinarily tough times for banking in general is not only a testament to its financial savvy, but it's also an indicator that the FDIC trusts its track record. And because the feds trust IberiaBank and need to shore up these failing financial institutions, it's been able to negotiate very favorable terms. Bank on more news coming out of IberiaBank in 2010.
3. Hot Market in Cold Economy
Let's not try to fool anyone. Lafayette is not immune to the economic troubles the country is facing, and many of us are feeling the pinch. But you sure would not know it from the national accolades that poured in throughout the year. The Lafayette MSA was ranked 9th by the Milken Institute among the best performing large metro cities in the nation, for job growth, salary growth, and five-year high-tech GDP growth. We were also named a Best Place to Launch a Business by Fortune Small Business, among the Best Places to Find a Job by Forbes.com, and one of the best Best Places for Business by Equifax (which noted that we are among 15 metro areas in the U.S. with the fewest small business bankruptcy filings). How about being named a Hot Market in a Cold Economy by Southern Business & Development Magazine? One of the Best Places to Find a Job by Money.com? One of Forbes Magazine's Best Mid-Sized Cities? There's more. Lots more. See the comprehensive list on LEDA's Web site at www.lafayette.org/rankings. It's nice to call Lafayette home.
4. Betting on the Bayou
Every year it seems that major business deals fly under the radar. Such was the case early in the year when publicly traded Insituform Technologies Inc. bought for $125 million in cash The Bayou Companies of New Iberia. Established by E.S. "Ed" Shea Sr. as Bayou Welding Works, Bayou began as a one man, one welding truck operation in 1942 and is still run by family members, who may be paid up to an additional $7.5 million, plus 50 percent of excess earnings, if earnings targets are met in 2009, 2010 and 2011. In connection with the acquisition of Bayou's assets, Missouri-based Insituform also completed the acquisition of non-controlling membership interests of two of Bayou's subsidiaries, Commercial Coating Services International Ltd. and Bayou Welding Works. The purchase price for these non-controlling interests was $8.5 million - $4.5 million in cash, $2.5 million in Insituform common stock and $1.5 million in a six-month promissory note. Then, in September, it was The Bayou Companies' turn to do the buying. Now a subsidiary of Instituform, Bayou announced plans to acquire Garneau Inc.'s pipe coating and insulation facility and associated assets located in Camrose, Alberta Canada.
The Oil Center's tenant mix is dominated by locally owned businesses like Renaissance Market, an antique store that also has a casual restaurant, the Brasserie.
5. Rebirth of the Oil Center
With a nudge from City-Parish President Joey Durel, LEDA and Lafayette General Medical Center pooled their resources to re-engage with the UL Community Design Workshop on a master plan for the revitalization of the Oil Center (the old plan had been gathering dust at UL for the past 13 years). Led by architecture and design prof Tom Sammons, the design studio's inventive graduate students have been drawing up plans for landscaping, parking and multi-use buildings. Bringing this plan to fruition is a multi-year project at best, and even that's not a certainty, as no clear funding sources have been identified. Monies for the improvements will inevitably come from a combination of private developers, current and future building owners and likely government entities, with the possibility that a Tax Increment Financing district may be formed to pay for infrastructure upgrades in the area including road repairs and the installation of sidewalks. Already the largest land owner in the center, LGMC is investing $70 million to renovate its existing hospital, and we have reason to believe there will be more expansion news coming out of the not-for-profit in 2010. What makes the Oil Center project more viable is that its diverse mix of medical facilities, banks, restaurants, specialty shops, beauty salons and a grocery store are primarily locally owned. With the weight of LGMC and its board behind the project, we expect to see some movement soon.
**6. News Blues
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Barely a day went by in 2009 that some media conglomerate somewhere wasn't announcing cutbacks, layoffs, declining revenue streams. And while Lafayette's economy remained steady enough to support its local media outlets, whether broadcast or print, several fell victim to the pain of operations located elsewhere. Most notably, The Daily Advertiser is but a shadow of its former self, with a skeleton crew now responsible for putting out Acadiana's daily journal of record. In TV land, Young Broadcasting, the parent company of KLFY-TV10, filed Chapter 11 bankruptcy reorganization and was purchased by its lenders. Citadel Broadcasting Corp., owner of radio stations 94.5 KSMB, 99.1 KXKC, 104.7 KNEK and 95.5 KRRQ, was prepping for bankruptcy by the end of the year, reported The Wall Street Journal.
7. LITE's Camera Action
It took a horse to put LITE and Lafayette's fiber capability on the map: Secretariat introduced Pixel Magic, a company that provides digital visual effects for motion pictures and television, to Lafayette. About the same time, the university, LITE and Lafayette Consolidated Government were establishing a technology business accelerator and soon after announced that California-based Pixel Magic was signing on as its first permanent tenant. The company is expected to have an economic impact of $4.4 million over the next three years. (See "Ten for the State" on Page 6 for more on Pixel Magic's impact).
Since this photo was taken earlier in 2009, a portion of the Ambassador Caffery South extension opened for traffic, and the remainder, which leads to U.S. Hwy. 90 at the Zoo of Acadiana, is expected to be complete in early 2010.
8. Road Most Traveled
It's hard to argue with real estate professionals who insist Ambassador Caffery Parkway South, the partially complete extension of the critical roadway from Verot School to U.S. Hwy. 90 - what will one day be I-49 - may be the most critical infrastructure project in the history of the parish. From an economic perspective, the extension opens up for commerce 6.5 miles of previously undeveloped and inaccessible land. And what it has done for connectivity to the outer perimeter of the parish and for folks coming in from New Iberia will be yet another shot in the arm for Lafayette Parish's tax base and our ability to attract regional and national retail players that wouldn't give us the time of day in the past. Moreover, this new route will certainly alleviate traffic in other areas, making getting around town a bit more pleasant for all of us. This extension is about much more than just the southern part of the parish, as it should one day be a key component of a comprehensive parish traffic plan linking north, south, east and west. With proper planning, it could link Scott and Carencro to Youngsville and Broussard.
**9. Downtown Redevelopment
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We would be remiss not to recognize that there is a lot more going on downtown than a late-night crime problem that desperately needs to be addressed. In 2009 the biggest news came from the development company Place de Lafayette, which renovated the old Tribune building on Vermilion Street into a multi-use space that now houses two new businesses, Recycled Cycles and Philippe's Wine Cellar, and will soon have a third tenant, a restaurant called The French Press. Justin Girouard, who was sous chef at the famous New Orleans restaurant Stella, and his wife Margaret, both Lafayette natives and STM grads, will serve breakfast and lunch Wednesday through Saturday in a casual atmosphere and will pull out the white linens for Friday and Saturday dinner. Within a few months of the Girouards announcing their plans, Nidal Balbeisi of Zeus fame confirmed his purchase of the former Masonic temple, just a block away on Vermilion, from Stanley Lerille. Lerille had been offering a laid back lunch during the week and high octane disco on weekends at his establishment, Stan's. Balbeisi's new Italian concept, Trynd, will offer authentic cooking from the south of Italy. Upstairs, he is building a cigar bar that will feature brown liquors like smoky single malt scotch, barrel-aged bourbon and vintage cognacs, along with high end cigars and all their accoutrements, such as cutters, lighters and humidors. Stan's menu continues at the Vermilion location through Dec. 31 but will then move to Jefferson Street, next to Sadie's, according to Balbeisi.
Has the deal to convert UL's 100-acre horse farm into a community park gone cold?
**10. Horse Farm Deal Goes Silent
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Wish we could say we saved the best for last, but for all the excitement the plan for turning the horse farm into a passive recreational park caused in every circle of the community this spring, there is now an equal amount of disappointment. UL President Joe Savoie, who successfully lobbied the state Legislature to allow the UL Board of Supervisors to sell the property so that it can become a park, says the ball is in the Community Foundation of Acadiana's court, and the silence from CFA has been deafening. CFA Executive Director Raymond Hebert says progress is being made and that he remains optimistic the deal will come to fruition, even noting there should be some activity soon. But that's all he'll say. It's been seven months since the university confirmed that an anonymous donor is willing to gift $5.7 million to the not-for-profit CFA to purchase the horse farm with a big string attached: CFA must first raise an additional $5.7 million for development of the park and create an endowment fund for perpetual maintenance (there are numerous examples of community foundations across the country that own and operate parks). In our assessment, this was the "biggest deal" of the year for its quality of life and economic development implications, and we are anxiously awaiting word on how CFA plans to bring the community together to make it happen.
Additional reporting by Walter Pierce and Mary Tutwiler.