Business News

Big Deals 2011

by Leslie Turk

ABiz looks back on the diverse announcements, transactions, issues and happenings that helped define the local business community in the past year.

Wednesday, Dec. 28, 2011

ABiz looks back on the diverse announcements, transactions, issues and happenings that helped define the local business community in the past year. Although there were a few miscues, investigations and scandals, for the most part positive economic news dominated the local business scene. Listed in no particular order - though we do start with the best business news of the year - here are our picks for how 2011 will be remembered.
By Leslie Turk  Photos by Robin May

1. Schumacher's Major Shot in the Arm
Gov. Bobby Jindal joined Schumacher Group CEO Dr. William "Kip" Schumacher in late July at the company headquarters on Corporate Boulevard for what easily ranks as the most significant deal of the year. Schumacher Group - which generated $439 million in revenues in 2010, a 13 percent increase over 2009 - provides emergency and hospital medicine staffing and management services. Over the next five years, the expansion will create 600 new direct jobs in the Lafayette area, with average salaries of $62,500, plus benefits, and Louisiana Economic Development estimates the project will result in the creation of another 784 new indirect jobs. That's adding a total of nearly 1,400 new jobs in the Acadiana Region over the next five years to its existing staff of 1,500 (plus 3,000 contracted physicians) located across the country. The company is making a $19 million capital investment, including expanded headquarters facilities and specialized training space. Founded in Opelousas in 1994 by ER doc Schumacher, the company later moved its headquarters to Lafayette and now serves more than 3 million patients at more than 180 hospitals in 24 states. To secure the headquarters expansion, the state offered Schumacher Group a customized incentive package, including a performance-based grant from the Mega-Project Development Fund to reimburse 50 percent of the cost of expanding headquarters facilities, up to a maximum state contribution of $9 million. Schumacher Group also will receive hiring and training assistance from LED's Louisiana FastStart program, which has been ranked as the best state workforce solution in the nation by Business Facilities magazine.

2. Halliburton Picks Lafayette
What made word of Schumacher's expansion even sweeter was that it came on the heels of another mega announcement - that north Lafayette had landed a $65 million Halliburton expansion. The oilfield services giant selected Lafayette over a pool of state and international competitors for a major manufacturing facility that's expected to create 150 direct jobs with an annual payroll of $8 million, plus benefits - that equates to an average salary of $53,000 a year. Halliburton is investing $65 million in the project, which is well under way and creating an additional 250 construction jobs. The manufacturing facility is located on Pont des Mouton across from the Northpark Technology Center. Louisiana Economic Development anticipates that the 150 direct jobs will create another 357 indirect jobs, generating $4.4 million in additional tax revenue over the next decade.

The 200,000-square-foot facility will produce complex machined components for oilfield service operations with state-of-the-art manufacturing equipment. The facility will also produce value-added services, such as heat treatment, coating and other specialty operations, and will have assembling and product testing operations performed before shipping components to oil and gas producers around the world. At the time of the announcement Halliburton employed 863 people in Lafayette Parish, about 1,200 in Acadiana and almost 3,000 throughout the state.

3. Maritime Brings It Home
Although economist Loren Scott announced to a large crowd at the Cajundome Convention Center on Oct. 7 that Maritime International planned to move its production from China to Acadiana, the deal was made public in November when Gov. Bobby Jindal and Maritime International President David LeBlanc formally announced it. The $8 million manufacturing expansion will create 90 new direct jobs over the next three years and 150 new indirect jobs. Scott noted the expansion at ABiz's Entree to Business luncheon when pointing to projects that will help the Lafayette metro - which includes St. Martin Parish, where Maritime is based - gain 2,200 jobs in 2012 and another 2,000 jobs in 2013. The new Maritime jobs will pay an average salary of about $57,000 annually, plus benefits. The engineering and equipment company designs and manufactures bollards, marine fender systems, and mooring and navigational buoys for clients around the world, including the U.S. Navy. It also provides heavy marine fabrication services for the oil and gas industry. In addition to moving production now taking place in China to its plant in St. Martin Parish, the company will invest in robotic welding equipment to perform precision metal work in Broussard, adding 30,000 square feet of manufacturing space to its 65,000-square-foot facility. Maritime's current workforce totals 70 employees. Maritime, which also manufactures piles, vacuums, tanks and other general fabrication for the offshore oil and gas industry, will begin construction in 2012 and complete the expansion within a year. The project will generate about 100 construction jobs. Founded in 1996, Maritime International also has offices in Houston, Paris, Beijing, the United Kingdom and the United Arab Emirates. In 2010, the company generated $24 million in revenues.

4. LHC Group Settles Whistleblower Suit
Lafayette-based home health and hospice provider LHC Group put a major issue behind it in 2011, reaching a $65 million settlement agreement with the feds that brought closure to a civil inquiry involving Medicare reimbursement for home health services from 2006 to 2008. The settlement was reached in conjunction with a whistleblower lawsuit brought against the home health provider by the U.S. District Court for the Western District of Louisiana. The suit, filed by an individual who worked for a regional consulting firm LHC Group previously used to support the company's quality initiatives, was based on a complaint regarding how LHC Group determined "medical necessity," the legal justification for the coverage of certain medical services. That individual, later identified as Judy Master, gets more than $12 million for her efforts. LHC Group cooperated fully with investigators and said the settlement agreement reflects that the company disputes the government's claims and includes no admission or determination of wrongdoing. The government did not question LHC Group's quality of patient care, and there were no findings that the company billed or received payments for services not rendered. On a much brighter note, for the fifth consecutive year, LHC Group was named one of "America's 100 Best Small Companies" by Forbes magazine and was also recognized as one of the nation's "100 Fastest-Growing Companies" by Fortune magazine for the second consecutive year. LHC Group has about 8,000 employees at more than 300 locations in 19 states.

5. Whole Foods' Strip Tease
It was breaking news on May 11: "Whole Foods, Burlington Coat slated for old Kmart"

A day later this: "Whole Foods: no deal on old Kmart site"

The strip center on Ambassador Caffery Parkway that once housed a Super Kmart will not be home to Whole Foods, news that disappointed excited residents who have waited years for the organic grocer's arrival. The announcement, it turns out, was not just premature. It was wrong. A New Orleans-based spokeswoman for Whole Foods said a day after news broke that the organic grocer had not signed a letter of intent to build on an outparcel at the site, as Lafayette city officials had noted in a press release. So how did the big mix-up happen? Local officials were misled by Dan Muniza, vice president for construction and facilities management for Houston-based firm Fidelis Realty Partners, which purchased the site and redeveloped it for a Burlington Coat and Conn's. Muniza, for reasons still unknown, approved the press release, which clearly stated that Fidelis had a letter of intent with Whole Foods. Though it won't be going to the old Kmart site, Whole Foods maintains a high level of interest in this market and could very well make an announcement in 2012. Despite the mixup, there were ample retail openings worth noting in 2011: Academy on Louisiana Avenue, Parc Lafayette on Camellia and Kaliste Saloom, and restaurants Walk-On's, Cochon, Hai-Nam and Dean-O's South. Low retail point: the shuttering of Guamas downtown.

6. Courtesy's Road Show
Within a year of purchasing Jackie Edgar Ford in Breaux Bridge in late 2010, Don Hargroder took over Douet Motors in St. Martinville, becoming that city's Chevrolet, Chrysler, Dodge, Jeep and Ram dealer. Douet brings to eight Courtesy Automotive Group's count of dealerships with an expansive Acadiana footprint from Lafayette to Morgan City. Look for big news to come out of this automotive group, which generated $223 million in 2010 revenues, next year. While Courtesy remains tight-lipped about what it will build on a large tract of land it purchased on U.S. Highway 90, the company is building a new Cadillac dealership on Ambassador Caffery, renovating its Johnston Street headquarters and expanding its facility in Breaux Bridge. Courtesy's holdings at year-end: Courtesy GMC Buick and Courtesy Cadillac in Lafayette, Courtesy GMC Buick in Abbeville, Courtesy Ford Lincoln in Breaux Bridge, Courtesy Cadillac GMC in New Iberia, Courtesy Chevrolet GMC Buick in Franklin, Courtesy Toyota Mazda in Morgan City and, as of 2011, Courtesy Chrysler Dodge Jeep Ram in St. Martinville. For six years running, Courtesy Automotive Group has been the No. 1 GM dealer group in Louisiana. That's not going to change any time soon.

7. Lourdes' Legacy Looms Large
The deal is still being negotiated and price is a sticking point, but the implications of UL getting its hands on the old Lourdes site are so vast that it made the Big Deals cut this year. When Our Lady of Lourdes left its Saints Street complex for a $211 million state-of-the-art facility on Ambassador Caffery Parkway in June, it paved the way for UL to expand in a way that would bridge the academic campus with University Commons, an area encompassing the Cajundome and Research Park on West Congress Street. At University Commons, UL has big plans: another hotel, a performing arts center and a number of residential and commercial projects. The $6 million UL gets for selling the horse farm property to Lafayette Consolidated Government would make for a nice down-payment on the Lourdes complex, but it's going to require strong negotiating skills and strategic business acumen to get the deal done. With bold new leadership at the university and a community-minded hospital group hoping to leave a lasting legacy at its old site, we firmly believe the stars are aligning for this one.

8. SEC Sues SIPC
In an unprecedented move, the Securities and Exchange Commission sued the Securities Investor Protection Corp. in December to force it to cover losses in Allen Stanford's alleged $7 billion Ponzi scheme, which includes an estimated $1 billion in losses to South Louisiana investors. It wasn't until March of this year that a clearer picture of the local losses began to emerge when Baton Rouge attorney Edward Gonzales filed suit against the SEC for negligence and misconduct on behalf of nine Lafayette area investors seeking almost $19 million (more have since joined the suit, and Gonzales says his clients lost as much as $66 million). The local plaintiffs listed in the suit and the investments they are seeking to recover: Robert Juan Dartez LLC, $638,000; David B. Sturlese, $696,000; Cynthia R. Dore (who also resides in Houston), $3.09 million; Randolph J. Hebert, $7.2 million; Robert Hollier of Opelousas, $4.8 million; Hollam Pinnacle Group LLC of  Opelousas, $571,000; Michael R. Robicheaux and Cheryl T. Robicheaux of Breaux Bridge, $1.6 million; and Brittany Robicheaux of Breaux Bridge, $52,000. Before its extraordinary December action, the SEC had been haggling with SIPC for several months to get it to cover losses these investors sustained in the 2009 collapse of Stanford Financial. The SEC concluded in June that Stanford victims, like those of Bernie Madoff, should be compensated by the SIPC, which handles claims for investors if their brokerage firm fails. The SEC's long-awaited decision came after a two-year battle that started with an SIPC opinion that Stanford victims were not eligible to file claims. It also came a day after U.S. Sen. David Vitter put a hold on two SEC member nominations.

9. Homegrown Investment Scandal
Though no where near the magnitude of the Stanford scandal or the financial losses to local investors, another securities fraud case was confirmed in 2011 when a 28-count indictment against the former owners of Bowman Investment Group was unsealed. Federal authorities began the investigation in mid-2009 when a local couple, Evelyn and Stephen Hanks, filed a complaint against Bowman and its former broker dealer, Brookstone Securities. The couple, which had entrusted much of its life savings to Bowman and Brookstone the previous fall, said the brokers advised them to invest in bridge loans and private placement investments, promising high rates of return with little risk. Within only a few months, however, those investments had lost almost 75 percent of their value. In the end, authorities say more than 100 clients lost in excess of $8 million in the alleged fraud. Charged in October with conspiracy, securities fraud, investment advisor fraud, and wire and mail fraud were Richard J. Buswell, 43, and Herbert S. Fouke (aka Steve Fouke), 52, both of Lafayette. Authorities say Fouke, a former general contractor, recruited his business associates and friends to become clients of Bowman Investment Group; Buswell then traded on clients' accounts without their knowledge to generate large commissions. Read about Buswell's more recent dilemma and why he'll sit in jail until his October 2012 trial in "Turk File."

10. Coasting Along
In November Jeanerette's Metal Shark Aluminum Boats announced that it had landed a $192 million contract to replace the Coast Guard's fleet of small response boats. The company will build up to 500 of the boats, which are about 28 feet long. Metal Shark, a business name for Gravois Aluminum Boats, has been in business in Jeanerette for 25 years. While it expects to add 20 to 40 additional welders, rigging and electronic experts and installers to its workforce of 100 over the next year, Metal Shark could hire as many as 120 workers in the next three years as it completes the contract, according to the Lafayette Economic Development Authority.