As reported in a recent article, “Economic Development in the “New” New Orleans,” posted on Area Development Site and Facility Planning online magazine, 10 years after Hurricane Katrina the economy in New Orleans is thriving.
As noted in the story, “New Orleans has emerged as a city with the infrastructure, talent, and culture to support and inspire economic innovation. KPMG says it’s the most cost-friendly city for business in the country. It has also been ranked number one for export growth and has also doubled its trade volume in the past five years. From the NASA facilities and the wharfs of the Port of New Orleans to the skyscrapers of the central business district, the city and its industries are immersed in creativity and innovation.”
As reported at the UNO/Latter & Blum Economic Outlook & Real Estate Forecast Seminar for Metropolitan New Orleans last summer, the real estate industry is also benefiting from the improved economy. According to the presenters, the New Orleans real estate market is back. New Orleans continues to become more desirable and is attracting new residents, residential, retail, and commercial, to its inner-city historic neighborhoods and to its downtown districts.
Read the entire article below.
Economic Development in the “New” New Orleans
Craig Guillot, Area Development Site and Facility Planning
As New Orleans approaches the 10-year anniversary of Hurricane Katrina in 2015, the city is in many ways barely recognizable to what it was years ago. Economists and national publications say it has undergone one of the most rapid and dramatic economic turnarounds in recent American history.
Only a decade ago, the Big Easy was noted for its poor business climate, low quality of life, and crime issues. Recently, The Wall Street Journal called it the most improved metropolitan area in the country; the Brookings Institute identified it as the top-growing metro area for employment, and Forbes ranked it the number one metro area for IT job growth.
Having grown from a laggard to a leader in innovation, New Orleans is stronger than ever. Economic leaders say that transformation has happened through changes in the educational system, introduction of generous tax credits, and a cooperative regional commitment to growing, attracting, and retaining industry.
A Culture of Creativity
As the main economic driving force in New Orleans, GNO Inc. unites the 10 parishes in the Greater New Orleans region with the common goal of attracting industry to the area. GNO Inc. President & CEO Michael Hecht says the region has transformed itself to develop highly competitive advantages of low costs, unique business assets, strong leadership, a diversity of lifestyles, and an exciting culture that helps attract and retain a qualified workforce.
Hecht says New Orleans has taken the devastation Hurricane Katrina inflicted upon the city as a “wake up call” to action, enacting big changes over the past nine years. He put it this way: “Katrina was like a near-death experience for a morbidly obese person. We learned that we needed to change things and it led us to a much better life in terms of the economy.”
New Orleans has emerged as a city with the infrastructure, talent, and culture to support and inspire economic innovation. KPMG says it’s the most cost-friendly city for business in the country. It has also been ranked number one for export growth and has also doubled its trade volume in the past five years. From the NASA facilities and the wharfs of the Port of New Orleans to the skyscrapers of the central business district, the city and its industries are immersed in creativity and innovation.
Hecht says businesses are migrating to New Orleans because they can enjoy all the benefits of a thriving world-class city in a cost-competitive environment. GNO, Inc. works with everyone from state lawmakers and City Hall to universities and local entrepreneurs to grow and maintain a thriving business ecosystem. Additionally, Hecht says there’s an “energy” about New Orleans’ unique culture that can be applied to transform and innovate in multiple industries. New Orleans is making a big name for itself among innovative industries and entrepreneurs and the city’s unique vibe plays a big role in that.
“The part of the culture that we used to shy away from has become an important part of the whole sell. There is a big sense of transformation and energy here,” he explains.
A Workforce to Support Innovation
In a drastic turnaround from its pre-Katrina days, New Orleans is retaining and producing a highly educated and skilled workforce.Forbes magazine recently ranked it the “number one Brainpower City in the U.S.A.” Low costs and opportunities for rebuilding have attracted thousands of young professionals over the past decade. The strong university and trade school system, along with a top-ranked workforce-training program, has also created a talented homegrown population.
Dr. Monty Sullivan, president of the Louisiana Community and Technical College System, says the schools have shifted their focus from producing more graduates to producing the right graduates. The 13 technical and community schools around the state now design much of their curriculum and programs around meeting the needs of local industry.
“Major and skills matter. We’re not looking to produce more [graduates] but more in areas that align with and are relevant to the economy. We measure quality by jobs and wages,” says Sullivan.
Launched in 2008, the state’s FastStart turnkey workforce solution has been ranked as one of the top workforce training programs in the country and helps align workers with the needs of innovative industries. Flexible and customized for each application, it has helped create and retain qualified workforces for large manufacturing projects.
“We can provide the workforce and 9 out of 10 times it ends up being one of our biggest selling opportunities,” says Stephen Moret, Secretary of Louisiana Economic Development (LED).
Part of New Orleans’ post-Katrina transformation has been the extended diversification of its economy. Hecht says the city was previously too reliant upon tourism, hospitality, and the oil and gas industry. New incentives and initiatives have helped spark a boom in the digital media and medical industries.
A 2013 article in Forbes named New Orleans as the third-strongest market for IT jobs behind San Francisco and San Jose. The city has been a breeding ground for dozens of tech startups in the past nine years, having earned the nickname “Silicon Bayou.”
The development of the 1,500-acre BioDistrict New Orleans is also transforming the city into a national hub for world-class bioscience research and development. Over the next 15 years, the district is expected to support 34,000 direct and indirect jobs, $3.3 billion in local economic investment activity, and $24 billion in increase personal earnings.
Established in 2002 through a LED initiative, the BioInnovation Center serves as a catalyst for bioscience entrepreneurship in Louisiana. President Aaron Miscenich says the BioInnovation Center has, to date, helped start 70 companies and raise more than $30 million in capital. It serves as an incubator to help spur innovative biotech companies by providing a facility, expert business advice, and a qualified workforce.
The center’s “commercialization teams” can help turn innovative biotech ideas into viable products and businesses. “We can help them understand the missing pieces, whether it’s management structure, writing drafts of patents, or marketing and licensing agreements,” says Miscenich.
Renaissance RX is one such company that has developed from the center. Renaissance set up shop there with just a few employees in 2012 and recently announced it would make an $8 million investment to build a headquarters in the city and create at least 425 direct jobs. Along with a robust infrastructure and support from the center, Miscenich says biotech companies are attracted to New Orleans because of the workforce.
“Prior to the storm, you couldn’t find a candidate qualified enough to wash a petri dish. Times have changed. Our medical centers are attracting students and graduating people who want to stay here,” he says.
Innovative Incentives and Ideas
Innovation in New Orleans is also being encouraged by tax incentives. The angel investor tax credit provides up to 35 percent for individual investors who invest in early-stage, wealth-creating businesses. There’s also a digital media and software incentive, motion picture industry development tax credit, and modernization tax credit. An industrial tax exemption also provides 100 percent property tax abatement for up to 10 years on materials use in manufacturing. The research and development tax credit offers up to 40 percent for existing businesses with operating facilities in Louisiana to establish or continue R&D activities in the state. The quality jobs incentive also provides up to 6 percent on annual payroll expenses for up to 10 years.
According to Secretary Moret, “When you factor in all the deductions, credits, and incentives that are available, we literally have the lowest tax rates in the country for manufacturing operations.”
What makes the incentives more appealing is that they’re flexible. Moret says the state is open to negotiating for companies that can bring jobs and value. They’ll also make extra concessions for companies in industries that the city is trying to expand. “We have a lot of flexibility on incentives and…can make decisions on the spot,” says Moret.