BASF is investing $125 million in an expansion of its polyol plant in Geismar, La., scheduled to start up in 2008. A new alkylethanolamines plant, also in Geismar, is scheduled to start operations in 2007.

   Among the group's recommendations is the creation of "project opportunity funds" by the nine parishes. President and founder of Competitive Strategies Group Jay Garner, a 27-year industry veteran, says local municipalities are prohibited by law from offering tax incentives. "The state can, and has generous incentives," he says, "but you have to have a mixed bag to be successful." He says Baton Rouge Area Chamber leaders are working aggressively on the creation of a discretionary fund in each parish, "so if they have to make an offer or buy land, they can do so."
   When it comes to the federal Gulf Opportunity Zone incentives, corporate executives in the past have expressed concern over the relatively early sunset, still soon even after being extended through 2008. Garner, whose firm earns half its revenues from site selection, corroborates that concern: "I've worked some distribution center projects on the fast track, and food processing projects that are a couple years down the road, and I don't think these timelines are going to fit GO Zone," he says. "Some are in a hurry to move and some aren't."
   Asked whether the recommended industry targets were intentionally chosen to diversify from petrochemical because of the non-attainment areas, Garner says in part that is true, though some of the emissions must be attributed to vehicles. He adds that those recommendations come in part from consulting with analysts at Goldman Sachs: "What you see fits within what international analysts see as growth opportunities in the United States," he says.
   A potential obstacle to that growth has been public debate about the institution of impact fees. A measure to introduce them in Ascension Parish was turned back by one vote in summer 2006, but is sure to return to the local council agenda. East Baton Rouge Parish and other parishes are also considering them, while developers say special financing districts or a half-cent rise in the sales tax are the way to go.
   "We said any type of impact fee will be a mark against that parish by a potential investor," says Garner. "When you hear about the key factors in the site selection process, it still comes down to cost of doing business in community 'X' versus community 'Y.' Any time there is a fee structure that makes the community uncompetitive, it's a strike against them."
   What the state capital may have done better than anyone expected is absorb the population and real estate demand burdens wrought by the hurricanes.
   "They did a very good job of aggregating that influx of people into that community," says Garner.

Louisiana Economic Development Competitive Strategies Group McCallum Sweeney Consulting

"It generated tremendous economic opportunity and wealth in a very short time."
   Garner compares the situation to Mobile, Ala., where those who may have moved from New Orleans temporarily are now moving back. But "Baton Rouge is different, because those that left the New Orleans region found it easy to just be in Baton Rouge, just 60 minutes away," says Garner. They still have growing pains – an influx of students, and complaints about traffic, "so it impacted their quality of life," says Garner, "but they were able to acclimate to that very well. I think Baton Rouge is a real star in terms of how they've been able to manage growth, take the opportunity, and also do it in a way that wasn't at the expense of New Orleans, working with New Orleans in instances to retain companies, and help them make the transition back to New Orleans when they needed to. That's how classy they are."