usinesses like Baton Rouge Coca-Cola Bottling Co. that are weighing expansion or relocation options in Louisiana will find a very receptive ear in the state's economic development team. That's because a new focus on retaining and growing existing industry is now in place with newly hired personnel dedicated to that cause. Keeping those companies from exiting Louisiana in an economic downturn is every bit as important as luring new industry to the state.
Baton Rouge Coca-Cola Bottling Co., a subsidiary of Birmingham, Ala.-based Coca-Cola United
, has had a presence in Louisiana's capital city for more than 100 years. Its recently expanded facility is the fifth plant the company has built in the area during that time. But it had similar ties, including a production facility, in Hattiesburg, Miss.
"When we decided we needed to expand, we looked at the opportunity to expand our production in Baton Rouge and/or Hattiesburg, because of the history we have in those markets," says Darian Chustz, president of Baton Rouge Coca-Cola Bottling Co. "Because of the partnership we were able to develop with the Baton Rouge Area Chamber, the City of Baton Rouge and Mayor Kip Holden and Louisiana Economic Development, they were very supportive of our retaining jobs in Louisiana and having the opportunity to expand and grow. When our public partners stepped up as they did, it didn't make sense for us to go anywhere else but Baton Rouge."
The One That Didn't Get Away
A business park in an Enterprise Zone in Hattiesburg would have offered comparable benefits to the bottling company's Baton Rouge location.
"The difference for us was the infrastructure that Louisiana Economic Development [LED] was bringing to the table to help us secure this expansion," says Chustz. "We did not pursue those conversations with anyone in Mississippi, quite frankly because we weren't approached by them. When the local public partners here recognized the scope of what we were doing, they were very candid in communicating they did not want this plant to leave Louisiana. They said they'd do whatever it takes to keep us here. Given our history in Baton Rouge, we didn't explore going to Hattiesburg any further than that."
“Our public partners said they'd do whatever it takes to
keep us here. Given our history in Baton Rouge, we didn't
explore going to Hattiesburg any further than that.”
LED made $1.4 million in funding available through its Economic Development Award Program for construction of two water wells. The City of Baton Rouge, in a joint venture with LED, took care of other site improvements related to the $178-million project. The expansion brings the new facility to 781,000 sq. ft. (72,550 sq. m.) with space for 113 new jobs by 2012.
"We had outgrown our previous facility, where we had been for 37 years," says Chustz. "We ran out of warehouse space and production capacity and couldn't acquire enough property around that site to be able to expand it. That's how we ended up here." Construction on the replacement plant started in May 2007, and a year later the expansion was announced. April 28th, 2009, was the official opening.
The driving force behind the need to expand in recent years was the Baton Rouge area's surge in population following Hurricane Katrina in August 2005. "We have organic growth year after year in our business," says Chustz, "and we were able to accommodate that in our previous facility. But we've sustained a large portion of that population surge these past few years, and that, compounded by the GO [Gulf Opportunity] Zone incentives and the support of the state and city, put us in a position to go forward with this expansion."
Taking Stock of Who's Who And Where They Are
"We are currently reaching out to the top 1,100 or 1,200 companies around the state – not just the largest companies, but high-tech and other companies in growth mode," says Tommy Kurtz, executive director of LED's Business Expansion and Retention Group. The meetings have two purposes, he explains. One is to educate businesses about resources they may not be using that would benefit them. The second is to perform diagnostics, as it were, to ascertain via data collection the companies' current situation and likelihood of expanding. A software program uses the data to spot trends in industry sectors and local areas and helps the economic development team develop responses to specific issues.
"We submit a report every couple of weeks to Secretary [of Economic Development Stephen] Moret that shows what the key issues are that companies are facing, who's expanding, who's having problems and might be downsizing or closing, who's mad, who's happy – what are the successful initiatives that can be replicated in other sectors?
"All of this points to a solid retention program," Kurtz adds. "The difference is the state has made this a priority and is proactively pushing local and regional economic development organizations to help them in making those calls and reaching out. LED really has not in the past had the relationship nor the data of who the key drivers were in the state or the key contacts."
What's more, says Kurtz, LED is now mapping Louisiana companies and their products with GIS technology and an analytical program so the state can better respond to inquiries from companies seeking proximity to other companies in their sector. About half the state's parishes have GIS and mapping technology, which can be integrated with the state's application to generate new layers of location-specific information.
"A company might be looking for proximity to hydrochloric acid, for example," says Kurtz. "We can pull up all the plants that make it, the maps of pipelines, aerials and so forth, and potentially look at upstream and downstream opportunities for any type of manufacturing in the state. This co-location opportunity is the real benefit long term." Site consultants will have access to the data and to the mapping capability, Kurtz points out.
Speaking of site consultants, Kurtz says one is working with LED to identify companies with 50 or more employees in the state that may have similar operations in other states. In the contracting economy, those companies might be persuaded to consolidate operations in Louisiana, particularly if space at their site would allow it.
Two-State Duel Goes Monroe's Way
A recent example is industrial pump and compressor manufacturer Gardner Denver
's decision to consolidate its Thomas Products Division in Monroe. The northern Louisiana city won a hotly contested competition from Thomas' other location, Sheboygan, Wis. The move will result in an increase in jobs from about 70 today to about 300 by 2011.
LED had just a few weeks to prepare a case for keeping Gardner Denver Thomas in Louisiana, and a bias was in place in the company's management for retaining the Wisconsin site. Nevertheless, Louisiana and Monroe assembled an incentives package that made a compelling case.
It included a performance-based grant of up to $9 million for relocation expenses from the state's Rapid Response Fund, use of the state's Quality Jobs and Louisiana FastStart programs and a 124,000-sq.-ft. (11,520-sq.-m.) building expansion with a discounted lease rate from the city.
Local officials organized a prospective employee job fair with state advertising funds that attracted hundreds of qualified potential employees. Other local efforts also played a role in convincing Gardner Denver Thomas to choose Monroe.
Industry to State: You Snooze, We Lose
Site Selection Online – The magazine of Corporate Real Estate Strategy and Area Economic Development.
©2009 Conway Data, Inc. All rights reserved. SiteNet data is from many sources and not warranted to be accurate or current.