Smoothie King Decamps NOLA For Dallas; Lanny Keller Hardest Hit

If you saw our Quote Of The Day this morning, you noticed a grievous affront to the political gods by “pet Republican” columnist Lanny Keller of the Advocate, who penned a column yesterday touting the economic development “win” garnered by Gov. John Bel Edwards in the form of the $9.4 billion industrial plant Formosa Petrochemical is breaking ground on in St. James Parish.

The Formosa plant project is not John Bel Edwards’ economic win. It’s ludicrous to even connect that announcement with Edwards. The Formosa plant is Bobby Jindal’s win, and here’s proof

01.05.16

Formosa Project In Louisiana Named One Of Nation’s Top 3 Deals

Business Facilities magazine honors $9.4 billion project with Bronze Award in 2015 Economic Development Deal of the Year competition

BATON ROUGE, La. – Today, Gov. Bobby Jindal highlighted the selection of the Formosa Petrochemical Corp. project in St. James Parish as one of the nation’s top three deals in Business Facilities magazine’s 2015 Economic Development Deal of the Year competition. Formosa, a Taiwan-based company that has operated in Louisiana for more than three decades, announced in September 2015 that it was assessing the feasibility of developing a $9.4 billion industrial complex, which would include ethane crackers and downstream chemical manufacturing plants.

Pending a final investment decision by mid-2016, Formosa would develop the project in two phases on the west bank of the Mississippi River, near the Gramercy bridge. The project would create 1,200 new direct jobs with an average annual salary of $84,500, plus benefits, and result in an estimated 8,000 new indirect jobs, for a total of more than 9,200 new jobs in Louisiana. The Formosa Petrochemical project would become one of the largest, single-site ethylene production complexes in the world. In January 2014, Gov. Jindal visited Taiwan to meet with company officials and build the foundation for the Louisiana investment.

That didn’t stop Edwards from glomming onto credit for the final project announcement yesterday, nor did it stop Keller from letting him have his unearned credit. This was a rather obnoxious bit of spin on behalf of the governor…

For the politicians, it’s the incentives that are given the company — Formosa is already a big industrial producer in East Baton Rouge and Pointe Coupee parishes — and Louisiana’s traditionally business-friendly environment.

It’s the last that makes the new announcement of political importance, for to hear some business groups tell it, Gov. John Bel Edwards is sabotaging economic development in Louisiana.

It’s not just the tax debate in the State Capitol but Edwards’ background as a trial lawyer.

Here’s how Stephen Waguespack of the Louisiana Business and Industry sees it: “Hand-selected attorneys are broadly attacking numerous energy companies that have legally operated with coastal use permits in Louisiana for years, rather than seeking to penalize specific actions or bad actors. And the pursuit of lawsuits didn’t stop there, parishes are now being pressured by the governor’s team to do the same. This litigious behavior by state government itself is simply unprecedented and unacceptable.”

Perhaps a fair criticism, but what matters politically?

As Waguespack and other Edwards critics probably know, it’s difficult to change an image of a governor making big job-creation announcements like Formosa in St. James Parish and DXC, the new technology company that hopes to put 2,000 jobs into an office tower on Poydras Street in New Orleans. Smaller announcements in places like Hodge, for a timber mill, in 2017 are also important politically elsewhere.

Coming as they do in mid-2018, and with Edwards up for re-election in 2019, these latest announcements are manna from political heaven, even as the coastal lawsuits are little-noticed outside industry circles.

These are big jobs wins for the governor, and are likely to benefit him politically.

Edwards’ background as a trial lawyer might explain why his record is what it is, but that background is not the reason business groups perceive Edwards’ record as being unfriendly to business. His record is what it is – he’s a tax-and-spend leftist who has never stopped attempting to redistribute wealth throughout his political career. He was that way as a state legislator and he’s certainly that way as governor – the only time he hasn’t been trying to raise taxes was when he was running for governor, and everybody who was paying attention (which admittedly wasn’t a whole lot of people since Edwards successfully made that election about hookers and not policy) knew it.

And his economic development record as governor is manifestly atrocious. The DXC win notwithstanding, Louisiana is a Little California in terms of shooing away jobs and investment capital on net. The state had some 27,000 people move out last year, and it was the only state in the South to lose jobs.

Which gives perfect context to the Formosa project finalization announcement yesterday – it’s an island of positive news in an ocean of negative. Keller failed to point out the water…

which he promptly fell into today.

Smoothie King, founded in Kenner and headquartered in Metairie since 2013, will move its corporate headquarters to Dallas this summer, though it intends to keep a smaller, local office.

The move, first reported by the Dallas Business Journal, comes roughly five years after regional economic development leaders offered Smoothie King a $2.4 million incentive package to convince it to stay in the New Orleans area. At the time, Dallas, a growing hub for franchise companies, was the alternative.

Smoothie King CEO Wan Kim told the Dallas Business Journal that North Texas has the “advantages of being a major food and beverage hub” with a deep talent pool and better access to suppliers and vendors. The company has also cited greater availability of nonstop international flights from Dallas-Fort Worth International Airport as key factor in its decision.

Keeping Smoothie King in the New Orleans area has been a major economic development imperative for several years, not so much because of the jobs it represents but because of the fact it’s a Louisiana-grown company gone national, and to have Texas or some other state come in and poach it away represents a lot of egg on the faces of the state’s leadership.

Yes, Smoothie King’s major competitors are also in the Dallas-Ft. Worth area, but there’s a reason for that – and it’s the same reason why there are more major corporate headquarters operations within a two-mile radius of the intersection of I-635 and the Dallas North Tollway than in the entire state of Louisiana. Namely, Dallas is a better place to do business than Louisiana is. It has fewer money-grubbing crook politicians, a better tax code, superior infrastructure, less crime, far better schools, a better regulatory environment and a resulting business climate in which everybody expects to be successful and maximize the potential of their ideas and work product.

The public sector in this state, with the exception of the economic development crowd, looks upon business as prey and operates accordingly. Sooner or later business starts looking at itself as prey, and acts accordingly. When you’re prey, you flee for your life.

Which is what Smoothie King, as it joins the burgeoning Texodus, is doing. And the only one who didn’t see it coming is Lanny Keller.

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