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Editor’s Note
S
ometimes life takes you places you’d never dreamed you’d go.
For instance, recently I found myself out in the middle of Holden, La., spending a leisurely afternoon outdoors with the man who, when I was just six years old, officially became the man I was going to marry. Every week I’d watch him expertly maneuver a bright orange Dodge Charger with the numbers 01 emblazoned on the doors and I’d dream I was sitting there beside him. He’d let me hit the horn and the notes of “Dixie” would ring out as we’d launch ourselves into the air – my pigtails flying in the breeze. Yes, Bo Duke was definitely welcome in my playhouse anytime. Now, 29 years after Dukes of Hazzard’s last episode aired, I was asked to spend the afternoon with THE Bo Duke (ok, John Schneider if you want to get technical) on his new play area – a 58-acre property in Holden he purchased in January of this year to serve as John Schneider Studios. As I sat on his back porch, my childhood self squealing at this dream come true, Schneider shared with me his own dreams as he starts out on a new chapter of his life and career. And he’s not the only one that’s embarking on new adventures – even in this issue. This summer Congressman Steve Scalise became the first majority whip from Louisiana in 43 years, while Mary Lee Kottemann DeVun, granddaugher of Sam Cortese, creator of those iconic Roman Candy wagons still rumbling down the streets 100 years later, has surprisingly found herself in the rum business. And then there’s Melissa Beese, a woman who in only two years went from being a frustrated local mother to the owner of a toy company recently featured by Forbes magazine. This is what I love about Louisiana right now. It’s bursting with these stories – with businesses being born, with unforeseen opportunities springing up everywhere, with stories waiting to be told. And we’re here to tell them – to bring them to life in full color so that others can learn, be inspired, and join with us in celebrating the bright future that lies ahead for this region. In this, our second issue, Biz New Orleans is officially past the starting gate. Our engine is roaring and, just like so many of you, we’re not afraid to take the leap. n
Kimberley Singletary
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NOVEMber 2014 | volume 1 | issue 2
Publisher Todd Matherne Editorial Editor-in-chief Errol Laborde Managing Editor Kimberley Singletary Art Director Ciera Holzenthal Photographer Cheryl Gerber Web Editor Kelly Massicot Assoc. Multimedia News Editor Leslie Snadowsky Contributors Jeremy Alford, Pamela Marquis, Chris Price, Margaret Quilter, Peter Reichard, Judi Russell, Keith Twitchell, Bonnie Warren
advertising Vice President of Sales Colleen Monaghan Sales Manager Maegan O’Brien Maegan@BizNewOrleans.com (504) 830-7219 Account Executives Melissa Rehage Quijano Melissa@BizNewOrleans.com (504) 830-7225 Caitlin Sistrunk Caitlin@BizNewOrleans.com (504) 830-7252 PRODUCTION Production/Web Manager Staci McCarty Production Designers Monique DiPietro, Ali Sullivan Traffic Manager Erin Duhe administration Chief Executive Officer Todd Matherne President Alan Campell Executive Vice President Errol Laborde Vice President of Sales Colleen Monaghan Director of Marketing & Events Cheryl Lemoine Administrative Assistant Denise Dean Distribution Manager John Holzer Subscriptions Manager Sara Kelemencky
110 Veterans Blvd., Suite 123, Metairie, LA 70005 (504) 828-1380 Biz New Orleans is published monthly by Renaissance Publishing, LLC, 110 Veterans Blvd., Suite 123, Metairie, LA 70005; (504) 828-1380. Postage paid at Metairie, LA, and additional mailing entry offices. POSTMASTER: Send address changes to Biz New Orleans, 110 Veterans Blvd., Suite 123, Metairie, LA 70005. Copyright 2014 Biz New Orleans. No part of this publication may be reproduced without the consent of the publisher. The trademark Biz New Orleans is registered. Biz New Orleans is not responsible for unsolicited manuscripts, photos and artwork, even if accompanied by a self-addressed stamped envelope. The opinions expressed in Biz New Orleans are those of the authors and do not necessarily reflect the views of the magazine or owner. 6
November 2014 BizNewOrleans.com
Contents
42
34 Features
From the Lens
On the Cover
34 The Real House of Cards
64 Great Offices
Congressman Steve Scalise shares
Congressman Steve Scalise brings a Lousiana flair to the role of Majority Whip.
By jeremy alford
42 Craft Distilleries
ocal distilleries are capitalizing L on this booming niche market.
By leslie T. Snadowsky
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Behind the desk with HRI Industries’ Pres Kabacoff
70 Why Didn’t I Think of That? An enterprising mom’s eco-friendly toy business takes off.
80 Behind the Scenes
Camellia Beans loves seeing red.
his journey to becoming the first House Majority Whip from Louisiana in 43 years.
BizNewOrleans.com November 2014
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Contents
50
28
20
Columns
Perspectives
News
20 Dining Biz
50 Maritime
22 Tourism Biz
56 Insurance
18 Calendar 32 Biz Bits
The perfect wine list is more art than science.
The resurgence of O.C. Haley Boulevard
24 Sports Biz
Is money all that matters to the NFL?
26 Film Biz
Big news in film credits
28 Entrepreneur Biz
52businesses pushes the envelope for business launches.
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Chiquita Bananas’ return what it means for Louisiana.
The past, present and future of flood Insurance rates
60 Financial
How to make the most out of 401(k) plans
Upcoming events not to miss
Industry News
74 Biz Person of the Month
Q&A with actor John Schneider at his new film studios
78 Around Town - Events
Industry gatherings
Publisher’s Note
Giving Thanks!
A
s this is the month of giving thanks, I would like to recognize those who contribute to my personal and professional success. Thanks to my partners Alan Campell, Errol Laborde and the outstanding staff of Renaissance Publishing. They have worked hard this year on new projects such as New Orleans Sushi Fest, monthly New Orleans Magazine Hobnobber events, the huge St. Charles Avenue Magazine fundraising event for Operation Homefront - Wine, Dine & Design, the launch of Biz New Orleans and so much more. They produced more than 100 outstanding projects this year and I am proud of each and every one of them. I also must credit the key organizations that help me and our media properties grow, such as Entrepreneur Organization of Louisiana, Legatus New Orleans, the Jefferson Chamber and other area chambers and business councils, as well as the City Regional Magazine Association. These groups provide support and opportunities to exchange ideas with other professionals and to learn from their successes and frustrations. Finally, I have so much gratitude for my family and friends - my family for all their love and support, and my friends and business associates for being sounding boards to bounce ideas off of and for giving me their honest feedback. I hope you will all use this month of thanks to reach out to your family, friends and business connections and thank them for helping you grow - whether personally or professionally. We can’t do it alone! Happy Thanksgiving. 12
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Meet the Sales Staff Colleen Monaghan Vice President of Sales Colleen Monaghan is a seventh generation New Orleanean and member of the Mayflower Society, who loves her city with a passion. She is a UNO alum who has more than 30 years of experience in both publishing and the non-profit sector. Colleen enjoys art collecting, traveling the world and living life to its fullest. She has been known to organize fabulous events, both for herself and many charities in the New Orleans and San Francisco areas. You can reach Colleen at (504) 830-7215 or Colleen@BizNewOrleans.com.
Maegan O’Brien Sales Manager, Biz New Orleans Maegan O’Brien was born in New Orleans and raised on the Northshore in Mandeville, La. She graduated from Louisiana State University in 2010 with a bachelor’s degree in finance, but marketing and advertising are her true callings. She currently lives in Old Metairie and loves traveling, wining and dining, and spending time with family and great friends. You can reach Maegan at (504) 830-7219 or Maegan@BizNewOrleans.com.
Melissa Rehage Quijano Account Executive, Biz New Orleans Melissa Rehage Quijano was born and raised in New Orleans. She graduated from St. Mary’s Dominican, attended both LSU and UNO, and received a paralegal degree in 1996. She worked for 10 years as a paralegal in various law firms in New Orleans and then operated her own successful wedding photography business for 11 years. In addition to being on the Biz New Orleans team, she enjoys spending time with her two teenage children, cooking, the beach and heat, 30A, laughing with friends, dancing every day and music. She has a love for shoes and lipstick. Her heart and soul is her children and everything New Orleans. You can reach Melissa at (504) 830-7225 or Melissa@ BizNewOrleans.com.
Caitlin Sistrunk Account Executive, Biz New Orleans Caitlin Sistrunk was born in New Orleans and raised in Covington, La. She graduated from Louisiana State University with a bachelor’s degree in marketing. While attending LSU, Caitlin fell in love with both marketing and advertising. She is ecstatic to begin her career as a sales associate with our new magazine. Caitlin loves painting, hanging with friends and cooking. You can reach Caitlin at (504) 830-7252 or Caitlin@BizNewOrleans.com. 14
November 2014 BizNewOrleans.com
Biz Web
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Check us out on the web!
BIZ HOMEPAGE
Created in September 2014, BizNewOrleans.com is an interactive, reader-friendly news hub covering southeast Louisiana. The homepage features top news stories, daily blogs, videos and television spots, along with a calendar featuring upcoming business events in the region. Here you can submit an event, read the latest news, or catch up on a Biz-Cast.
BIZ-CAST Every Thursday, Biz video blogger Leslie Snadowsky delivers New Orleans’ first video Biz-Cast, highlighting top business stories and local events.
WWLTV-WUPL PAGE
Tune in to WWLTV-WUPL every Wednesday at 6:30 p.m. to see Biz-Caster Leslie Snadowsky answer all the Biz questions you want to know.
BLOGS Biz New Orleans features weekly bloggers that each provide a unique spin on business news, from profiles on hot startups, to creative business fashion, to the business of sports and tourism.
FACEBOOK & TWITTER
Follow Biz New Orleans on Facebook and Twitter and you’ll see pictures from our parties, updates on our Biz family and up-to-date news stories and information. Don’t miss the latest and greatest! Follow, tweet and like Biz New Orleans.
NEWSLETTER Designed for the busy professional, the Biz daily newsletter delivers the Biz world straight to your inbox,
including direct links to blogs, news stories, and events. Enjoy all the Biz on your computer or mobile device every afternoon.
See it all at BizNewOrleans.com BizNewOrleans.com November 2014
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Calendar
November
Saturday, November 15, 2014 First Annual Fat City Festival
Tuesday, November 4, 2014 Baton Rouge Area Chamber Monthly Lunch 11:30 a.m. – 1:00 p.m. Hartley/Vey Studio Theatre At Manship Theatre 100 Lafayette St., Baton Rouge brac.org
Friday, November 7, 2014 Governmental Seminar by Postlethwaite & Netterville 8:00 a.m. – 5:00 p.m. Hyatt Regency New Orleans pncpa.com
Jefferson Chamber of Commerce 12:00 p.m. – 5:00 p.m. Fat City – 18th Street from Severn to Edenborn, Metairie jefferson.chambermaster.com/events/
Saturday, November 15, 2014 2014 Urban Heroes Celebrating New Orleans’ Staying Power Presented by Urban Conservancy & StayLocal 6:30 – 9:30 p.m. Propeller Incubator 4035 Washington Avenue, New Orleans 2014UrbanHeroes.eventbrite.com
Saturday, November 15, 2014 Friday, November 7, 2014 Junior Achievement of Greater New Orleans City Stars Soiree 7:00 p.m. – 11:00 p.m. JA BizTown, 5100 Orleans Avenue, New Orleans Rising Star awards presented to five young entrepreneurs and entertainment by Louisiana Spice and 610 Stompers. jagno.org
Tuesday, November 11, 2014 YLC JumpStart Meeting – learn more about YLC 6:00 p.m. – 7:30 p.m. YLC Building, 1840 Euterpe Street, New Orleans Caitlin@ylcnola.org
Wednesday, November 12, 2014 GNO Inc., 10th Anniversary Celebration Reception 6:30 p.m., Dinner 8:00 p.m. National WWII Museum U.S. Freedom Pavillion: The Boeing Center 945 Magazine Street, New Orleans gnoinc.org
Wednesday, November 12, 2014 State of the Parish Address Luncheon 11:30 a.m. - 2:00 p.m. Crowne Plaza New Orleans Airport Hotel 2829 Williams Blvd., Kenner Chamber members: $40 | Future Members: $50 jefferson.chambermaster.com/events/
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November 2014 BizNewOrleans.com
The Louisiana International Trade Gala Presented by World Trade Center of New Orleans 6:30 p.m. cocktails, 7:30 p.m. dinner U.S. Freedom Pavillion: The Boeing Center 945 Magazine Street, New Orleans wtcno.org
November 17-18, 2014 Innovation Louisiana 2014 New Orleans BioInnovation Center www.NewOrleansBio.com/innovationla A look at life science startups, university researchers, and the wider business community regarding technology innovation issues.
Wednesday, November 19, 2014
Friday, November 28, 2014
Baton Rouge Big Think
Jefferson Chamber’s Toastmasters Club
7:30 a.m. – 5:30 p.m. Manship Theatre at Shaw Center for the Arts 100 Lafayette St., Baton Rouge bracbigthink.com
12:00 p.m. – 1:00 p.m. One Galleria Blvd., Galleria Building LAMMICO Suite 700 Metairie Contact Anthony Vojkovich at (504) 813-1442
Friday, November 21, 2014 St. Tammany West Chamber of Commerce New Member Orientation 8:00 a.m. – 9:00 a.m. Chamber Office 610 Hollycrest Boulevard, Covington sttammanychamber.org
December Tuesday, December 2, 2014 2014 JEDCO Annual Luncheon 11:15 a.m. networking – 11:45 a.m. lunch Hilton New Orleans Airport – Grand Ballroom 901 Airline Drive, Kenner jedco.org
Tuesday, December 2, 2014 Jefferson Chamber of Commerce - Chamber 101 8:15 a.m. – 9:30 a.m. Fidelity Homestead 1811 Metairie Ave., Metairie Contact Michelle Dugas at (504) 835-3880
Jefferson Parish President John Young
Friday, November 21, 2014 BNI Golf Classic 7:00 a.m. – 2:00 p.m. Belle Terre Country Club 111 Fairway Dr., La Place janet@louisianabni.com or (504) 834-5264
Thursday, December 4, 2014 Jefferson Chamber of Commerce Christmas Business Card Exchange 5:30 p.m. – 7:30 p.m. Mike Nicoll’s Home – 27 Palmetto Avenue, Kenner Contact Jay Fallo at (504) 835-3880
We’d love to include your business related event in next month’s calendar. Please e-mail details to editorial@BizNewOrleans.com.
BizNewOrleans.com November 2014
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Columns | Dining Biz list,” Worden says. “And if you don’t, then you better hire somebody who does.” He says restaurants often lay out top dollar for chefs, architects, furnishings and decorations, but leave the wine list and the staff development necessary to understand it as afterthoughts. To Worden, it’s critical that someone who regularly interacts with patrons be involved in selecting wines. That someone needs to keep in mind the general public, as well as the food the restaurant offers, while also spending time with wholesalers and cultivating a strong sense of the available options.
“..it’s important to include a range of options but not to go overboard on low-end wines because they can cannibalize sales on the high end.”
Photo By cheryl gerber
Balance is Key A good wine list offers something for every palette and price point.
F Peter Reichard is a native New Orleanian who has written about the life and times of the city for more than 20 years, including as a former newspaper editor and business journalist. 20
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or my heart, and for glad-hearted occasions, I keep a good store of wine at home and rarely pass up the opportunity to pair a fine wine with my fine dining. I know the difference between a gewürztraminer and a malbec, and I know which one I prefer with a steak. I know, where the cuisine allows me either option, I’ll always pick the red over the white. And experience has taught me that – at my usual price range anyway – I tend to prefer Argentinian and Chilean reds over Californian
and Spanish. So, yes, I’m somewhat ignorant. But I’m also the kind of customer restaurants should keep in mind when it comes to putting together a wine list. Geoff Worden is a wine blogger, restaurant consultant and veteran of the retail and wholesale wine scene. During his more than two decades of uncorking bottles, he’s seen his share of restaurants getting their wine lists right – and wrong. “The most important part of building a wine list is to actually care about your wine
In some cases, the restaurateur may him or herself know a great deal about wine. This might work against a good list, however if the focus turns to personal favorites and esoteric selections. “For wine geeks, it’s heaven,” Worden says. But for the typical diner, it may be mystifying. You can try to build a perfect list around food pairings, but ultimately you need a variety available, even for the Philistines. “You ought to be able to give the customer what they want,” Worden says. “Then you can go to the back and roll your eyes.” On the other hand, he warns against dumbing down a list to the point where the bons vivants and wine connoisseurs will get bored. “It’s just like a fine wine,” he says. “You’ve gotta have balance.” Beyond that, there are the balances to be achieved when it comes to inventory and price. As to inventory, a restaurant must be careful not to “overpopulate,” Worden says, but you also can’t sell a wine you don’t have in stock. And when it comes to price, it’s important to include a range of options but not to go overboard on low-end wines because they can cannibalize sales on the high end. Luckily, today’s selection is better than ever, allowing for richer pairings. “The wine world has gotten to the point now where you almost have to work to find a really lousy bottle of wine,” Worden says. “There’s an inordinate number of really solid wines available, and they’re available from all over the planet in a way they never have been before.” n
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Columns | Tourism Biz Future Tenants Mid-November, 2014 – Jack and Jake’s
Filling a 23,000-square-foot space at what was formerly the Myrtle Banks school building at 1307 O.C. Haley Boulevard, Jack and Jake’s will include a fresh food market, oyster bar, bistro pub, art gallery, coffee shop, juice bar and office spaces for non-profits and small businesses. Spring of 2015 - The NOJO Jazz Market
A 360-seat performance and rehearsal venue at 1436 O.C. Haley Boulevard
Photo By cheryl gerber
O.C. Haley Is Set to Soar The Southern Food and Beverage Museum is only the latest organization to make the move to this historic boulevard.
C
Margaret Quilter is an Australian expat whose tales of adventures abroad have been published in international magazines. Check out her weekly blog, “Tourism Biz” at BizNewOrleans. com
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entral City’s historic commercial corridor, Oretha Castle Haley Boulevard, has been bustling with activity over the past few months as work crews restore and rebuild dilapidated buildings, breathing new life into a neighborhood that locals once tended to avoid. For years tour buses have been bringing groups to the boulevard to experience the Ashe Cultural Center, Café Reconcile and Zeitgeist Multi-Disciplinary Arts Center. Now with the Southern Food and Beverage Museum, The New Orleans Jazz Orchestra, and Jack and Jake’s public market moving into the neighborhood, visitors finally have a reason to linger awhile. “When people come to the neighborhood, they tend to come to do something specific,” says Linda Pompa, executive director of O.C. Haley Boulevard Merchant and Business Association. “There has been some crossover, where people will come to an event at Zeitgeist
November 2014 BizNewOrleans.com
or Ashe and then walk over to Café Reconcile. It is a nice synergy between the event and meeting type places, and we expect to see more and more of this.” Among the newest neighbors is the much-anticipated Southern Food and Beverage Museum, which opened the doors to its new 30,000 square-foot space at 1504 O.C. Haley Boulevard on Sept. 29. “When we left the Riverwalk we had already bought the property on O.C. Haley,” says Liz Williams, president of the SoFAB Institute and director of Southern Food and Beverage Museum. “It is an affordable area and easy to get to by streetcar, which, being a tourist attraction, was important to us.” Pompa explains that in its heyday there were 200 businesses along the boulevard and it was densely populated. “The Dryades Market, which is where SoFAB and the Jazz Market iare, was built in 1849, so this has been a commercial district for a
very long time,” she says. Now a hotspot for non-profits and social enterprises, the corridor is being rejuvenated - drawing more locals and tourists into the area. “With the renaissance of the corridor it becomes not only another neighborhood for our visitors to explore, but also for our citizens,” says Mark Romig, chief executive officer of New Orleans Tourism Marketing Group. SoFAB wanted to be part of the change. “We felt like the area was going to be undergoing a renaissance and we wanted to be part of that.” Williams says. “There is a lot of activity on the streets these days, and this is a neighborhood that is really polishing itself up.” Williams says that when SoFAB was at the Riverwalk, attendance was estimated at approximately 35,000 a year. With the new facilities, those number are expected to reach closer to 100,000 people a year. Around 40,000 people a year visit Ashe’s performances and exhibits at 1712 O.C. Haley Boulevard – they too are looking to expand to include more performance space and a visitor’s center. Another long term resident, Café Reconcile, recently underwent expansion at 1631 O.C. Haley Boulevard. The restaurant has extended its hours to cater to the evening crowd. Additionally, restaurants, live music venues and art gallery spaces are all in the pipeline for the commercial corridor, and many established organizations are looking at revamping their buildings. “Not much on the boulevard is going to be left underutilized, vacant, or blighted – it will continue to be a nice mix of businesses, nonprofits and cultural institutions,” Pompa says. n
BizNewOrleans.com November 2014
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Columns | Sports Biz
See No Evil, Hear No Evil, Speak No Evil Will love of money drive the NFL out of control?
W
chris price is an award-winning journalist and public relations principal. When he’s not writing, he’s avid about music, the outdoors and Saints, Ole Miss & Chelsea football.
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hen legendary NFL head coach Vince Lombardi opened the Green Bay Packers training camp in 1959, he famously told his players, “Winning isn’t everything; it’s the only thing.” Fifty-five years later, for the biggest sports league in the country it seems winning has been usurped by money. Now, it seems, “Money isn’t everything; it’s the only thing.” How else are we to interpret the strange actions of the NFL – from commissioner, to owners, to team executives, to players – over the first half of the season? Is the league so flush with cash that it is turning a blind eye to vile behavior from its members? “Defending the shield” (i.e. brand) and “protecting the integrity of the game” have
been buzz phrases of Roger Goodell’s since he became NFL commissioner in 2006. But his tenure has been anything but an exhibition of upstanding citizenry. In the NFL’s “worst week ever” earlier this season, video of one player battering his spouse and photos of a four-year-old child beaten at the hands of his NFL-playing father emerged. In both cases, the powers that be with the league and their respective teams did not appear to recognize how repulsive their players’ actions were; doling out miniscule discipline, they seemed willing to let them represent the league and their franchises with little more penalty than a suspension of a game or two. It wasn’t until big-money sponsors, like Anheuser-Busch,
which has had a six-year, $1.2 billion contract in place with the league since 2011, pulled or threatened to pull their advertising dollars that the NFL changed course and began bungling through mea culpas. Why? Easy, money. When Goodell took over as commissioner the league made $6 billion a year. Now it makes $10 billion annually, and Goodell’s goal is to reach $25 billion. According to Forbes magazine, in 2013 the average NFL team generated record revenue of $299 million and record operating income of $53 million. The average team was worth $1.43 billion, 23 percent more than a year ago. That is the biggest year-over-year increase in profits since 1999. The 32 franchises range in value from the Dallas Cowboys at $3.2 billion, with $560 million in revenue and $246 million in operating income, to the St. Louis Rams at $930 million, with $250 million in revenue and $16 million in operating income. It is expected that after next season the Rams will move back to Los Angeles, the country’s second largest media market, further increasing the league’s opportunity for growth. Consider this - professional sports ownership has been very good to Tom Benson. He bought the New Orleans Saints for $70 million in 1985. Today, the team is valued at $1.11 billion, with an estimated $278 million in revenue and $50 million in operating income last year. That’s a 1,485 percent increase in value in 30 years; 60 percent of that increase is estimated to have come since 2006 when Goodell became commissioner. With one of the most complex stadium lease agreements in place for the Superdome, Benson parlayed his winnings into purchasing the city’s NBA franchise for $340 million two years ago. Today the Pelicans are worth $420 million, with $116 million in revenue and $11.2 million in income. In two years he’s seen a 23 percent increase in the value of his second sports franchise. Benson, like his brethren in owner’s suites across the league, has remained relatively silent on the actions of players and the performance of the commissioner this season, other than to say Goodell has his full support. Social change is hard. Making money as a team owner hasn’t been. Why rock the boat? If the second half of the season produces great games and poster boy moments, memories of this incident will fade with time, the league will be forgiven and the gravy train will chug on toward that $25 billion goal. n
BizNewOrleans.com November 2014
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Columns | Film Biz
Film Credit Changes Brewing California tries to get back in the game as North Carolina pulls out.
STATE
CALIFORNIA
NORTH CAROLINA
STATUS
Effective July 2015
Available now
Effective January 2015
CREDITS
20 to 25 % of qualified expenses
30 to 35 % of qualified expenses
replaced with $10 million grant program for the year (in 2013 N.C. awarded $61 million in credits)
CAP
raised from $100 million to $330 million per year for 5 years
no cap
$5 million for feature films or TV season, $250,000 for commercials
CREDITS AWARDED
based on how many jobs a project supports (Now available to projects with budgets over $75 million)
to all productions spending at least $300,00 in-state (5 % offered for resident labor costs)
for minimum spend of $5 million for feature films, $250,000 per TV episode or commercial – online application.
S Kimberley Singletary is the
managing editor of Biz New Orleans magazine. A 20-year Southern California veteran, she has been surrounded by the film industry for most of her life and is thrilled to be covering its emersion in her newly adopted home.
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LOUISIANA
o there have been some interesting changes in the film tax credit business lately. It seems California has finally decided to do something about the fact that the film industry has been abandoning the state in mass in exchange for more lucrative offers – including here in Louisiana. On Sept. 18, California Governor Jerry Brown signed AB1839 into law – a bill that raises the state’s cap on its 20 to 25 percent credits from $100 million to $330 million starting July 2015. But according to many industry professionals, it’s too little, too late. Leonard Alsfeld is president and CEO of FBT Investments. The company’s FBT Film & Entertainment division was started in 2003 in response to Louisiana’s new film credit program and has since grown to become the largest tax credit
November 2014 BizNewOrleans.com
broker in the state. According to Alsfeld, the bill is nothing more than a band-aid and will have no effect on Louisiana. “It’s purely a defensive move,” he says. “It’s not going to be enough to lure films to go there. It’s just the legislature’s way of making them look like they’re in the game.” The fact is, even though California is set to triple their cap, they still have a cap. According to non-profit FilmL.A. Inc., California is the only top five film production player that caps their credits. Louisiana, on the other hand, has no cap and offers 10 percent higher credits. But there is another piece of film credit news that Alsfeld says will likely have an effect on Louisiana’s film industry – and it’s all good. North Carolina, a state with a long-standing history in the film business – with regular production
going on since the 1980s and a film credit program that since 2010 has offered 25 percent – has announced that their credit program will officially end on Dec. 31 of this year. The credits are instead being replaced with a $10 million grant program. To put this into perspective, according to The Hollywood Reporter, $10 million is less than what the state paid in 2012 to just one film: Iron Man 3. “When those filmmakers inevitably go looking for a new home, it’s bound to be good for us,” Alsfeld says. Meanwhile, Louisiana continues to expand its infrastructure. Rumor is that film giant Starlight Studios will soon be making an announcement about its planned move to a 32-acre location in east New Orleans. n
BizNewOrleans.com November 2014
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Columns | Entrepreneur Jason Foster of Foster Bear Films (launched in week 22) shoots performance troup Acrodisiac (launched in week 21).
What is an Entrepreneur? Sure, we all know an entrepreneur is an enterprising, risktaking individual motivated to launch something new. But where did this unusual word come from? Not surprisingly, it is of French origin, which seems fitting for our entrepreneurial city. Even better, according to the Oxford English Dictionary, one of its early meanings referred to “the director of a musical institution.” The OED’s primary definition is “one who undertakes” (presumably not referring to conducting funerals), a “champion.” The word first appeared in print in 1473 in reference to the 4th century B.C. Roman military leader Publius Decius, described as “so hardy an entrepreneur in battle.” Today’s entrepreneurs may not find themselves on an actual battlefield, but they surely carry on the spirit of a champion that first emerged in ancient times. photo courtesy of Foster bear films
A Business A Week For A Year More than halfway to its goal, 52businesses is proving what a difference a week can make.
M Keith Twitchell
spent 16 years running his own business before becoming president of the Committee for a Better New Orleans. He has observed, supported and participated in entrepreneurial ventures at the street, neighborhood, non-profit, micro- and macro-business levels.
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any of us find it almost impossible to get to the health club for a workout once a week. Imagine if your New Year’s resolution had been to start one new business every week. Two New Orleans entrepreneurs made exactly that commitment – not to start a business themselves on a weekly basis, but to provide the support structure to get one launched every week for one year. Pulling no punches, Jason Seidman and Colin Grussing decided to call their enterprise 52businesses. Both have entrepreneurial backgrounds, having started their own businesses, as well as programs such as NOLATech Week, which Seidman co-founded. After meeting at an entrepreneurship unconference, both found they shared a desire to support other people in launching businesses. They also wanted to de-mystify the process. “One goal is to show people the
November 2014 BizNewOrleans.com
accessibility of entrepreneurship,” Seidman says. “We want people to understand that they don’t have to quit their job or spend their kids’ college fund to start a business.” Seidman describes 52businesses as “like a boot camp for entrepreneurs.” After all, he says, “We only have one week to get them up and running.” The process begins with an online application, the numbers of which are accelerating every week. In fact, 10 percent of the applications for 52businesses are now coming from outside the United States, though the emphasis continues to be on New Orleans-area startups. Once an applicant has been selected, the week begins with a thorough analysis of the proposed business. This includes everything from market analysis, to legal needs, to finances. Once the assessment is done, Seidman and Grussing draw on their own experience, as well as a deep pool of experts, to begin
moving from concept to enterprise. Social networks are used to test the viability of the business. 52businesses also uses its website and blogs to share the learning process for the benefit of existing entrepreneurs and businesses. “We want people to start businesses in a responsible way, and we want to see them succeed,” Seidman says regarding the motivation for his project. The project itself has certainly been successful: halfway through, 26 businesses have been launched in 26 weeks. “Initially it was pretty crazy, but we’ve been learning as we go, and moved towards a more defined process,” he says. Seidman adds that there is interest in replicating the program in other cities, and he and Grussing are working with Tulane University to develop a comparable program. This could ultimately mean the partners will be helping to launch a new business not every week, but every day! n
Biz Bits - Industry News On The Move NEW ORLEANS – Pete November has been promoted to executive vice president and chief administrative officer for Ochsner Health System. In this newly-created role, November will lead the integration of Ochsner’s new affiliated partners. He will manage shared services for Ochsner Health System including legal services, internal audit, facilities and real estate, information technology, compliance and supply chain services.
“Today, two-thirds of STEM degrees in Louisiana are earned by men. In fact, only two women in all of Louisiana’s public higher education graduated with a bachelor’s degree in physics in 2012-2013.” - Stephen Waguespack, LABI president, speaking about the Oct. 24 LABI breakfast panel held in Baton Rouge to discuss the importance of drawing women to STEM (science, technology, engineering and math) fields.
LaPorte CPAs & Business Advisors one of ‘Top 200 Accounting Firms’ for 2014
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MANDEVILLE – The Professional Women of St. Tammany named Donna O’Daniels its 2014 Woman of the Year at its annual banquet Oct. 9. O’Daniels, president and CEO of the St. Tammany Parish Tourist and Convention Commission, was honored for both professional accomplishments and community service. She has worked with the Tourist Commission since 1996, serving as president/CEO since 2005.
SPEAKING OUT
Do You Know a Small Business Standout? Nominations being accepted now for 2015 National Small Business Week Awards
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This is the 5th year the company has received this award from national newsletter INSIDE Public Accounting.
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New Orleans – INSIDE Public Accounting (IPA), an independent national accounting newsletter, has named LaPorte CPAs & Business Advisors as one of the 2014 ‘Top 200 Accounting Firms’ in the country for the fifth year in a row.
Are you a small business owner with an amazing success story to tell? If so, submit your nomination today for the 2015 National Small Business Week Awards. Nominations are currently being accepted online at http://awards.sba.gov.
More than 540 firms participated in this year’s survey. IPA based its selection of the 2014 ‘Top 200 Accounting Firms’ on firm revenue and growth, including companies with annual revenue of between $14 and 31 million. The IPA 200 averaged 5.4 percent top-line growth, and 6.2 percent growth to the bottom line. This year LaPorte ranks as the 142nd largest firm in the country.
For more than 50 years, SBA has recognized the outstanding achievements of America’s small businesses for their contributions in their local communities and to our nation’s economy. Winners will be announced during National Small Business Week in May 2015.
Established in 1946, LaPorte is one of the largest independent accounting and business consulting firms in the region, with over 160 personnel in New Orleans, Baton Rouge and Covington, La., and Houston, Texas. The firm offers a variety of services, including accounting, audit and assurance business consulting, and tax planning and compliance.
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Renaissance Rx Moving to the CBD Spring 2015 move will include an addition of 425 jobs New Orleans – Biomedical company Renaissance Rx has
announced that it will move into new headquarters in the CBD in the spring of 2015. The move will include a 425-job expansion. Founded in 2012 with five employees at the New Orleans BioInnovation Center, Renaissance Rx now employees more than 800 across the country. Renaissance RX provides pharmacogenetic testing that reveals how individual patients respond to specific medications based upon their genetic makeup. The results allow physicians to prescribe the precise medications and dosages that will work best for each patient. Commonly called “personalized medicine,” this gene-based approach to medication is a major trend in healthcare.
Technological Upgrades at Ochsner Hospital is now the first Epic Systems client to integrate electronic health records with the new Apple HealthKit NEW ORLEANS – Ochsner Health System, based in New Orleans, has announced that it is the first Epic Systems client to successfully integrate its electronic health record (EHR) with the new Apple HealthKit. Approximately 53 percent of Americans have their medical records within the Epic EHR, and its MyChart application is the most used patient portal in the United States.
“In the past, we relied on patients to log information, bring it to us, and then we would input the data and decide a course of action,” said Robert Bober, M.D., director of cardiac molecular imaging, Ochsner Medical Center. “Now we can share information seamlessly between patient and physician to allow real-time, accurate analysis of a patient’s health status. This is ideal for patients with chronic diseases such as heart failure, hypertension and diabetes.”
Geocent Sponsors SLU Programming Teams Hammond – Geocent, an information, technology and engineering firm headquartered in Metairie, La., has given $5,000, and pledges to give $5,000 annually, as the sole sponsor supporting the Department of Computer Science and Industrial Technology at Southeastern Louisiana University (SLU) in forming, coaching, and entering into competition one or more computer science teams.
“This unique program will foster top-notch software engineering talent who will experience competition that rewards hard work and success,” said Rick Gremillion, president and chief operating officer for Geocent. “In turn, Geocent will fill more of its job openings with these high performers, and will allow local students to be employed by a growing Louisiana technology company that performs exciting work. We are honored that the Southeastern programming team will be ‘Powered by Geocent.’”
Delgado Community College Receives $1.5 Million GE Foundation Grant will support New Orleans workforce and economic development New Orleans – The GE Foundation will provide a $1.5 million grant to Delgado Community College to help fill the advanced manufacturing and water management skills gap in New Orleans. This grant will support Delgado Community College’s ongoing efforts to train certified water infrastructure personnel to work at the Sewerage and Water Board of New Orleans.
The GE Foundation will partner with Delgado Community College, Sewerage and Water Board and the City of New Orleans to create career pathways in advanced manufacturing for hundreds of job seekers over three years. The City of New Orleans, like many communities across the country, is beginning to experience skilled labor shortages. According to the Sewerage and Water Board of New Orleans, nearly 40 percent of the Sewerage and Water Board workforce is nearing retirement eligibility, leaving the critical utility and its upgrade needs vulnerable. The GE Foundation grant will help to address this issue.
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Biz Bits - Industry News North American Technology Company Begins Operations in Kenner
Blaze Fast-Fire’d Pizza Coming january 2015
4th Source plans to employ 320 people by 2018
Build-Your-Own Artisanal Pizza Restaurant Set to Open in The Paramount at South Market District
KENNER – 4th Source is officially open for business at 2400 Veterans
Memorial Boulevard in Kenner. A systems and information technology company, 4th Source relocated their corporate headquarters and delivery services center to Kenner from Georgia, where it will continue to provide near-shore technology and IT services to a variety of industries. Currently, 15 employees work out of the new headquarters. Eight of those employees are newly-based in Jefferson Parish. The company anticipates the creation of 320 direct jobs over time at an average salary of $50,000, plus benefits. This corporate headquarters is the company’s fourth office established in the U.S.
NEW ORLEANS – Blaze Fast-Fire’d Pizza (Blaze), the nation’s leading build-yourown pizza chain will soon be opening its first New Orleans location this January in The Paramount at South Market District (611 O’Keefe Avenue). Blaze features an interactive assemblyline format that allows guests to customize one of the menu’s signature pizzas or create their own, choosing from a wide selection of fresh, artisanal ingredients – all for under $8.
Founded by Elise and Rick Wetzel (cofounder of Wetzel’s Pretzels), the concept is backed by investors including LeBron James, Maria Shriver, Boston Red Sox coowner Tom Werner and movie producer John Davis.
Classes Underway for Louisiana Insurance Academy Delgado & Independent Insurance Agents and Brokers of Louisiana, hope to encourage more people to consider a career in insurance.
“Our mission at Blaze is really simple – we’re all about bringing the community a place where guests can connect, create and enjoy great pizza at crazy fast speed,” says Jim Mizes, president & COO of Blaze Pizza. “If you think about it, there hasn’t been a good way to enjoy a made-fromscratch pizza without the wait. Now there is. We believe this will be a game-changer in New Orleans.”
New Orleans – A new collaborative effort is raising awareness about career opportunities available in the insurance industry. Delgado Community College and the Independent Insurance Agents and Brokers of Louisiana (IIABL) have teamed up to launch the Louisiana Insurance Academy – a 10-week program focused on kickstarting a career in insurance.
Classes started September 30 and will be held three times a week on Tuesday, Thursday and Friday mornings at Delgado’s City Park Campus. All classes are being taught by actively practicing insurance professionals. Topics covered during the 10-week program include insurance essentials, such as customer service, homeowners insurance, commercial property insurance and commercial liability insurance. Upon successful completion of the program, students will attain two industry-based certifications – Accredited Customer Service Representative - Personal Lines (ACSR-P) and Accredited Customer Service Representative - Commercial Lines (ACSR-C). Job placement assistance with insurance agencies statewide will also be available for successful completers.
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We’d love to include your business-related news in next month’s Biz Bits. Please e-mail details to editorial@BizNewOrleans.com.
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is a man in command at his office on Veterans Memorial Boulevard. Photo by Cheryl Gerber.
H e a r t s & C lu b s
How to Play the Game Co n g re ssma n St e ve Sc a lise may have little in common with th e cu t t hr o a t , h o m i c i d a l ma in c ha r a c t e r of Netflix’s Emmy- n omin ated Hou se of C ards, b u t h e ho ld s hi s o w n in on e of the most powerfu l position s on t he H i ll. By JEREMY ALFORD
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Hol ly wood vs. Re al i t y “For those of us climbing to the top of the food chain, there can be no mercy. There is but one rule: hunt or be hunted.” –Frank Underwood, Majority Whip in Netflix’s “House of Cards”
“With any kind of relationship you ought to confront your differences right away and get it out of the way.” –Congressman Steve Scalise, Majority Whip
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LEFT: A nod to his roots, Scalise sported his Archbishop Rummel High School baseball jersey this year while participating in the annual congressional baseball game. RIGHT: Speaking at the weekly House Leadership press conferences in D.C. Photos courtesy of the office of Congressman Steve Scalise.
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t was June 18, 2014, the night before Congressman Steve Scalise, a Jefferson Parish Republican sent to D.C. by voters in 2008, would find out if he would become only the second Louisiana member of Congress to serve as whip since late Congressman Hale Boggs held the position for the Democrats from 1962 to 1971. The smell of seafood in the air mixed with anticipation as Scalise addressed his team inside a private room in Acadiana, a fish house in Washington D.C. with a New Orleans chef and menu. Acadiana is located on K Street, one of Washington’s major thoroughfares of power and home to the offices of the nation’s most influential lobbyists and special interests. That evening it was as if the street were curving downward in a slight bend, stretched by the weight of Scalise in the middle as he was coming into his own. In less than 24 hours, his life would change forever.
Bringing a hometown flavor to the House With a nod to the Saints’ unforgettable Super Bowl year, and to cheers from staffers, consultants and supporters, Scalise handed out red Marucci baseball bats to his whip campaign team, the folks who had spent weeks working over other congressmen to secure their votes. Inscribed on the bats: “Bring the Wood.” The next morning, with the U.S. House scheduled to hold leadership elections that afternoon, Scalise attended practice for the summer’s congressional baseball game, an annual event that pits Republicans against Democrats. He worked in politics between swings, eye ever on the prize. Throughout the rest of the day, his campaign team checked off names on their blue clipboards, complete with red “Geaux Scalise” stickers, whipping votes for the whip election. There were roughly 40 members of Congress on the whip campaign team, but Scalise had also called up Jason Hebert of The Political Firm, among others, to help out. Former congressman Jeff Landry of New Iberia traveled to the Hill as well to lobby his former colleagues. At one point during the day, reporters from The Washington Post caught Scalise storming into his office, a cell phone pressed to his ear. Directions were shouted to the team.
“No deals with anybody,” Scalise chirped. “We’re going to win this thing.” That was the general impression, even 1,100 miles away in Louisiana. Still, there was an unknown factor to the day’s outcome. According to a member of the campaign team, interviewed after the historic vote that put Scalise over the top, “When you’re running a traditional election, you can build an apparatus to figure out how you’re doing and where you are. But today we walked in and it was in God’s hands. Confidence was high, but with the secret balloting process, we just didn’t know.” Another source close to the process said some higher-ups in the House leadership let it be known that, despite the secret balloting, Scalise won the whip position by a wide margin. “It sounds like he crushed it,” said the source, repeating what he had heard. As for the day’s lighter moments, one staffer noted with a laugh, “There was a noticeable absence of ‘House of Cards’ references. I was expecting more, aside from questions back home asking if this was what Frank Underwood did.”
Fast forward three months On Sept. 29 Scalise was back in his district office off Veterans Memorial Boulevard in New Orleans. Surrounded by photos of powerful friends in D.C. and Mardi Gras trinkets, Scalise took it all in. With Congress in recess, this was his chance to breathe and enjoy it, although a Secret Service detail outside his door was a reminder of how far he had come. As majority whip, Scalise is third in line in the leadership, which places only the majority leader and the speaker of the House above him. Slightly balding and not the tallest or richest member of Congress, quick with a smile and a wink from his pale blue eyes, Scalise’s friends contend he’s still the same modest guy he has always been except now with body guards who also accompany him home. “That is a big change,” he said with equal parts amazement and trepidation, glancing outside his office. So what does the majority whip do? The only access much of the public has to the job is through Netflix, which remade the BBC’s BizNewOrleans.com November 2014
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LEFT: Scalise with his wife and children in D.C. during the race. RIGHT: Sharing his support of Israel’s right to self defense with the country’s ambassador, Ron Dermer. Photos courtesy of the office of Congressman Steve Scalise.
“House of Cards” for an American audience in 1993 to much fanfare. The show stars Kevin Spacey as an overly ambitious majority whip who is not above using unscrupulous tactics, including murder, in his ultimate goal to become president of the United States. “I finally started watching it,” Scalise said when asked about the Emmy-nominated series. “I’m seeing what Kevin Spacey does with the position. I did meet him. I was on the whip team several years ago when the show first started production and they brought him to a meeting. He takes a little different approach to how we do things. That’s how Hollywood does it.” In contrast to the drama of Hollywood, here’s how Scalise describes his job: “The basic responsibility of the whip when a bill comes to the floor is to make sure it has the 218 votes needed to pass. My job is to count how many Republicans are voting for it.” There’s a bit more to it than that. In addition to helping steer the party’s policy agenda, Scalise is expected to turn nay votes into yea votes. Sometimes that’s easier said than done and past whips have been known to really turn the screws on members who didn’t want to swallow what the party was pushing. Scalise, however, in his very brief tenure, has gained a reputation for being thoughtful and evenhanded. Since opportunities to whip important votes were rare during the summer and fall, Scalise instead curried favor by overseeing the remodeling of the cloak room in the old House chamber, where Abraham Lincoln once met with friends and talked around a fireplace more than 100 years ago. Scalise reopened the lounge area to members in September and it now includes artifacts from the former president’s life in politics. “We got everyone together for jambalaya, gumbo and boudin,” he said.
Taking no chances Scalise was able to run for whip during the ongoing term because former House Majority Leader Eric Cantor of Virginia unexpectedly lost his re-election bid this summer and resigned from his post, setting up the leadership swap. Pundits contend one of the reasons Cantor was booted out by voters
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was because he lost touch with his home district and focused more on the District of Columbia. Scalise, obviously, didn’t want to repeat the same blunder. Although he could have phoned it in, Scalise initiated a six-figure media buy this fall for his congressional re-election campaign, despite not facing serious opposition. The spot, called “Pass the Popcorn,” cleverly casted Scalise as the star of a movie trailer. (Yes, like Spacey.) While some questioned the need for such a huge buy, one operative noted dryly, “He doesn’t want to go full-Cantor.”
Baptism by fire In his first real test as whip in late July, Scalise and the GOP leadership failed to cobble together enough votes to pass legislation addressing the steady flow of unaccompanied minors across the U.S. border. Surprisingly or not, he received pushback from a member of his home delegation. Teaming up with other conservatives, Congressman John Fleming, a Shreveport Republican, caused the leadership to shelve its proposal and present a compromise the following day. Overnight, though, the national media turned on Scalise and the leadership, not knowing a solution was in the works. “It was a baptism by fire,” Scalise said. “It was literally my first day on the job.” A senior GOP staffer, predicting the conservative faction will continue to be a problem for Scalise, said, “This was not some great principled stance. This was political. I think they wanted to make a statement about the new leadership team.” While Scalise managed to salvage the border bill overnight and address amnesty concerns voiced by Fleming and other conservatives, the question remains whether Scalise will be able to continue to do so. If not, Fleming could get crossways with his fellow delegation member once again. Doug Sachtleben, Fleming’s communications director, offered the following statement: “Rep. Fleming was encouraged that the new majority whip was able to move House leadership to work constructively with conservatives, and he is optimistic that this bodes well for the future.”
What Scalise Means for Business It has been quite a few terms since Louisiana had a lawmaker in a key House leadership position in Washington, D.C. But with Congressman Steve Scalise serving as the majority whip, business interests back in the Bayou State are pondering how that plays out for them. Stephen Waguespack, president of the Louisiana Association of Business and Industry, said a recent trip to the nation’s capitol helped paint a decent picture of where it all may be heading. “We’ve been able to brand ourselves as the center of a manufacturing renaissance in the country,” Waguespack said. “This is the perfect time for Steve to take on this role. He can help promote a state that is out-punching its weight. He’s also an excellent spokesperson and has an open door to business and industry.” Scalise’s profile has certainly been raised and has attracted the fundraising attention of corporate America. He has a long list of new donors, including Amazon, Delta Air Lines, News Corp. and Procter & Gamble. He’s also traveling the country and appearing at campaign events for other members of Congress, grabbing opportunities when he can to promote Louisiana. Coming from a state with a massive oil and gas industry, Scalise is also in an influential position when it comes to related policy. In September he helped move the American Energy Solutions for Lower Costs and More American Jobs Act, as well as the Jobs for America Act, through the House. “As the representative of a region with one of the lowest unemployment rates in the country, I understand that a smart energy policy equates to more jobs and a healthy economy,” he said from the House floor.
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While Kevin Spacey’s character would have likely had his opposition “disposed of” in one way or another, Scalise knows it’s all part of the job. “In the end every member has to vote which way their district wants them to vote,” he said. “John and I have a very good relationship, but he has a strong philosophy and I respect it and I understand it. So I can communicate with him on the policy side.” One congressman, asking to remain anonymous, said Scalise was relentless in his pursuit of Fleming’s support but wasn’t heavy-handed. “He did lean on John a lot, but it was done in a way where good and reasonable arguments were presented,” the congressman said. A congressional staffer added, “Steve never let up. I think it set a good tone for what can be expected. Everyone doesn’t want to follow the speaker’s lead, and Steve is working to find compromises for that. You get the sense, at least right now, that everything doesn’t have to flow in the same direction. He’s willing to take on twists and turns.”
More home state opposition Aside from Fleming, Scalise has also had to deal with opposition from Congressman Charles Boustany, a Republican from Lafayette who instead backed Congressman Peter Roskam of Illinois for the whip position. Boustany offered up his vote to Roskam long before the mid-June election, and supposedly prior to Scalise’s entrance into the race. Back home, the decision did not go over well. “I was surprised and disappointed when I found out that Charles didn’t support Steve for the majority whip position,” said Louisiana House Speaker Chuck Kleckley, a Republican from Lake Charles. “I understand he may have made a commitment to someone else in that race, but you would think that guy would have given Charles a pass.” Boustany and Scalise are said to have moved forward, at least publicly. Asked if he would vote for Scalise should another balloting be needed in November, Boustany said, “Without hesitation.” For Scalise, it was another opportunity to show what kind of leader
he wanted to be. “We’ve aired out our difference and I feel really good about where we are,” he said. “With any kind of relationship you ought to confront your differences right away and get it out of the way.”
The Force is strong in him By 1972, when his twin engine Cessna disappeared over Alaska, somewhere between Anchorage and Juneau, Boggs (the last Louisianan who served as whip) had climbed up to majority leader, as many whips do. It’s not unimaginable that Scalise could accomplish the same. To be certain, Scalise was meticulous and shrewd on the path he took to the whip’s position. The math was behind him for the victory earlier this year, since he was chairing the 170-member Republican Study Committee and had served as the party’s recruiter for the freshman class last election cycle. He had also taken up with a group of conservative lawmakers who refer to themselves as “The Jedi Council.” The conservative group includes one-time vice presidential candidate Paul Ryan of Wisconsin and fellow Congressmen Jeb Hensarling of Texas, along with Jim Jordan of Ohio and Tom Price of Georgia. “We meet about every week or so,” Scalise said in an earlier interview about the group, which until recently was one of Washington’s best-kept secrets. Even top aides aren’t allowed in their meetings. Given all of these factors taken in concert, it’s not totally unexpected that today Scalise is overseeing a 20-person staff out of the majority whip’s office. He is following in the footsteps of other well-known whips like Boggs, House Majority Leader Kevin McCarthy, former Vice President Dick Cheney, Trent Lott and others. The trick now is to not only leave his own mark, but plan for a political future than can take him, and Louisiana, further. “It’s really neat I am able to be a part of that history,” said Scalise, one of those red Marucci baseball bats sitting by his side on the large table in his district office. “But I’m going to keep working hard. We’re only just getting started.” n
Immediately following the secret ballot election among his colleagues, Scalise addressed the national media at a press conference and was later swarmed by more press to whom he reiterated his excitement in bringing a fresh new voice to the leadership table. Photo courtesy of the office of Congressman Steve Scalise. 40
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I’ll Have Another Please Louisiana craft distillers are getting in on the action of an industry that continues to explode. By Leslie T. Snadowsky
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LEFT: Donner-Peltier Distiller’s Rougaroux Rums, LA1 Whiskey and Oryza Rice Vodkas and Gins. RIGHT: In business less than two years, Donner-Peltier’s Distillery in Thibodaux, La., features a German-made 3,000 liter, 18-foot-high steam-fired copper Kothe still with two columns, capable of rectifying spirits 17 times in a single pass. Photos courtesy of Donner-Peltier Distillers. BizNewOrleans.com November 2014
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“Louisiana was always known for its food, and now it’s becoming known for its beverages. –Matthew Dufour, co-owner and operator of Louisiana Lightning
C
arol Interiano has been mixing drinks in the shadow of the Superdome at Walk-On’s for almost a year. Locals and tourists alike come to the 1009 Poydras St. bar, where she said they’re often looking for something new and intoxicating. “We introduce our customers to new products, and they embrace all the local drinks we have,” the petite, 23-year-old brunette said while handling a Louisiana Lightning whiskey bottle. Interiano said her special blend of the clear sour mash whiskey, lemonade and a splash of Sprite is perfect for the ladies who want to enjoy a smooth, light whiskey, but still appreciate their liquor. Louisiana Lightning is made by a craft distillery in Amite and is just one of the local craft spirits lining the bar at Walk-On’s. “The craft distillery industry is exploding,” said Matthew Dufour, co-owner and operator of the first licensed clear whiskey distillery in the State. Dufour said he started his distillery business less than two years ago with a 500-gallon, $150,000 pot still and five employees. Working with his dad Lionel, Dufour said their Louisiana Lightning is now sold at more than 400 stores throughout Louisiana. Distribution is set to expand to Mississippi and Texas, and they’ve been getting inquiries as far away as New York, breaking sales records month after month.
Drinking It In There has been significant growth in the number of craft distillers in the U.S. and Louisiana. According to the Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau’s 2013 Annual Report, the number of permitted craft distillers grew by 122 percent from 2009 to 2013. As of September 2014, there were 1,705 distillers nationwide, and 675 of them were craft. Eleven of them are in Louisiana, and a handful more are in various stages of development. The Tax and Trade Bureau define craft libations as those coming from distilled spirits producers that paid tax on less than 100,000 proof gallons annually. “My Dad’s been wanting to do this for years,” Dufour said. “He always wanted to make whiskey. I was a little nervous, and I tried to talk him out of it. Thankfully, I failed.” The father and son’s “lightning in a bottle” non-aged whiskey has won six awards and retails at $18.99. Dufour said a Wild Strawberry Whiskey will premiere in December and bourbon aged in a barrel by July 2015. The key to their success, he said, is that he and other craft distillers are doing something the big distillers aren’t – producing cus44
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tomized, home grown products, using local ingredients and local labor. “People love local,” Dufour said. “Without public demand, none of us would be in business. Louisiana was always been known for its food, and now it’s becoming known for its beverages. There’s a lot of interest in Louisiana. It’s not just Duck Dynasty.”
Tying One On “It’s part of the general Renaissance in the U.S. of going back to basics,” said Bill Owens, president of the American Distilling Institute (ADI), of the explosion of craft distilleries. “The public wants hand-crafted, locally made products. That’s the niche we’re going to fill.” Owens says the industry is growing 30 percent a year. Of the currently 717 craft distilleries across the nation, 550 are operational and the rest are on the verge of decanting their first marketable drop. He said about 10 percent of craft distilleries are owned and operated by women. ADI is a professional membership organization that certifies craft distillers, craft blenders and farm distilleries. The Institute has certified 800 brands as purely craft, and reports more than 1 million cases of craft distilled products were sold in 2013, approaching 0.5 percent of all U.S. distilled spirits cases. The group taps those who feel they have a nose for making quality craft hooch and booze and offers workshops and business plan spreadsheets. He said startup costs range from $500,000 to $10 million, and it typically takes at least two years for a distillery to open for business. Craft distilling is a lifestyle choice for “long distance thinkers,” Owens said. “No one says they’re going to open a distillery and flip it. They do it because their grandfather was a bootlegger or their grandmother ran her own still.” According to American Craft Spirits, a nonprofit trade association, said 5,000 distilleries were operational in 1890. After Prohibition there were only eight left operating legally. “Prohibition did us no favors,” said Philip M. Dobard, vice president of the Southern Food and Beverage Institute (SoFAB). The historic legislation may have drowned an age-old culture of craft distilling, but Dobard said the industry is awash with optimism. “It’s just starting to recover,” he said, “and it’s growing nationwide.” American Craft Spirits predicts there will be 600 new distilleries by the end of 2015, and the industry will experience much stronger growth than mainstream spirit brands. “It’s in your DNA,” Owens said. “People are passionate about this – especially farmers. In Louisiana, if you make your own rum, it’s like you’re going back 250 years in history.”
LEFT: The first licensed clear whiskey distillery in Louisiana, Louisiana Lightning in Amite La., will soon expand distribution to Mississippi and Texas. ABOVE: Bayou Rum’s Satsuma, Silver and Spiced rums have won 49 awards so far this year. The distillery uses local, raw, unrefined cane sugar. Photos courtesy of Louisiana Lightning and Bayou Rums.
Hair of the Dog “The liquor business was in a stranglehold by big conglomerate companies ever since Prohibition,” said Trey Litel, president of Louisiana Spirits, LLC, and craft distiller of Bayou Rum brands. “But now you have people out there who say, ‘I can make a rum out of the best sugar cane there is in Louisiana – why not us?’” In 2011, Litel and his partners started construction on the largest privately owned rum distillery in the U.S. – a 35,000-square-foot facility in Lacassine, La. – where they ferment, distill, maturate and bottle from the same location. With two American-made Vendome Copper pot stills, Litel produces a line of Bayou Rums – Satsuma, Silver and Spiced – which have been on the market for just over a year and have already won 49 awards in 2014 so far. He said Bayou Rum takes advantage of the local landscape, using raw, 100 percent unrefined cane sugar and molasses from M.A. Patout & Sons Enterprise Factory in Patoutville, La., all pressed from fresh sugarcane harvested from Louisiana fields.
“People today care about what they eat and what they drink,” Litel said. “They find out what’s in a product. The ‘Farm to Table’ movement is coming over to distilled spirits.” With 13 employees and close to 23 acres, Litel has the capacity to expand, but he said the company is still growing its brand and distribution. Bayou Rum is sold in 2,000 outlets throughout Louisiana, including CVS and Wal-Mart, and he expects sales this year to be twice last year’s. “We feel like we have an historical base,” Litel said. “Rum made in the state - we feel like we’re bringing it back legitimately.”
Tough to Swallow It used to be against Louisiana law for craft distillers to let customers take tours of their facilities or buy their products and merchandise on site. Thankfully, however, that is no longer the case, and Litel is now able to follow a retail and tourism model - like at the acclaimed Buffalo Trace Bourbon Distillery in Frankfort, KY - thus enabling his rum distillery to reach its full potential.
“We were the catalyst,” he said. “We drafted a one-page bill and gave it to the local politicians. We wanted a chance to show that distillers like us could bring in tourism and revenue dollars to the state.” Senate Bill 64 was introduced and passed by the Louisiana State Legislature in May 2012, and Litel officially became able to offer distillery tours, a viewing room, a rum tasting bar and a gift shop where customers can buy up to 12 bottles of his signature rum. Another law craft distillers are supporting is the “Distillery Excise Tax Reform Act of 2014.” Currently, craft brewers and winemakers have a more manageable excise tax schedule that supports growth and local economic benefits. Craft distillers are seeking parity. To amend the Internal Revenue Code of 1986 would reduce the rate of taxation on distilled spirits. According to Owens, the proposal, introduced in the House of Representatives in February 2014, would create a tax rate of $2.70 per proof gallon for the first 100,000 proof gallons produced annually. For each gallon over 100,000, the tax would then revert to the cur-
“The ‘Farm to Table’ movement is coming over to distilled spirits.” –Trey Litel, president of Louisiana Spirits, LLC BizNewOrleans.com November 2014
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Candy is Dandy, But Liquor is Quicker Historic Candy Company Expands Into Flavored Rums 2015 will mark the 100th anniversary of the first day that Sam Cortese began selling hand-pulled Roman Candy from his now-signature red and white mule-drawn wagon through the streets of New Orleans. His granddaughter, Mary Lee Kottemann DeVun, and her husband David DeVun, wanted to create a little something to commemorate the date. It took two years of research and development, but by using the same molasses base and flavorings found in the original chewing candy, Roman Candy Rum was born. And it looks like the family stumbled onto another iconic craft brand. “It tastes just like candy,” DeVun said of all three labors of love – chocolate, vanilla and strawberry flavored rums. “We originally made it just to give out to the family. But it got raves.” Based in New Orleans, DeVun said his 70-proof rum is distilled and imported from Puerto Rico, but they batch it, flavor it, and bottle it in the U.S. Following the craft distillery trend, he said he’s looking forward to the sweet opportunity to move his whole operation to Louisiana. Roman Candy Rum went public in January 2014, and by April 2014 they won a gold and silver distinction for their chocolate and vanilla rums at the Wine & Spirits Wholesalers of America convention in Las Vegas. Roman Candy Rum can be found in New Orleans at Rouses, Dorignac’s, Breaux Mart, Robert Fresh Market and Albertsons. DeVun says his rums cost $17.99 to $22.99 a bottle. The company now has eight employees and sales have been growing exponentially. While his brother-in-law, Ron Kottemann, is still masterfully rolling and selling hand-made taffy, one stick at a time, from the same wooden wagon on the streets of New Orleans, DeVun is trying to get a handle on his burgeoning empire. He says he plans on selling holiday gift sets with both Roman Candy taffy and rum, and aged and dark rum varieties are in the works. There has also been customer demand for the miniature wooden replicas of the red and white wagon used as market displays that another Cortese family member makes. “Our business plan is to blow up and saturate Louisiana,” DeVun said. “We’re all about New Orleans.” But not just New Orleans is all about Roman Candy Rum. DeVun said he’s received queries from New York, San Francisco and Canada. “The college kids in Baton Rouge got a hold of it, and they love it,” DeVun said. “And a nice lady from Missouri called and wanted to buy some. Since we’re not allowed to ship it, she hopped into her car, drove down here, bought $300 worth and drove right back home.” In 2014, 750 cases of Roman Candy Rum were manufactured. DeVun said they’re looking forward to doubling production in 2015. “We consider ourselves a small batch company, but never say never,” DeVun said. “I’m convinced craft distilling and brewing are the fastest growing industries in Louisiana. The best reward is being successful at a dream. As my Daddy used to say ‘If you can do it, it ain’t bragging.’”
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Created to mark the 100th anniversary of Roman Candy, the company’s new rum is winning awards and looking to double production. Photo courtesy of Roman Candy Rum.
“Tourists often come in here wanting to try something new, something they can’t get at home.” –Bazil Zerinsky, bartender at Bar Tonique Claude cocktails, and she also favors Donner-Peltier’s Rougaroux Rums, LA1 Whiskey and Oryza Between 2009 and 2013, the number of permitted craft distillers in the Rice Vodkas and Gins. U.S. grew by 122 percent. Louisiana Lightning’s founder Lionel Dufour According to Beth began producing whiskey less than two years ago and the company Donner, co-owner continues to break sales records month after month. Photo courtesy of Donner-Peltier of Louisiana Lightning. Distillers, the decision to expand from rum to rent full rate of $13.50 per proof gallon. other spirits was driven by demand. “We want the same breaks wineries and “We thought since there are so many vodka, brewers get,” he said about the bill. “That whiskey and gin drinkers, let’s use this boom would let us put out our products cheaper, to the best of our advantage,” she said. hire more people and create jobs.” Bayou Rum’s Litel said U.S. rum distillers also have an economic disadvantage competing against rum imported from Puerto Rico, whose manufacturers, he said, get tax breaks that often make products like his more expensive on the shelf. His products range in price from $7.99 to $27.99. “When you buy Bayou Rum you’re supporting sugar cane farmers in Louisiana,” he said. “When you buy imported rum you’re supporting another country. You make the choice.”
Three Sheets to the Wind “Drinking local products means a lot to me,” said Mo Erin, a young twenty-something, while sipping a cocktail at a table by the window at Bar Tonique on 820 N. Rampart Street. “I like their finesse and high quality.” A hipster haven at the edge of the French Quarter, Bar Tonique boasts a beverage menu of handcrafted cocktails without the pretense. “We’re all cocktail and liquor nerds here,” said another young woman, Bazil Zerinsky, while coaxing the last few drops from a stainless steel cocktail shaker into a glass. “We love to learn about spirits and old drinks.” As a Bar Tonique bartender for more than two years, Zerinsky said she’s come to believe it’s all about attention to detail, whether it’s making the perfect potion or distilling it. “We try to get new products when they come on the market,” she said. “Tourists often come in here wanting to try something new, something they can’t get at home.” Zerinsky said she uses the popular locally distilled Old New Orleans Rum for her St.
Pick Me Up Donner said her Thibodaux, La., distillery, which has been in business less than two years, is the first aged whiskey distillery in Louisiana since Prohibition. Staying true to their “Grain to Glass, Cane to Cocktail” mission is what she banks on to keep afloat. “If you stay craft, make one batch at a time, and stay true to your product, I think you’ll succeed,” she said. Donner added that when they built the distillery, Senate Bill 64 had not yet passed. “Passage of that bill was huge because being able to have people come in and tour and taste your product and buy it without going through a distributor is a big benefit,” she said, noting the 15 percent retail bump her business enjoyed. Donner’s products sell for between $20 to $45 and are stocked in 450 outlets throughout Louisiana. She said the distillery just got licensed in Mississippi and currently ships to Montana and Canada - manufacturing 5,000 cases in 2013. They plan to produce 10,000 in 2014 and 20,000 in 2015. As a startup, the distillery invested in a German-made 3,000 liter, 18–foot-high steamfired copper Kothe still with two columns, capable of rectifying spirits 17 times in a single pass. They have a 50-gallon still just for gin and recently purchased a Vendome 750-gallon still for their whiskey expansion. After the distillery secured Grade A molasses from their local sugar mill for their rum, they turned to one of Louisiana’s top crops for their Oryza Vodka and Gin – long grain, natu-
rally grown, gluten free rice from Rayne, La. “We know the people who farm the rice, and we know the people who grow the cane,” she said. “It’s such a unique situation to be in, to have a relationship with the people who help make your products.” The Donner-Peltier Distillers line of rums includes Rougaroux Full Moon Dark Rum, and 13 Pennies Rum, which is naturally flavored by locally grown pecans and cane syrup and used in some of the bread puddings and bananas fosters served at French Quarter restaurants. There is also the 101 proof Sugarshine Rum, which was awarded a 93 rating by The Beverage Tasting Institute, making it the highest rated rum in Louisiana. But it’s the distillery’s LA1 94-proof aged whiskey, made from four grains and chocolate malt, that’s got them in a muddle. “We have a waiting list,” she said of the coveted brand currently aging and due out next spring.
On the Wagon Some credit the craft beer movement for the recent success of distilleries, saying it paved the way for impassioned craft spirit proprietors. The ACSA reports craft spirits trails craft beer by 20 years and wine by 40, but the growth curve for craft spirits is statistically slightly greater than the comparable period in craft brewing, a $10.2 billion dollar market. “Craft distilled products are following in the paths of the artisan and craft wine, cheese and beer booms,” Owens said. “We’re the last of that cycle.” Even though he concedes the highly regulated and expensive industry is enough to give anyone a hangover, Louisiana Lightning’s Dufour said he’s anticipating adding more stills. “The success of local craft beer companies gave us optimism.” For Donner, a former stay-at-home mom for 19 years, being a craft distiller has more than enough rewards to make up for the headaches. “It’s a sense of pride,” she said. “We’re so proud of the product in our bottle, and to be living a dream.” n
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Perspectives A closer look at hot topics in three southeast Louisiana industries
50 Maritime
56 Insurance
60 Financial BizNewOrleans.com November 2014
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Perspectives | Maritime
Oh Yes! We Have Some Bananas The triumphant return of Chiquita Brands International to the Port of New Orleans is energizing the Port and further boosting the city’s ties with Central America. By Judi Russell
O
n October 21 the first shipment of Chiquita Brands International in four decades arrived at the Port of New Orleans - the culmination of years of lobbying by the Port and Louisiana economic development officials. For Gary LaGrange, president and CEO of the Port of New Orleans, the move was a long time coming. LaGrange worked at Gulfport’s port in the ’90s and remembers that Chiquita even
then wanted to bring in larger ships. But Gulfport was refused permission to dredge its port to 42 feet because of environmental issues. Chiquita’s return to New Orleans this year is also inf luenced by the company’s desire to expand; a pending merger between Chiquita and Dublinbased Fyffes plc would make Chiquita the world’s biggest banana company. The return of Chiquita gives
the local economy a major boost. In addition to bringing up to 350 full-time, good-paying jobs, the move is expected to have an impact on the port of about $485 million over the first 10 years of activity, LaGrange says. The Port’s container cargo activity will increase by 15 percent annually, and the ships coming into New Orleans with thousands of containers filled with bananas will sail back south loaded with cargo from
Louisiana, including paper, rosins and food products. In September, Chiquita reached an agreement with Mediterranean Shipping Co. to transport fruit from Central America to the U.S. MSC usually docks at the Port’s Napoleon Avenue Container Terminal. Negotiations to lure Chiquita back to New Orleans took place on and off for about 10 years, LaGrange says. Pre-
TOP: Negotiations with Chiquita have been happening on and off for about 10 years. The return is a big win for the Port of New Orleans and Louisiana development officials. OPPOSITE PAGE: Container activity at the Port is expected to increase by 15 percent annually from Chiquita alone. Photos courtesy of Chiquita Brands International. 50
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A look at The First Lady of Fruit Full name
Chiquita Brands International Inc. (NYSE:CQB) Founded
1870
Headquarters
Charlotte, N.C.
Annual revenue
More than $3 billion Employees
More than 21,000 in 70 countries Products
Bananas, salads, other fruits Fun Facts
Chiquita was the first company to brand a banana. The iconic blue stickers are all individually placed on each banana by hand. The famous “Chiquita Banana” jingle debuted in 1944 to teach consumers how to ripen bananas, considered an exotic fruit. “I'm Chiquita banana and I've come to say Bananas have to ripen in a certain way - When they are fleck'd with brown and have a golden hue Bananas taste the best and are best for you.” Source: Chiquita Brands
Photo by Cheryl Gerber
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Katrina, Chiquita all but agreed to relocate to east New Orleans at France Road. Hurricane Katrina caused the closure of the Mississippi River Gulf Outlet, so that plan was abandoned. About seven years ago, Chiquita indicated it wanted to relocate its headquarters from Cincinnati. “We teamed up with the state and GNO Inc., to try to get the headquarters here,” LaGrange says. “Ultimately they picked Charlotte. We were outhustled.” Sweetening the pot Louisiana persevered, hoping to draw the company’s business away from Gulfport. This time, the proposal included some sweeteners: $11.3 million to offset the company’s costs over the next 10 years, $2.2 million for a ripening facility and another $2 million offered by the port for infrastructure improvements, to include refrigeratorcontainer electrical connections. The $11 million is performance-based upon the amount of cargo Chiquita actually brings to New Orleans. Stephen Moret, secretary of the Louisiana Department of Economic Development, says a turning point in the negotiations occurred when Louisiana officials met with Chiquita’s officers in Charlotte this past April. The more than $15 million the state committed to the project is a good investment, Moret says, based on an LSU economic impact study detailing the move’s positive impact on the Port plus the increased state tax revenue. Chiquita’s return “makes us one of the premier ports for temperaturesensitive cargo,” he points out. GNO Inc. was another major player in the deal. The organization’s President, Michael Hecht, says the group’s participation was a natural given that international trade is one 52
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TOP: Louisiana’s proposal to draw the fruit giant included $11.3 million to offset Chiquita’s costs over the next 10 years, $2.2 million for a ripening facility and another $2 million for infrastructure improvements. Photo by Chiquita Brands International. BOTTOM: Chiquita’s return “makes us one of the premier ports for temperature-sensitive cargo,” says Stephen Moret, secretary of the Louisiana Department of Economic Development. Photo by Cheryl Gerber.
of its six focus sectors. Chiquita has a long history in New Orleans. The company did business here for 70 years before decamping to Gulfport, and Samuel “Sam the Banana Man” Zenmurray, who ran what was then called United Fruit Company, was a major donor to Tulane University. Hecht says Chiquita’s return is one more in a series of companies returning to greater New Orleans as the city moves further away from Hurricane Katrina. Another example
is industrial carbon company Rain CII - a Fortune 1000 company. Rain CII relocated to Houston after Katrina, but has since returned its corporate headquarters to St. Tammany Parish. In February, International Shipholding Corp. also returned. The company was headquartered in New Orleans for many decades but moved to Mobile, Ala., after Hurricane Katrina. “We were able to convince them to return
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Chiquita is one of several companies who have returned to New Orleans recently, including industrial carbon company Rain CII and International Shipbuilding Corp. Photo by Cheryl Gerber.
home,” says Aimee Quirk, Mayor Landrieu’s economic advisor. The company brought 210 jobs with them. Hecht says other companies have considered moving away but reconsidered. Smoothie King and Pelican Energy fall into that group. No other city has our combination of “low cost and high culture,” he says, noting that accounting firm KPMG rated New Orleans as the “least expensive midsize market in America,” in terms of business costs.
“In addition to bringing up to 350 full-time, good-paying jobs, the move is expected to have an impact on the Port of about $485 million over the first 10 years of activity.” Chiquita’s return adds fuel to the city’s attempts to firm its relationship with Central America. The Port has opened an office in Sao Paulo, Brazil, to cover all of South America and parts of Central America. GNO Inc., meanwhile, is in discussions with Copa Airlines of Panama to establish direct f lights to New Orleans. Copa’s head, Stanley Motta, is a Tulane graduate, and Hecht hopes that Chiquita’s move will be another reason to start up that service. “Every relationship we establish or grow with Central or South America or the Caribbean builds the case to restart direct service,” he says. n 54
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Perspectives | Insurance
The Homeowner Flood Insurance Affordability Act dictates that rates on most subsidized properties can be raised by no more than 18 percent annually.
Still Not On Solid Ground Although this year’s Homeowner Flood Insurance Affordability Act granted a reprieve from rate hikes of up to 3,000 percent, the issue remains far from resolved. By Judi Russell | Photography by Cheryl Gerber
T
he latest danger threatening those that own or wish to own a home in this region is very much man-made. While flooding has always been a reality in this area of the country, two years ago, in an effort to put the National Flood Insurance Program (NFIP) on sound footing after several extremely costly disasters, then-Rep. Judy Biggert, a Republican from Illinois, and Rep. Maxine Waters, a California Democrat, teamed up to write the Biggert-Waters Flood Insurance Reform Act of 2012. The intent of the law was to ensure
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homeowners living in low-lying, floodprone areas paid the full cost of their flood insurance, rather than getting by with lower rates subsidized by NFIP. When the newly-calculated premiums were calculated, though, the figures were jaw-dropping, with costs jumping in some cases as much as 3,000 percent. Real estate agents immediately predicted disaster. Trudy Dowell, an agent with Re/Max Real Estate Partners on the West Bank, shared that one of her clients living in the Belle
Chasse/Jesuit Bend area was paying less than $1,500 annually for flood insurance. Under Biggert-Waters, the premium was set to jump to $17,000 a year. “You’re talking about another housing crash,” Dowell says. “The housing market has been terrible for a few years anyway.” Temporary Help
After a lot of testimony protesting BiggertWaters, Congress passed the Homeowner Flood Insurance Affordability Act of 2014. The new act stopped the big increases
“Flood insurance is certainly a concern, but paranoia and panic are alleviated to a degree,” says Evelyn Wolford, president of the New Orleans Metropolitan Association of Realtors.
and provided for gradual rate increases instead. Most subsidized properties can have their premiums raised by no more than 18 percent annually (with some exceptions), and grandfathering in of existing policies is allowed (again, with some exceptions.) Meanwhile, the Federal Emergency Management Agency, or FEMA, will look at ways to make flood insurance more affordable, with the aim of most policyholders having premiums of no more than one percent of the value of their coverage. In return for the relief, all residential policies will include a $25 surcharge, which will continue to be assessed until all subsidies are eliminated. The affordability act doesn’t do away with BiggertWaters forever; it provides for the matter to be revisited in 2017. The economic development group GNO Inc. played a major role in convincing Congress to do something about the sudden and severe rate hikes. “Biggert-Waters would have
made our economy untenable,” says GNO Inc. President, Michael Hecht. After a board member alerted him to the problem, representatives from the organization joined eight parish presidents on a trip to Washington to push for a new law. Eventually, GNO Inc. became part of a coalition that included people from 35 states and 250 organizations. In his testimony to a Congressional committee, Hecht said that implementation of Biggert-Waters would “ultimately destroy NFIP itself, as policyholders will be forced into foreclosure and leave the program in droves, sending it into a death spiral.” Location is everything
The act delaying BiggertWaters calmed the homebuying public down considerably, says Evelyn Wolford, a Latter & Blum agent and president of the New Orleans Metropolitan Association of Realtors. “Flood insurance is certainly a concern, but paranoia and panic BizNewOrleans.com November 2014
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Essential Documents Potential homebuyers should have these documents on hand when inquiring about flood insurance: • Elevation certificate • Current appraisal • Copy of the current flood insurance policy, if available • Pictures of the front, sides and back of the structure • Requirements by lien holder and mortgage company • Exact date the policy is to start Source: Dan Burghardt Insurance
TOP: “Everybody agrees there will have to be some increases,” says GNO Inc. President Michael Hecht. One of his ideas is for each U.S. household to pay $200 toward catastrophe relief. BOTTOM: To get the best flood insurance deal, homebuyers should hire a civil engineer to do a flood insurance survey.
are alleviated to a degree,” she says, adding that people can be fairly sure their insurance rates will be stable for a few years. But if the country is hit with a major storm like Hurricanes Katrina and Sandy, rate hikes could be necessary sooner rather than later. Wolford works on the West Bank and says homeowners there are less worried about flooding now that improvements have been in plumbing and drainage.
The Affordability Act doesn’t do away with Biggert-Waters forever; it provides for the matter to be revisited in 2017. Property owners in the Lakefront/Lake Vista area are also in pretty good shape, says Sandra Green, an agent with Gardner Realtors. She says that those in Lakeview north of Robert E. Lee Boulevard toward the lake have very affordable flood insurance premiums, and on the other side of Robert E. Lee, new construction built to proper elevation levels also have low premiums. It’s a different story in eastern New Orleans, says Gardner agent Robin Stewart. She points out that some neighborhoods have had lots of 58
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foreclosures, and the flood insurance policies have lapsed. Buyers purchasing these homes can’t be grandfathered in to policies with low rates because of the lapse, Stewart says, and they may face very high premiums when they buy new policies. What to do
To make sure they get the best flood insurance deal possible, prospective homebuyers should hire a civil engineer to do a flood insurance survey, especially if the property under consideration is rated “A” (higher probability of flooding), says Parke Ellis, chairman of Gillis, Ellis & Baker Inc. insurance company. The surveys used to take a day or two, but civil engineers are in such demand that you need to allow a couple of weeks, he says. Because floods are certain to continue to occur, the National Flood Insurance Program will need more revenue. According to Neal Conolly, president of Wright Flood Insurance Co. in New York, until Hurricane Katrina the NFIP premiums and loss were in balance. Hurricane Katrina caused more than $18 billion in claims, while this past year Louisiana policyholders paid in less than $400 million. “Everybody agrees there will have to be some increases,” says GNO Inc.’s Hecht. But before premiums jump, he recommends making sure that every homeowner required to have flood insurance (everybody with a feder-
ally insured mortgage) buys and keeps it. His other ideas include either privatizing the program, or charging each household in the U.S. $200 toward catastrophe relief. Jeff Albright, president of the Independent Insurance Agents & Brokers of Louisiana, says it is unrealistic to expect the NFIP to cover both the ordinary disasters that cause flooding as well as the so-called “super storms,” which result in billions of dollars’ worth of
damage. He believes the goal should be to keep the program self-funded but create a catastrophic pool like Hecht suggests for extraordinary events.
Hurricane Katrina caused more than $18 billion in [flood insurance] claims, while this past year Louisiana policyholders paid in less than $400 million. Dan Burghardt, president of Dan Burghardt Insurance, has another idea. He says the standard homeowners insurance policies already contain coverage for events that only occur in some parts of the country, such as the collapse of a roof from snow. Floods are happening now in places like Arizona, so his argument is that flood insurance should be built into all standard policies, thereby spreading the risk over many households to keep the cost low. No matter what options end up on the table, one thing is certain: the clock is ticking. n
Flood-induced foreclosures in eastern New Orleans have meant lapsed insurance policies and potential headaches for prospective homebuyers.
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Perspectives | Financial
Employees depending on 401(k) plans aren’t socking away enough of their paychecks, which means many are going to have to delay retirement.
“Someday” is Closer Than You Think A look at how employers and employees can make the most out of today’s 401(k) plans By Judi Russell | Photography by Cheryl Gerber
A
ccording to Professor John Page, of Tulane University’s A.B. Freeman School of Business, the formula for a successful retirement is simple: Save 15 percent of your income, live on the rest, and never get divorced. Of course, Page is aware of just how many people will follow that advice – not a lot. That’s why most financial advisors tell clients to pay themselves first by setting aside part of their paychecks right off the bat, before the money has a chance to land in their pockets. 60
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Even better is taking advantage of so-called defined contribution retirement plans, such as 401(k) plans, which allow workers to invest pretax dollars often matched by their employers. Unfortunately, not everybody has gotten the message. The days of depending on a defined benefit retirement plan, such as a pension, are gone for most workers in the private sector. But employees depending on 401(k) plans for retirement aren’t socking away enough of their paychecks, which means that a lot of them are going
to have to keep working longer than they had planned. The Center for Retirement Research at Boston College says that in 2013, the median savings of working households ages 55-64 with 401(k) plans was only $111,000 – down from $118,000 in 2007. No sure thing
Years ago, many entry-level workers shared a similar goal: get a job with benefits, including a pension, and keep that job until retirement. As recently as 1983,
62 percent of workers had defined benefit retirement plans, the Center for Retirement Research reports. Pensions were popular with employers, Page says, because they allowed companies to court and keep workers without having the cost of the benefit appear on their financial statements. In 1961, for example, General Motors satisfied its workers with a 2.5 percent wage bump coupled with a 12 percent pension increase. In the 1980s regulations took effect that forced companies to
In 2013, 71 percent of workers had defined contribution-401(k) plans.
On Your Own The number of workers covered by a defined benefit retirement plan has fallen sharply as defined contribution-401(k) plans take hold. Defined benefit (pension plans) only: 1983 2001 2013
62% 23% 17%
Defined contribution-401(k) plans only: 1983 2001 2013
12% 61% 71%
Source: Center for Retirement Research at Boston College
list their pension obligations. The results were shocking. “Most large companies owed more to their workers than they had in equities,” Page says. Since that time, no publicly traded company has started a defined benefit plan. Pensions have remained prevalent in public sector jobs, says Jared Llorens, associate professor with LSU’s Public Administration Institute. He says offering a pension allowed states and municipalities to pay lower wages than the private sector.
But even public-sector pensions aren’t a sure thing anymore. Emmett Dupas III, a retirement planning consultant with Northwest Mutual Wealth Management, says states and municipalities that underfunded pension plans are scrambling to find the money to pay retirees. Dupas points to the dispute between New Orleans and the city’s firefighters as an example. Another longtime retirement pillar, Social Security, is also under the microscope. When the benefit debuted, life expectancy
Saving enough? Workers nearing retirement had a decline in their 401(k)/IRA plans.
Median 401(k)/IRA accumulation of working households with 401(k) plans in those nearing retirement: Workers
55-64:
2013 2007
$111,000 $118,000
Source: Center for Retirement Research at Boston College
was much shorter than it is now. Today, the average person gets back all of the contributions he or she has made into Social Security in six years, Dupas says. But that retiree may go on to collect the benefit for another 25 years. On your own
With defined benefit plans disappearing, and the future of Social Security worrisome, 401(k) plans take center stage in many workers’ retirement savings. In 2013, 71 percent of workers had defined contribution-401(k)
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plans, according to the Center for Retirement Research, while only 17 percent had defined benefit plans. The economic downturn that began in 2008 led some employers to reduce their match or eliminate it altogether, Dupas says. But most have restored the match. In part, this is because of regulations which require a certain match if highly compensated employees (who may also be owners) want to take the maximum deferment themselves. Besides the match, companies
The average person gets back all the contributions they made into Social Security in six years, but may go on to collect for another 25.
have a few other ways to encourage enrollment in their defined contribution plans, says Claude Silverman, a partner in Ericksen Krentel Financial Group’s wealth management section. One is to offer a good mix of investments from which to choose. A company should first develop an investment policy statement and then pick out a wide array of options that appeal to investors of different ages and varying amounts of risk tolerance. It’s also good to encourage automatic enrollment, he says,
whereby new employees automatically contribute unless they opt out. “That has resulted in some increase in participation rates,” Silverman says. It’s also possible to bundle automatic enrollment with an automatic increase in deferral rates over time. Education helps, too. If employees understand the ups and downs of the marketplace, they won’t panic when they see the movements of their investments, says Jay Butcher, head of payroll company Netchex in Mandevile.
Make sure workers understand the value of investing pretax dollars and encourage them to seek advice in drawing up a complete retirement plan, which takes into account all of their assets along with the expenses they foresee. And if employers make their match every pay period, Dupas says it helps employees to see that their retirement funds are growing steadily. Employees should also be counseled to reconsider their investment choices at regular intervals. “As we get older, we become more conservative,” Dupas says. A few companies are looking at combination plans, which include a defined benefit plus an ending benefit. But for most of us, the retirement we get will be the one we save for. “If I participate in an employer-sponsored plan, it’s my money,” Butcher says. “I can invest where I see fit. [When it’s] time to retire, I can enjoy the returns or, if I took too much risk, I bear the penalty.”
As employees zero in on retirement, they’ll face more financial decisions. “Start taking a closer look at your plan and your asset allocation,” says Andree Schneider, a financial advisor with Raymond James & Associates, Inc. At age 70-and-a-half, employees face a required minimum distribution, and that distribution is taxable. You may need advice to help you coordinate your retirement income with Social Security and to decide how much you can withdraw every year without running out of money. Advice can also help you resist the urge to skim off some of that nest egg for a boat, or a timeshare, or a vacation. “There’s always the temptation to make that one-time impulse purchase for some reason,” Silverman says. Essentially, following a plan can help ensure you don’t run out of money in what are supposed to be your golden years. n
Following sound financial advice can help workers resist the urge to skim off their nest egg for a pricey purchase. BizNewOrleans.com November 2014
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Great Offices
Stepping Back to Move Forward Past and present collide in the classical work space of Pres Kabacoff, CEO behind HRI Properties – responsible for $2 billion in revitalization projects around the country. By Bonnie Warren Photography by Cheryl Gerber
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“My passion is to fix the center of New Orleans so it will connect with our neighborhoods to create a vibrant new city.”
LEFT: A voracious reader, Kabacoff’s current reading matter is stacked on his desk. RIGHT: A small round table is filled with family photographs. OPPOSITE PAGE: The handsome adjoining boardroom is a study in the grand design of the era in which the building was constructed. It features a unique bas-relief ceiling and an envelope of mahogany paneling that matches Kabacoff’s office.
A step inside Pres Kabacoff’s office in the neoclassic Hibernia Bank Building at Carondelet and Gravier Streets is a step back to an era when wood paneling was the mark of luxury. Kabacoff is right at home in his small but grand workspace in the stately building that dates to 1921. Twenty-three stories tall, it was the tallest building in New Orleans for 43 years. “I find this a vibrant space, and I never stop marveling at the fine original workmanship in the building and my office and the adjoining board room in particular,” says the 69-year-old visionary who recently climbed to the top of Mount Kilimanjaro, the highest freestanding mountain in the world. Kabacoff has spent most of his adult life conquering business mountains. “It’s the challenge that makes each business project interesting,” he adds as he gives an update on HRI Properties, the company he has lead since its founding in 1982. “Today we have 1,600 employees and we have completed $2 billion worth of revitalization projects in 15 cities across the U.S.” Kabacoff is quick to give heaping credit to Tom Leonard, president of HRI Properties, for his help in leading the company to the pinnacle
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of success it enjoys today. “Tom grew up in the company, and he has proven to be a great leader,” he says, adding that Almanac Realty Investors on Wall Street just invested $150 million in HRI. “It’s an amazing honor to have been sought out by Almanac for such an impressive investment,” he says. There is nothing sleek in Kabacoff’s office. Here you will find fine mahogany paneling, a pair of elaborately carved chairs from Rajasthan, India, an antique Oriental rug covering the wooden floor, a George Dureau painting of Professor Longhair, and his ever-present briefcase – a hand-woven, simple, medium-sized shopping bag. The adjoining boardroom is a study in the grand design of the era during which the building was constructed, with a unique bas-relief ceiling and an envelope of mahogany paneling to match his office. Kabacoff thinks of himself as a man of simple desires who is presently teaching himself to play chess. “I usually begin my day by studying the game of chess in my garden,” he says, referring to the new environmental “green” house he recently built in the Bywater with his wife, Sallie Ann Glassman, an artist and voodoo priestess.
GRAND AMBITIONS
Notable Projects by HRI Properties Hotels Hyatt French Quarter Hilton Garden Inn Convention Center Hilton Garden Inn French Quarter/CBD Condos Federal Fibre Mills The Henderson Apartments American Can Company Blue Plate Artists Lofts Bywater Art Lofts Fidelity Building Gravier Place D.H. Holmes Apartments River Gardens Historic Apartments Woodward Wight Apartments Hibernia Tower Affordable Housing Flint Goodridge Mater Dolorosa apartments
HRI Properties was founded by Kabacoff and the late Edward B. “Ed” Boettner while both were working on converting the Federal Fibre Mills building into major venues for the New Orleans 1984 World’s Fair. The company has since become known for its incredible transformations. “We are currently aggressively involved in the revitalization of the upper Canal Street area,” Kabacoff says. “My passion is to fix the center of New Orleans so it will connect with our neighborhoods to create a vibrant new city.” Kabacoff says his focus is on a triangle, with Canal Street at the apex, and the Iberville area and Charity Hospital as the two anchoring points. HRI is currently converting the 225 Baronne Building into mixed use and upgrading the Iberville public housing projects into modern homes. “This is all also being driven by the huge medical projects now in progress along Tulane Avenue,” he says. “I envision New Orleans taking its rightful place right up there with Houston and Birmingham as a noted medical center.” He dreams that someday the core of New Orleans will be like Paris. “In Paris you can go for many blocks and have a fascinating, safe experience,” he continues. “If you can fix the center of New Orleans, then you can have the same experience of being in Paris. We can never forget how important the French Quarter is in all of this. My dream is to expand the current tourist boundaries of the French Quarter to embrace the city as a whole.”
GIVING BACK Kabacoff’s civic challenges include helping Phyllis Landrieu with her Childhood & Family Learning Foundation (CFLF) that represents child advocates, educators and service providers throughout New Orleans, providing comprehensive health assessments for the children of Orleans Parish. “I agree with Phyllis, who feels every New Orleans student deserves the same chance at success the same opportunity to be a vibrant, healthy and motivated young scholar,” he says.
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Kabacoff is also involved with other projects, such as searching for ways to save our coast and how to reduce the mass incarceration of the population. “There are so many challenges that we need to face in our community,” he says. “I am always searching for ways to improve our way of life in this wonderful city that I have always called home.” And now that Mount Kilimanjaro has been conquered, Kabacoff still does his training of walking up and down the steps of the Hibernia building a couple of times a week. “Don’t forget to add that Sallie Ann joins me most of the time,” he says. “I also cross train by running, lifting weights and swimming on the days I don’t do my Hibernia climb. Our goal is to do the Inca Trail in the Peruvian Andes in the summer of 2015.” It’s clear that this is a man who’s not afraid to set his goals high. n
The original elevator that once connected Hibernia’s presidential office to the vault is no longer in operation. Instead, it houses a screen from an altar purchased by Kabacoff and his wife, Sallie Ann Glassman. 68
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Why Didn’t I Think of That? | Creative businesses taking hold in Southeast Louisiana
Necessity + Mother = A Great Invention When Melissa Beese set out to find no-tech, educational toys for her challenged son, she ended up stumbling upon a lucrative niche business market. By Pamela Marquis Photography by Cheryl Gerber
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Every parent has experienced the following unhappy scenario: After watching endless splashy ads for some cheap plastic creation in between cartoons, a child begins to plead, whine and beg ceaselessly for a much-hyped toy. Finally relenting, the parent then proceeds to spend a small fortune on the toy, only to watch the child discard the “must-have” after five minutes of play in favor of the box it came in. This is exactly the scenario that Melissa Beese, a mother herself, The Birth of Little Pnuts aimed to avoid when she created her own New Orleans-based toy busiAfter her first son was born prematurely, Beese was told that he would ness, Little Pnuts, in 2012. not develop like other children. Among other things, she was instructed Litte Pnuts has found success by providing high-quality engaging not to purchase battery operated toys for her son, as he needed to learn toys that truly celebrate the how to do everything on his power of learning through own to further his cognitive play. For a flat fee of $240, development. Unfortunately, families are provided with she discovered that the four “special deliveries” American toy market could each year of eco-friendly, not provide her with the sustainable and natural and kinds of toys she was lookorganic toys – all aimed at ing for, so she began her supporting healthy child research and eventually development. Each shipfound them in Europe. ment, which includes three “I was looking for toys to five toys, is curated by that would enhance every Beese to meet the developsensorial perspective, toys mental milestones for the that would provide challengage of the child through es, toys that would engage each three-month phase of while providing a sense of development. accomplishment,” she says. “We try to combine the “I wanted toys that focused thrill of receiving a parcel on such things as eye-hand with the desire to provide coordination. I wanted the kids with thoughtful, wellkind of toys that help chilmade toys and games that dren learn patience, focus encourage little brains to and concentration.” stretch and grow,” Beese When her second son was says. “All our toys have born, subscription boxes education behind them. For filled with baby basics were example, Clever Bear Learns coming into popularity. The to Count by Haba helps chilidea to blend her now-extendren learn about numbers in sive knowledge of educaa variety of ways. The numtional toys with an exciting bers become visual, and new business model came children don’t just memotogether – and Little Pnuts rize the numbers; they visuwas born. alize them and understand them in a very tactile way.” Making the Leap Little Pnuts has quickly In 2011 Beese learned become a success with both that the biggest toy market children and parents. in the world was being held “Melissa is like having a Little Pnuts is about to launch its newest offering - travel boxes. Designed in Germany. Gathering her to look like suitcases, they sell for $30 and include an activity, game and best friend in the toy busicourage, she booked her cards to help keep little ones happily engaged while traveling. ness, and her service is like plane ticket and attended having that friend drop care the conference with only her packages off at your home,” says Jillian Warner, who writes the influenbusiness cards and her idea. When she returned home, she had 32 sepatial blog Mommy Testers. rate brands interested in workig with her. Currently Little Pnuts operates from a tiny but well-organized home Within four months, Beese put together a business plan, marketing office where Beese has seamlessly blended her background in marketplan and website, and Little Pnuts became a reality. ing, graphic design and photography with extensive hours of exhaustive “I would tell anyone who has an idea that they are passionate about to research to build her business. just do it,” she says. “Just do it: Stop thinking about it, and just jump in and do it.” BizNewOrleans.com November 2014
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cel with the r a p a g in iv e c e r e the thrill of in b m o c o t y r t “We ade toys and m ll e w , l u f t h g u kids with tho e id v o r p o t e ir s de h and grow.” c t e r t s o t s in a r urage lit tle b o c n e t a h t s e m a g The Name Growing up, Beese’s father called her “Peanut,” and it stuck. “My father only used ‘Melissa’ when he was angry with me,” she says. “My oldest and dearest friends still use that name.” When her two sons came along, they were her “little p’nuts.” The name was destined to be the name of her business. Competition The first thing Beese wants people to know is that she is not in competition with stores such as Toys “R” Us or Target. “In an age where big-box stores have taken over, Melissa has essentially packed up the care and quality of the neighborhood toy stores we grew up with, put it in a box and sent it around the country,” Warner says. Though there are many other subscription services for children, such as Little Passport and KiwiCrate, they do not offer the personal attention Beese puts into each one of her boxes. 72
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“I have attended trade shows with her and watched her in action, carefully examining each item she considers for her boxes,” Warner says. “She brings both a parent and a child’s perspective to the table and truly finds high quality educational toys.” Marketing There’s no doubt that even though she sells Old World-quality toys, Beese’s business savvy is solidly rooted in the 21st century. Her website is clean, informative and interactive, and she says social media is a significant key to her success. Beese enjoys ongoing one-on-one connection with her customers through her Facebook, Pinterest, Instagram and Twitter accounts. To connect all of her social media, Beese uses Hootsuite - a program that allows her to schedule all of her posts in the morning to go out throughout the day automatically. Through her posts she tries to show parents how to keep their kids off the sofa and how to live up to her business slogan of “imagine.create.play.”
Newest Project Beese is ready to launch her newest boxes, travel kits for long trips. These themed boxes will also enjoy Beese’s personal hands-on touch and are designed to be gender-neutral and geared to different age groups. The $30 boxes, which are designed to look like suitcases, contain an engaging game, cards, and an activity. “With these boxes I want parents to have something to give their children other than an iPad,” she says. Overhead Beese is a one-woman show and keeps her costs down by locally outsourcing some of her duties such as: printing to Mpress, packaging to Pratt Industries and branding to Bond Public Relations & Brand Strategy. To fulfill and ship deliveries she depends on the services of Ecommerce Solution Group for her subscription boxes and The Light House for the Blind for her travel kits. Revenue In her first year, Beese made a goal for herself of reaching 240 subscribers; she now has more than 1,000. She’s seen a 150 percent growth and has exceeded all of her fiscal projections. For now, she will continue to put all of her profits straight back into growing her business. Recent Recognition Little Pnuts has been nationally recognized and featured in many influential media sources, including Parenting, Working Mother and Pregnancy & Newborn magazines; Forbes.com; and CBS’ The Talk. Plans for the Future Plans are to open a brick-and-mortar store by the beginning of this year’s holiday shopping season. The location currently under consideration is on Harrison Avenue. The space is approximately 2,000 square feet and will serve as a retail store and Beese’s away-from-home office. She plans to employ one or two employees and offer New Orleanians a chance to see her products in person. Biggest Challenge Beese admits to being a true workaholic and finds it very hard not to use all of her energy to check off every item on her extensive to-do list. “My challenge is to shut the office door and turn off my phone,” she says. “My kids are so important to me, and they need to always be my No. 1 priority. I need to practice what I preach and spend more quality time with my children.” n
A sampling of the natural, eco-friendly, high quality toys offered by Little Pnuts. Each is geared toward a different developmental level. BizNewOrleans.com November 2014
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Q&A - Biz Person of the Month
A Duke Boy And a Dream Known for his iconic role as Bo Duke in The Dukes of Hazzard, John Schneider takes on a new title as owner of John Schneider Studios in Holden, La. By Kimberley Singletary Although most will remember John Schneider for the six years he spent on the television screen as “just a good ole’ boy, never meaning no harm,” the 54-year-old actor is full of surprises. For instance, he’s a singer with 13 albums to his name. In fact, four of his singles and one of his albums hit No. 1 on the U.S. country charts. He’s also a philanthropist. Along with Marie Osmond, he co-founded Children’s Miracle Network in 1983. The international non-profit has since raised over $4 billion for children’s hospitals and medical research. And then there’s the acting. After Dukes, Schneider has gone on to play everything from Billy Flynn in Chicago on Broadway, to the father of Superman in the hit show Smallville, to stints on other hit shows including CSI Miami, Desperate Housewives, Nip/Tuck and Glee. Currently he co-starts on Tyler Perry’s The Haves and The Have Nots on the Oprah Winfrey Network. The show is filmed at Perry’s studios in Atlanta. According to Schneider, it was seeing this fellow celebrity’s studio TOP: Schneider poses with props from the horror film Smothered - the first film created at John Schneider Studios by Schneider’s production company, Fairlight Films. Photo by Cheryl Gerber. BOTTOM: Schneider in the role that made him a TV icon - Bo Duke in CBS’ The Dukes of Hazzard. The show ran from Jan. 1979 to Feb. 1985. 74
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LEFT: A prop leftover from filming for Smothered. RIGHT: Schneider at his home away from home - one of two houses on the studios’ 58-acres. Photos by Cheryl Gerber.
that inspired him to follow his own childhood dream. In January of 2014, after a lot of searching, Schneider purchased a 58-acre parcel of land in Holden, La. He has since shot his first feature film on the property – a horror movie called Smothered, which is expected to be out this fall. According to Schneider, his production company, Fairlight Films, will focus on “real, gritty, compelling stories that will be the topic of discussion long after the end credits roll.” On a warm summer day, I met up with Schneider on his property to talk a bit about his plans for John Schneider Studios.
that’s when I actually got my DGA (Directors Guild of America) card and actually wrote and directed the last episode – (laughing) hopefully that’s not the reason why it was the last episode.
“The fact that people have the talent and passion here is wonderful. Passionate people move faster, and it’s all about moving faster.”
BIZ: How did you get into the production business? I know you did some things on that end with The Dukes of Hazzard.
BIZ: What interests you about production?
JS: Writing and directing, yeah. Before Dukes, when I was a kid we used to shoot movies with super 8 cameras and splice them together on the carpet. But then on Dukes
JS: It’s telling a story, and more specifically telling your story. As an actor you’re helping tell someone else’s story, which is great, but there’s nothing better than writing something
from a blank book or screen and following it all the way through to a movie. I think, for an actor, it’s just a natural progression. I want to have the studio to tell my stories, but also others’ as well. It’s designed for the independent filmmaker to park their catering truck over there and park their grip truck over there and be able to shoot 50 locations and never move. BIZ: What made you choose this location for your studio?
JS: Well, when I first saw it everything was about three feet deep in leaves. There are two homes on the property (built around 1910 and 1950), but nobody had lived here for years. Over the years the property had been a church camp, a YMCA camp and a Navy Seal training ground, but it was completely grown over when I saw it. It was a very haunted house looking place - holes in the floors, grass growing on the roof.
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LEFT: An aerial view of John Schneider Studios, which includes a lake, swamp, river, baseball field, pool, two houses, a bamboo forest and a 5,000-square-foot soundproof building. Photo by Ron Hale of Cyberlink. RIGHT: Schneider poses with the Smothered cast, which includes the lead actors from horror classics Friday the 13th, Halloween and Leatherface. The film has met with rave reviews and is due out late this year. Photo by Talon Tarter.
BIZ: It’s got a pretty convenient location – about an hour from the airport and less than 45 minutes from Baton Rouge, but it doesn’t sound like it was exactly ideal. What attracted you to the property.
JS: Well, for one, there’s a river, lake, swamp and baseball field all within 100 yards of each other. We’ve got everything here – a pool, a 5,000 square-foot soundproof building and even a five-acre bamboo forest. For instance, you can be up in Canada in the woods over there, and in Vietnam over there. And of course we can do Louisiana or Florida with the swamp area. That kind of convenience boils down to money savings for a filmmaker. Oh, and I have a hill! When I was scouting for Smothered that was the single hardest thing to find. BIZ: Who is your target audience for the studio?
Other Louisiana Film Studios Big Easy Studios – New Orleans Millenium Studios - Shreveport Nims Center Studios – New Orleans Quixote Studios – St. Rose Raleigh Studios Baton Rouge at The Celtic Media Centre – Baton Rouge Second Line Stages – New Orleans St. John Sound Stage – LaPlace
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JS: It’s really independent filmmakers like myself. When I went looking for places to shoot, I really wasn’t finding what I wanted. There just wasn’t a place where you could do film and post-production in the same place, and also a place where you could have so many shooting options in one location. BIZ: Why is it so important to offer a “one stop shop” as you’ve called it?
JS: Most filmmakers waste a lot of money by moving their crew. I write for things to be shot wisely because it saves money. Smothered was shot in 14 days - three days in Baton Rouge and 11 days right here. The average independent film is shot in around 15 to 20 days. So first and foremost it’s an economical choice. Here you can shoot and have your editor right here assembling dailies on site. This house here has three bedrooms, so your director, assistant director and producer can stay right on site. We’re also going to be adding a double-wide trailer with two offices and two more bedrooms.
BIZ: You’re looking at bringing revenue to the area.
JS: Oh yeah. We spent $1 million in those 14 days on Smothered and probably $750,000 of that was right here in Livingston Parish, buying things like food, supplies and hotel rooms. We also had a lot of bulldozer and backhoe work. There’s a lot of “I need this now,” and the people here were ready to work. BIZ: Who is your competition?
JS: There really isn’t any. Celtic is here. But that studio is big and beautiful and more for $100 million productions. BIZ: Obviously you were attracted to Louisiana by the film credits, but is there anything else that you appreciate about filming here?
JS: The work force is great, the talent force is great, and they’re passionate about it. They like being in the movie business. The fact that the people have the talent and passion here is wonderful. Passionate people move faster, and it’s all about moving faster. You can’t be waiting around or you don’t make your day, and if you don’t make your day, you start out behind tomorrow. BIZ: How do you envision the schedule working out? How much of the time will be your productions and how much will be others renting the studios?
JS: I’m planning on making two movies a year, so the ideal would be for me to use the studio six months of the year, leaving the other half for rentals. The whole season for The Haves and The Have Nots takes a month. We shoot fast, so that gives me time. BIZ: You’ve played some really wholesome characters (Bo Duke, Pa Kent on Smallville). I think a lot of people may find it surprising that your first completed film is a horror movie. Where did that come from?
JS: Well it’s horror, but there’s a real human-
TOP LEFT: Smothered filming on the lake at John Schneider Studios. Photo by Talon Tarter. TOP RIGHT: When he’s not filming for Tyler Perry’s The Haves and the Have Nots, Schneider spends most of his free time on the property. Photo by Cheryl Gerber. LEFT: As a writer and director, Schneider says he’s all about the details. “I’m not a guy that likes to hand things off to other people,” he says.” Photo by Talon Tarter
Schneider is in good company: Below is just a sampling of celebrities with their own production companies. Brad Pitt – Drew Barrymore – Ice Cube Reese Witherspoon – Tom Cruise – Will Smith Sandra Bullock – Tyler Perry – Queen Latifah Natalie Portman – Demi Moore – Mel Gibson Bette Midler – George Clooney – Charlize Theron – Hillary Swank – Alicia Silverstone Barbara Streisand – Will Ferrell – Sofia Vergara – Leonardo DiCaprio – Adam Sandler
ity to it. Somebody told me once that all of my characters are disenfranchised. It’s true. I’ve been disenfranchised and I’ve been franchised. I’ve been on both sides of it, and it’s tough. Yes there is horror, but it’s also hysterical. BIZ: There’s a real Louisiana connection in many of your upcoming films.
JS: Yes, the next one in fact was inspired by a conversation I had with a man at Crazy Dave’s Daiquiri here in Livingston. And then there’s Backwater - about a nurse who is a suspect in some suspicious hospice deaths in Denham Springs.
BIZ: What’s your goal for the studio?
JS: As the studio gets rented out, my desire is to take that money and put it back into the infrastructure here. Right now it’s not a big moneymaker. For instance, I recently charged someone $2,000 to shoot here and somebody came the next day to trim some trees and the bill was $2,000. That’s the current reality. Right now though I have a group working on putting together a business plan to have investors come in as a real estate deal. If that happens we’ll look at really expanding and building some sound stages – create a French Quarter down the middle here and add two plantations. It’s going to be great. n
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Around Town - Events 35th Annual Tulane Business Forum
Jefferson Chamber Port Breakfast
September 18, 2014
September 23, 2014
Hilton New Orleans Riverside
Metairie Country Club Banquet Room
The Tulane Association of Business Alumni, Freeman School of Business at Tulane University and IBERIABANK teamed up to present this year’s business forum, entitled “Taking Flight: Business Leaders Executing Plans for Success.” The forum brought together various business leaders to discuss success secrets and look at best practices. Included among the event’s six speakers was Iftikhar Ahmad, executive director of New Orleans Aviation, Laurie Ann Goldman, former CEO of SPANX, and Wan Kim, CEO of Smoothie King.
At this sold-out morning event, Gary LaGrange, president and CEO of the Port of New Orleans since 2001, shared updates and announcements from the Port, including expansions, rankings, and the economic impact the Port is having on both a local and national level.
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1. Greg Feirn, David Kearney and Rosalind Butler 2. Smoothie King CEO Wan Kim 3. Paul Spindt, James Brown, Walter LeBreton and David Dunlap
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1. Senator Conrad Appel, Rep. Julie Stokes, Frank Quinn and Tony Ligi 2. Gary LaGrange 3. Judy Harrison, Joey Richard and Michelle Breaux
WTC New Orleans Executive Speaker Series
Biz New Orleans Launch Party
September 25, 2014
October 9, 2014
Westin Canal Place Hotel
Little Gem Saloon
The third of four speakers in this year’s WTC New Orleans Executive Speaker Series was Walter Robb, co-chief executive officer of Whole Foods Market. Robb joined Whole Foods Market in 1991 and rose through the ranks to attain his current title in 2010. During the event, Robb spoke about the company’s increasing presence in Louisiana - promising the opening of another store in the near future.
Hundreds of business professionals gathered at Little Gem Saloon for an evening of food, drink and music to celebrate the first issue of Biz New Orleans magazine – New Orleans’ only business magazine. The first issue hit stands October 1 and featured a cover story on GNO Inc. President, Michael Hecht, who spoke briefly at the event, along with Gary Blossman, president of First Bank & Trust - sponsors of the evening. While grooving to music by the Yat Pack, attendees enjoyed heavy hors d’oeuvres and a fivetier cake designed by Cheryl Scriptor, owner of Bittersweet Confections.
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1. Matt Lawless, Scott Lawless and Charles Elliott 2. Walter Robb 3. Dominic Knoll and Walter Robb
1. Tammy and Pat O’Shea 2. Michael Hecht 3. Todd Matherne and Todd Murphy
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Behind the Scenes
“We’ll have several lines of bean-centric products launching in the next year.” - Vince Hayward, CEO
L.H. Hayward and Company, LLC – makers of Camellia Brand Beans ®
L.H. Hayward and Company was founded in 1923 by Lucius Hamilton Hayward to provide beans to the French Quarter Market. Now, Hayward’s fourth generation of descendents, Connelly, Ken and Vince Hayward, run the show. From their 45,000-square-foot facility at 5401 Toler Street in Harahan, the company cleans, processes and packages 17 different varieties of beans, peas and lentils. Their top seller? Red beans of course! 80
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