Mega Projects Lift New Orleans Economy
It may have been battered by Hurricane Katrina and the Gulf oil spill, but New Orleans' economy is more vibrant than ever. Here's why companies are selecting the city for their large-scale projects.
Area Development Research Desk (March 2011)
New Orleans has recently found itself on several roundup lists. New Geography called it America's Biggest Brain Magnet. Forbes placed it in the top 10 cities for relocation. And Fast Company named it a global Fast City. So New Orleanians were surprised to see the city leading another roundup: Newsweek's list of America's Dying Cities.
New Orleans' population declined by 27 percent from 2000-2009, according to Census data. Michael Hecht, president and CEO of Greater New Orleans, Inc., says that while data considering 10-year-plus periods reveals a population drop, over the past three years, the city has been making a stronger comeback than ever.
"Louisiana has had three years of net in-migration for the first time in decades," Hecht says. "Today, more diverse businesses are moving to New Orleans than in years."
The state is a strong partner in that revitalization. "What's happening is combination of policy reforms, pro-business reforms at the state and local levels, combined with aggressive business recruitment efforts," says Louisiana Secretary of Commerce Stephen Moret.
Uptick in Expansions
While New Orleans' population had been declining since the 1960s, Hurricane Katrina resulted in a sudden mass migration. The 2010 Gulf oil spill further damaged business. But over the past several months, a number of companies have announced major expansions that are collectively creating thousands of jobs.
Last year, Folgers announced a $69 million investment in its Orleans and St. Tammany Parish facilities. In July, Globalstar, a satellite voice and data company, said it would move its corporate headquarters to nearby Covington and create more than 500 jobs by the end of 2019.
Later in the year, Blade Dynamics selected New Orleans' Michoud Assembly Facility for a wind turbine blade and component facility that will add 600 jobs. In a speech at the opening, company Head of Sales Theo Botha said, "The opportunity for establishing high-quality industrial manufacturing in a technology-friendly environment with fantastic logistics and, most importantly, a willing, dedicated, and skilled work force, is a dream ticket for our business."
Nucor selected nearby St. James Parish for a new iron production plant that that could create 1,000 jobs. And Diamond Green Diesel, a renewable diesel fuel producer, will locate in nearby Norco. The U.S. Department of Energy awarded the project a $241 million loan guarantee.
Why New Orleans?
Hecht says what he calls "the three C's plus the L" - cost, cash incentives, culture, and leadership - attract business to New Orleans. For large-scale projects, the combination of available sites, excellent cost structure, and New Orleans culture are alluring.
Aggressive state and local programs have also brought companies to New Orleans, especially Louisiana's Fast Start job training program. "[Businesses] say the quality of it is so high that it allows them to save money by outsourcing training," Hecht says.
Botha concurs. "The [Fast Start] team's obvious capability and track record was a big factor in establishing credibility that promises would be delivered and that we would hit the ground running," he says.
"All our Fast Start team does is major expansions and new startup manufacturing facilities," Moret says.
New Orleans is accelerating its commitment to business. The recently formed NOLA Business Alliance, local jobs website WorkNOLA.com, and the influx of young workers are writing the city's revitalization story.