A conversation with. Michael J. Olivier, Secretary, Louisiana Economic Development
"We are prepared to invest in the new economy, particularly in the sectors of energy, heavy manufacturing, and petrochemicals. In heavy manufacturing, we are among the top states in the U.S. in terms of shipbuilding."
A. We have been in a recovery mode since Hurricanes Katrina and Rita. With the help of the federal and state governments, our businesses are starting to recover. The extraordinary Gulf Opportunity Zone Act (GOZA) gives Louisiana the authority to issue approximately $7.9 billion in tax-exempt private activity bonds to finance the acquisition, construction and renovation of nonresidential (commercial) property, qualified low-income residential rental housing, and public utility property located in impacted areas. The accelerated depreciation feature allows businesses who are repairing, renovating, or buying buildings in the zones to claim an additional first year depreciation reduction equal to 50 percent of the cost of new property investments made in the zone. The act also increased New Markets Tax Credit to $1 billion.
Q. Are you focusing on specific sectors?
A. We are prepared to invest in the new economy, particularly in the sectors of energy, heavy manufacturing, and petrochemicals. In heavy manufacturing, we are among the top states in the U.S. in terms of shipbuilding. A General Motors assembly plant has been here for 30 years, long before assembly plants become popular. In petrochemicals, 27 percent of the natural gas in the U.S. moves through Louisiana, some offshore and some onshore, and we are one of the leading crude oil-producing states. Marathon Oil in St. John Parish has announced a $3.2 billion expansion, and Valero is expanding by $800 million in St. Charles Parish. We also have more than 90 chemical plants, and are a major supplier of organic and petrochemicals in the United States. In addition, Louisiana Economic Development is in discussion with a number of biofuel and ethanol-related projects; nine liquefied natural gas terminals are currently on the drawing boards.
Q. Any additional areas being explored?
A. Investments are also being made in biosciences. Over five years, Louisiana has invested $30 million in three wet labs, in Shreveport, Baton Rouge, and one soon to be constructed in New Orleans. Transportation logistics is also very important to transport our commercial products. We are the largest importer of rubber, and a major importer of steel and coffee in the United States through the Port of New Orleans.
Q. How are you keeping up with the demands of high technology?
A. We are diversifying by making strategic investments. As a result of the Louisiana Optical Network Initiative (LONI), Louisiana will take part in the LambdaRail next generation Internet network. We are making a $47 million investment to transform the research capacity of our educational institutions. The fiber network is expected to have the same effect on our nation's technological development as the interstate highway system has had on interstate commerce. LONI's participation in LambdaRail will route the developing computer highway through Louisiana and along the Gulf Coast, where before it would have bypassed this region. Also, a $27 million investment at the University of Louisiana at Lafayette in the Louisiana Immersive Technologies Enterprise (LITE) project includes the SGI Center for Innovative Research and Advanced Visualization. The 70,000-square-foot facility, which is the only one of its kind in the world to offer advanced visualization services and supercomputing at this time, opened [last November].
Q. How is your economic development department different from other states?
A. Demonstrating our professional competency, we are the first statewide economic development organization to achieve both ISO 9001certification and to receive Accredited Economic Development Organization (AEDO) status from the International Economic Development Council.
Q. Is the post-hurricane strategy working?
A. It is important that we promote our recovery. We lost about 11,000 businesses; mostly small businesses were the victims. But we are seeing results because of our no-interest loan programs, and a recent grant program with up to $100 million geared towards small business development and retention. Entering 2007, we are approaching 100 prospects, representing $9 billion in value of new commercial investments and 17,000 net new jobs.
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