New Orleans — Major national companies setting up shop in the metro New Orleans area is hardly news. Major national companies setting up shop in New Orleans proper? That’s a different story. It’s also what happened several times in 2012.
With the city luring organizations such as GE Capital and Costco and the expansion of several existing businesses in the past year, local business leaders believe New Orleans is laying the groundwork for a new wave of economic development — something they hope will diversify the economy and provide a brighter future for the cash-strapped city.
Aimee Quirk, Mayor Mitch Landrieu’s economic adviser, said the city has several things going for it now that it hasn’t previously: a young, entrepreneurial workforce that came here after Hurricane Katrina, better collaboration between the public and private sectors and a more aggressive attitude toward attracting and retaining business.
“We are on a path. We’ve got great alignment with the public-private sector,” Quirk said. “We are all on a course with a shared vision that makes us very powerful.”
Rod Miller, president and CEO of the New Orleans Business Alliance, the city’s official economic development organization, said a shift in the city’s business climate came in after Katrina.
“Katrina was an eye opener,” he said. “It put us in a spotlight and highlighted our flaws.”
A desire among business leaders to reinvigorate a somewhat stagnant economy based largely on the tourism industry helped spur change, Miller said. Meanwhile, young people who came to town after the August 2005 storm brought with them an entrepreneurial spirit.
That, Miller said, created a pool of potential talent for companies that began to look more seriously at the city as new economic incentives were launched in an effort to attract them.
But is New Orleans just riding a post-Katrina wave of outsiders interested in the rebuilding, which in many cases is coming to an end?
Quirk doesn’t think so. Noting that the city is nearly 10 years out from the storm, the trend seems to be that business here has changed, she said.
Knowing that recent companies moving to the city provide a sense of momentum, the city and business alliance are now in the midst of preparing to launch a strategic plan that will focus on five specific areas that mix high-paying jobs with more plentiful modest jobs:
Michael Hecht, president and CEO of Greater New Orleans Inc., an economic development alliance that serves a 10-parish area in southeast Louisiana, said that the strategic plan sends a message to the country that New Orleans has gotten serious about its economy.
“The new New Orleans is different in real and positive ways from the previous incarnation,” Hecht said. “Given that the No. 1 enemy of business is uncertainty, these measures create a structure and plan and framework ... for the community,” Hecht said.
While there has been much work done behind the scenes to foster a new attitude toward business in New Orleans, a stigma of a corrupt city with a high crime rate, failing schools and little to offer as a return on investment might be a bit of a hindrance, according to one economist.
“We still have a perception problem,” said Janet Speyrer, associate dean of research and professor of economics at UNO.
The reality is simple, Speyrer said: to truly turn the corner, New Orleans will need to ensure that multiple new high-wage businesses continue to relocate here, showing that it is a new city.
While New Orleans landing something such as Costco can create new jobs, they are lower wage, and the store isn’t an automatic boon to the local economy since, she said, it can often just make consumer shift spending from one business to another, rather than spending more money. And while companies such as GE are also great additions, its workforce of about 300 people can’t quite boost a city’s entire economy.
Quirk said the city realizes that it needs to keep courting those types of enterprises to make a real difference, which is why it has developed the five-point strategic plan. She also pointed out that efforts to grow retail in the city and improve quality of life have been successful in 2012 with the construction of the Mid-City Market and Algiers Plaza, two shopping centers with various outlets in their respective namesake neighborhoods.
In 2013, a proposed new shopping center in South Claiborne Avenue Central City will go before the City Council in hopes of allowing ground breaking in the not-too-distant future. Officials also hope to see some action taken on a proposed outlet mall at the site of the former Six Flags theme park in eastern New Orleans.
In the meantime, Quirk said, growth often “begets more growth and wealth creation throughout the city.”
Hecht said that ongoing discussions with businesses interested in the city could prove to be yet another nail in the coffin of the city’s past profile if new deals are finalized this year.
“What I believe is we are two or three major companies away from New Orleans hitting critical mass in terms of being a tech hub,” Hecht said. “We have companies now like Gameloft and GE. Two or three more and I think we’ll turn the corner and be mentioned in the same sentences as Austin and Seattle.”
While there have been recent victories in on the business front, Quirk admits it will take some time for residents to experience effects of the recent efforts to revive the economy.
“It’s all incremental,” Miller said.
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