More than four years after Hurricane Katrina submerged 80% of New Orleans, the Crescent City may be on the precipice of yet another perfect storm.
Local officials and civic leaders say that an economic and social renaissance is underway, thanks to the convergence of a number of factors -- education reform, an influx of young entrepreneurial talent, a motivated labor force, a business-friendly governor and an energetic emphasis on regional cooperation in the wake of Katrina.
Add to that the Feb. 6 election of Louisiana Lt. Gov. Mitch Landrieu as mayor, and -- one day later -- the Saints' first Super Bowl win in franchise history, and many believe the stars are aligning for a city that just a few years ago was nearly wiped off the map.
"The Saints truly are a metaphor for what is happening in this region," said Jerry Bologna, director of economic development services for the Jefferson Parish Economic Development Commission, during a recent familiarization tour for site selectors and the media. According to Bologna, 7,000 new businesses have sprouted in Jefferson Parish -- Louisiana's most populous parish -- since Katrina.
Michael Hecht, president and CEO of the nonprofit economic development agency Greater New Orleans (GNO) Inc., describes the timeline of the New Orleans economy as a three-act play, of sorts. In Act 1, the city experienced "decades of slow decline." In Act 2, Hurricane Katrina brought the city to its knees.
Act 3, in the words of Hecht, is the "redemption story."
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| Michael Hecht, president and CEO, Greater New Orleans (GNO) Inc. |
Lamented Hecht: "We have a 50% reality problem and a 50% perception problem."
Those perceptions are beginning to change. Southern Business Development magazine named New Orleans the 2009 Major Market of the Year, and Forbes.com in 2009 ranked New Orleans No. 8 on a list of top cities for relocation. Thanks to a concerted effort by GNO Inc. to generate positive press for the region, the agency claims that more than 200 articles in the national and international media in 2009 trumpeted the region's strengths.
In February, New Orleans resident and political commentator James Carville wrote an article for CNN.com detailing some of the ways in which the region is building momentum, from the election of Landrieu to the charter school movement. The article's headline declared: "New Orleans is Storming Back."
Katrina: a Defining Moment for the Region
Katrina, which reportedly caused $100 billion in damage, was a defining moment for the region, and Hecht acknowledges that many of the "massive changes" taking place in the 10-parish region were "forced upon us by Katrina."
Some of the effects of Katrina are measurable, some not. There are the billions of federal and private dollars that have been flowing into the region for infrastructure improvements and for the rebuilding of the tens of thousands of homes and businesses destroyed in the hurricane. The jobs spurred by those rebuilding efforts have helped the keep the city's unemployment rate lower than the national average during the recession.
Then there are the intangibles, such as "public and private leadership at the state, regional and local levels" being "more energized than ever before," according to GNO Inc.
Economic development and business leaders also talk about a work force that is more energized. The civilian labor force of more than 650,000 people is touted as one of the region's key strengths, with the median hourly wage rate -- $14.76 -- nearly a dollar lower than the national average. However, while the population is about 89% of what it was prior to Katrina, according to data from GNO Inc., business leaders such as David Kearney have noticed a change in the quality of the work force since Katrina.
"Since Katrina, the labor force has improved dramatically," said Kearney, vice president of Kearney Cos. Inc., a New Orleans-based logistics service provider. When asked why, Kearney replied: "Because the people who are here want to be here."
While the culture, the food and the nightlife always have been a draw to the Big Easy, economic development officials note that Katrina, ironically, has been the catalyst for a new wave of talent migrating to the region. Since August 2005, volunteers and young entrepreneurs from all over the country have flocked to New Orleans to be a part of the rebuilding effort, and many of them have stayed. According to the Louisiana Workforce Commission, the New Orleans metropolitan area gained nearly 100,000 nonfarm jobs between October 2005 and June 2009, and the commission predicts that by 2016 employment in the area will grow 24% from 2006 levels.
Entrepreneurs have found a nurturing environment in New Orleans, and an enthusiastic partner in GNO Inc. In 2009, the agency, along with the nonprofit group Idea Village, refurbished an 85,000-square-foot building in the city's warehouse district and called it the I.P. (Intellectual Property) Building, in hopes of establishing an entrepreneurial hub. The building's 11 tenants include a 3-D modeling company and a disaster management consulting firm; amenities include a caf, a gym and "brainstorm rooms."
Since Katrina, at least three other formal entrepreneurial hubs have been created in New Orleans, according to GNO Inc., and the agency is setting up another hub -- the I.P. North Building -- in Covington, La., on the north shore of Lake Pontchartrain.
"More than an incubator, the I.P. North Building is a place for creative and digital companies to create a community and call home, benefitting from a dedicated space, specialized services and even free media promotion," GNO Inc. says on its Web site.
Enticing entrepreneurs and businesses to call the region home are local and state incentives that "comprise the most robust collection of business incentives in U.S. history," GNO Inc. boldly proclaims. The agency notes that Louisiana Gov. Bobby Jindal in 2009 signed into law over 75% of the legislation on GNO Inc.'s agenda, including a bill that eliminates personal tax on the sale of privately held Louisiana businesses and a bill that extends and enhances the digital media tax credit program.
Hecht noted that New Orleans is leveraging its "historic strengths" -- such as its port system, which is one of the largest in the world -- along with new technologies to reinvent the region's economy. It also is leveraging the lessons learned and business opportunities generated by Katrina.
For example, GNO Inc. recently unveiled an initiative called "GreenN.O.," which aims to "create a new, green industry sector" by leveraging local expertise in sustainable building, water management, clean energy, and disaster mitigation and recovery.
"The bitter fruit of Katrina is it gives us a chance to make lemonade of lemons," Hecht said.