Locals make dipping sauce from Cut Off
October 1, 2013Lockport pool gets council OK
October 1, 2013
For nearly a decade, Terrebonne Parish’s economic development agency has shepherded loans, aided small businesses, sought to recruit new industry and worked to retain businesses already located here.
But Parish President Michel Claudet proposes gutting the Terrebonne Economic Development Authority’s finances and placing its duties within the parish’s Planning Department. The surprise move has prompted outcries from some politicians, business owners and community advocates, and the resignation of TEDA’s executive director.
Claudet has publicly offered no clear reasons; TEDA Executive Director Steve Vassallo says he is at a loss to explain why.
“We thought we were setting the world on fire,” said Vassallo, who took over the reins of TEDA in 2011.
The events have sent shock waves through Terrebonne Parish, with TEDA partisans both on and off the record alleging that Claudet’s unilateral swipe is rooted in personal pique. Claudet supporters – unwilling to speak publicly or have their observations attached to their names – say long-standing suspicions of problems at TEDA made the move necessary, and that they have no doubt it is in the best interests of Terrebonne Parish.
Parish officials, business and civic leaders as well as present and former TEDA employees and board members shared some of their insight in dozens of interviews last week, but in most cases only on condition that their names not be used.
A single truth emerging from conflicting accounts given from all sides is that the relationship between the parish government’s administration and TEDA is at best star-crossed, and that communication between government officials and TEDA has been less than open.
Claudet’s intentions – kept under wraps for more than a month – were made public when he introduced his 2014 proposed budget to council members last week.
“Fiscal Year 2014 will see Terrebonne Parish Consolidated Government refocus our efforts on continued growth and diversification of the local economy,” Claudet’s introduction to the budget states. “With this in mind, our proposed budget will discontinue funding the operations of the Terrebonne Economic Development Authority and re-establish economic development activities as part of parish government. We feel that this new structure will allow for greater efficiencies and outcomes in the parish’s business retention and attraction efforts.”
The issue is significant for taxpayers and business owners because it could mean changes in how certain loan and grant applications are handled, choices of future development projects and the continuation or elimination of programs already underway.
Neither TEDA, its staff nor board members are alleged to have violated specific laws or regulations. But the interviews give strong indications that at certain levels within the business community there is displeasure with how the organization has functioned.
CLAUDET LAUDED
Claudet’s planned elimination of TEDA funding, despite his failure to explain the reasons behind it, is accepted within segments of the business community because of the respect many of its members have for the parish president.
“Michel Claudet has been an exceptional parish president, a business person, a lawyer, and I don’t think he does anything lightly,” was what one industry leader said. The view was echoed by many others.
The first public hints that problems were afoot surfaced last Monday – two days before the Claudet bombshell – during a meeting of the Parish Council’s Community Development and Planning Committee. Vassallo was scheduled to present a semiannual report on the agency’s accomplishments. After doing so he addressed the council, informing them that he learned Claudet was preparing to pull TEDA’s plug.
Vassallo, who feared personality conflicts between himself and Claudet might have resulted in problems for the organization, said he had already given TEDA chairman Clarence Williams his formal resignation from the $100,000 per year position he holds.
He then presented a copy of his resignation letter to committee chairwoman Arlanda Williams.
After an emotional response, Williams said she would not accept the resignation. Councilwoman Christa Duplantis expressed anger that TEDA and Vassallo were under attack.
The resignation, however, is not for Williams or the council to accept or reject. Vassallo’s contract with appropriate notice can be terminated at will. Approval or rejection – even by the TEDA board – is not needed.
DEJA VU?
In addition to the very public resignation announcement, Vassallo had orchestrated a chorus of people to come to that meeting and speak on TEDA’s behalf. Among them were attorney Joan Malbrough – who owns the building TEDA rents as its headquarters on Roussell Street – and the manager of the Marriott Courtyard hotel, which is Vassallo’s home.
Other speakers expressing support for the work TEDA has done included Houma attorney Bubba Watkins. In addition, Vassallo came armed with written testimonials from business owners who said they have been helped by TEDA’s efforts.
When addressing the council Vassallo made clear his suspicions that difficulties with Claudet were about to lead to the demise of TEDA.
Claudet himself said nothing as the drama unfolded, giving not a clue of what he would present two days later.
The dramatic announcement of Vassallo’s resignation and the passionate testimonials given by supporters were not unprecedented.
In 2011, when he held a $100,000 annual contract to do community development for the town of Pagosa Springs, Colo., a resignation letter blaming negative media coverage of difficulties involving projects there was read aloud at a public meeting and supporters of Vassallo read prepared statements lauding the work he had done.
In that instance – in a position he had held for less than a year – Vassallo was accused of interest conflicts, including handling community development projects for other jurisdictions while also working for Pagosa Springs.
Vassallo says there are few similarities between the Pagosa Springs debacle and the situation in Houma. Pagosa Springs was already split on its community development plans. By Vassallo’s reckoning there has been little such rancor in Terrebonne.
PRAISE FOR CEO
Despite the negative experience in Colorado, others who have worked closely with Vassallo are highly complimentary.
“He has done a marvelous job for us and he was very, very effective,” said Mary Hawkins Butler, mayor of Madison, Miss., where Vassallo’s community development work won accolades.
The Colorado issues as well as other criticisms of Vassallo were considered by the TEDA board as well as the Terrebonne Parish Council during the selection process, but Vassallo’s credentials won out.
The selection process – which itself drew controversy – was necessitated by other TEDA issues predating Vassallo’s selection and arrival.
The agency’s former director, Mike Ferdinand, left under a cloud in 2010. Disagreements with management style were publicly cited, and TEDA board members at that time said the firing was not related to an EEOC complaint brought by a former employee against Ferdinand.
Vassallo’s upbeat style, open communications and cheerleader attitude has been cited by business owners and some government officials as key to TEDA’s effectiveness. Detractors say the upbeat approach, however, is long on publicity but short on substance.
The projects that Vassallo touts as indicative of TEDA’s success are seen by some personalities in government and business to be less than desirable.
Among the issues is the establishment of a cooperative agreement between TEDA and the province of Weihei, China.
“TEDA is the only economic development authority in the state to have established such a partnership with mainland China – and, with Louisiana already being the fourth largest exporter to China among the 50 States, we can expect trade with that nation to increase dramatically in the coming year,” Vassallo said at a banquet last year sponsored by Shell Oil, celebrating relations between Louisiana and China.
COOL RESPONSES
On the surface, elements of parish government appear at least warm to the plan for future business between the Good Earth and the Chinese province. Parish Planning and Zoning Director Pat Gordon has been a supporter. Claudet has been supportive although some of his public comments have been guarded.
The Chinese deal rubbed some people in Terrebonne the wrong way, in large part because of sensitivity over shrimp imports from that nation. Terrebonne seafood processors and fishermen were among those who brought a successful trade action against China in 2004, seeking tariffs from that nation and others accused of violating U.S. trade laws and driving down the price of domestic shrimp unfairly.
Critics say TEDA did not take into account the level of sensitivity plans to export local products to China might bring.
There are also questions about how supportive local officials were of TEDA’s Entrepreneurship Fest, where budding and experienced business owners could get tips from the pros to aid their success. The event drew more than 500 participants from throughout the state.
But parish government support – from the executive branch – appeared thin. Claudet, who was invited to attend, did not do so.
10-YEAR HISTORY
Disenchantment with TEDA’s direction has been attributed to business leaders from organizations like the Terrebonne Chamber of Commerce and the South Central Industrial Association.
Leaders of those groups have declined comment, although some of them – such as SCIA director Jane Arnette – were instrumental in the creation of TEDA.
At a U-shaped conference table on the third floor of Houma’s Whitney Bank Building, on an afternoon in 2003, business and civic leaders completed the long-suffered task of birthing an agency to shape the commercial future of Terrebonne Parish.
The Terrebonne Economic and Development Authority was then created by a state statute, a local bill proposed by then-state Reps. Reggie Dupre and Damon Baldone, after a great deal of political wrangling.
“I was so very excited,” said former President Bobby Bergeron, on whose watch TEDA was created. “To diversify the economy is why we put TEDA together. At that time economic development was an alien landscape for us.”
What economic development was achieved occurred through a division of parish government.
Former Terrebonne Parish Economic Development Director Mart Black, who now works in private industry, was among the architects of the fledgling organization.
“I handed the work off, sort of like you would hand off a football,” Black said, recalling the inception of TEDA.
The legislation creating TEDA offered the parish an option of funding the agency through its occupational business license fees, which were raised in price by 100 percent to accommodate the funding scheme.
The agency’s 2012 revenues of $853,078 were supplied mostly by those fees, of which TEDA’s share was $673,491. The remainder of revenue was derived from grants and administration fees for loans and other services.
Salaries took up $383,988 for 2012; contract services $86,585; and travel, training and trade shows $28,185.
Salaries ran $443,646 in 2011; the difference is attributed to layoffs of personnel after Vassallo’s arrival.
The travel and trade show expenses were significantly higher than the year before, which saw $7,827 in such payouts.
DIVERSIFIED BOARD
Among the political issues that dogged creation of the agency was how its board would be made up. Questions of diversity were answered by the eventual inclusion of nominees for board spots by the local branch of the NAACP.
When the parish council eventually approved the plan, the makeup up the TEDA board was to be 12 members, one of whom would be non-voting.
The parish president would have one appointment; the parish council has two appointments. One of those would come from a list of two nominees from Terrebonne’s National Association for the Advancement of Colored People.
There are three people who would be appointed by the council from a list of six nominees submitted by the Houma-Terrebonne Chamber of Commerce, with one of those spots reserved for a black person.
Three appointments are made from submissions made by the SCIA, and one of those must be female.
L.E. Fletcher Technical community College nominates two people and submits those names to the parish council, which appoints one of them. The Terrebonne Parish School Board submits two names, one of whom is appointed.
That TEDA has made great strides in outreach and service to minority-owned businesses is clear in its statistics and records.
That’s one reason why community leaders, like NAACP President Jerome Boykin, are mystified by Claudet’s plan.
“TEDA has done an outstanding job,” Boykin said.
MINORITY CONCERNS
Data submitted to the state by TEDA for 2012 shows that of 389 individuals or businesses receiving assistance, including loans or loan applications, and business plans, 83 were black or Latino. A total of 36 of the people receiving service declined to state their ethnicity.
“That’s what I would consider an excellent report card,” Boykin said. “When you have an organization that goes out of their way to assist everyone, especially disadvantaged businesses, it is positive for the community.”
TEDA’s staff – consisting of Vassallo and three other employees – has a 50 percent minority makeup.
TEDA’s critics – insisting on anonymity – offer as their understanding of Claudet’s reasons blanket and vague statements that, in essence, say the agency is not operating effectively.
The semiannual report submitted by Vassallo to the council last week – a requirement of the enabling legislation – was long on generalities and short on nuts-and-bolts numbers.
But Vassallo supplied detailed financials when asked for them by the Tri-Parish Times.
He credits the number of jobs attributable to TEDA’s involvement at 403; jobs retained at 2,080; businesses receiving technical assistance, 150; businesses receiving direct information or explanations of Louisiana incentive programs, 50; advanced referrals regarding state tax incentive programs, 24.
EFFECTIVE TEAMS
Prior to Vassallo’s arrival, TEDA aided Weatherford by assisting in talks with the state, which wanted to rescind a $1 million grant because of its inability to deliver on jobs pledged. That inability, Vassallo notes, was due to hurricanes and the Deepwater Horizon spill than any fault of Weatherford’s.
As for TEDA’s effectiveness, Vassallo also points to Gov. Bobby Jindal’s praise of the agency, for its involvement with the opening of Standard Crane & Hoist LLC. TEDA, the governor said, should be thanked for bringing the company to Terrebonne rather than allowing it to leave the state. The parish government, along with the South Louisiana Economic Council, also were instrumental in the placement of Standard, according to information from Jindal’s office.
Critics – again, asking not to be identified – have cited a lack of metric data to show the agency’s effectiveness, including details on how many individual contacts were made in attempts to bring business to Terrebonne. Vassallo counters that in economic development, numbers like website visits – which according to TEDA’s most recent report were exceptionally high – are an important measure that critics may not be counting.
“It is easy to ignore something if it doesn’t support what you are trying to say,” Vassallo said. “Unique visits was right at 41,000 for the Web site for the last 12 months.”
The web visits translate into greater development potential, because, according to Vassallo, the websites are businesses and industries do their initial shopping.
The only other criticism that has emerged so far of TEDA has involved concerns voiced by former employees to parish officials of favoritism in grant and loan application handouts. People alleged to have close ties to some TEDA staff members or board members, according to critics who refuse to be publicly named, have been more apt to receive assistance.
Vassallo and the organization’s first vice president, Donna Washington, were asked directly about those allegations.
“Utter nonsense,” said Vassallo, who provided grant and loan records that could legally be shared without violating confidentiality requirements. Washington also stated that there was no truth to the allegations.
RACIAL TINGE
Boykin, when informed of the clandestine accusations, suggested that TEDA’s sparkling record regarding diversity could have made it a target of the budget ax.
“If a parish official or anyone else had evidence the TEDA board did anything wrong or illegal they would have come forward, and the reason they can’t come forward is there is no evidence there,” he said.
If there are any inappropriate dealings at TEDA they have thus far escaped the notice of auditors, who have repeatedly given the agency a clean bill of health.
Interviews this past weekend produced verifiable information that Claudet is privy to some of the complaints, and that council members Danny Babin and Red Hornsby are also aware of them, and may have initially brought them to Claudet’s attention.
Strong evidence does exist that Vassallo has been a lightning rod of sorts concerning criticism of TEDA.
Criticism of Vassallo or questioning of his commitment to Terrebonne Parish has been confirmed by some parish officials who spoke on condition of anonymity.
SHAKY ROOTS
Vassallo acknowledged that he does not own a home here. His wife left Terrebonne to take a position in Mississippi, after social and occupational rejection here.
Vassallo said he and his wife have done their best to take part in community events and organizations.
“Personally speaking, it is true Rosie and I did not purchase a house in the parish upon arrival, as we were still paying a mortgage in Madison, Miss., for a house we were trying to sell that was vacant,” he said. “In addition, we owned four other residences in Oxford. What I did do upon arrival was purchase a $35,000 vehicle from Greg Leblanc Toyota; rented a very expensive townhouse for two years from Mona Christen, which aided the community; joined Rotary and (a Mardi Gras) krewe.”
Rosie Vassallo joined Kiwanis and was named Kiwanian of the Year in 2012 and volunteered for the Manning Passing Academy and Women’s Business Alliance. The Kiwanis experience, Rosie Vassallo said, was enjoyable and rewarding. The club’s members, she said, were particularly welcoming. The rest of Terrebonne, she affirmed, was not.
The couple gave up their condo and Vassallo now lives at the Marriott. He acknowledged that with a three-year contract, he did not feel comfortable putting down realty roots.
Critics have said that someone paid to be the parish’s biggest cheerleader can have credibility problems when he himself isn’t investing a piece of the Good Earth’s earth.
“I have never heard of an economic development director losing a deal because he did not own a home in the community,” said Vassallo.
MORE DISTANT VIEWS
Asked if a direct challenge to a popular parish president – as occurred during last Monday’s meeting – was in TEDA’s best interest, Vassallo noted that an independent economic development agency free of political and government restraints was the intention of TEDA’s founders, and for good reason.
“There are things the agency can do that local government cannot,” he said. “Documents and information relating to development, which are considered open in the parish government sense, are not necessarily disclosable by an economic development agency.”
Economic development experts in Louisiana and other localities say it is often difficult for communities, especially those with entrenched business communities whose bases extend generations, to accept outsiders in such a crucial role.
Terrebonne’s economic development efforts have unarguably won recognition throughout Louisiana and elsewhere. Business people, including Bobby Bergeron, say they have been told of TEDA’s perceived successes when they travel to other towns.
David Tatman, former CEO of the Louisiana Industrial Development Executives Association, said he is familiar with the mark Terrebonne is leaving in economic development. It is consistent, he said, with the forward movement of Louisiana in general.
“They were one of the local economic development groups, and all of our groups were very focused on trying to bring jobs and eco development to their regions,” Tatman, now a private consultant, said of TEDA, acknowledging that in years gone by new development ideas were a hard sell in the state, but that the situation changed. “LIDEA played a big part in changing that mentality. From an economic development standpoint Louisiana is ahead of the curve. In this highly competitive global market you have to be on top of everything. In Terrebonne and that area there is a level of sophistication in terms of the economic development efforts that is broader than any one professional. The projects you are working on today are the projects you want to land in three years. There is a strong economic development effort with a lot of industries working collaboratively. We are not just competing against Mississippi or Alabama but against China and North Korea. We have to look at the impact natural gas has had on our economy and projects involving liquefaction.”
Terrebonne or any other parish, in Tatman’s view, could conceivably succeed by running its economic development efforts internally. It all depends, he said, on the talent that is hired.
BOARD WEIGHS IN
If Vassallo himself is a reason for Claudet’s plans to defund TEDA, there is no evidence of such awareness among board members, at least not those who returned calls.
Don Hingle, regional president at First Business Bank, has been mentioned as a Vassallo detractor who has Claudet’s ear. But he did not return phone calls.
He was a booster of Vassallo when the CEO was first appointed. Over the past year, however, minutes indicate that he has had serious questions and reservations about alterations to Vassallo’s contract, including a liberal discretionary travel allowance and a raise.
Lori Davis, president and co-owner of Rig-Chem, finds it difficult to assess Claudet’s proposal, and needs to know more about the direction the parish president wishes to go in. If she has reservations about how TEDA has performed, it has not evinced itself in boardroom discussions or other documented records.
“Terrebonne Parish is doing great as a community,” she said. “Everywhere I look there is new construction, people moving in, a lot of things that are happening. Would that be happening with or without TEDA? That is one of the questions we need to ask. Was TEDA the catalyst? All of these new businesses, is that the result of our industry, the desire to live here, the demographics?”
In an interview Davis questioned whether a globalized direction is in the best interests of the parish, noting that “it is important to take care of the businesses we have, to see that the infrastructure and education will be able to support what we have. We have a shortage of workers, of skilled labor, and I wonder if bringing more business from the outside, on a global perspective, are we able to support that kind of growth? You can outgrow yourself; you can grow too fast. Some of the things we are looking at are the result of reality and some things are not. I question some of our decisions related to China. I know we have a responsibility to continue to ask questions.”
Another board member, Synde Devellier, said she assumed the positions TEDA has been taking and its priorities are what the parish, as well as the chamber and SCIA, were supporting.
“I think we could do something better with communications and that it could go both ways,” she said. “If we are not satisfying their needs they need to communicate it, instead of through rumors and gossip. Let’s talk about it and address it. Could we do more? I am sure that we could. But we all have to come to the table and communicate what it is we are wanting to do. The entrepreneurship festival was nice. It was something hands-on. It is something new and I think more businesses new and old should or could benefit from that. The China issue we will have to take slowly, it is a faraway thing and we are in the process. Planning ahead, what exactly does the parish or the Chamber or SCIA want or need?”
Devellier was distressed by the harsh feelings evinced during last Monday’s council committee meeting.
“I came but I forgot the popcorn, I didn’t know it was going to be such a show,” she said. “I left with a stomachache.”
Another board member, Robert LeBlanc, said he sees the proposal from Claudet as a reflection of the board’s performance.
“It had been recommended by some consultants to keep economic development outside the parish government, to keep it independent,” LeBlanc said. “And I think it ought to stay that way.”
PRESIDENT’S PROPOSAL
Claudet’s proposal is an obvious product of thought and planning, and there are no indications it was dreamed up overnight.
The plan calls for three staff positions.
They are a senior planner with a salary range of $61,000 to $96,000; a marketing manager with a range of $42,000 to $66,000 and an administrative coordinator with a salary range from $25,000 to $40,000.
The budget for the economic development department is proposed at $626,080 for 2014.
Performance, the plan reads, will be based on percentage metrics with an emphasis on partnering with Greater New Orleans Inc., a development and advocacy organization that is already closely working with Terrebonne to get federal flood insurance rates lowered.
Why the TEDA approach is in his estimation broken and, therefore, requiring a fix, has not been shared by Claudet, though some parish council members are eager for answers to those questions.
If Claudet’s plan as part of the budget is eliminated by the council – a vote that could be a close one either way – he can still veto their decision.
And an override of that veto, even the strongest TEDA adherents say, is not likely.
At least two council members, Danny Babin and Red Hornsby, appear squarely in Claudet’s corner on the economic development question. Arlanda Williams and Christa Duplantis are clearly opposed.
Council Chairwoman Beryl Amedee is among those who have not made a decision either way.
“I plan to study this and I plan to ask a lot of questions,” Amedee said.
VOTERS COULD SPEAK
Elimination of TEDA’s share from the occupational license fees is the only action the parish can take against the agency. If that occurs there is still an opportunity for it to be saved, since the legislation enabling it allows voters to enact a millage to support it.
For that to happen, the council must vote for the matter to come before voters in a special election. Terrebonne voters have proved that they are quite picky about what services they will choose new taxes for, and there are no indications that a TEDA tax would win support.
“I am not in favor of duplication,” Amedee said.
Meanwhile, Vassallo says he will continue to campaign for TEDA to remain viable and that he, like a lot of other people, is awaiting more detailed explanations as the budget process moves forward. His focus now, Vassallo says, is rooted in a desire to save the organization and has nothing to do with his own position.
If there is any program whose administration has negatively affected TEDA’s effectiveness, he said, it is a federal loan program administered through the state which has cost the agency a “massive expenditure or hours.” That time has been at the expense of other outreach TEDA could have done, Vassallo said, but the agency’s involvement in it was cemented in place before his watch.
“My years of experience in economic development would not have allowed me in good faith to implement this program into TEDA had I been here at the time,” he said. “Hindsight has proven this assessment correctly. TEDA actually worked with 682 individuals and businesses via this program.”
Among the “wins” for TEDA cited by Vassallo is the invitation given to Schottel Inc. to expand into the parish.
“We worked with them throughout the entire year to assist in making this happen,” Vassallo said. “The CEO could not have been more complimentary of TEDA’s efforts. Michel Claudet was a guest the day of their announcement and heard their presentation. This manufacturer is locating on the east side of Houma.”
It is safe to say the love is gone between resigning TEDA director Steve Vassallo and Terrebonne Parish President Michel Claudet. But just over two years into Vassallo’s three-year contract, many are asking, ‘What went wrong?’
