Alfred Stewart
May 25, 2007Yvonne Knudsen- Smith
June 1, 2007
Sen. Butch Gautreaux, D-Morgan City, plans to introduce Senate Bill 33 this coming Thursday at the regularly scheduled transportation meeting, if not sooner, which he feels will have the full support of the Terrebonne Economic Development Authority (TEDA) and the Terrebonne Port Commission.
The bill, if passed, would redefine the Terrebonne Port Commission’s current powers of expropriation to ultimately deal with situations like the one with South Carolina-based L-M Limited Partnership president Porter Baron and his seemingly derelict 1,800-acre site in Gibson along Bayou Black.
A breakdown in negotiations with Baron for his land for the purpose of economic development, have only acted as a catalyst for the legislation.
“This is not aimed at Porter Baron, but had this whole situation not come up, then we probably would not have scrutinized the current law,” said Gautreaux.
Terrebonne Parish, as a whole, could benefit from Baron’s land if companies can get a chance to develop it.
The Terrebonne Port Commission port director Rabalais said the last company that looked at the land through TEDA could have brought 400 to 500 non-oil field jobs to the community.
And it was the second company that wanted to locate to his property, since Baron came to parish government wanting help to sell his property.
The property, which is near the Assumption-Lafourche border, offers railway, highway and waterway access. It is also near two power substations owned by different power companies, SLECA and Entergy.
Senate Bill 33 defined
The bill, if passed, would change the current law in a minimal, but powerful way.
The current law limits the Terrebonne Port Commission’s power of expropriation, barring the Port Commission from expropriating any land with an existing facility.
If the bill passes, certain existing facilities could be up for grabs. Under the proposed new law, the Port Commission would not be able to expropriate existing fabrication, shipbuilding or seafood handling facilities, which have been operating for two years immediately preceding the filing of an expropriation petition.
This means if a facility doesn’t fall into the categories of fabrication, shipbuilding or seafood handing and hasn’t been operating for two years preceding the filing of an expropriation petition, then the Port Commission will be able to take the property, paying the land owner fair market cost.
The Port Commission authored Senate Bill 33.
Rabalais said he’s happy with the wording of the bill and doesn’t think it opens up a lot of property to expropriation. If anything, he thinks the bill decreases the Port Commission’s ability to expropriate more than it increases it.
“Before it [law] was very broad, very vague. Now, it gives it a more definite scope,” he said.
Rabalais also said it had been a while, since he read the bill.
The bill, with its eerie similarity to eminent domain, has left some unsettled, including Laurie Shannon, a member of TEDA’s board of directors.
“I just don’t believe in expropriation, specifically for economic development. I don’t believe in expropriation for almost any reason, almost,” said Shannon.
TEDA CEO Michael Ferdinand said he had no comment on the bill and doesn’t know if the bill would even open Baron’s property to expropriation by the Port Commission.
“It’s legislation. It’s what was put forward,” said Ferdinand.
Porter Baron has his own opinion on the bill.
“The best I can say for that kind of taking of private land for private purposes is that it’s tyrannical. It’s socialistic if not communistic. From the land owner’s point there’s little practical difference,” said Baron. “And I do hope the legislature doesn’t approve it.”
Gautreaux said the bill will probably undergo some amending.
“Whatever gives the greatest amount of comfort to those involved, then that’s what we want to do,” he said. “I think it will pass this year, because it’s got the support of local government.”
Gautreaux said Ferdinand and Rabalais would be on hand to speak on the bill when it’s introduced.
Sen. Reggie Dupre, D-Houma, is the bill’s co-signer.
Porter Baron’s Perspective
Baron said he and his company are being targeted by Senate Bill 33 and he thinks Gautreaux bears much of the responsibility for the bill.
“I don’t have anything against Sen. Gautreaux,” said Baron.
Baron said he respects the senator, citing the fact he came down to Morgan City sometime after Katrina for a Sen. Gautreaux appreciation day.
He had plans to attend the festivities, but became ill and stayed in his hotel.
He said he sent a check to Gautreaux and told the senator he had a lot of respect for what he had done after Katrina to help people.
“If he thinks this is best for Louisiana, I respect him for doing what he thinks is best for Louisiana,” said Baron. “I, nevertheless, am opposed to it because I think it sets a very bad precedent. We’re meant to be a democratic republic.”
Baron said if his property is expropriated much of it will be used for private industry tenants.
Both the Port Commission and private companies through TEDA have expressed interest in purchasing Baron’s land. And talks have ranged from purchasing a 300-acre pairing of two side-by-side tracts to the entire 1800-acre property.
Baron refused to talk dollar amounts, but gave indications he wants a lot for his land, given his perception of the market.
“It’s a very unusual piece of property nowadays, simple because most of the waterfront that is even remotely comparable to that property is developed,” said Baron.
He said he has driven up and down the coast from Florida to the Texas-Mexico border looking for waterfront properties suitable for industrial use and found there isn’t much left to be had.
He also said he spent time looking in court houses at conveyance records for similar properties, as well as looking at market conditions over the last two or three years, to come to his asking price, which Gautreaux has put just over the $100 million mark for the 1,800-acre property.
For the purpose of property taxes, Baron’s land has been assessed around $20 to $24 million with another assessment scheduled for the near future. But until recently, his property had been assessed at just $2 million.
Baron, however, has not had the land appraised and said an appraisal isn’t always necessary.
Rabalais said Baron won’t even allow anyone on his property to even do an appraisal.
“When I bought a house, I didn’t have an appraisal made. I bought the house, the first house I ever bought. I made a deal with the owner and lived up to it and then later on got financing when I decided I can’t do this by myself. Then I got an appraisal so that I could get financing after the purchase,” said Baron. “A lot of deals are done that way.”
Baron said he is aware of the Port Commission hiring an appraiser. And he doesn’t endorse the Port Commission’s appraisal of his land.
His fear is that if he endorses the appraisal, he would be indicating acceptance under the law, meaning the state could expropriate his property.
“We’re not really interested in doing an appraisal. However, since the Port Commission is doing one, we may have to do one in order to protect ourselves against any sort of difference of opinion that our appraiser, if we had one, might have with the Port Commission’s appraiser,” said Baron. “If we do it, it will be an action in defense.”
The action in defense could also see Baron and his company getting more money for the land they would otherwise, if it were expropriated.
Does he really want to sell his land?
Baron was clear. He wants to sell his land.
“We’ve been wanting to sell that land, since before I was involved in managing the L-M company,” said Baron.
But, no one else seems to be taking him seriously, anymore.
“Obviously when you’re asking for three and four times the value of a property, then you’re not a willing seller,” said Gautreaux. “And I don’t deny anybody an opportunity to make whatever they can make. That is a free market. But when you price to sell well above any point of negotiation, there’s obviously no point in even asking for a negotiation.”
Rabalais points to the fact Baron changes his asking price when an interested party is brought to the table.
“He approached the parish government to sell the property for them. He’s got a sign up on his property that it’s for sale,” said Rabalais. “But whenever you bring somebody to the table he keeps changing the price.”
Rabalais also thinks Baron’s asking price is outrageous.
“He’s not going to sell it. He’ll never sell it. Nobody in their right mind is going to come in and pay three times the value of land to buy the land. I don’t care how deep your pockets are. You didn’t get deep pockets by making deals like that,” said Rabalais. “It just won’t be sold.”
Ferdinand said TEDA has passed the information provided to them by Porter Baron to clients by way of asking price to clients interested in the property.
And the clients have not provided to TEDA a counter offer for Baron.
“He’s yet to show me his purported willingness to negotiate,” said Gautreaux. “He put himself as a willing seller, but since we’ve got people interested in the property, that’s all changed. I think he just wanted to see how hard we could work and how many prospects we could bring to him.”
Baron sees it all as little more than negotiation and he’s just waiting to hear a counter offer.
“I told them [the last company TEDA brought to the table] to make us an offer, another offer. We had lowered our price, but we were still far apart. And they have stopped communicating with me,” said Baron. “If they’re not going to come back with significant offers, then they’re just waiting for the state to take it for them. I think that’s wrong. I think they should come back to us with a significant offer.”
Baron also complained about the procedure of going through TEDA to communicate with perspective clients. He said the last company did little communicating with him directly, choosing mostly to talk to TEDA.
“When it comes to negotiating for the property, TEDA should really not have anything to do with it,” said Baron. “And in the future, I will ask them to simply arrange to meet with their prospect. I will negotiate the price with the prospect and then TEDA will negotiate with the prospect what the state will do.”
But, there doesn’t seem like there’s going to be a future for anymore negotiations with Baron.
Communication Breakdown
Gautreaux said his last conversation with Baron was right after Baron offered his property for $104 million.
“I expressed to him my disillusion. And we haven’t spoken since. And I don’ care to speak to him, because to me it’s just a waste of time,” said Sen. Gautreaux. “If I had nothing to do, if this was a hobby, then I might talk to him just out of sheer amusement. But, I’m not a hobbyist and I don’t have a lot of time to waste. So, when people present themselves as completely unreasonable, I just back away, leave them alone and wish them well. That’s exactly where I am with Porter Baron.”
Rabalais also isn’t happy with the fact Baron’s property has benefited from taxpayer dollars. He said Baron’s property is a dedicated spoil site.
When the Army Corps of Engineers dredges the nearby channels, they dump the dredge material on Baron’s property, building it up. The Corps has been doing this since the 1960s.
Baron’s property was much more wetland than it is now, said Rabalais.
“That’s the real story, is that’s he’s an absentee landowner. And he has made the local government expend a lot of funds to try to sell the property for him. And then when you bring somebody to the table, he pulls the rug out from under them,” said Rabalais. “Now, I don’t think anybody wants to deal with him.”
While the companies going through TEDA are kept confidential, Baron believes he know which company was most recently interested in his property.
He’s gone so far as to try to contact the company directly, believing the company is more than capable of affording the land around his asking price.
“It’s not my fault that we’re not talking. I’ve invited them to talk and they’ve sat back waiting for Sen. Gautreaux and Sen. Dupree to get bill through the senate,” said Baron. “And then they’ll try to get it to the house and the Governor will sign it if they pass it. And the state will expropriate the property.”
Baron still hasn’t gotten a response or a counteroffer.
Staff photo by SHELL ARMSTRONG • Tri-Parish Times * The waterways of Terrebonne Parish are an integral part of the economic development of the area, but industrial land along the canal is scarce and the Terrebonne Port Commission hopes Senate Bill 33 will make an 1,800-acre waterfront site in Gibson available for new business development.
