Business 2022: Inflation, clean energy, healthcare changes | Business News

Two of the biggest business news items nationally and locally in 2022 were the high inflation that drove up fuel, food and housing costs and the series of interest rate hikes initiated by the Federal Reserve in an effort to cool off the economy and get prices under control.

While those issues impacted practically everyone in south Louisiana, there were other significant developments. A host of cleaner energy projects were announced during the year; if these developments all come to fruition, it could cause a major reshaping of the petrochemical industry that has formed the base of Louisiana’s economic foundation for decades. But don’t throw dirt on the state’s fossil fuel industry just yet — rising European and Asian demand for liquefied natural gas is boosting LNG activity.

The health care industry underwent significant changes during the year, with personnel changes at the top of several major employers, a move by LCMC Health to increase its New Orleans presence and a new owner for Lafayette-based LHC Group.

Here is a list of the top business stories covered by The Advocate | The Times-Picayune in 2022.


If you haven’t heard, a lot of things got more expensive in 2022. From groceries to clothing, the effect of inflation rippled across the economy in south Louisiana and far beyond.

However, no economic segment may have felt more volatility than the state’s energy sector, which hurt the pocketbooks of businesses and consumers alike.

Perhaps the most painful price increases could be felt at the pump, where gasoline prices skyrocketed shortly after Russia’s invasion of Ukraine upended global energy markets. Though Louisiana’s average gas price tends to fall below national marks, the state still endured an all-time average high of $4.55 per gallon in June, up from $3.12 in February, according to AAA’s Gas Prices tracker. The state’s average has since fallen to $2.76 per gallon as of Tuesday.

Meanwhile, natural gas — a key feedstock for Louisiana’s petrochemical sector and electricity grid — suffered a similar fate. Amid a rise in European demand for its liquefied form, natural gas prices nearly tripled from $3.71 per million British thermal units to well above $9 per MMBtu in August, a level not seen since 2008, according to the U.S. Energy Information Administration.

The rise dinged Louisiana’s chemical manufacturers, and it wreaked havoc on the state’s utility grid.

Some companies, however, aimed to take advantage of the frenzy. Spurred by opportunity, LNG exporters in Louisiana rushed to close several long-term contracts with foreign buyers.

Headlined by Venture Global LNG’s $13.2 billion Plaquemines LNG project, some firms locked up financing for more LNG export terminals, and one company even moved ahead with construction of a Lake Charles terminal even without a concrete financing plan in place.

So long as similar economic conditions endure, Louisiana’s LNG industry should benefit in 2023 and beyond — much to the chagrin of environmental justice groups, who continue to call on the state and the country to leave fossil fuels behind.

Energy gets clean

Amid a push to decarbonize the globe, Louisiana’s economy saw a continued wealth of “cleaner” energy projects and initiatives announced in 2022.

CF Industries — whose Donaldsonville complex is the state’s largest greenhouse gas emitter — confirmed a $200 million carbon capture project for the facility that will enlist ExxonMobil and EnLink Midstream. The company is also considering Ascension Parish for a new, $2 billion “blue” ammonia plant.

Shell confirmed an alternative fuels complex is in the works for its shuttered petroleum refinery in Convent. The facility will produce sustainable aviation fuel and renewable diesel.

Greater New Orleans Inc.’s push for a “green” hydrogen corridor in south Louisiana gained steam in September when the Biden administration tapped the initiative for a $50 million Build Back Better grant.

Meanwhile, Canadian fertilizer manufacturer Nutrien said it is considering building a “clean” ammonia facility at its Geismar complex.

Back in October, the Biden administration announced a pair of Louisiana plants — Syrah Resources in Vidalia and Koura in St. Gabriel — would receive a total of roughly $320 million to produce materials used in manufacturing batteries for electric vehicles. Earlier this year, Syrah was approved for a $102 million federal loan to expand its production capabilities.

In all, $29 billion worth of clean energy projects have been slated for the Baton Rouge and New Orleans metro areas, and other projects could be on the way, according to economist Loren Scott.

Many of the projects, however, are tied to carbon capture, a process by which industrial facilities attempt to trap their carbon dioxide emissions, liquefy them and bury them deep underground.

Though industry leaders have lauded the benefits of the technology, residents in Livingston and St. Helena parishes have voiced their opposition to carbon capture, fearing that carbon injection wells could do more harm than good.

LCMC Health makes moves

LCMC Health announced plans to acquire three Tulane hospitals from the national chain HCA Healthcare, significantly increasing its footprint in the New Orleans area from six to nine hospitals in a $150 million deal.

Tulane Medical Center in New Orleans, Tulane Lakeside Hospital in Metairie and Lakeview Regional Medical Center in Covington are included in the acquisition. The Louisiana Attorney General’s Office must decide whether to allow the sale by Feb. 16.

Tulane’s move to a locally-owned nonprofit from a for-profit national parent company was about “mission alignment,” said LCMC Health CEO Greg Feirn.

“If you think about LCMC health and our nonprofit mission and Tulane University being a nonprofit, both here, located in New Orleans, where dollars are reinvested in New Orleans — from that standpoint, a partnership just makes sense,” said Feirn, adding that Tulane faculty have long worked at LCMC hospitals. “In a way, it’s tried and tested and it works, and I think HCA realizes it works.”

Under the new agreement, the majority of services at Tulane’s downtown hospital will move to East Jefferson General Hospital in Metairie and University Medical Center over the next two years. All employees will be retained, according to a news release from LCMC, and patients who go to the downtown location will eventually move to the system’s other locations.

In addition to the $150 million payment to HCA, LCMC has agreed to invest $220 million in the facilities at East Jefferson, Tulane Lakeside and Lakeview Regional. The downtown medical center, including a renovated Charity Hospital, will be repurposed to house a new nursing program, clinical research programs and more space for students in medical fields. Tulane University has committed $600 million to revamp downtown New Orleans.

After the deal is closed, LCMC will move services from the 235-bed building on Tulane Avenue over the next 12 to 24 months. The emergency room will remain open through that time, and Feirn said they will work with Tulane to decide whether it will remain open after the relocation of other services.

The move will transform the New Orleans area into a health care duopoly where just two systems — Ochsner Health and LCMC — will provide care for patients.

Children’s Hospital New Orleans, which is operated by LCMC, announced in December it had agreed to take over day-to-day operations of Our Lady of the Lake Children’s Health in Baton Rouge under a new partnership, effective Jan. 1.

Neither Children’s nor OLOL, which is owned by Franciscan Missionaries of Our Lady Health System, will acquire the other or change names in this deal, the hospitals said. The hospitals will not combine revenue and there are no job cuts planned.

LHC Group acquired

If there were any shock waves following the news of LHC Group of Lafayette being acquired by a national company, they may not have lasted long. 

It was back in the spring when the news broke across the country that UnitedHealth had a deal in place to acquire the growing Lafayette home health company in a $5.4 billion deal. Once the dust settled, it was obvious what was happening: The large health company was venturing into the home health care sector, and it was part of a wave of mergers among companies specializing in home care. 

LHC Group, with its 700 employees in Lafayette and 30,000 at locations across the country, will stay at its massive office along Hugh Wallis Road. If anything, the merger will accelerate its already aggressive growth, experts say.  

If the deal gets federal approval, LHC Group will be part of Optum Health, a fast-growing division of UnitedHealth Group that works with more than 100 health plans. UnitedHealth, through Optum, expects to double LHC Group’s patient volume in about three years.  

“We have been in close contact with some of the executives at LHC,” said Mandi Mitchell, president and CEO of the Lafayette Economic Development Authority. “It means more growth and more investment in our area. It was just an extremely strategic, extremely wise, choice move on the part of the executives there.” 

Peter Ricchiuti, a finance professor at Tulane University who tracks regional stocks across the South, described the move this way: “(They) got bought out by somebody who’s really not in the business. And it’s a big company with deep pockets that will enable you to make more acquisitions. It’s like having a rich aunt — United Health Care bought them just for who they are.” 

The move would also be part of a change of leadership at the company that got started in the Palmetto home of Keith and Ginger Myers in 1994. Myers and his wife, a nurse, volunteered to help local senior citizens who could no longer take care of themselves and had no one to help. 

Keith Myers, now CEO and board chair, will move into a role of chairman and CEO emeritus and senior adviser to Optum. Joshua Proffitt, LHC Group’s president and chief operating officer, has been named CEO. 

Changes at the top of local health care

New faces could be found in just about any C-suite at south Louisiana’s major hospitals or health care systems: Ochsner Health, Our Lady of the Lake Regional Medical Center, Woman’s Hospital, Mary Bird Perkins Cancer Center and the Spine Hospital of Louisiana all found themselves with new top leadership.

The dominoes began to fall in February when Scott Wester left the Lake after a 14-year tenure as its top executive. Wester, who took a similar gig in Florida shortly thereafter, was officially succeeded in October by Chuck Spicer, a former OU Health administrator.

Following the departure of Dr. Barbara Griffith, Rene Ragas took the reins as president and CEO of Woman’s Hospital in March. Ragas had been CEO of Our Lady of the Angels Hospital in Bogalusa since December 2014 and the north shore market president for Franciscan Missionaries of Our Lady Health System since June 2017. 

In May, Robert Blair announced he would step down as CEO of the Spine Hospital of Louisiana following a 12-year stint. His replacement is Terri Hicks, the former chief financial officer of St. Francis Medical Center in Monroe.

Perhaps the biggest change of them all was Warner Thomas, who led an aggressive expansion plan for New Orleans-based Ochsner Health. Thomas left to take over Sutter Health, a large health care system based in northern California. His successor is Pete November, Ochsner’s former chief financial officer.

Last but not least, Mary Bird Perkins Cancer Center in September said Dr. Jonas Fontenot, the center’s chief operating officer and chief of medical physics, would take over for Todd Stevens as president and CEO beginning in January. Stevens, who sat in the top spot for 23 years, is moving to a “chief business officer” role to focus on long-term growth strategies for the nonprofit cancer center.

Housing slowdown

After several years of a booming sales, the south Louisiana housing market drastically slowed down in 2022, due to a series of interest rate hikes by the Federal Reserve.

“The market is cooling off a little bit from the past two years,” said Tom Cook, an appraiser with Cook, Moore, Davenport & Associates. “But if something goes from being 1,000 degrees to 500 degrees, you can say it’s cooling off. We’re cooling off from red hot.”

Through the first 11 months of the year, home sales were down 13.7% in metro Baton Rouge when compared through November 2021. 

Despite the sales slowdown, median home prices are up 6.7% in metro Baton Rouge, coming in at $254,850. And the inventory of homes remains fairly low. 

A similar sales drop has been seen in Acadiana, where the total number of homes sold is nearly 13% behind last year’s pace, while in Lafayette Parish that total is 15% behind.

At a time when the most obvious challenge to New Orleans area homebuyers may seem to be rising mortgage rates, local agents say multiple issues are threatening to cool what has been a hot housing market.

In Orleans Parish, the rise in home prices, mortgage rates and homeowners insurance, among other costs, has sent the monthly tab for a typical homebuyer nearly 50% since last year, based on estimates from real-estate experts and publicly available data.

The same is generally true in St. Tammany Parish and in Jefferson Parish, where the all-in costs are up by about 50% and 47%, respectively.

“Everybody knows home prices are high and interest rates are high, but it doesn’t really hit you until you look at the numbers this way,” said Britt Tate, a broker at Essential Mortgage. “It’s a huge jump and it’s really starting to have an impact on the market.”

Low unemployment, plenty of jobs

Louisiana’s monthly unemployment rate set or tied a record low four times this year, as businesses continued to struggle to find employees.

The state’s unemployment rate dipped to 2.9% in November, while the number of people receiving unemployment benefits hit a record low of 61,754.

At the same time, the number of available jobs has steadily increased. Baton Rouge and New Orleans hit record highs for job openings.

The low unemployment rate and high tally of openings are connected, for a few reasons, said Andrew Fitzgerald, senior vice president of business intelligence for the Baton Rouge Area Chamber.

Some workers have ditched multiple part-time gigs for one full-time job with better pay. For example, a food service worker handling two jobs might have switched careers to office management or something similar. While they filled one job, they also left two openings behind.

Another factor is people choosing to leave staff work and make it on their own, as an independent contractor, freelance worker or consultant.

The shifting labor market is yet another enduring economic effect of COVID-19. Workforce levels are still down from pre-pandemic times, providing opportunities for in-demand workers to rethink their career choices. 

Economists say the mobility is a sign of a healthy economy, albeit a perplexing challenge for employers.

“Employers are still looking for people, and that’s one of the reasons you see the quit rate actually as high as it is,” said Gary Wagner, Acadiana business economist with the University of Louisiana at Lafayette. “It’s a great time to move if you’re in the labor force.”

New Avondale owners make moves

The new owners of the former Avondale Shipyards made a renewed push to draw shipping customers and tenants, renaming the facility and announcing the completion of several on-site projects after the pandemic and other setbacks slowed progress at the facility.

T. Parker Host, the Virginia-based terminal operator that bought the site on the west bank of the Mississippi River for $60 million in 2018, held a formal “relaunch” in October where local officials, company leaders and Gov. John Bel Edwards re-christened the shipyard the Avondale Global Gateway.

The name change is aimed at highlighting the 275-acre area’s shift from a site that once built warships for the U.S. Navy into a manufacturing and transshipment hub.

Local politicians are hoping that the “waterfront industrial park,” with access to transportation links via river barge, rail, the nearby Louis Armstrong New Orleans International Airport and interstate highways, will meet the projections of economic development groups and attract $1 billion in private-sector investment over the next five years, along with thousands of new jobs and hundreds of millions in new tax revenue.

“I think that area is well-positioned to take off in the next couple of years,” said Parish Council member Deano Bonano, in whose district Avondale is located. “I’m very pleased with their progress.”

So far, however, reinventing the old shipyard has been slow going.

T. Parker Host CEO Adam Anderson said the port’s 300 employees are now handling about 100 different commodities for 50 clients and host two or three ships each week. But he said the company still hasn’t finalized an agreement with any of the big manufacturing clients it is targeting as an “anchor tenant” that would attract related businesses.

Anderson’s plan to repurpose the site as a logistics hub for the oil and gas industry was thwarted initially by record-high waters that stalled Mississippi River commerce for the better part of 2019. The COVID-19 pandemic soon followed and then Hurricane Ida hit the area last year.

Projections in the latest economic impact study of Avondale see it attracting $1 billion in private-sector investment over the next five years, along with more than 2,000 direct new jobs and close to $1 billion in new tax revenue.

Anderson and Jefferson Parish economic development leaders hope Avondale Global Gateway will become a “waterfront industrial park” with at least six “anchor tenants,” which will be manufacturing-based companies with very long leases. That foundation would attract other related businesses to set up nearby, creating industrial clusters.

New container ship terminal in St. Bernard

Gov. John Bel Edwards and the Port of New Orleans in December announced that two global leaders in the maritime industry will invest $800 million in the proposed container ship terminal planned for the Mississippi River in St. Bernard Parish.

The commitment from Ports America, the largest marine terminal operator in the U.S., and Terminal Investment Limited represent a major milestone in the development of the proposed port, called the Louisiana International Terminal. It helps ensure that construction could begin on the $1.8 billion facility once all necessary permits have been secured.

It’s not clear how long that permitting process will take, particularly amid opposition from some officials in St. Bernard. Port NOLA officials have said they hope to break ground on the facility in 2025 and be open for business by 2028.

“This is the best news, from a civic, business and economic development perspective, we’ve seen here in years,” said business and civic leader Gregory Rusovich, who owns Transoceanic Development and is a former port commissioner and chair. “Two of the largest operators and carriers in the world are putting money into the project. Now, we can officially proceed.”

The $800 million investment commitment from New Jersey-based Ports America and TIL, the U.S. investment arm of the Switzerland-based Mediterranean Shipping Company, comes on top of $500 million already committed by the port of New Orleans. Together, their $1.3 billion will go a long way toward funding construction, which officials now say will could be as much as $1.8 billion.

The deal is a joint venture between the two companies, the Port of New Orleans and the state. The companies will operate the terminal once construction is complete.

For much of the past two years, port officials have been touting a $1.5 billion price tag for the project. But Port NOLA CEO Brandy Christian said given escalating costs and the reality of construction delays, it’s important to plan for the upper end of what the project might cost.

That means port officials still have to come up with an additional $200 million to $500 million to fund the project. Christian said she is optimistic that federal funding can be tapped to make up the difference.

According to port officials, the new container terminal, which will be located in Violet, is critical to helping the Port of New Orleans make up ground lost to other Gulf Coast ports in recent years, including Houston and Mobile.

Though the local port’s upriver container terminal at Napoleon Avenue has recently increased its handling capacity, container ships are ever larger in size, and those above 10,000 20-foot equivalent container units cannot make it under the Crescent City Connection.

The Violet terminal is designed to put the Port of New Orleans back in the game. Once completed, the facility will be able to handle 2 million 20-foot-equivalent container units annually.

Economic development officials have said the project will create 17,000 jobs by 2050, though that includes indirect jobs and temporary construction jobs as well as permanent jobs.

Businesses fight New Orleans crime

In an effort to pressure the city’s elected officials to act more aggressively, nearly 180 New Orleans-area businesses, civic organizations and activists announced in July that they were banding together to craft their own plan to combat the unrelenting surge of violent crime, which they believe will send the metro area into a vicious cycle of decline if it isn’t tackled urgently.

The push by the private and nonprofit sectors, which includes a pledge of $15 million in private and charitable funds over three years, came a week after crime data showed New Orleans as the nation’s most murderous city in the first half of the year. By the end of October, the city’s murder rate had topped the total for 2021, which already was the worst since before Hurricane Katrina.

The group, calling itself The Nola Coalition, includes civic organizations such as the National Association for the Advancement of Colored People, Baptist Community Ministries and the Metropolitan Crime Commission. More than 100 businesses have formally backed the group, including major local employers such as LCMC Health and Cox Communications.

“This is not a problem without a solution,” said Melanie Talia, CEO of the New Orleans Police and Justice Foundation, a crime prevention pressure group. Talia, a former assistant district attorney in Orleans Parish, said the coalition is calling “for a full-court press” to stop the bleeding of NOPD staff, which has an unfilled vacancy rate of 20%, or 316 out of 1,542 budgeted positions.

The focus of the new group initially is to get past some of the political noise that has characterized the crime debate in recent months, and to show there is a broad consensus for immediate action, said Michael Hecht, president and CEO of GNO Inc., which helped organize the effort.

By early December, the Nola Coalition had raised $4.4 million from area businesses, well short of its $15 million target. So far, the largest private donation for civic causes has come from International-Matex Tank Terminals, a commodities and fuel storage firm, which donated $1 million in August, 15% of which is being used to fund staff at GNO to administer the coalition.

Hecht said he sees the IMTT contribution as representative of “a new generation of philanthropic leadership” in the city, one that is more deeply involved in the issues and active in the response.

ASAP blues

2022 was a rough year for ASAP, the Lafayette-based food delivery service.

In November, the company said it would lay off 89 employees at its downtown offices because of a prolonged drop in business.

In a letter to the Louisiana Workforce Commission, the company said the firings were “based on a prolonged decrease in revenue as reported in our public filings.”

ASAP reported a $73.5 million net loss in the third quarter, the fourth consecutive time the business has ended a quarter in the red.

The company has attributed its losses to a drop in business caused by inflation, high gas prices and competition from other food delivery services. Through the first nine months of the year, ASAP has had an average of 18,346 daily orders. That’s nearly half of the 35,565 average daily orders the business had through September 2021.

The drop in customers has taken a toll on sales. For the first nine months of the year, ASAP reported $91.4 million in revenue, compared to $143.5 million through September 2021.

ASAP, which had been known as Waitr until it was forced to rebrand in 2022 due to a trademark dispute, saw its business soar during the early days of the COVID-19 pandemic. Indoor dining was banned and restaurants scrambled to offer delivery service.

ASAP has pulled out every tool imaginable this year to improve its financial performance. It has changed its business model to deliver more than food, including auto parts and apparel, and it has reduced outstanding debt. It expanded its delivery services for sporting events, offering concession delivery to seats in the Caesars Superdome, MetLife Stadium, LSU’s Alex Box Stadium and the University of Louisiana at Lafayette’s Russo Park.

After three tries, shareholders in November approved a reverse stock split, where 20 shares would be converted to 1 share, in an attempt to raise the price and avoid delisting from the Nasdaq exchange. Companies that trade on Nasdaq must maintain a $1 price or higher for at least 30 days to avoid penalty.

But shares of ASAP still remain extremely low. In late December, the stock was trading at 33 cents a share.

Cheers to Faubourg Brewing

Faubourg Brewing Co., the New Orleans-based brewery purchased five years ago by Tom and Gayle Benson, merged with three other regional breweries owned by an Alabama private equity firm with the aim of building a regional craft beer powerhouse.

The Benson Group and Wiregrass Equity Partners of Montgomery, Alabama, said a Wiregrass-owned holding company Made By The Water LLC that owns craft beer breweries in the Carolinas and Florida would relocate its headquarters to the huge Faubourg Brewery in New Orleans East as part of the deal.

The beer-maker moved quickly to ramp up production at its huge, underused New Orleans East property and started hiring to fill dozens of new positions.

Benson said New Orleans would become the core of the enlarged company, with the aim of “making New Orleans the cultural hub of the craft beer industry in the Southeast.”

“I pride myself on making New Orleans first, and I think we can bring all of the best in craft beer from these historically strong craft beer areas in the Southeast and make New Orleans the primary focus of the industry,” Benson said.

The Bensons bought Dixie Brewing Company, as it was then known, in 2017 with the promise it would bring brewing back to the city. Dixie Brewing, founded in 1907, had been operating from its Tulane Avenue facility until Hurricane Katrina forced it to shut down and contract brewing to out-of-state breweries.

Gayle Benson completed a new $30 million brewing facility on Jourdan Road in New Orleans East in 2019, the year after Tom Benson died. Two years later, the company changed its name and brand from Dixie to Faubourg, and has since introduced new beer brands and flavors, including Dat’suma, an India Pale Ale with satsuma notes, and Blackened Voodoo, a “Dunkel-style” dark lager.