LAFAYETTE — An agency tasked with regional planning and development is broke and has lost all of its staff just two years after moving into a new $2.4 million federally funded office on Gloria Switch Road.
The Acadiana Regional Development District, which serves eight parishes in the Acadiana region, is struggling to stay afloat pending efforts to rebuild it from the ground up, according to internal records and the new interim director brought in earlier this year to salvage the operation, Kevin Belanger.
“When I took over, there was only $32 in the account,” said Belanger, who is CEO of a similar but more active and solvent regional agency based in Houma, the South Central Planning and Development Commission.
The Acadiana Regional Development District had been slipping financially for a few years, but the breaking point came in fall 2013. That’s when the U.S. Department of Commerce barred the group from future funding after audits found the local agency was paying operating expenses with about $190,000 in federal money that should have been used to provide economic development loans to local businesses, according to correspondence between ARDD officials and the Commerce Department.
In February, the ARDD board accepted the retirement of former CEO Stan McGee, laid off the two remaining staff members and contracted with the Houma-based commission led by Belanger to oversee its operations.
The ARDD now has little revenue and about $780,000 in debt, a mix of money owed to the Commerce Department, lines of credit, loans and credit card bills, Belanger said.
“It has come to the point where they can no longer survive financially,” he said.
Bankruptcy at this point hasn’t been ruled out, but Belanger said the plan is to rebuild the group under a different name, the Acadiana Planning Commission, and grow a new self-sustaining agency that could provide a range of new services for the region, such as planning for rural communities, regional building code enforcement programs and lending for economic development.
“What happened in the past is not good, but the opportunities we have today are really, really good,” Belanger said.
St. Mary Parish President Paul Naquin, who serves on the board that oversees ARDD, said the agency was doing fairly well in the days when federal recovery dollars were flowing into the region for fisheries, housing and businesses in the wake of a series of hurricanes: Katrina, Rita, Gustav, Ike.
“After that, the federal government tightened up. Once we ran out of grants, we didn’t have any income we could work with. We just couldn’t keep the doors open,” Naquin said.
The questionable use of the Commerce Department money only compounded the problem.
“When we found out we were in the red, that’s when the light came on and we called somebody in here,” Naquin said of the board decision to reach out to Belanger’s group.
Belanger said the bulk of ARDD’s activities in the past involved working with a pool of federal and state grants to make business loans, and the agency’s main income was from a percentage ARDD was allowed to keep from the repayment of those loans.
Relying simply on loan programs for revenue will not likely work in the future, Belanger said.
“In this area, they were basically a lender,” Belanger said. “You just can’t be a one-pony show.”
When asked how ARDD made money, he responded: “I think they were living off what we are now having to look for.”
The ARDD is one of eight regional planning and development districts in Louisiana authorized by the state Legislature in the 1970s.
Each district shapes its own programs and priorities.
Belanger is drawing on his experience leading the South Central Planning and Development Commission, which has grown in recent years to a significant regional player operating with a $10.2 million budget.
The group lends money for business development, but it also sustains itself by offering a long list of services to local governments in Terrebonne and neighboring parishes, including grant writing assistance, building code enforcement, long-range planning, technical expertise for computer systems, and assistance in drafting law and policy.
Smaller local governments usually don’t have the in-house expertise to handle those issues or the budget to hire private consultants, Belanger said, but a regional commission can offer services for a good rate due to the economies of scale.
“My job is to save those parishes money,” he said.
Belanger said he hopes the group in Acadiana, which he hopes to pass off to new staff at some point, could offer similar services here.
The plan fits in with the Greater Lafayette Chamber of Commerce’s current push to build a stronger regional chamber group.
“Kevin (Belanger) is a very entrepreneurial guy who has creative ways to make government programs work on a regional level,” chamber President and CEO Jason El Koubi said. “I think it’s a natural complement to what we are trying to do on the private side.”
Naquin is hopeful.
“I’m almost positive you are going to see a lot bigger district that we had before,” he said. “We are shooting for next year where we have our own director and reconstituted board.”
But first, the agency has to regain its footing.
The Commerce Department could seek to take back ARDD’s new $2.4 million, 12,000-square-foot office on Gloria Switch Road now that the group is barred from getting any money from the federal agency, which paid for the building with the understanding it would be a regional economic development center.
Belanger said deals are in the works to keep the building and to have an outside agency assume responsibility for some of the debt to the Commerce Department in exchange for taking over a portion of the ARDD’s outstanding loan portfolio.
The agency likely will retain some of its loan portfolio for revenue and has some income from businesses leasing space in the office building on Gloria Switch Road, Belanger said.
And he said a newly formed agency under a different name and leadership could one day win back approval to handle Commerce Department economic development loans.
Belanger said he is now making the rounds to officials in the Acadiana area to float the idea of a new, more robust planning district.
He is bullish about the prospects but also acknowledges the uncertainties.
“This is all new territory we are covering,” he said.