LAKE CHARLES — Business has been brisk lately at the Seafood Palace, a popular spot for boiled crabs tucked away in a strip mall here. Stop by for dinner on Friday or Saturday, and there may be an hour’s wait for a table.
Sales are up more than 20 percent from last year, according to owner David Papania. “With all the new development coming into Lake Charles,” he said with a smile, “it shouldn’t get nothing but better.”
Regional economists agree, saying this area of southwest Louisiana is primed for its largest period of growth ever, thanks to a raft of major petrochemical projects in the works.
Almost 12,000 new jobs are expected over the next two years — more than any area of the state — driven by nearly $82 billion in industrial projects announced so far in Calcasieu and Cameron parishes.
Work has begun on what could be the largest single investment in the history of the state, if not the country: a potentially $22 billion fuel plant being built by South Africa’s Sasol Ltd. A final decision on its size is expected in the next two years; if it all comes to pass, the project could create more than 1,250 permanent jobs paying an average of $88,000 a year. In Calcasieu, the epicenter of the petrochemical industry, that’s twice the median household income.
One firm is spending $70 million to erect a “man camp,” a temporary, dorm-type village to house 4,000 workers. Another firm has permits in hand to build cheap housing for 2,500 on 100 acres at the West Calcasieu Airport.
In the suburb of Westlake, population 4,600, new homes are rising along the golf course and banks are under construction along the main drag. Many who live here say they’re excited about the influx of new money set to pour into their economy. But even with the boom in its early stages, they acknowledge some growing pains, like longer waits at restaurants and more traffic. And Calcasieu officials are bracing for strains on housing, law enforcement, schools and other public services.
The building boom won’t generate much in the way of new property taxes. That’s because the state’s industrial tax exemption program shields new capital investment from property taxes for a decade. The break, which local governments have no say in awarding, will cause the parish to forgo hundreds of millions of dollars.
Calcasieu Parish Assessor Wendy Aguillard acknowledges the loss, but says she expects the gap will largely be closed by gains in local sales taxes from people moving into the parish and buying homes, renting apartments, eating out and buying goods.
“Most people think it’s a fair tradeoff,” she said.
Elected officials and company executives say they’re working to ensure that a tidal wave of growth doesn’t ruin the area’s small-town feel.
“Southwest Louisiana has needed something like this for a number of years, really, since the oil crash of the early 1980s. The area never fully recovered from that,” said Michael Hayes, public affairs manager for Sasol. “This industrial expansion is going to really help the area become what we believe we can be. In 2005, we had urban renewal by hurricane. Now, a lot of the community leaders’ expectation is that we’ll have urban renewal by capital project development.”
But Hayes is familiar with the concerns, too.
“Everyone’s nervous about, ‘What is it going to do to our feel of the community? Are we going to be able to maintain that same small-town texture feel that we have today? Are we going to struggle with traffic? Are we going to be able to get a table at a restaurant?’ ” he said. “We’re going to have to work to preserve those things that are truly special about southwest Louisiana.”
Westlake Mayor Daniel Cupit is mostly worried about the short supply of housing, but he expects that will be felt by the parish as a whole.
“As far as our little town’s concerned, the traffic is going to be a problem,” said Cupit, who hopes that planned roadway expansions and other improvements could ease those fears.
It’s hardly any surprise that the chemical and refining industry is embracing the region, which boasts easy access to railways, waterways, the interstate and a regional airport, as well as low crime and opportunities for hunting and fishing. Southwest Louisiana has always welcomed big business with open arms. But the main driver of recent growth is low-cost natural gas, which provides an inexpensive fuel source and serves as a key component of a range of household goods, from fertilizers to detergents, pharmaceuticals and paints.
Hal McMillin, who represents Westlake on the Calcasieu Parish Police Jury, chairs a task force studying the impact of the expansions. “This is our opportunity to get it right,” he said. “Forty years from now, I don’t want my grandkids looking back and thinking there wasn’t much foresight on what was happening in this economic expansion.”
To prepare for the spate of new development, Calcasieu Parish Sheriff Tony Mancuso has deployed deputies to Odessa, the West Texas oil town, and Alberta, Canada, to see what can be learned from areas that have seen a sharp rise in temporary workers. Officials in the Odessa area tell The Advocate they’ve seen skyrocketing housing prices and unprecedented waits at red lights, but few truly worrisome trends.
Mancusco expects only “subtle changes” in the Lake Charles area.
“It’s not like when a community gets a large population thrust upon them, like an evacuation during a hurricane,” he said. “I think we have plenty of time to prepare for this, which should help us with any crime issues, to keep those down.”
Matt Vezinot, a top aide to Mancuso, acknowledged that with so many people moving to the parish, “there’s always going to be a certain percentage of the population that’s less than desirable, and I think we expect that.”
But Vezinot hopes that those coming to work at Sasol’s new complex will be “a more mature, and maybe a more technical workforce.” Plus, they’ll have plenty to keep them busy in their time off, he says: “It’s not like out there in the middle of Texas, where there’s nothing close.”
Initially, at least, Vezinot is worried the Sheriff’s Office will have trouble retaining employees as better-paying jobs at the plants open up. But overall, he believes the expansion’s benefits outweigh such inconveniences, even if he expects some grumbling.
“Especially in the Calcasieu area, people move to the country because they like to move to the country, and it’s changing and they don’t like change,” he said. “There aren’t a lot of the full-time residents or citizens that live in that area that are very happy with it, but I think we’re going to have this great economic expansion, and there’s a price to pay for it.”
Though the great expansion in Lake Charles is still in its infancy, Scott Landry, of Moss Bluff, is already having trouble hanging on to workers. While revenue at his catering business has spiked by 25 percent in the last eight months, Landry has lost workers to higher-paying jobs in construction and at the area’s casinos. And he’s having to pay more to the ones he’s able to keep.
“A dishwasher in Lake Charles is making over $10 an hour,” he said. “If you show up to work, you’re kept.”
As Sasol has sized up the project’s footprint in the past year, the company has offered to buy out residents near the proposed expansion site at above-market rates, which some take as a gesture of goodwill.
Most neighbors have taken the deal. One who didn’t: Renee Jones, Westlake’s clerk of court, who has lived in her home for more than three decades. She figures that most of her neighbors weren’t around when she arrived, so she’s “kind of just going back to how it was.”
She also doesn’t see a lot of other options.
“I’ve been to Moss Bluff, I’ve been to Sulphur, I’ve been to Westlake,” Jones said. “I’ve asked people if I could buy their land, but nobody wants to sell their land, so what do you do? Where do you go?”
Follow Richard Thompson on Twitter, @rthompsonMSY.