When executives of 4th Source joined state and local officials at a news conference Thursday to announce the Georgia IT firm’s decision to move its headquarters to Kenner, speakers cited the state’s economic incentives, Jefferson Parish’s business-friendly environment and the attraction of the New Orleans area for young talent as reasons for the move.
But Chief Executive Officer Michael Wedge’s Mid-City roots and his familial ties to New Orleans didn’t hurt the metro area’s chance of beating out competitors in Colorado and Tennessee, either.
When the company was starting to look into expanding late last year, Wedge’s sister, Charlotte Burnell, the former chief administrative officer of Kenner who now runs the business consulting firm Strategic Planning Associates, suggested he get in touch with the Jefferson Parish Economic Development Council.
“We came down and it was like, ‘Wow, this is almost too good to be true,’ ” Wedge recalled. “We went through a lot of (due) diligence and we went through a lot of discussions, but that’s how the door got opened.”
4th Source provides IT products and services to corporate clients in industries such as health care and marketing.
While it is based just outside Atlanta, most of its roughly 50 U.S. workers are in Denver and Memphis and the lion’s share of its workforce — 340 employees — are in Mexico.
That balance will start to shift in July when the company takes over the former Xerox Corp. office on Veterans Memorial Boulevard to use as its headquarters and the site of its primary domestic customer-support operations.
4th Source will have 25 employees in Kenner by the end of this year and 80 by the end of 2015, officials said.
Its five-year goal is 320 local jobs, which Gov. Bobby Jindal said would create an additional 412 indirect jobs.
The jobs will average $50,000 in pay plus benefits.
Jindal said the recruitment of 4th Source is part of the state’s battle to stem a “brain drain” by creating a modern economy.
Wedge grew up in New Orleans in the 1960s before his family moved to Kenner in the ’70s. After attending LSU for a couple of years, he left the state in 1980 and spent the next 30-plus years out of the state and even out of the country. A year ago, he joined 4th Source, which was founded in 2004.
Potential homecoming aside, Wedge said, the case for metro New Orleans was strong because it’s a good fit for the company geographically.
The IT business, he explained, initially expanded to all corners of the globe because the technology allowed it, but the industry, led by its customers, has come to realize that geography, politics and culture really do matter.
By “nearshoring” to Mexico rather than to India, Pakistan or China, the company’s operations are all in the same time zone and a quick plane flight away for executives or customers.
“Our customers can go to the centers, which typically doesn’t happen when you outsource around the world,” Wedge said. “We get a personal relationship … when a customer can meet with the people who are going to support them.”
Also, he said, the cultural barriers between the U.S. and Mexico are less pronounced than if some operations were in the Far East. The benefits of not having operations in the Ukraine — a major center of high-tech offshoring and current political unrest — speak for themselves, he noted.
Wedge said that in addition to the state’s universities supplying a local workforce, New Orleans’ unique culture will help 4th Source attract talent from around the country and the world.
“We find that people want to come here, which really helps us in recruiting and retaining talent,” he said.
Wedge said New Orleans also has the benefit of affordable commercial real estate close to the city, unlike Denver, where the company would have been forced to find a home far away from the city itself.
Wedge said the company chose Kenner after its search for the ideal building led it to Veterans just off Williams Boulevard. He said the site’s proximity to the airport and an extended-stay hotel next door made the site the right choice.
Kenner Mayor Mike Yenni hailed the company’s decision as an important part of Kenner’s efforts to make itself “a community of choice” for families and young professionals.
Jefferson Parish President John Young said 4th Source’s move validates the parish’s emphasis on having a low-tax, business-friendly climate.
4th Source will receive a number of financial incentives, including the state’s Digital Interactive Media and Software Development tax credit.
That program provides a 25 percent tax credit on eligible expenditures and a 35 percent credit on Louisiana payroll expenditures.