By the Way

Could Topship end up in the same boat as Louisiana affiliate?

Mississippi offered Topship millions in incentives and tax breaks to build a shipyard on 116 acres the state port bought as an inland port.
Mississippi offered Topship millions in incentives and tax breaks to build a shipyard on 116 acres the state port bought as an inland port. Sun Herald file/2016

A journalism colleague has come through with a story on how Louisiana’s economic-development deal with Edison Chouest affiiliate LaShip has failed to pan out, a story worth keeping an eye on since Chouest has picked up millions in incentives in Mississippi as well.

Chouest affiliate Topship was the most recent to strike a deal with the Mississippi Development Authority. MDA executives acknowledged when I wrote about the deal in March that their “due diligence” before extending the incentives failed to include research on how the Louisiana deal had worked out.

MDA also did not look into job numbers at Chouest affiliate Gulf Ship, a shipyard in the same Harrison County industrial park where Topship plans a shipyard and other activities not yet announced.

Tom Wright, an investigative producer at WVUE Fox 8 in New Orleans, got in touch by email after I wrote about Topship. We met in person recently at an Investigative Reporters and Editors conference in New Orleans, where he promised he would let me know when WVUE updated the Chouest story in Louisiana.

This morning, Wright tweeted me a link to the story he worked on with chief investigative reporter Lee Zurik. It’s quite a story.

LaShip received public economic incentives valued at $75 million, the Associated Press had reported in February 2011.

As I reported back in March, LaShip was supposed to create 1,000 jobs by September 2012 and sustain the number through December 2015. The agreement was amended in August 2012, requiring LaShip to meet its job commitment by March 2014 and maintain the number through June 2017.

Zurich and Wright pick up the story: “The jobs still aren’t there. In the first quarter of 2016, LaShip had just 232 jobs. Again, they promised 1,000.”

But there’s more. Isn’t that always the case?

WVUE reports another Chouest affiliate, North American Fabricators, closed. “The state admits Edison Chouest simply transferred the workers from their shuttered company to the new one — and got a large incentive package for it,” WVUE’s story says.

That’s exactly what workers fear at Gulfport Chouest affiliate Gulf Ship, which opened on the industrial seaway in 2006. Harrison County pitched in $12 million in Katrina-recovery dollars for a boat-launching yard. Gulf Ship was supposed to create 800 jobs, but that number proved elusive.

When Gov. Phil Bryant in February announced MDA’s new economic-incentive deal with Topship, he failed to mention Gulf Ship had laid off employees a week earlier. Nobody at Gulf Ship or Chouest would talk to me, but several current or former Gulf Ship employees told me the shipyard was down to 110 jobs.

MDA has extended to Topship $10 million for infrastructure improvements and $1 million for workforce training. The state will give Topship $5 million of the total only after the company’s jobs commitment is met, according to a copy of the agreement.

The port will hand over $25 million in Katrina dollars to Topship. And the port spent $32 million on the 116 acres, with Topship repaying the money through a lease.

Topship will receive a host of tax breaks as well, including a 20-year exemption on state income taxes, and 10-year exemptions on county and city property taxes.

To be fair, Chouest and his affiliates service offshore oil companies, and the oil industry has been suffering for a few years now. It will come back. Everyone says so. Local economic-development cheerleaders are certain the Chouest affiliates will be booming again one day. The Chouest family built their global empire from nothing.

An interesting note: As the companies have grown, so have Chouest contributions to political candidates and PACs, particularly Republicans.

The WVUE story and others before it have pointed out Gary Chouest in March 2015 contributed $1 million to former Gov. Bobby Jindal’s failed presidential campaign. So there’s that.

Anita Lee: 228-896-2331, @calee99

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