New Orleans Tax Incentives Cause Tech Companies To Take Notice
New Orleans, a city known for its tourism and hospitality, and as an oil and gas hub, has been quietly remaking itself. In the 13 years since Katrina devastated the city, life in New Orleans has seen more than 45 high-tech startups make their home here.
Companies like Accruent, providing software-based inventory systems; Gameloft, the French video game giant, and GE Digital, a cloud-storage software company.
But that seems to be just the tip of the iceberg. Last year DXC Technology, the Virginia-based global information technology giant, announced plans to build a new “Digital Transformation Center.” Of the 30 cities that vied for the opportunity, their top choice was New Orleans.
DXC leased several floors of the Freeport-McMoRan Building, previously the World Headquarters of the energy giant. The building is directly across the street from the Superdome, home of the city’s beloved Saints NFL Team.
The choice of location could not have been more iconic for New Orleans in symbolizing the shift from an energy based to a tech based economy.
The New Silicon Valley?
Tech companies are setting their sites on New Orleans for a variety of reasons, both economic and cultural. Louisiana offers a 25 percent tax credit for moving their technology operations to the state and local universities receive millions in state and city funds to train prospective employees.
In 2008 the city overwhelmingly supported the renovation of the I.P. Building, an 85,000-square-foot office building in the fast growing Warehouse District. The Intellectual Property, or “I.P.”, Building, is a joint project between the GNO, Inc., The Idea Village, and developer Brian Gibbs.
The project was inspired by “Silicon Alley” in New York City, and as Michael Hecht, GNO, Inc.’s CEO put it, “It’s a state-of-the-art tech facility that hipsters in San Francisco would be happy working in.”
According to the GNOInc.org website, the project was conceived for two purposes:
For companies: to create a supportive and energizing new media community
For the media: to serve as the symbolic and physical manifestation of the digital revolution in the New Orleans region – “GNO 2.0”
The building is tailored to the needs of creative professionals with:
High-speed technology infrastructure
An on-site café/bar
Shared conference space
The IP hub sits in the midst of one of the most vibrant restaurant and party scenes in America. There is no doubt that New Orleans’ reputation for food, music, and affordability has been spreading and it may be the biggest incentive of all.
Low Cost, High Culture Draws New Talent
“We’re a low-cost, high-culture city,” Hecht says. “We’re San Francisco, but at half the cost – and with nicer people.”
In 2011, Gameloft, Paris-based game maker, made New Orleans their U.S. hub. With GNO, Inc.’s support, they attracted over 17,000 applicants for only 15 available jobs.
Robert “Bobby” Savoie, founder of Geocent, an information technology and engineering services company with clients like the National Aeronautics and Space Administration and U.S. military. The small startup began with 10 employees in 2011 and have over 300 today.
Savoie says he sees applicants coming from high-cost areas like the California Bay Area where top paid engineers say they have to get roommates because they can’t afford to live alone. He says, “Our programmers and engineers can afford to buy a house in New Orleans. A young couple can afford to raise a family here.”
Lucid, another startup has grown to 300 strong. Patrick Comer, Lucid’s founder and CEO, says he was motivated to settle in New Orleans in part because his wife is a native and they wanted to be part of the city’s rebuilding efforts after Hurricane Katrina.
“Only about a quarter of our employees come from Louisiana,” Comer says. “We are relocating talent to New Orleans because they want to come here. The cultural authenticity of the city is extremely attractive to them.
We’ve learned that, our employees can take a day off for Mardi Gras and still be delivering for us at a very high level. Also, we can pay California salaries and our employees enjoy a New Orleans cost of living. That’s huge.”
New Orleans is Ready to Explode
It doesn’t hurt that the rest of the city is also doing well economically. Since Katrina, downtown New Orleans has attracted over $7 billion in investments and in 2017 recorded a record 17 million-plus visitors.
Geocent’s Savoie told U.S. News in an article titled, “New Orleans: Silicon Valley of the South?” by Contributor Ken Wells, that he believes New Orleans’ tech boom is poised to continue booming. With modern companies focusing on digital marketing, this is just the tip of the
“I love our company here and I love our future here. In a way, we export brains and import money,” he says. “We are just on the edge of this and it is ready to explode and where better to buy than New Orleans?”