Self Storage Company Helps Find Solutions as New Orleans’ Small Businesses Face a Critical Blow

Posted on May 31 2011 - 10:46am by John Stevens

Avondale Self Storage is among the 400 small businesses struggling to find a way to survive as New Orleans’ largest manufacturing employer prepares to close and leave the state with 5,000 jobless, a move that could cripple the city’s economy.

When David Loeb opened his storage facility three years ago he based his decision on the availability of large tracts of land, the Huey P. Long Bridge expansion project  which promised increased traffic, and a stable work force of 5,000 only two miles away at the Avondale Shipyard. But that stability will soon disintegrate with the Northrup Grumman defense contractor’s announcement that it will close its shipyard in early 2013 and hand operations over to Huntington Ingalls.  The shipyard sits along the Mississippi River on the West Bank of the Jefferson Parish.

The closure is a tough blow to nearby small businesses and the entire New Orleans economy. Loeb and about 400 other small businesses in the area sent a letter to President Obama urging his administration to help keep Northrop Grumman from “throwing 5,000 workers out of jobs and abandoning the New Orleans community.”

Rep. Cedric Richmond, D-New Orleans, met with a handful of those business owners at a U.S. Highway 90 truck stop May 16 to discuss their concerns.

“We’re fighting a difficult fight and we’re fighting a private company that, for the most part, decides what to do with their land and their company,” Richmond told business owners during the meeting. “We just have to figure out a way to influence them politically.”

Just as with floods and hurricanes, some state officials feel New Orleans needs to prepare continuity plans for market changes that will have a state-wide effect on businesses and leave thousands jobless. The impending job loss in New Orleans mirrors a national trend. Across the country last week, jobless claims increased by 10,000 to 424,000, according to Labor Department figures.

Rep. Richmond worked with Sen. Mary Landrieu, D-New Orleans this month to secure a $1.5 million federal grant to pay for a study to help identify other uses for the shipyard site.

“I think it’s a sign. I know it’s a sign, that it’s important to the administration and that they are paying attention to this,” Richmond said.

But the small businesses aren’t just waiting for the government to come up with solutions as their survival remains on the line. At Avondale Self Storage, Loeb plans to attract business through value-added services, such as laptop stations connected to free wireless Internet, copying services and shipping and office supplies in the storefront.

“We have to be something more than what was traditionally envisioned for self-storage,” Loeb said.

It is good the surrounding businesses know what is coming and have time to prepare, Carmen Sunda, director of the Louisiana Small Business Development Center for the Greater New Orleans region, told the Washington Examiner.

Loeb and other business owners said they need access to data regarding the future of Avondale shipyard in order to make informed business decisions. Jerry Bologna, director of economic development services at the Jefferson Parish Economic Development Commission, said the results of the $1.5 million Avondale study will offer more answers for small business owners.

State and local leaders will continue to be pushed for solutions, said Loeb, adding that he is hopeful the shipyard will be developed into something that can sustain affected businesses.

 “I may be very naïve, but I just cannot believe that a facility as well developed and expensive as Avondale shipyard can go dark,” Loeb told the Examiner. “It may not be what it is today, but surely it will be something.”

Sources Used:

Larino, Jennifer. “Other Businesses Prepare for Post-Shipyard Life.”  The Washington Examiner. May 29, 2011.

Mowbray, Rebecca. “Avondale Shipyard Closure Expected to Have Broad Impact on Regional Economy.” The Times-Picayune. July 15, 2010.

Homan, Timothy. “Unemployment Claims in U.S. Unexpectedly Increased to 424,000 Last Week.” May 26, 2011.