Tech on the Bayou? Looking Back at IBM’s Surprising Decision to Locate in Baton Rouge

September 25, 2017

In March 2013, IBM shocked the tech community with its plan to build an 800-job technology center in Baton Rouge, Louisiana. In our second episode of “The Big Deal” series, we take a look at the impact of this major announcement on Baton Rouge and the State of Louisiana as a whole.

To get the full story, we talked to Adam Knapp, President and CEO of the Baton Rouge Area Chamber (BRAC) and Greg Trahan, Director of Economic Development for Louisiana State University (LSU). Finally, to zero in on the effect of the project on the community, we asked our DCI colleague and current resident of Baton Rouge, Rebecca Gehman, to conduct some “woman on the street” interviews with local business owners.

Andy Levine (DCI): Back in March 2013, the news broke that IBM would build an 800-job technology center in Baton Rouge, Louisiana. Governor Bobby Jindal declared, “Today’s announcement is a gamechanger that will have a generational impact on Baton Rouge and our entire state. This project will continue to position Louisiana as the leader in the global technology sector.”

Patience Fairbrother (DCI): As we continue our “The Big Deal” series, we decided to take a look at the IBM announcement, and to see how it changed Baton Rouge and the state of Louisiana.

Andy: So, welcome to Episode 28 of “The Project: Inside Corporate Location Decisions”. I’m Andy Levine of Development Counsellors International.

Patience: And I’m Patience Fairbrother, also with DCI, and Andy’s cohost of “The Project”.

Andy: So, last month, we looked at BMW’s decision to locate in Greenville, South Carolina, and its impact on the state’s economy. Today, we look at the big deal that took place four and a half years ago when IBM shocked the tech community and announced plans to build an 800-job technology center in Baton Rouge, Louisiana.

Patience: So, we’re going to hear from two key players in today’s podcast. Adam Knapp is with the Baton Rouge Area Chamber, where he served as president and CEO for nearly a decade. Greg Trahan is the Director of Economic Development for Louisiana State University, and as we’ll hear, the university played a central role in winning the IBM project.

Andy: As we spoke to both Adam and Greg, there were two elements of this project that stood out to us: number one, the role of the university, LSU in this case, in winning and delivering the project; number two, the decision of the community to step up and build a new facility for IBM.

Patience: Let’s start with the university side of the equation. Here’s Adam Knapp of the Baton Rouge Area Chamber.

Adam Knapp (Baton Rouge Area Chamber): We know it came down to two other sites, really, and our region in those final conversations, and highest among them, in this view, something to dive deeper into, highest among them was communities with computer science programs at universities in proximity to that region. So, that was one of the deciding factors that drove the narrowing of sites, were places with a good strong computer science program.

Andy: Baton Rouge had LSU and a strong computer science program, but what really impressed IBM was the university’s willingness to sit back and listen to IBM’s needs, and literally reshape their curriculum. Here’s Greg Trahan from LSU.

Greg Trahan (Louisiana State University): LSU, and most universities, I think, are pretty reticent to open up a curriculum or various curricula to industry, especially in a way that says, “Tell us what we’re doing wrong, or tell us what we could do better. Help position our students and our workforce for the future.” That’s not something that universities, I think, inherently do very well, and yet, that’s exactly what happened. So, you had an entire curriculum, a computer science curriculum, that was overturned in some ways, and really expanded and opened it up. And you had IBM experts coming down to Baton Rouge and sitting with faculty in workshop-type settings, pushing the boundaries of sort of what was possible within the curriculum, to say, “Listen, you’re going to need to modify this and change this.” And the result was a profound shift in the curriculum, which benefits everyone.

Andy: Over the past four years, LSU’s computer science program has changed dramatically. Here’s both Adam, and then Greg, on the change.

Adam: It will eventually triple the size. They’re at a little better than double the enrollment in their computer science program, where they are today, and continuing, aggressively, to grow it.

Greg: We’ve seen a complete doubling, which is pretty remarkable for a program, and that was really born out of two things. The first was, you obviously had curricula that were now… a curriculum that was much more attractive to a student who, you know, rather than in the old programming paradigm, you say, “Well, right away, you’re going to learn about cloud computing, and cyber, and data, and analytics, and you’re going to build mobility applications, and you have the proximity of IBM.”

Patience: LSU and its computer science program was a key strength for Baton Rouge in winning IBM, but available real estate was a serious weakness.

Adam: But, what was our greatest weakness, I think, in that, was our available temporary facilities that they had access to, and then a clear path toward a permanent home for the facility.

Patience: The IBM search team shared this shortcoming with Adam and his team, and that’s when they brought the Baton Rouge Area Foundation in to help solve the problem.

Adam: It is a unique situation with our community foundation, which, in Baton Rouge, is a very strong community foundation, probably $600 million in total assets under management and growing, and has attached to it a for-profit development company that they’re able to do community revitalization projects with, that entity, as well. So, that entity came in as the development partner, attached to the community foundation, to build the facility. And they were very responsive, came in very quickly with an idea, brought in an architect that they use, and that architect rendered a downtown facility on the site within about a two-week time frame, from one visit to the next visit, for the company.

Patience: They shared the rendering with IBM with a bit of drama.

Adam: We took the company up on a parking lot roof deck overlooking the vacant site where this was to be constructed, and showed them the renderings, kind of with a reveal, almost like on a reality TV show, right. And it was really just a tremendous amount of excitement that came from the potential for that facility and what that looked like.

Patience: And, according to Adam, Baton Rouge literally moved from the bottom of the shortlist to the top of the list.

Adam: That change of having a permanent home as impressive as what we were able to put together changed the nature of the conversation. I mean, you could see, they had great poker faces throughout their many visits, and the confidentiality was incredibly high, obviously. You could see those poker faces melt away when they saw the rendering of the building, standing on top of that parking lot, looking at the empty space, at what was going to come about.

Andy: So, that’s how Baton Rouge won the IBM project, but we also promised to share with you the impact which this deal has had on the community.

Patience: So, to answer that question, we turned to our DCI colleague, Rebecca Gehman.

Rebecca Gehman (DCI): Hi, guys. Glad to be part of “The Project”.

Andy: So, Rebecca’s husband, Pete, is getting his PhD in Economics at LSU, and she’s based in Baton Rouge, and we asked her to conduct a few man-on-the-street interviews in downtown Baton Rouge.

Rebecca: Right. And just for background, I actually live in downtown Baton Rouge, so the first interview was actually me walking downstairs to a cafe right below my apartment building, and I met with the co-owner of that cafe, James Jacobs, who owns it with his wife, Lina.

James Jacobs (Magpie Café): And so, I came to Baton Rouge after I graduated college in the late ’80s, and then I became a business owner in Baton Rouge in 2012. My wife and I decided to leave our careers and open Magpie. And we operated a cafe on the other side of town over several years, and then after we saw what the development that was going on in the downtown area, and specifically IBM with its large customer base and employees, and how many of the employees lived downtown in residents where they were growing in the downtown area, we decided to make our investment into creating a larger scale of Magpie Cafe. And so, we did that in the latter part of 2016.

Rebecca: And you said that a turning point, when you first realized this was happening, was when you were at a downtown development meeting?

James: That’s correct. I was at a downtown development meeting, and I guess I just really wasn’t certain about what was going on in the downtown area, and just wasn’t staying too… I wasn’t really much on it. And then, I went to the meeting and I saw the agenda of all of the developments going on, IBM being one of them, but saw hotels and residents, and just thought that our demographics and our customer base would really gravitate towards living downtown, working downtown, and visiting businesses downtown. So, we thought our baking, local foods, craft cocktails, craft coffee would lend well as a model to the downtown area.

Rebecca: Let’s talk about the growth you’re seeing today downtown, and how you think that’s going to look like in 5 or 10 years.

James: So, I will say, I’ve got a great story for you, and that is, that we sit here in Magpie, and we look across this parking lot, and in a few minutes, we’re going to have one of the most beautiful sunsets that there is to see at ground level. And the landlord who owns this building I’m in, I made a comment to him, “What a beautiful sunset it’s going to be until someone builds an apartment complex on that parking lot.” And he laughed, and he said, “I wish I could get that property because I would build something there in a second.”

So, knowing that people believe in downtown, knowing that I see hotels, apartments, new businesses just trying to come down here, my wife and I told ourselves that this is the long-term plan for us, and that this is an investment in what’s to come, and that this is just the beginning of what we see as a wonderful opportunity for us as a couple and as a business. So, we have a lot of good faith that downtown is going to continue to grow, if that answers your question.

Patience: So, we’re up to the takeaways portion of the episode, and we’re going to have Rebecca stick with us for this one. Andy, let’s start with you. You did the interviews with Adam and Greg. What stood out to you?

Andy: The role of LSU. So, in this one… In other episodes we’ve done, universities have been minor players or small players in a location decision. In this one, LSU, Louisiana State University, was a major player in this, and the ability to take a strong computer science program, basically say, “We’re willing to reshape this, we’re willing to make this much, much bigger, and we’re basically going to meet you halfway, IBM, and work with you to do this.” So, to me, that was interesting in terms of the university as a key partner in winning the project.

Patience: Let’s turn now to Rebecca. We heard from her interview with James at the Magpie Cafe. So, what’s your beat, Rebecca, on the impact that IBM has had on downtown Baton Rouge?

Rebecca: Sure. So, I actually came from the Manhattan area, and I’ve only been in Baton Rouge for about a year. And downtown was actually not the first place I moved to, but I ended up deciding to move there because of all the downtown amenities. And from what I can tell from the people I spoke to, like James and others, was that those amenities just simply did not exist a few years ago. And to walk you through a day in my life downtown, it could start off with a meeting over coffee at Magpie, a walk on the Mississippi River levee, a bike on the Greenway, and then ending it with getting groceries at Matherne’s, which was a direct result of IBM being there, and then maybe a drink again at one of the bars on 3rd Street.

Andy: Sounds like a nice day.

Rebecca: It’s a perfect day in Baton Rouge every day.

Patience: So, that is a wrap on Episode 28 of “The Project: Inside Corporate Location Decisions”.

Andy: We want to thank Adam Knapp of the Baton Rouge Area Chamber, Greg Trahan of Louisiana State University, and James Jacobs of the Magpie Cafe.

Patience: But we also want to thank our DCI colleague, Rebecca Gehman, for conducting the man-on-the-street interviews in downtown Baton Rouge.

Andy: “The Project” is sponsored by DCI. We are the leader in marketing places, and have served over 450 different cities, states, regions, and countries. You can learn more about us at aboutdci.com.

Patience: We hope you will keep listening. There are many more projects to come.

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