The New Orleans Landscape Industry: Four Years Later

It hasn’t been an easy journey, but nearly four years after hurricanes Katrina and Rita hit the Gulf Coast, rebuilding efforts have spurred economic growth in the greater New Orleans area.

Despite the looming shadow of a national recession, the city continues to add more jobs and suffer from fewer foreclosures than the rest of the country. In fact, Louisiana Economic Development expects higher job growth and lower unemployment rates in 2009 than is projected in bleak national forecasts.

That’s good news for area landscape professionals, who have been working to bring the residential and commercial properties of their city – and their own businesses – back to life since 2005.

Continuing to reenergize the city during an economic downturn has its challenges, however. A slowing housing market and the countrywide credit crunch are taking their toll. According to The New Orleans Index for 2009, published by the Brookings Institution and the Greater New Orleans Community Data Center, construction work is shifting from home building (new home construction fell 25 percent in 2008) to infrastructure repairs. This signals increased challenges for residential landscapers, but it opens new opportunities for those who do landscape work for schools, libraries and commercial properties. Plus, Congress recently extended the benefits of the Gulf Opportunity Zone Act 2010, which encourages companies to continue building in the area by offering bonus depreciation and low-interest bonds.

Officials in the state recognize that the New Orleans area will suffer along with the rest of the country this year. Yet, according to Louisiana Economic Development’s economic projections for 2009–2010, the city has “laid the groundwork for long-term economic success,” and by 2010 all areas of the state are projected to resume growth.

New Orleans vs. the U.S.

Economists say recovery stimulus funding has allowed New Orleans to weather the national recession better than most other metropolitan areas. At least $50 billion has been sent to state agencies following Katrina. The money has gone to everything from disaster responses to erecting schools, parks and libraries, according to the Louisiana Recovery Authority. Recovery dollars are being used to rebuild levies, roads, schools and hospitals. Statewide unemployment has remained 2 to 3 percentage points below the national average. Home sales have slowed, but not collapsed as they have elsewhere. – CNNMoney.com

Among landscape professionals in the New Orleans area, perceptions on the state of the industry vary.

“The New Orleans market is still steady. I see some of my local competitors buying new trucks and ramping up, and we’re doing the same,” says Benton Foret, owner of Chackbay Nursery & Landscaping in Thibodaux, La. “We are staying steady, and the economy is holding its own.”

Yet according to Dan Standley, owner of Dan’s Landscaping & Lawn Care in Terrytown, La., customers are getting spooked and are looking for ways to cut costs. “The economy is predicating price,” he explains. “People are looking for the lowest bottom-line price.” 

Despite varied observations (based in no small part on what areas of the city business owners are located in), the general consensus remains: Area landscapers survived the hurricanes and the rebuilding – and they aren’t going to let a speed bump like the economy slow their growth. So they’re focusing on what they can control: quality customer service and marketing.

Learn more from Standley, Foret and Mike Carazo of All Terrain Landscape & Irrigation in Metairie, La. – three professionals who are determined to survive the economic storm as well as they did the hurricanes that preceded it.


Stay Positive, Stay Successful
It’s no surprise Hurricane Katrina hit Standley’s business in Terrytown hard.

But about two weeks after the surge hit – well before power returned to his headquarters – Standley had his 12 employees working out of a Super Lawn Truck to service commercial customers who were unaffected by the storm.
Although he lost business as a result of the hurricanes, Standley’s company survived by shifting its focus from landscape management (typically 85 percent of his service mix) to restoration.

Nearly four years later, he estimates that at least 80 percent of his service area has recovered from the storm, although there are still pockets, like the Lower Ninth Ward, that may take years to bounce back. “The city is gradually getting stronger,” Standley says.

Now, however, the concern is the national market – he expects business this year to drop by 10 to 12 percent. “Last year for installs we had two months of work booked up by mid summer; this year, we have two weeks of work. People are gun shy,” he explains, adding the goal is communicating with customers and showing them ways they can save money and still get quality in return.

It’s also about communicating with employees so they’re prepared to provide the exact services customers need. And it’s about being efficient – by installing GPS devices in company vehicles and performing preventive maintenance so equipment lasts longer. Plus, Standley stresses, it’s about staying positive. “Quitting is not an option – I refuse to participate in the recession,” he says. “We just keep plugging along.”

Weathering the Economic Downturn

Take cues from Dan Standley of Dan’s Landscaping & Lawn Care in Terrytown, La., to keep current clients happy and attract new ones, no matter what storms Mother Nature or the economy throw your way. Communicate. Stay in close contact with current customers – you can’t afford to lose their business. “One of the biggest marketing mistakes people can make is not staying in touch with their client base,” Standley stresses.  Rethink prices. You don’t have to be the lowest-cost bidder, but Standley says he has lowered some prices to help out customers. “At this point the goal is to show customers we can save money without sacrificing quality,” he says. Keep your integrity. In the New Orleans area, a lot of landscapers – many of whom aren’t even qualified contractors – come in with incredibly low bids and then don’t do the work they promise. Standley refuses to sink to their level. “We just sit back and wait for them to mess up and then we slide back in,” he says. “They just cut too many corners.” Diversify. If your design services aren’t in customers’ budgets right now, what will they buy? Standley now offers horticultural services, hedge and shrub trimming, and aerating. “They’ve been good add-on deals for us,” he says. Seek referrals. “Qualified referrals are the basis of our business,” Standley says. “Eighty percent of our business comes from 20 percent of our client base.” When a customer commends you on your work, take the opportunity to remind them you’d love a referral. Standley also connects with vendors and other contractors he knows to secure quality recommendations. Add incentives. Standley recently sent out a direct mail campaign with incentives for property managers. What deals can you offer now to draw customers who are looking for a bargain?

Conservative Growth
Although hurricanes Katrina and Rita certainly affected Foret’s business, it was Hurricane Gustav in 2008 that hit his hometown of Thibodaux the hardest.

Yet as soon as they were able, employees of his $2.8 million, residential, commercial and industrial design/build and maintenance firm were back to work.

Rather than their usual duties, however, the crews took to the streets removing toppled trees and debris, handing out ice and food, and patching roofs. “People were in such a state of shock that I was concerned we would be affected for a long time,” Foret says. Yet the community rebounded quickly, so Foret returned to offering the design and maintenance services his company is known for.

Although he recognizes some clients are hesitant to spend money this year, Foret is optimistic. “I can’t tell you how much growth we’ve seen in this area in the past two or three years,” he says. Thanks to Gulf Opportunity Zone tax incentives, more businesses are springing, so commercial business is staying strong even as the residential market lags.

For now Foret is focusing on managing his company’s profitability and strengthening his core business.

“We’re being conservative. If we have profitability, we’re reinvesting those profits in the business and attaining the brightest people in our industry so we can continue to move forward.”

Building on the Basics
Carazo recognizes the losses resulting from hurricanes Katrina and Rita were many. Yet he chooses to focus on the positive. “People are rebuilding. I don’t think it’s as bad as the media says,” he explains.

Although he lost business as a result of the hurricanes, Carazo thinks the New Orleans area as a whole is doing OK.

He even has crews from other parts of the country calling him about work because things are better in New Orleans than where they are. “People in New Orleans still have loans so there’s more positive spending from that,” Carazo says.

That’s good news for his $200,000, six-employee landscape and irrigation company. After Katrina, Carazo estimates customer demand dropped more than half.

“I lost a lot of my maintenance clients,” he recalls. Now he’s going after more design business, hoping he can land contracts for new construction and then keep those customers around as maintenance clients.

And he’s considering diversifying, too, by offering lawn and garden maintenance, repair services, hardscaping and lighting installation. “I’m trying to offer things my current customers don’t have,” Carazo says.

Yet he recognizes people are scaling back their budgets – particularly residential customers. Since the hurricanes, he’s also battled increased competition from people who peddle low-cost landscaping they aren’t qualified to handle.

“Ultimately in New Orleans right now it’s all about price,” Carazo says. “Seven or eight out of 10 clients are going to say something is too expensive.

“We’re offering quality and trying to meet people’s budgets,” Carazo adds. “We’re resilient. After the hurricanes, we have the worst behind us.”