The Stockman Syndrome

The Stockman Syndrome

Orange’s next Congressman is mainstream again

by James Shannon

Business Journal

Absent a cataclysmic event of almost unimaginable proportions, Steve Stockman will be the representative in Congress for the new 36th District, which includes all of Orange County. That means those billboards that say “Re-elect Congressman Stockman” might actually be true again by the time the dust settles in November – a mere 16 years after Stockman was defeated following his single term in Congress.

Stockman, then 39, first made political history in 1994 when he unseated 42-year incumbent Congressman Jack Brooks, chairman of the House Judiciary Committee and former LBJ protégé. It’s pretty much been all downhill from there until this recent campaign. Democrats who had been caught flat-footed by Brooks’ defeat in 1994 rebounded two years later as Nick Lampson defeated Stockman, who had wandered in the political desert ever since. He lost Congressional elections in 1996 and 2006; in between, he sandwiched in an unsuccessful bid for a seat on the Texas Railroad Commission.

After first announcing he would run for Ron Paul’s District 14 seat, Stockman changed plans at the last minute and filed for the new District 36. He finished a close second in the GOP primary, then in the runoff handily dispatched political novice Stephen Takach, the first-round leader who had pumped nearly $750,000 of his own money into the campaign.

So what has changed for Stockman this time around?

In his first term in Congress, Stockton was swept in alongside the Contract with America group whose provocative freshman class installed movement leader Newt Gingrich as Speaker of the House. Their attempts to change the status quo in Washington met with some initial success, but when they managed to shut down the entire federal government, a majority of citizens believed they went too far. Political observers said the reaction to that overreach propelled a wounded President Bill Clinton to re-election in 1996 and led to the ouster of Gingrich.

Stockman, buoyed by the early euphoria of the Contract movement, soon had to deal with suggestions he too had overreached. In an article that appeared under his byline in Guns & Ammo magazine, Stockman suggested that the burning of the Branch Davidian compound was staged by President Clinton and the Bureau of Alcohol, Tobacco and Firearms to justify the ban on assault weapons. “These men, women and children were burned to death because they owned guns that the government did not wish them to have,” the article read.

In a recent interview with the Business Journal, Stockman ruefully admitted the Guns & Ammo incident had taught him a lesson: “Don’t let a staff member write an article and put my name on it.” But the damage was done.

Flash forward to 2012, and the political landscape has been altered.

Stockman Syndrome

The term “Stockholm Syndrome” – or capture-bonding – refers to a psychological phenomenon in which hostages develop positive feelings toward their captors, as happened during a five-day hostage crisis at Kreditbanken in Stockholm, Sweden, in 1973.

It can be argued that the Stockman Syndrome is actually the reverse of the Stockholm version. A sizeable group of East Texas voters are convinced they are being held hostage by the federal government – specifically the administration of President Barack Obama – in many ways both subtle and profound. This view is constantly reinforced by Fox News, political blogs and even mainstream GOP officials like Gov. Rick Perry and Sen. Mitch McConnell.

In that context, the views espoused by Stockman that may have been seen as extreme by many voters in the past seem more plausible today – but not because he has moved toward the political mainstream. Rather, that mainstream has shifted significantly to the right – particularly in Texas and even more so in East Texas.

This suggests Stockman’s brand of conspiracy theory politics might not make him even the most outlandish member of Congress from East Texas.

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Despite his erratic history and focus on cultural issues, Stockman is essentially a conservative, pro-business Republican who espouses limited government.

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Rep. Joe Barton (R-Ennis) is a climate change denier who once blocked the bipartisan Combating Autism Act of 2006, reportedly because he rejected that there could be environmental causes of autism, and he apologized to BP chief executive officer Tony Hayward, accusing the White House of a “$20 billion shakedown” of BP after the company reached an agreement to establish an escrow account to pay the claims of people harmed by the oil spill in the Gulf of Mexico.

Rep. Louis Gohmert (R-Tyler) recently endorsed Rep. Michelle Bachman’s suggestion that a top aide to Secretary of State Hilary Clinton was a sleeper agent of the Muslim Brotherhood. Previously he had warned of pregnant Muslim women coming to the U.S. to give birth to what he termed “terrorist anchor babies” who would grow up and commit acts of terror against Americans.

Stockman grinned at this suggestion and called Gohmert “a friend who has contributed to my campaign.” He has offered his own assessment of the current administration: The Stockman campaign website advertised “Obama Barf Bags” for contributors willing to pay $10 dollars.

To be sure, this 2012 model presents a more reserved candidate. Stockman, now 55, no longer seems like the wild-eyed radical described in print accounts during his previous term in Congress. His smile is ever-present, as seen in our cover illustration taken from a campaign photograph when the candidate visited a Burger King in Jasper, and he is nattily attired in a neat suit and tie. His website lists his support for securing the border and a federal balanced-budget amendment, and opposition to gun control, abortion and gay marriage.

He appears to be sticking to safer issues recently, weighing in on behalf of the Kountze cheerleaders whose school principal banned them from displaying banners with Bible verses at football games.

In a statement, Stockman said, “The Kountze superintendent who is limiting the freedom of expression of these kids should probably start packing his bags. This is not San Francisco or New York. This is East Texas, where people still love Jesus and don’t like liberals who try to take away their Constitutional Rights.”

To his credit, Stockman has not tried to run away from his past. In a biography posted on his campaign Facebook page, he described his life in 1980 as a college dropout who became a homeless drifter eating from garbage cans and sleeping atop a concrete pillar in the Fort Worth Water Gardens. He said he cleaned up his act, earned a degree in accounting, discovered religion, and eventually challenged Brooks.

In a recent interview with KBMT Channel 12, he mentioned he his past homelessness but preferred to talk about his missionary trips to help the less fortunate. At a campaign event at a restaurant in Houston, he was represented by his wife, Patti, who told those in attendance her husband was on a missionary trip to Africa.

Stockman has few obstacles in his current path to the House. His opponent is Democratic nominee Max Owen Martin, a pilot and small business owner from Clear Lake City. His campaign website proclaims Martin “The Sane One in the Race,” but he might question his own sanity on Nov. 6. His views are not ambiguous: “It is encouraging to see the economy improving day by day, due to the policies of the Democratic Party and its president, Barack Obama,” said Martin. He has been endorsed by various AFL-CIO groups in the district, the Houston Association of Real Estate Brokers, Galveston Bay Area Sierra Club and the Orange County Democrats.

Libertarian Michael Cole, an educator at Little Cypress-Mauriceville High School, will also be on the ballot.

In the political calculus of 2012, that makes Stockman the prohibitive favorite. Despite his erratic history and focus on cultural issues, Steve Stockman is essentially a conservative, pro-business Republican who espouses limited government.

This article originally appeared in the October issue of the Greater Orange Business Journal

All Aboard!

Beaumont opens new Amtrak station

The new Amtrak station welcomed its first Sunset Limited bound for New Orleans on Friday, Sept 14. The station features a new platform, a covered waiting area, rest rooms and a police substation.

Amtrak completed the construction of the station at 2555 W. Cedar St. in January of this year. It was built to Amtrak’s standard for low-use stops. The Sunshine Limited passes through Beaumont six days a week. On Tuesday, Friday and Sunday, travellers may board the train at 2:05 p.m. and arrive in New Orleans at 9:40 p.m. Monday, Wednesday and Saturday, passengers board the westbound train from New Orleans at 3:48 p.m. The westbound Sunset Limited continues, making stops in Texas, New Mexico and Arizona, and arrives in Los Angeles almost two days later at 5:35 a.m.

Mayor Becky Ames was on hand for the official grand opening with other civic and business leaders and hailed the new facility for boosting the city’s image with those arriving by train.

The new station is on a four-acre site that was purchased by the city of Beaumont. The American Reinvestment and Recovery Act provided Amtrak with funding for the construction of the station. Beaumont funded the construction of the police substation at a cost of $289,000.

Tickets and reservation for rail travel may be secured through Amtrak’s Web site.

Property Management

Creel Investments and Keller Williams announce partnership

Darren Creel of Creel Investments and his team have joined ranks with Kathy Cleveland at Keller Williams Beaumont to form Keller Williams Rental Services, a residential property management company.

Darren Creel is a former Army military police officer and former Beaumont Police officer who has been investing in real estate since 1993 and formed Creel Investments in 1995.

In October 2009, Kathy Cleveland purchased Keller Williams Realty in Beaumont. Earlier this year, she opened two other offices, one in Port Neches and another in Lumberton. Currently, over 70 agents are licensed and working at any one of the Keller Williams offices. As a company who is constantly expanding, Keller Williams is pleased to now be affiliated with Creel Investments property management.

“In property management, your integrity is all you have going for you at the end of the day. We work hard to ensure that our integrity is as high as possible every single day,” said Creel. Their property management and maintenance team manages more than 800 properties in the Golden Triangle Area.

“When the opportunity came to join a group like Keller Williams with its high standards of customer service and the friendly and capable team that works with Kathy Cleveland, we jumped at the chance,” added Creel.

Creel Investments will continue to work out of its Beaumont office as the main headquarters and also has an office in Port Neches, and has announced the opening of a new office in Lumberton with Keller Williams.

high as possible every single day,” said Creel. Their property management and maintenance team manages more than 800 properties in the Golden Triangle Area.
“When the opportunity came to join a group like Keller Williams with its high standards of customer service and the friendly and capable team that works with Kathy Cleveland, we jumped at the chance,” added Creel.
Creel Investments will continue to work out of its Beaumont office as the main headquarters and also has an office in Port Neches, and has announced the opening of a new office in Lumberton with Keller Williams.

Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at setxbiz.blogspot.com or e-mail james@beaumontbusinessjournal.com.

Rice farmers vs. Keystone pipeline

TransCanada seeks writ in Jefferson County court

Landowners and environmental protestors joined together at the Jefferson County Courthouse on Wednesday, Sept. 12, as attorneys for TransCanada sought a writ of possession on three parcels of land here so construction of the Keystone XL pipeline could begin. A hearing was held before Judge Tom Rugg in County Court at Law No. 1 to decide the narrow issue of the writs.

Houston attorney Thomas Zabel has represented TransCanada in many of these cases where land was taken by eminent domain. He noted that under Texas law, property owners could not challenge taking of land for pipelines.

But a recent Texas Supreme Court decision in the case of Texas Rice Land Partners vs. Denbury Green Pipeline said otherwise. The high court unanimously ruled that the pipeline company had to prove it served a common good before it should be given the right to seize private property. The test of whether the project is indeed a common carrier is legally murky. The Texas Railroad Commission approved TransCanada’s permit to operate a pipeline as a common carrier, yet the agency has stated that it doesn’t review the applications for pipelines and doesn’t have the authority to determine common carrier status or give eminent domain permission to TransCanada.

At the beginning of the hearing, Judge Rugg said, “We have a trio of TransCanada pipeline cases today, and I’m not sure why we’re here,” then he noted, “Common carrier status seemed to be the issue of the day.”

The urgency for the proceeding rests with the writ of possession TransCanada asked the court to issue, which would allow pipeline construction to begin even as landowners continue their legal appeals. Zabel noted TransCanada has posted surety bonds to compensate landowners should they prevail.

Terry Wood, attorney for Texas Rice Land Partners, when asked if those bonds were sufficient to make his clients whole again should a court rule against TransCanada, was quick to respond. “Absolutely not,” he said and questioned procedures that favored “TransCanada’s desire to build their pipeline over the constitutional rights of my client.”

Leeanne Johnson of Orgain, Bell & Tucker represented the other two landowners in court, both linked to prominent Beaumont families — Phelan and Dishman. She strongly disputed TransCanada’s arguments, at one point telling the court that Zabel was being “disingenuous at best.”

Zabel said TransCanada needs those writs so if TransCanada meets resistance when workers show up on the property “the sheriff can say they have a right to be there.”

Based on Johnson’s statement to the court, he might have something to worry about. One of the landowners she represents was identified as the M.A. Phelan Trust. If construction crews show up at the Phelan farm, said Johnson, “Mike Phelan said they are going to stop them.”

Judge Rugg bemoaned the lack of clarity from the higher courts. “I’m left with no guidance from Denbury,” he said, but promised to rule by Sept. 24.

Cheniere to start construction

Project to convert Sabine Pass facility to export LNG

By the time Golden Pass Partners decided this month to apply for permits to convert its facility along the intracoastal canal to include the ability to liquefy and export natural gas, its rival across the river Cheniere Energy Partners was almost ready to start construction on converting its facility.

Both Cheniere and Golden Pass planned and built their multi-billion LNG export facilities at a time when experts were warning a serious shortage of natural gas in the United States was imminent. As construction neared completion, new recovery techniques and the discovery of additional deposits of natural gas radically altered the equation.

Cheniere was first out of the gate, moving ahead with the construction of facilities to liquefy and export natural gas in Louisiana, moving the U.S. one step closer to becoming a major exporter of the commodity.

The company said it had given engineering contractor Bechtel Oil, Gas and Chemicals Inc. the green light to start building two liquefaction trains at its Sabine Pass, La., import terminal. Bechtel designated Recon and Bomac as the prime subcontractors, with those three firms and Cheniere officials on hand for the session.

The U.S. exports relatively small quantities of LNG to Japan out of Alaska, but the Sabine Pass facility would be the first terminal to do so out of the lower 48 states. The company has struck long-term agreements with four global buyers to supply over two billion cubic feet a day of natural gas for 20 years.

Golden Pass to export LNG

Conversion would mean $10 billion investment, 9,000 jobs

Golden Pass Products LLC (Golden Pass) has submitted an application to the U.S. Department of Energy (DOE) to export liquefied natural gas (LNG) from the Golden Pass LNG receiving terminal at Sabine Pass.

The proposed project involves construction of natural gas liquefaction and export capabilities at the existing Golden Pass LNG facility. A final investment decision will be made following government and regulatory approvals.

If developed, the project would represent about $10 billion of investment on the U.S. Gulf Coast, generating billions of dollars of economic growth at local, state and national levels and millions of dollars in taxes to local, state and federal governments. The project would generate approximately 9,000 construction jobs over five years with peak construction employment reaching about 3,000 jobs.

The proposed project would have the capacity to send out about 15.6 million tons of LNG per year. New infrastructure required to export will be located on the existing property, which currently contains two berths for LNG tankers, five storage tanks and access to the Golden Pass pipeline. The expanded facility would then have the capability and flexibility to both import and export natural gas.

The proposed expansion of Golden Pass is an opportunity to capitalize on America’s abundant natural gas resources. The Energy Information Administration’s Annual Energy Outlook 2012 shows that the United States has substantial gas supplies that can support gas exports, including LNG exports, over the longer term.

The application filed with the DOE is to export natural gas to nations that have existing free trade agreements (FTA) with the United States. A similar application is planned for non-FTA countries.

The expansion, Golden Pass Products, is a partnership of Qatar Petroleum International and ExxonMobil affiliates. The experience of its two partners provides Golden Pass Products market-leading project development skills and technical expertise that would allow the company to construct a world-class liquefaction and export facility in the United States.

This proposed expansion is taking place in a changing energy market. The abundance of natural gas in the U.S. is revolutionizing the scale and future of domestic energy development. Because of its abundant supply and world-class industry capability and infrastructure, the U.S. has the opportunity to capture significant economic benefits by expanding domestic and international markets for natural gas. LNG exports will help maintain a robust domestic U.S. gas production industry.

Company officials noted this project would create an opportunity to adapt an existing business to the changing demands of the global market, capture benefits in the U.S. through jobs and investment and deliver an abundant energy resource to our trade partners. LNG exports are consistent with U.S. efforts to expand international trade and reduce barriers to trade. The U.S. is already an exporter of many commodities and energy products, including wheat and coal. The company believes the freedom to import and export goods and services benefits Americans in the form of more choices, more value, more wealth and more jobs.

In announcing its application for this new project, the company cited demonstrated safety and environmental performance in the construction and operation of its existing Sabine Pass facility. The Golden Pass expansion project would be built and operated with the same unwavering commitment to safety as the existing facilities. Through construction of the existing facility, Golden Pass demonstrated an excellent safety record with more than 5 million work hours without a lost-time injury. Since operation, there have been zero lost-time injuries at the Golden Pass employee base. Golden Pass is an excellent environmental steward, with zero water discharge or air violations. The expansion project would be built on the existing industrial footprint, minimizing environmental and community effects.

The U.S. government, through the Department of Energy and the Federal Energy Regulatory Commission, utilizes a rigorous application and permitting process for LNG export projects. DOE evaluates several criteria, such as energy security and price implications, in order to determine if an LNG export project would be in the public interest. FERC ensures the safe operation and reliability of proposed and operating LNG terminals.


Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at setxbiz.blogspot.com or e-mail james@beaumontbusinessjournal.com.

Keystone pipeline coming

Construction of Gulf Coast Project underway in Jefferson County

 

Those big tractor-trailer rigs transporting large quantities of pipe across Jefferson County represent the advance guard of a huge construction project that will bring crude oil to the thirsty refineries along the Texas Gulf coast – and jobs to Southeast Texas.

TransCanada Corporation announced July 27 that it has received the final of three key permits needed from the U.S. Army Corps of Engineers in order to advance the 485-mile Gulf Coast Project. With the permit from the Fort Worth Army Corps district added to previously received permits from the Galveston and the Tulsa, Okla., districts, TransCanada is now in a position to start construction of the oil pipeline in the coming weeks.

“Receiving this final, key Army Corps permit for the Gulf Coast Project is very positive news. TransCanada is now poised to put approximately 4,000 Americans to work constructing the $2.3 billion pipeline that will be built in three distinct ‘spreads’ or sections,” said Russ Girling, TransCanada’s president and chief executive officer. “The Gulf Coast Project will contribute millions in property taxes to counties in Oklahoma and Texas, money that can be used to build roads, schools and hospitals.”

The pipeline will transport growing supplies of U.S. crude oil to meet refinery demand in Texas. Gulf Coast refineries will be able to access lower-cost domestic production and avoid paying a premium to foreign oil producers, reducing cost and the United States’ dependence on foreign crude oil.

Although the release does not spell it out, TransCanada officials confirmed to the Business Journal that the Gulf Coast Project is the southern link to the Keystone XL pipeline that has been approved for construction even as the application to reroute the Nebraska portion of Keystone is under review.
Girling points out building a safe and reliable pipeline remains TransCanada’s top priority.

“TransCanada has an industry-leading safety record, and that is something we take great pride in,” he added. “People expect their energy to be delivered safely and reliably – on this point there can be no compromise. As an industry, we need to have the best and most modern policies, procedures and equipment in place to prevent and respond to incidents.”

TransCanada says it has state-of-the-art leak detection systems, elevated safety features and specialized staff training in place to ensure its crude oil pipeline system is safe. These features include:

• Around-the-clock monitoring of pipeline operations by highly trained staff who are empowered to shut down the pipeline at the first sign of a problem.

• A greater number of data sensors and emergency shut-off valves than in older pipeline systems.

• Information updates every five seconds on pipeline operating conditions from more than 36,000 electronic sensors that transmit data via satellite (16,000 sensors in the current operational Keystone pipeline, 6,800 for the Gulf Coast Project, 13,500 for Keystone XL).

• The ability to shut down the pipeline and isolate affected sections within minutes using hundreds of remote-controlled shut-off valves.

• Requiring all possible problems to be investigated immediately by pipeline controllers and field staff. The pipeline cannot be re-started until it is confirmed safe to do so.

Fred Jackson, staff attorney to Jefferson County Judge Jeff Branick, said TransCanada has also agreed to additional monitoring of roads and bridges used by heavy trucks and other equipment traversing county roads during the construction process.

“TransCanada has retained a third-party contractor to conduct surveillance along the ‘haul route’ that will be used,” said Jackson. “The road chiefs from each county precinct will receive reports from the monitoring.”

As shown in the map (Page 14A), the pipeline will enter Jefferson County from the west and traverse many lightly populated areas but will occasionally come near established neighborhoods. In March of this year, the Beaumont City Council got in on the act, unanimously voting to grant TransCanada a permanent easement for the pipeline to cross the Tyrell Park marsh in exchange for a one-time payment of $240,640.

The terminus for the pipeline is at the Sun Oil Tank farm in Port Neches with an additional tank farm likely to be constructed when the entire Keystone XL pipeline is completed. A dense network of existing pipelines will then transport the crude oil to area refineries.

The company has voluntarily agreed to 57 additional safety procedures that will be incorporated into the construction of crude oil pipelines, including a higher number of remotely controlled shutoff valves, increased pipeline inspections and burying the pipe deeper in the ground. TransCanada also uses a technique called horizontal directional drilling to drill under major rivers a minimum of 25 feet. This will allow the company to bury the pipe deeper on both sides of the riverbank, offering protection from floods or high river levels. The pipe will be made of thicker steel as it crosses rivers, will operate at a lower pressure and be further protected by advanced non-abrasive coatings.

TransCanada notes they have safely and reliably operated pipelines and other energy infrastructure across North America for more than 60 years. The company’s existing 2,154-mile Keystone pipeline from Alberta to Cushing, Okla., and Wood River/Patoka, Ill., has safely delivered more than 280 million barrels of Canadian crude oil to U.S. markets since July 1, 2010.

The U.S. Department of State is currently reviewing TransCanada’s application for a Presidential Permit to proceed with the 1,179-mile Keystone XL pipeline from Hardisty, Alberta, to Steele City, Neb., and is expected to make a decision in the first quarter of 2013. TransCanada also continues to work with the Nebraska Department of Environmental Quality to finalize a route that avoids the environmentally sensitive Sandhills area of Nebraska.

“The Gulf Coast Project and the entire Keystone system will further help the U.S. achieve true energy security,” concluded Girling. “The U.S. Energy Information Administration has forecast the United States will continue to import more than 7 million barrels of oil each day into 2035. I continue to believe Americans would prefer to consume their crude oil from domestic producers and from Canada rather than higher-priced oil from countries that do not share American values.”

With more than 60 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure, including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada operates a network of natural gas pipelines that extends more than 68,500 kilometers, tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with about 380 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns or has interests in more than 10,900 megawatts of power generation in Canada and the United States.

Signs of economic recovery

2012 sales tax revenue up, real estate sales improve

When Texas Comptroller Susan Combs announced July 11 that state sales tax revenue in June was $1.98 billion, up 15.2 percent compared to June 2011, it was good news for a state economy that continues to show signs of strength.

“Sales tax revenue has increased for 27 consecutive months in Texas,” said Combs. “Strong business spending in industries such as manufacturing and oil and natural gas boosted the latest sales tax collections. Revenue from consumer spending in the retail trade and restaurant sectors also did well.”
In Southeast Texas, reported sales tax revenues also rose, in some cases dramatically, as forecasters sifted the fiscal tealeaves to detect trends that might suggest an even more robust economic recovery. But the June numbers were cause for at least cautious celebration.

In Beaumont, the nearly $2.8 million sales tax payment for June represented a 16 percent increase over the same month a year ago. Nederland recorded an even more impressive 51 percent increase, with Groves registering a solid 24 percent improvement. Port Arthur was off the charts with the nearly $1.6 million sales tax payment representing a 78 percent increase, although that figure should be viewed with caution as the increase could be the result of an auditing recalculation. The Comptroller’s Office does not separate sales tax revenues by business sector, making definitive analysis difficult.
Overall, total sales tax revenue for Jefferson County in June was up 33 percent over the same month last year. For 2012 to date, collections are up 14.8 percent over 2011 – a solid upward trend that suggests the June increase is not an aberration.

Next door in Orange County, there was more good news. Bridge City enjoyed a 29 percent sales tax increase over June 2011, with the city of Orange posting a welcome 24 percent surge. Vidor continued the upward trend with a 19 percent increase while Rose City enjoyed a 71 percent jump, although revenues totaled only $18,320, with the smaller totals making the numbers more volatile. Total sales tax revenue for Orange County in June was up nearly 20 percent over the same month last year. For 2012 to date, collections are up 2.46 percent over 2011, but the trend is positive.

In Hardin County, the gains were generally more modest but continued the upward trend seen in adjacent counties. One exception was Kountze, which showed a nearly 41 percent gain on revenues of $30,799; another was Sour Lake with a 36 percent increase on revenues of $57,982. Lumberton was steady with a 3.26 percent increase as was Silsbee with 4.99 percent. Overall, Hardin County recorded a 8.87 increase in June, with the 2012 number increasing 5.74 percent over 2011.

Putting these numbers in perspective requires some insight from area practitioners and analysts. Ann Galassi is economic development manager for the Sabine River Authority. As a board member of the Southeast Texas Economic Development Foundation, she was asked if she believes these positive signs are indicative of an overall economic recovery in Southeast Texas.

“My gut feeling is yes, but I don’t think we’re out of it yet,” said Galassi. “I’m very cautious about saying these are good signs — they are positive signs, but if you look nationally we’re showing a lot more positive signs than elsewhere because our job growth is larger than in other places.”

Despite the caution displayed by many in her profession, Galassi does see some cause for optimism.
“I think it helps, but I think the hard numbers, the reality – there are a lot of businesses that have struggled through all this and have done really well and there are those that haven’t,” she said. “It helps that industry – the manufacturers and the petrochemicals and refineries – have put investments in this area and believe this is where they need to be doing business.”

Dr. M. Ray Perryman, president and CEO of The Perryman Group, is an economist whose column appears each month in the Business Journal. He sees the surge in sales tax revenue as a positive harbinger for the economy.

“The gains have all the appearances of some staying power, and we are seeing them in many parts of the state,” said Perryman. “One thing a lot of people don’t realize is that sales tax also includes a lot of business-to-business transactions, which has really picked up in all of the areas that have anything to do with drilling, refining and petrochemicals.”

Real estate recovery

 

Other hopeful signs of economic recovery can be found in the real estate sector. Dr. Mark Dotzour, chief economist of the Real Estate Center at Texas A&M University, recently cited evidence of housing market strength, asserting the residential real estate market in Texas has appeared to have formed a bottom and is beginning to recover. Total sales of nearly $40 billion were reported to the Real Estate Center in 2011, very similar to 2004 before sales spurted in 2005-07 because of greatly relaxed underwriting standards. Dotzour said, “It appears to me that sales volume has stabilized around $40 billion for the past three years. Early results indicate that 2012 will show a substantial increase.”

The inventory of homes for sale is another indication of stabilization in the residential market. If there is an excessive amount of homes for sale, the risk of price declines is higher. When inventory gets lower, prices start to rise.

Dotzour cautions that comparing current home sales to peak-year figures sparked by what turned out to be disastrous lending policies are not really valid as an indicator of housing market reality.
“In 1999, we thought 184,054 units sold was so hot it was off the charts; in 2011, we thought 203,637 units sold was a difficult market,” he said. “Don’t compare your business activity with what happened in 2006 and 2007. Those years were an aberration. That kind of sales volume should have never happened. We have learned our lesson, and from now on you actually have to have a job and some income to buy a house. That’s called ‘a normal market.’”

In March, the Beaumont market saw a decline year-over-year in new home sales, a decline following a rise in February 2012. A total of 202 new homes were sold during the 12 months that ended in March, down from 205 for the year that ended in February. New home sales represented 2.9 percent of overall housing sales, less than the 4.2 percent of sales a year earlier. For new and existing homes, sales gained year-over-year in March after also increasing in February year-over-year.

For existing homes, the sales numbers were more robust. In the first five months of 2012, total home sales in Beaumont increased each month, rising from 110 homes sold in January to 197 sold in May, the last month for which statistics were available at press time. In May, the average price of those homes was $153,100 with a median price of $134,100.

Dr. Perryman has also seen the Real Estate Center at Texas A&M’s forecast “substantial” gains in real estate sales for 2012 over 2011 and shares their optimism.

“The increase in home sales is generally being seen in multiple listing data around the state. The situation is still a bit cautious due to the lending environment but should be sustainable,” he said.
As this apparent economic recovery takes additional tentative steps forward, both sales tax revenues and real estate sales will be valuable barometers to gauge how extensive the resurgence will be.

Location, location, location

Boomtown BBQ working to overcome obscure hideaway

The real estate agents’ mantra about location might be a cliché, but it expresses an underlying truth – an identical house or property can increase or decrease in value due to its location.

That truism has come home with some force for Chris and Emily Swanson, who moved their Boomtown BBQ restaurant less than two miles down Calder from their original location and dropped off the radar of many customers who had patronized their first location in the rustic building that once housed Fat Mac’s, another barbecue joint.

That building was on a stretch of Calder just past where it crosses Phelan. That part of Calder is not as heavily traveled as other parts of that avenue, but it is Times Square compared to the intersection of Calder and Junker where they remodeled a spot in a strip center that also houses Honey-B Ham and Tizzy’s salon. Sitting at the end of the strip center, Boomtown is almost invisible from Calder, as if they were hiding in plain sight.

Opening in the old Fat Mac’s in March 2011, Swanson said it was a larger restaurant than they originally had in mind but it came equipped with tables, chairs and equipment.

“That made it appealing because we didn’t have a whole lot of money,” he said. “The not-so-appealing part was that it cost a whole lot of money to rent that place.”

Swanson staggered under the $5,100-a-month rent, which when utilities were added meant the first $200 they took in each day went to the building – before food, employees, insurance and everything else was calculated. That sent them searching for a new location; they got out of their lease after 11 months. That building is currently being prepped for an August opening as Tibideaux’s New Orleans Kitchen.
By April 2012, the Swansons had moved into their new digs – formerly Gino’s Pizza & Pasta – but some of their customers have had a hard time finding them.

A better life

Chris and Emily Swanson are a hard-working couple with four kids who were living from paycheck to paycheck and looking for a better life. Chris was an auto insurance adjuster; Emily was a kindergarten teacher in a BISD elementary school. Together they took the plunge.
“We’ve put everything we have into this,” he said. “We both took out our retirements, we put all our eggs in one basket and said we’re going to make this work.”

Getting into the notoriously tough restaurant business was not as daunting a challenge as it might be to others. Chris’ father, Cook Swanson, had thrived in the industry off and on over the years. He built Christopher’s – a restaurant named after his son – in the building on 11 Street that later housed Hoffbrau Steaks and currently is home to Starvin’ Marvin’s.

Chris recounted how his father was living in Austin when he took his truck and trailer and moved to Durango, Colo.

“He parked his trailer at an old gas station and started selling Serious Texas Barbecue, as he called it. He later converted the gas station into a restaurant, then a couple of years later started a second Serious Texas Barbecue at the other end of town,” he said.

That success convinced Chris to attempt to emulate Cook’s success. The resulting cuisine might not be your father’s Texas barbecue – but it is his. Colorado may have something to do with that. The population boom in that beautiful state in recent decades has been fueled by transplants, coming in large part from the East Coast, the West Coast and Texas, each bringing their own ideas about barbecue.

For example, east of the Mississippi, when you order barbecue you’re talking about pork. Pulled pork tops Boomtown’s menu of smoked meat. Next is the more traditional Texas barbecued beef brisket, chicken, sausage links and ribs. They also have a nice smoked turkey breast. The barbecue sauce at Boomtown is something of a hybrid – a vinegar-based sauce typical of Carolina barbecue with flavors of Texas barbecue sauce added. Swanson said their regular customers swear by it, but Boomtown might benefit by offering a more conventional sauce for Texas barbecue purists.

Further down the bill of fare is where Boomtown BBQ really stands out with what Swanson calls his “Twisted Menu.”

“The G-7 is a sandwich I made up because we didn’t have a sandwich of our own; I wanted a sandwich that was a little bit different than anybody else around here,” said Swanson. It comes on a bun piled high with pulled pork, queso blanco, beef brisket and barbecue sauce.
The queso blanco is more typical of something you’d find in a quality Mexican restaurant, made with white cheese, diced green chilies, cilantro, onions and jalapeños.

The closest thing Boomtown has to a signature dish might be the Taco Bomb, a spicy combination of pulled pork and cheesy potatoes on a flour tortilla with onions, jalapeños and barbecues sauce. BBQ Nachos feature pulled pork and queso blanco on tortilla chips with onions and jalapeños. They also offer a nice cobbler for desert.

Chris and Emily Swanson have energy and passion to burn and it is reflected in the food that comes out of the kitchen. Their first year in the restaurant business has been a tough one, but they are not going anywhere. If you ever patronized their first place and wondered where they went, take the time to seek them out. New customers are welcome, too – and that Taco Bomb is, well … the bomb.

‘Business Journal, you have a problem’

In a recent article that appeared in both the Business Journal and The Examiner, we tested a notion that had been offered almost as an article of faith – whenever local doctors got sick, they traveled 90 miles west to Houston for treatment. A billboard erected earlier this year near the intersection of Dowlen Road and Highway 69 proclaims, “Houston … you have a problem,” then touts “World Class Surgery. Personal Attention. Right here in Beaumont.”

The focus of the article was new specialty health care facilities including Previty Clinic at Baptist Hospital and the recently announced Victory Medical Center. We often solicit opinions from people with inside knowledge of a particular industry. On rare occasions, we agree not to identify them by name to encourage them to speak openly about institutions they might encounter in their business. That was the case with ‘Boutique Medicine”. Here is a comment that appeared in that story:

“There’s no question we have quality health care in Southeast Texas because both hospitals have been recognized nationally – Christus and Baptist,” said one observer who closely tracks the local medical scene, and enumerates the points that are important to many patients. “You have a board-certified physician – you definitely want to know that, and there’s nothing wrong with asking doctors their clinical outcomes; you can go online and see that now. So you have everything that’s necessary here to provide the service in the right atmosphere with the right clinical outcomes.”

So far, so good. But the next comment from this unnamed observer proved problematic, as you will see – although it seemed like a minor point at the time:
“Insurance companies are all about saving dollars,” said the observer. “If you need an MRI, they may send you over to the MRI place that used to be a movie theater that has a rejuvenated MRI machine that is probably 15 years old and you can get your MRI for half the price. Never mind they can’t see a tumor that’s in your liver – it’s half the price!”

To be fair, this unnamed observer is not directly involved in promoting any particular diagnostic center so the comment did not immediately create concern in our editorial process. But it definitely caught the attention of Dr. L.E. Richey, owner of US Imaging, which has been serving patients and physicians in Texas since 1989. The company owns and operate nine outpatient medical imaging centers in Houston, Sugar Land, Pearland, Beaumont, Bay City and San Antonio.
As it happens, their facility here – Beaumont MRI – is located in an old movie theater on College Street near Gateway Shopping Center. Richey takes sharp exception to the idea that any of his facilities offer substandard care.

“We specialize in taking care of hundreds of thousands of people every year, and we’re not in it just to make a buck,” said Richey. “The quality of what we do is every bit as competitive in the marketplace. It’s like I can have a nice home for $250,000 or you can have another home that costs a million dollars, but in the long run all you do is live in it – and that’s what we’re doing. We’re practicing very effective medicine and taking good care of people, and when somebody says we’re not doing quality work, that is very, very offensive – and just plain wrong,”

Richey said you don’t have to just take his word for it, and cited this statement from Dr. L. Paul Gerson, a board-certified radiologist in private practice in Houston who spent 30 years as chief of neuroradiology at St. Luke’s and Texas Children’s Hospitals.

Gerson said he “was surprised at the negative description of Beaumont MRI.


I don’t know who their ‘local medical observer’ is, but I can tell you that his opinion is wrong” and then offered a blunt assessment: “I think that as a ‘medical observer’ I can judge the quality of MRI studies and I can say that the images produced by Beaumont MRI are perfectly diagnostic. … I can see no justification for their uncalled for and negative portrayal of Beaumont MRI.”

On a recent afternoon, Richey drove over from Houston to give the Business Journal a tour of his facility here. The former movie theater has been tastefully converted into a medical imaging center with no traces of the space where audiences once thrilled to the exploits of Luke Skywalker and Indiana Jones.

Beaumont MRI offers a service menu that includes digital X-ray, magnetic resonance imaging (MRI), MRA, CT scan and ultrasound in a spotless modern facility. During our visit, we observed center administrator Rhonda Rhodes and her staff offering warm, personal service to patients undoubtedly under stress from the health issues that required the diagnostic procedures in the first place. There was nothing “cut-rate” about any aspect of Beaumont MRI and despite the unflattering reference in our previous story, we would be perfectly comfortable with recommending Beaumont MRI to friends and family members.
That is a good thing, because subsequent investigation revealed that a preferred provider for the health insurance policy covering employees and family members at Examiner Corp – parent company of the Business Journal – is Beaumont MRI.


Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at setxbiz.blogspot.com or e-mail james@beaumontbusinessjournal.com.

Motiva celebrates!

Project makes Motiva Port Arthur country’s largest refinery

A crowd of dignitaries gathered in a massive white tent at the Motiva Refinery in Port Arthur on May 31 to celebrate the completion of a five-year construction project that made that facility the country’s largest oil refinery and one of the largest in the world. The landmark Crude Expansion Project more than doubled the facility’s daily processing capacity to 600,000 barrels of crude.

With more than 14,000 people working on the project at peak construction and more than 300 new permanent jobs, the expansion bolstered Motiva’s position as one of Port Arthur’s largest employers and a leading revenue source for the city, county and local public schools. The overall economic impact of the project in the region has been estimated in excess of $17 billion.

Executives of the companies that jointly own Motiva – Peter Voser, chief executive of Royal Dutch Shell; and Khalid Al-Falih, president and CEO, Saudi Aramco – turned the ceremonial valve commemorating the start of oil flowing through new processing units at the complex. At the event, Motiva CEO Bob Pease extended his thanks to Port Arthur and the surrounding region for their continued support of the project.

“This was truly a community effort that involved so many people and businesses in the Golden Triangle area of Southeast Texas,” said Pease. “The tremendous talent and skill of the employees and contractors who worked on the expansion, day in and day out; the quality of products and services provided by local suppliers; the enthusiasm and support of public officials and local community — All of these contributions came together to make this project a success.”

Pease also noted that the expanded refinery can process a wide variety of crude oils, ranging from relatively light to heavy. It also has the flexibility to switch between primarily producing gasoline and diesel to adapt to varying market conditions.

Al-Falih described the expansion project as a significant milestone of Saudi Aramco’s enduring energy ties with the United States.

“Our investment in Port Arthur is an integral part of Saudi Aramco’s global downstream expansion strategy. Our commitment to meet the needs of the United States’ oil market, our expanded stake in U.S. downstream, and our R&D investments in future transportation fuels will contribute to enhancing the United States’ long-term energy security – today, tomorrow, and for decades to come,” he said.

Al-Falih is a Saudi national with an extensive background in this country and a particular connection with Texas. A graduate of Texas A&M, Al-Falih noted that Texas companies and individuals have been in Saudi Arabia for eight decades, making the business and personal links extensive and lasting.

Royal Dutch Shell CEO Voser added, “Port Arthur’s expansion is central to Shell’s plans for selective downstream growth in North America. This refinery will make a major difference to our ability to process the lowest cost crudes to high quality oil products for our customers.”

The Port Arthur Refinery celebrated its 100th anniversary on Nov. 13, 2003.

It began operations as first refinery of The Texas Company (later Texaco) in 1903. It was a direct by-product of the Jan. 10, 1901, Lucas Gusher and the resulting Spindletop oil boom.

On Jan. 1, 1989, Saudi Refining Inc. purchased 50 percent of the Port Arthur Refinery as part of a joint venture with Texaco and Saudi Refining, and the refinery became known as Star Enterprise. On July 1, 1998, a joint venture was formed between Texaco, Saudi Refining and Shell Oil Co. under the name Motiva Enterprises LLC.

Headquartered in Houston, Motiva Enterprises LLC is a refining and marketing joint venture owned by affiliates of Shell and Saudi Aramco. Motiva’s marketing operations support a network of about 8,300 Shell-branded gasoline stations in the eastern and southern United States.

In 2001, Texaco was purchased by Chevron and its interest in Motiva was sold to Shell Oil and Saudi Refining Inc. The Port Arthur Refinery is still operated as Motiva, which is now jointly owned, with Shell Oil and Saudi Refining Inc. being 50/50 partners.

The refinery covers about 3,600 acres and is located in Jefferson County within the city limits of Port Arthur, between Highway 73 and Highway 87 on Savannah Avenue. It is the largest single lube plant in the United States, producing lubricant base oils that are sold to Shell Lubricants as well as various industrial companies. The refinery has a diverse workforce of about 1,300 full-time employees and more than 500 contractors on site each day.

FreshBrew buys Tri-Cities Vending

Beaumont acquisition could triple sales in 18 months

Houston-based FreshBrew Vending, a subsidiary of FreshBrew Group, has acquired Beaumont’s largest vending company, Tri-Cities Vending, in an effort to begin expanding its Houston operations. All operations were transitioned to FreshBrew Vending on May 1.

“We couldn’t be more excited about taking the first steps in expanding our vending services to other markets,” said Steven Weyel, chief operations officer for FreshBrew Group. “We look forward to working with all of Tri-Cities’ employees as we enhance our operational offerings to our new client base.”

FreshBrew has invested in cutting-edge technology to ensure its vending products offer the very best services to both its clients as well as the vending end user.
“The built-in mobile communication between our drivers and home office enable us to respond to any issues within a two-hour timeframe,” said Weyel.

In addition, FreshBrew Vending offers elevated security control over its machines that includes full cash control of each location as well as cyber locks, which only enable keyed access to the machine during the designated employee’s shift hours. Any other time of day, the cyber lock restricts access to the machines.

In an interview with the Business Journal, Ali Ansari, president of FreshBrew Group, said while the security features will not necessarily make their vending machines immune to a teenager with a crowbar, the technology greatly enhances customer service and internal quality control and called the Tri-Cities acquisition a major boost for FreshBrew fortunes.

“It’s not only the immediate boost to the size and scope of our vending business that makes this acquisition so exciting for us,” he said. “We are even more excited about all the Beaumont Tri-Cities employees who are now joining our organization. With decades of combined experience in the vending industry, we see the dedication and passion each person is going to bring to our team.”

The Beaumont market offers FreshBrew Vending the opportunity to expand its services into other industries, such as refineries, additional hospital systems and potentially some casinos in Louisiana.

Despite the name, FreshBrew is no longer really in the retail coffee business per se, explained Ansari.

“We sold our office coffee division to a company called Filter Fresh, who recently got bought out by Aramark, so we’re strictly a coffee roaster and a vending company. We’re not doing coffee vending; we’re just doing snacks, drinks and frozen product,” he said, emphasizing the food quality in vending machines has greatly improved in recent years. “Now you have Kraft products; you’ve got Tombstone pizzas; you’ve got amazing brands now – they’re frozen and you just microwave them up, with a combination of ice cream and food in the machine. You get the best of both worlds.”

Ansari said the Tri-Cities acquisition will not be their first foray into business in this area.

“We’re excited to come to Beaumont. Our family used to own the Gateway Shopping Center a few years ago, so we’re very familiar with Beaumont,” he said. “We sold it right before the hurricane in 2005.”

He said FreshBrew will retain all Tri-Cities employees and none will be transferred to Houston. “We’re looking to hire more people in Beaumont as we expand our services and grow that market,” said Ansari.

FreshBrew Vending is Houston’s largest privately owned full service vending company with customers in the region’s eight-county area with what they describe as “an enterprise-wide commitment to its customers that redefines full service vending.”


— James Shannon

Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at setxbiz.blogspot.com or e-mail james@beaumontbusinessjournal.com.

Adios, Rajan

Total project director takes on his new role in Beijing

The deer and the antelope play at the Griffith Ranch, a 300-acre spread near Winnie and the home of exotic game and Carl Griffith, the former sheriff and county judge. It was in the latter role that he helped facilitate the Deep Conversion Project at the Total Port Arthur Refinery, a multi-billion dollar expansion that has positioned the facility to play a major role in 21st century fuel production.

Now some five years later, a small gathering in the hangar at the ranch is bidding a fond farewell to one of the major players in the project. Griffith, now a private citizen, has gathered friends and public officials for a crawfish boil in honor of Rajan Krishnan, who came to Southeast Texas as Deep Conversion Project director. In two days he would depart for Beijing, where he will play an integral role in Total’s new coal gasification efforts in China.

On this night, Rajan and his wife Sunitha are enjoying the company of friends even as they contemplate the next adventure in their lives.

Deloris “Bobbie” Prince, mayor of Port Arthur, was in attendance. She has been a prominent supporter of the Deep Conversion Project since it was in the conception stage, but her presence here is also personal.

“I wanted to wish Mr. Krishnan well in his new job, and to thank him and Total for all their efforts here in Port Arthur,” said Prince. In her job as mayor, she moves easily between the personal and the political with her acknowledgement of what Total represents in the community as both a job-creating business and conscientious corporate citizen.

Similar recognition can be construed from the presence of Jefferson County Commissioners Everett “Bo” Alfred, Michael “Shane” Sinegal and Brent Weaver along with district court judges Bob Wortham and Mickey Shuffield. The social lubricant of the crawfish boil with the attendant corn, potatoes and beer has been a familiar ingredient in forging bonds of friendship.

“A week after I came to Port Arthur, they took me to my first crawfish boil,” recalled Krishnan with a chuckle. “I have really learned to enjoy Cajun food, more so than the rest of my family.”

Krishnan had previously held management positions at Total’s heavy oil joint venture in Venezuela before coming to Total Port Arthur Refinery as technical manager in 2002. He became assistant general manager in 2003 before being named director of the Deep Conversion Project in 2006.

With more than a decade of his 24 years with Total spent in Port Arthur, Krishnan has forged deep ties in Southeast Texas. His two sons were largely raised here – one attends Johns Hopkins in Maryland; the other works for Total.

“This is our home now,”  he said. “When I retire, we will return here.”

A native of India, Krishnan followed a circuitous route to Texas. He graduated from the University of Calicut in India as a chemical engineer in 1975.

“A lot of engineering students from India have found much success in the United States but I didn’t really want to leave home – so I said ‘Let me go to France,’” he said. France was much closer to home so he continued his studies there, earning a Masters degree in chemical engineering from the French Petroleum Institute.

Perhaps it was inevitable that Krishnan would then go to work for the Paris-based Total, one of the world’s largest integrated international oil and gas companies that   operates in more than 130 countries.

Krishnan’s job has taken him to all corners of the globe. In addition to his current posting to China and his earlier sojourn to Venezuela, his first assignment in the United States was in New Jersey. He became an American citizen in 2002.

His passion for his work is evident. At the conclusion of an interview with the Business Journal, Krishnan said, “You can build or you can transform but you must put your heart in it.”

Rajan Krishnan may be in China now, but he left a significant chunk of his heart in Texas – and said he will be back to get it.


Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at setxbiz.blogspot.com or e-mail james@beaumontbusinessjournal.com.