In recent years, South Louisiana is seeing a construction boom from private investment mixed with government incentives that rivals few places in the world. Louisiana has a population of just over 4 million people, most living in metro Baton Rouge or metro New Orleans. However, the most recent announcement regarding the  Formosa “Sunshine Project” is another in a string of megaprojects slated for our state. As a construction and business lawyer, I love announcements like the one yesterday.

The Louisiana Department of Economic Development reported yesterday that Formosa Petrochemical Corp, under its subsidiary FG LA LLC will build a $9.4 billion dollar facility on 2,400 acres in St. James Parish on the west bank of the Mississippi River. This will be near the Sunshine Bridge. Apparently, Louisiana had some visionary thinking it commissioned the project referred to as “the bridge to nowhere” over 50 years ago.

What will this do for the region?

According to the project’s website, the Sunshine Project will create more than 1,200 new jobs directly for the region with an average salary of nearly $85,000 plus benefits. The indirect job creation should be much greater due to the need to service this type of project. It appears that Metro Baton Rouge will be the biggest secondary benefactor from the project after St. James Parish due to its proximity to the project.

Formosa predicts the project will reach final approval in the first quarter of 2019. This means construction should start around this time next year. This project is slated to be completed in two phases over approximately 10 years of construction.

How have other similar areas fared in light of similar news?

On its face, the Sunshine Project seems amazing for the St. James Parish region. Formosa is working with local and state officials to make sure the massive development complies with regulations. Numerous studies regarding economic impact and traffic have been conducted to ensure local residents and businesses are going to benefit from this historic project.

Hopefully, for St. James Parish and the surrounding areas, the Sunshine Project will have a similar domino-effect like what is going on in Southwest Louisiana.

According to news articles, the Lake Charles economy led the nation in 2016 due to the massive construction projects related to natural gas in the region.

Site Selection Magazine’s Ron Starner reported on the $117 Billion Region back in 2017, discussing the major impact megaprojects have had on Southwest Louisiana.

Projects such as the Cheniere Energy investment have led to other business investments in the region such as the Big Lake Fuels, Entergy power plant, Lake Charles Clean Energy, Lake Charles LNG/BG, Magnolia LNG and Cameron LNG projects to name a few.

When regions land massive construction projects like this it leads to other capital investments. For example, Lake Charles has the Golden Nugget and L’Auberge casinos which are huge economic drivers.

Lake Charles has become a model for the nation. To learn more about how impressive this run is check out this other Starner article from March 2018. The region is outpacing the rest of the nation by leaps and bounds. This is only good news for Louisiana. Can the Sunshine Project do for St. James what is happening now in Westlake and Lake Charles? I think it can.

How will this affect the construction industry in Louisiana?

Governor John Bel Edwards stated in the press conference yesterday that at the Sunshine Project’s construction peak, there could be over 8,000 construction jobs.

The direct affect to the construction industry will be massive due to the Sunshine Project. Coupled with the massive amount of work in the Lake Charles area and this new project coming online in 2019, Louisiana’s construction industry will continue to grow.

Local businesses will have either a direct or indirect growth due to the work. Sure there will be an influx of outside contractors coming to get a piece of the action, most notably from Texas. Regardless, the net affect can only be positive. There are opportunities in this boom for local companies to grow and prosper.

Other notable projects in the region.

Like Lake Charles, St. James Parish has more than one proposed billion-dollar-plus project on its horizon. Yuhuang Chemical Inc., is building a methane-to-methane plant that is set to cost over $1.8 billion for construction. This job is scheduled to be completed by the end of 2019.

As noted above, good things happen when massive construction projects begin. Government gets more revenue from direct tax dollars, infrastructure is built to support the project and surrounding communities, ancillary businesses start to benefit from the new work and people who move to the region for work. The list goes on and on.

What you need to know if you have questions?

Needless to say, there are many moving parts to deals like the Sunshine Project and all the projects mentioned in this post. Every phase of the construction process will be in play and smart contractors will need to know how to handle these situations so they can land life changing jobs or contracts on these projects.

There are many legal issues here. Everything from Louisiana contractor licensing issues, to construction contract drafting/negotiation, paymentbond claims, lien, and notice issues related to both the public and private jobsundertaken. Other issues related to performing the actual work and suppliers who get the materials to the job. Prepared and smart contractors will benefit and thrive while those who do not prepare will be swallowed in the wake.

The last thing you want is for your construction company or business to end up in litigation for something that could have been prevented. We handle construction law disputes all the time but our happy clients find the information they need before a dispute happens.

The bottom line is to get a construction attorney you trust to make sure this construction boom is profitable for your firm for years to come. Contact Smiley Law Firm today or leave your comments below if you have questions about how your company will be challenged.

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