New Orleans has always been a most unconventional of American cities. As national prosperity continues to decline under the weight of a constricting economy, the city nearly destroyed by forces of nature nearly four years ago is perpetuating an inverse trend. Even beyond the employment opportunities created by ongoing reconstruction projects, an explosion of entrepreneurialism fostered by big thinkers like Sean Cummings is incubating a re-birth of this historic city.
Sitting in the offices of The Receivables Exchange, the successful start-up I profiled last week, Cummings recounts how President Nicolas Perkin called two years ago to discuss the prospect of basing his new company in New Orleans, he joked in response: "The day you arrive, you will double the number of entrepreneurs" in the city.
With New Orleans still reeling to recover from the devastation wrought by Katrina, Cummings--a successful real estate developer--recognized an opportunity to do something more than simply help re-build his native city. Partnering with Perkin and two other business leaders, Cummings launched Start Up New Orleans, a web-based information service designed to connect entrepreneurs with the resources they need to set-up a new business in the Crescent City.
In March 2008, Cummings established the aptly-named "Entrepreneur's Row" in a property he owns at 220 Camp Street. By November, Entrepreneur's Row housed the offices of nine companies, including The Receivables Exchange. More than simply a landlord to start-ups, Cummings has personally invested in six of those companies.
Cummings's efforts represent just one spoke in a larger wheel of growth that is turning around the post-Katrina New Orleans economy. The Times-Picayune cites his offices on Camp Street as the first of five significant "entrepreneurial hubs" recently established in the city--the leading edge of a trend to cluster innovators close together so they can network and collaborate with each other.
The Idea Village, a non-profit established in 2002 to help draw new investment to the city, is focusing efforts to tie the development of entrepreneurial hubs to neighborhoods in greatest need of economic revitalization. In Fall 2006, Idea Village broke ground in the upper 9th Ward to build the Entergy Innovation Center, partially financed with a $200,000 contribution from the Entergy Corporation. Its state-of-the-art community technology center, conference space, and offices for entrepreneurs and nonprofits are scheduled to open this week. The Idea Village is currently assessing other locations in need of economic development--Gentilly and New Orleans East--while considering where to base their next major entrepreneurial hub.
Thousands of businesses relocated or simply closed after Katrina, skewing the yardstick for any attempt to measure the rate of new growth in New Orleans. I could tell you that the 6% unemployment in the metropolitan area is more than 30% lower than the national rate, and that the US Census Bureau recently identified New Orleans as the fastest growing city in the country, but what does that even mean in an area that lost half of its population and about a third of its industry after the 2005 storm?
A few weeks ago, the Brookings Institution sparked a disgruntled debate by ranking New Orleans as one of the poorest performers of 100 metropolitan areas assessed for how they are weathering the recession. The Brookings analysis inexplicably ignored the game changing destruction of Katrina, comparing the current local economy to a high point from 2004. Business Week, however, recently named New Orleans as one of the best places to ride out the recession.
Cumnings concedes, "There is a national recession going on and New Orleans is not completely immune to that. Perhaps post-Katrina financing is propping things up here more than elsewhere." But beyond the conventional re-building process, he says, "What you are seeing with New Orleans represents a profound shift."
The city hasn't enjoyed any real growth of prosperity in over a century, he explains. New Orleans had its heyday as a bustling port city in the 19th century, when its position near the mouth of the Mississippi made it the gateway for goods flowing to and from middle America. With diminishing maritime transport throughout the 20th century, the city stagnated as it shifted to a tourism and resource-based economy.
"Now, there's a real in-migration of artists and entrepreneurs," he says. Citing the work of Richard Florida, Cummings describes the city's current era as a "creative class-led transformation of New Orleans."
Since the Internet has reduced the importance of geographic positioning, new companies can open offices virtually anywhere. Cummings says, "The perception of New Orleans is of a party town, but it's also great place for business." The costs of rent, overhead, and taxes can be less than in most major American cities, and residents can enjoy the Cajun food, vibrant art scene, and live music that gives the city its distinct cultural identity. "Folks on a start-up wage can live a good life in New Orleans--not just a hand-to-mouth existence."
"Each of the companies at Entrepreneur's Row is not only playing to a competitive advantage by being based in New Orleans," he says. The start-ups are flourishing because "they've identified macrotrends." Free Flow Power "plays into the need for clean renewable energy" and The Receivables Exchange "plays into the need for commercial credit and liquidity."
The growing trend of entrepreneurial innovation in New Orleans has its strongest push in digital media sectors, environmental sustainability, and urban planning and design. While the recession has shuttered businesses across the country, "these companies defy the national trend because of the types of things they do."
To describe the human engine driving the transformation of New Orleans, Cummings cites a quote from his role model, Steve Jobs, whose face overlooks our conversation from a blown-up picture propped up on the windowsill.
"Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes... the ones who see things differently -- they're not fond of rules... You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things... they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do."
Cummings uses the quote to refer to those starting up new businesses in New Orleans, but I can see the description applies to him as much as anyone else. A cursory review of some of the local media coverage of Cummmings shows he has been both glorified and vilified in New Orleans, with some not trusting the intentions of an ambitious real estate developer, particularly with regard to his position as appointed director of the New Orleans Building Corporation, a public benefit entity created by the city council in 2000.
In addition to his role in drawing new entrepreneurs to New Orleans, Cummings is playing a major part in the ongoing transformation of the city by spearheading a $250 million riverfront development project, "Re-Inventing the Crescent," scheduled to break ground in December. Planned for completion in time for the city's 300th birthday in 2018, the dilapidated docks, warehouses, and empty parking lots now lining the north bank of the Mississippi River will be transformed into 100 acres of green space, with parks, playgrounds, bike paths, a sculpture garden, an outdoor movie screen--funded with public money, and designed for public enjoyment.
Cummings describes it as "the most important addition to the city since the French Quarter." With a roster of world-class artists, architects, and urban planners commissioned to contribute work to the project, he says the completed riverfront "will become an architectural icon of the 21st century." Even more than just a pretty place for a picnic, the riverfront development is also expected to create 24,000 new permanent jobs in the hospitality sector, academia, and the creative professions.
Some long-time residents are wary of any planned transformation of their beloved city--particularly one being led by a wealthy real estate developer appointed to his quasi-public position by a city government with a long tradition of corruption. Despite an ethics review determination that his current real estate holdings do not put him in a position to directly profit from the riverfront development, some people in New Orleans still have their doubts about Sean Cummings.
After spending time talking with him, I must say that any doubts sparked by reading public criticism about him fell away as I absorbed the earnestness of his passion for the city. I consider myself a fairly good judge of character, and Sean strikes me as a highly intelligent and creative thinker--a man of admirable integrity driven by an honorable mission to help rejuvenate New Orleans. "If you want to reduce it to its essence, I enjoy improving the quality of life for people," he tells me. "That's why I do what I do."
He may not surrender all his wealth and possessions to charity and devote himself to working for the poor, but in his own capacity, making full use of his particular talents, knowledge, and experience, Cummings is poised to have a meaningful impact on raising the standard of living across New Orleans.
Cummings speaks with the greatest intensity when discussing how he wants to "harness the power of beautiful design to uplift the human spirit" and believes New Orleans will again make an "important contribution to the global conversation about art, design, and entrepreneurialism."
"You are witnessing a city being reminded of its greatness," he tells me. Eventually, those New Orleans natives suspicious of Sean Cummings's motivations will become grateful for the reminder.