METAIRIE, La. -- Smoothie King, a Louisiana company for almost 45 years, was coaxed with up to $2.4 million in taxpayer funds to drop its plans to move to Dallas in 2012 and stay in the state for at least five years.
But now, with Smoothie King’s commitment to stay in Metairie expiring at the end of December, CEO Wan Kim, the South Korean businessman who owned more than 100 Smoothie King franchises in his home country before coming to New Orleans to purchase the fruit-drink maker in 2012, is reportedly looking once again to move Smoothie King’s global headquarters to Texas.
A source connected to Smoothie King confirmed the possible move to WWL-TV on Thursday, shortly after the Dallas Business Journal reported the same thing based on sources in North Texas real estate. Those sources told the publication that Smoothie King Franchises, a subsidiary of SK USA, planned to move its corporate offices to a new development called The Sound at Cypress Waters, in Coppell, Texas, a Dallas suburb.
Smoothie King Chief Development Officer Kevin King told the Dallas Business Journal the company had no plans to relocate to the Dallas area, but the firm’s corporate communications group sent a more detailed statement to WWL-TV on Thursday that acknowledged it was “considering options” and promising to expose more details later:
"The company has no definitive plans to move at this time but is considering options that will support our franchise system and fuel our future growth plans. Similar to the process five years ago, we are not legally able to discuss any details pertaining to ongoing discussions. We have informed our 50 corporate team members about this exploratory process but no decisions have been made. Once we are able to legally discuss this, we will disclose the details.”
Louisiana Economic Development agreed to pay Smoothie King up to $2.4 million in incentives if they met benchmarks for increasing Louisiana payroll from $4.1 million to $8.5 million over five years. The state paid the first $1.4 million after the company met its benchmarks in 2013, 2014 and 2015, but it fell short of the requirements for 2016, LED said.
LED reduced its annual payment for 2016 from $480,000 to $413,519 for failing to reach a payroll of $8.2 million.
LED and local economic development agencies GNO Inc. and Jefferson Parish Economic Development Co. are in the process of trying to convince Smoothie King to stay.
“We value Smoothie King’s corporate headquarters in Metairie as an important contributor to our state economy,” LED Secretary Don Pierson said. “Born in Jefferson Parish, Smoothie King now operates nearly 1,000 global locations through company-owned and franchise units. The company supports important causes through its community mission, and sponsors naming rights to the New Orleans NBA and concert venue, the Smoothie King Center. Throughout our engagement and relationship with the company, we have always worked toward retaining and expanding Smoothie King’s presence in the state.”
Smoothie King’s statement to WWL-TV emphasized it will continue with its naming-rights agreement for the Smoothie King center.
“We remain proud of our New Orleans roots and are committed to continuing to serve our valued guests in the 66 locations we operate across the area. As evidenced by our long-term investment in the Smoothie King Center, we fully support this community and will continue to do so,” the statement said.
Michael Hecht, President and CEO of GNO Inc., played a major role in keeping Smoothie King in Louisiana in 2012 and said they'll work hard to do it again.
"Five years ago, the State, Region and Parish teams all worked together to retain Smoothie King, a deeply valued home-grown company. Since that time, we have continued to support Smoothie King in multiple ways, including marketing, personnel support, and building the second fastest growing airport in the country," Hecht said in a statement. "Going forward, we will explore every avenue to ensure that Smoothie King continues to grow and prosper in Louisiana.”
When the state announced the deal to keep Smoothie King in 2012, then-Gov. Bobby Jindal claimed the company was staying for more than just the incentives.
“Smoothie King looked closely at moving to Texas, but they chose to stay here in Louisiana because we have a strong business climate and the best workers in the world,” Jindal said on Nov. 20, 2012.
But the deal between the state and Smoothie King acknowledged that the company should be compensated for extra costs for flying to Asia from a non-hub airport in New Orleans. Dallas’ airport is a hub with direct flights to Asia.