With all the debris to be removed after Hurricane Katrina, eastern New Orleans businessman Robert Packnett expected to get a piece of the pie.

Knowing his landscaping business would slump after the storm, he paid about $60,000 for three trailers so he could haul debris.

But a year later, his trailers look like they did the day he bought them. Packnett, who said he applied for contracts with the U.S. Army Corps of Engineers and others, said all he has been offered is low-paying subcontractor work.

These days, he works out of his vehicle at Louis Armstrong New Orleans International Airport, sinking into credit card debt and considering walking away from his struggling R&P Landscaping business.

Packnett, an African-American, is an example of the minority business owners Mayor C. Ray Nagin tried to help through an executive order issued late last month.

The order requires all businesses receiving "any public spending," including tax credits and waivers of city taxes and fees, to use locally owned and disadvantaged businesses.

Nagin said it's a way of ensuring New Orleans businesses like Packnett's are not left out of the recovery while contracts go to out-of-state companies.

Others say it's more red tape and a disincentive to developers.

"This demand by black leadership has repeatedly caused New Orleans to lose most otherwise willing relocating businesses thus losing the educated middle class, including black, white, Hispanic and Asian," said Jay Grisaffi of New Orleans in a letter to CityBusiness.

"Does anyone believe it is fair for the leaders of this city to insult, deny and disregard the many contributions of the white community, both currently and historically?" Grisaffi wrote.

State Rep. Jim Tucker, R-Algiers, disagrees with the new requirements, which he said could chase businesses to other parishes or, worse, other states.

"I just don't see where this is going to help the recovery," said Tucker, who is white. "Anytime you put a restriction like that on (an) employment contract, you're going to slow down the recovery."

Contract shortage

Sherman Copelin, an African-American and president of the New Orleans East Business Association, said New Orleans firms say they are not landing enough post-Katrina contracts.

"You had a lot of outside companies taking advantage of the opportunities ... that Katrina has created. And so we need to keep the money and the tax dollars flowing in the city of New Orleans," Copelin said.

The executive order sets new goals for the Disadvantaged Business Enterprise program by requiring public and private projects receiving public funds or incentives to provide 50 percent of the work to local businesses. Another requirement is that 35 percent of such projects involve socially or economically disadvantaged businesses, particularly those in hurricane-devastated areas.

Packnett, whose company maintains landscaping at the airport, said he can't find work locally. Out-of-town contractors only offer third- or fourth-tier subcontracting positions, which means little pay, he said. He's also afraid of being stiffed by working with out- of-state firms.

To make matters worse, he must pay his workers $12 an hour, up 50 percent from $8 before Katrina. The higher wages cut into profits from contracts signed before Katrina, he said. He also has helped workers find housing.

He is now moonlighting for Eric Hill Nissan in eastern New Orleans and is thinking of working there full time.

New relationships

Tucker said he is "all for hiring local people." But contracts should go to firms who offer the best price and can rebuild the region quickly, he said. If a local firm meets those qualifications, it should get the work, he said.

Arnold Baker, an African-American businessman who owns Baker Ready Mix concrete plant in New Orleans, said the requirements are needed. Nagin announced the new DBE requirements at Baker's Frenchmen Street plant.

"Since it's easier to go with what you know and most people are stretched for time anyway, it's easier to not seek out new relationships. That I think is one of the primary benefits of these executive orders, in addition to increasing the likelihood that more of the tax dollars and profits will stay in the city to help support a long term sustainable economy," Baker said.

Baker, who is also chairman of the New Orleans Regional Black Chamber of Commerce, said African-American business owners in New Orleans often complain about being left out of post-Katrina business opportunities.

"The challenge that we're having is that while we're seeing national and regional business opportunities, the local ones have not yet come to fruition," he said.

Baker said the mayor's requirements will better position local firms to take advantage of an expected rebuilding boom. Baker stressed he is advocating for local businesses owners of all races.

"It's going to take not only every business here to get it done, but it's going to take every business in the region working feverishly to rebuild it."