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FAST LANE - October
2005
The program allows for loans between $15,000 and $100,000, with the contingency that at least one full-time job be created within the first year of the loan disbursement and maintained through the life of the loan. Statistics indicate that nearly 95 percent of Kentucky’s firms employ fewer than 50 people. Furthermore, these companies generate the vast majority of new jobs in the state. “As vital as these small businesses are to the Commonwealth, most of them have a slim margin of error during those first few years of operation, and sometimes a loan is critical to their success,” Gov. Ernie Fletcher said. “The problem is, conventional lenders may turn them down as too high a risk. This new program fills that void.” Loan proceeds may be used for acquisition, construction, expansion, working capital or any other business expense deemed reasonable by KEDFA. “KEDFA also may be able to provide borrowers with a longer repayment period than conventional lenders would allow for the same loan purpose,” Economic Development Secretary Gene Strong said. “In addition, KEDFA might be willing to accept a second lien on equipment or second mortgage behind a bank loan as collateral, whereas another lender may not. We expect to lend to startup companies and other young companies that have not established a sound financial track record, which is considered riskier lending. But it’s a risk we think is worth taking, because small businesses are the future of Kentucky’s economy.” The U.S. Small Business Administration also has a variety of lending programs, the most commonly used being a bank loan guaranty and fixed-asset lending (capped at 40 percent of project costs). These loans can be used in tandem with KEDFA loans to help businesses assemble a complete financing package. The interest rate on the new KEDFA loans will be tied to the Wall Street Journal prime rate at the time of closing, plus a spread based on a complete risk profile of the project. Loans will have repayment time frames of three to 10 years. For more information on the program, call (502) 564-4554 or visit www.thinkkentucky.com NEWPORT
SouthShore will feature three 20-story buildings that will house 200 condos as well as a Class A office tower encompassing 130,000 square feet of space. A marina is also planned for the site. The project is the latest in a flurry of riverfront development on both sides of the Ohio River. Two other condominium towers have been announced for the Kentucky side of the river, as well as a $600 million mixed-used development along the Cincinnati riverfront. Combined, the projects represent an investment of some $900 million. Dan Tobergte, president and CEO of the Northern Kentucky Tri-County Economic Development Corp. (Tri-ED), told The Kentucky Enquirer that the projects are a fulfillment of “what we hoped would happen when we started developing the riverfront.” “The cities recognized the opportunity and did a lot of condemning of blighted properties and positioning the state for seed funds for parking garages to help get things started,” Tobergte said. RADCLIFF Cardinal Health, an Ohio-based company that provides products and services to the health care industry, has announced plans to open a new customer care center in Hardin County. The company’s 81,900-square-foot facility will be located in Radcliff and is expected to be operational in early 2006, creating 500 new jobs. The new center will provide support services for Cardinal Health’s 50,000 customers in the United States, including hospitals, pharmacies and physicians offices. Headquartered in Dublin, Ohio, Cardinal Health ranks No. 16 on the Fortune 500 list of companies. The company manufactures and distributes pharmaceuticals and medical supplies, offers clinical services to hospitals and develops automation systems that improve the management and delivery of supplies and medication. Cardinal Health manufactures pharmaceuticals for 90 percent of the top 10 pharma companies as well as the majority of leading biotech firms. The company has business operations on six continents and employs some 55,000 people, 42 percent of whom are located outside the United States. The Kentucky Economic Development Finance Authority has granted Cardinal Health preliminary approval for tax benefits up to $8 million under the Kentucky Jobs Development Act, an incentive program aimed at increasing service- and technology-related employment in the state. STATE A chat with a Kentucky company trying to find a closer source for its chili sauce containers sparked state officials to search for a reliable way of linking businesses with Kentucky-based suppliers. And now that way is a reality. The Kentucky Cabinet for Economic Development has launched the Kentucky Business Finder, a free-access Web site that allows users to search by type of business, product or service line and even by county. Already nearly 850 Kentucky businesses have registered for the new database, and thousands more are expected to sign up as word gets out. “I don’t know of any other state doing what we have done with the Kentucky Business Finder, creating a database that connects businesses directly with other businesses,” Gov. Ernie Fletcher said. The database is not intended for use by consumers, but rather by businesses looking for suppliers and business partners. Any business with at least one facility operating in Kentucky may register with the network. Detailed information is available at www.kentuckybusinessfinder.com. CENTRAL KENTUCKY
The Arkansas Delta region is the other region that has been selected to participate in the program. The two regions were selected from 11 across the country that applied to be part of the initiative. Central Kentucky’s Heartland is a seven-county region on the western edge of the Bluegrass with a rich Civil War heritage. The region is home to the birthplace of Abraham Lincoln and also has deep roots associated with the Catholic Church, Shaker Village and the African-American community. The region also has a strong agriculture component, with many family farms now threatened by development pressures from Louisville and Lexington. The region’s nine Main Street communities are all National Register historic districts, and there are numerous other National Register properties in the area. Key partners on the project include the statewide preservation organization, Preservation Kentucky, the Kentucky Heritage Council, and the Dry Stone Conservancy. The new initiative is being funded in significant part through a $745,000 three-year grant from the W.K. Kellogg Foundation. SOMERSET
Harlan County native Allan Steinberg has been hired as an economic development specialist to serve the additional counties by providing the region’s leaders and business owners information about SKED’s business recruitment efforts, community development services, low-interest loan programs and small business technical assistance. More information about SKED services is available at www.southeastkentucky.com. STATE
Tourism experts have found travelers to be highly interested in agritourism, which provides farmers with a way to preserve the family farm and green spaces by opening their property to the public as a bed-and-breakfast inn, a winery or ranch where visitors may purchase farm products and plants, eat a meal, or take part in farm activities or entertainment. Through such programs, farmers are able to diversify their operations and sources of revenue. For farmers interested in learning more about the program, the Bed & Breakfast Association of Kentucky will be hosting a one-day Aspiring Innkeepers Training Session on Nov. 6 at the Griffin Gate Marriott Resort in Lexington. The workshop will feature an introduction to the B&B lodging industry, overall business planning, setting up business operations, guidance related to housekeeping, and marketing and promotion of your new B&B. Educational training manuals, materials, handouts, lunch, and refreshments are included in the training session fee of $149 for the first person and $99 for a second person. Attendees will receive a discount for the BBAK Annual Conference on Nov. 7 and 8, which will offer further educational workshops, industry speakers, and a B&B vendor trade show. For more details, visit www.kentuckybb.com or contact BBAK President Todd Allen at (859) 336-3075. STATE
This year’s award recipients were Steve Keck of Somerset Recycling Services, Inc. in Somerset (for-profit business with over 25 employees), Julian Moss Jr. of Moss Flowers, Inc. in Lancaster (not-profit business with less than 25 employees), Lora Jane Hyden of Pointe of Joy Performing Arts in Paintsville (start-up business), and Tom Fields of Southeastern Kentucky Rehabilitation Industries, Inc. of Corbin (not-for-profit). The Excellence in Entrepreneurship Award was established in 2001 to honor excellence in entrepreneurship throughout Eastern and Southern Kentucky. Award recipients were selected based on nominations received from 55 Eastern and Southern Kentucky counties. For more information, visit www.centertech.com or call (606) 677-6000. EASTERN KENTUCKY The driving tour includes three compact disks narrated by country star Ricky Skaggs, a native of Lawrence County, through which the Country Music Highway passes as it wends its way 150 miles through Kentucky from Portsmouth, Ohio at the northern end to Whitesburg, Ky. at the southern end on the Virginia border. A fourth CD features songs performed by famous natives who grew up close to the National Scenic Byway. The narrative CDs tell the story of the Appalachian experience through interviews with some of the musicians and other community members along the way. Topics include the importance of regional culture, work, religion and family, as well as music. “The narrative encourages tour-takers to stop and talk with people along the way,” said Bob Gates, director of the Historical Society’s Kentucky Folklife Program, one of the driving tour coordinators. “We hope to help eliminate some of the stereotypes surrounding the region this way.” RICHMOND
LOUISVILLE The award from the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, will allow the university to create the Center for Predictive Medicine, a facility that will join a growing number of Level 3 Regional Biosafety Labs being built across the nation. A dozen UofL scientists are working to determine which genes and proteins keep infectious diseases out of our bodies and which genes and proteins let them in. Eugenia Wang, for example, is studying the flu virus, while Yousef Abu Kwaik is exploring how Legionnaire’s disease invades the body. James Graham is investigating how gene expression might offer clues to fighting tuberculosis. The center, which will be roughly 45,000 square feet in size and will be built on a 4.2-acre tract at the northeast corner of UofL’s Shelby Campus, will allow researchers to do their work in a state-of-the-art facility that will be designed and built according to rigorous safety standards. The lab’s top-of-the-line facilities and new technologies that can be made available to researchers will help them ramp up their efforts to find ways of fighting infectious diseases. Regional biosafety labs are being built at nine universities: Colorado State University at Fort Collins, the University of Chicago, University of Missouri at Columbia, Duke University, Tulane University, University of Alabama at Birmingham, University of Pittsburgh, University of Tennessee at Memphis and the University of Medicine and Dentistry of New Jersey at Newark. LOUISVILLE The ideaFestival, an event initially developed and tested in Lexington by KSTC and its partners, focuses on innovation and out-of-the-box thinking through the exploration and promotion of cutting-edge ideas across science, design, the arts, business, education, technology, film, etc. The event’s format is designed to promote cross-fertilization of ideas, creative thinking and networking. Since its inception in 2000, ideaFestival has grown in both scope and attendance. The most recent ideaFestival, held in 2004, drew nearly 10,000 attendees. IdeaFestival organizers, in anticipation of continued growth, decided to move to Louisville to take advantage of more venues, more sponsorship availability, and the opportunity to make the festival an annual event. “We want to grow the festival into a blockbuster national and international event that will help enhance Kentucky’s image as a place where cutting-edge ideas are welcome and can grow,” KSTC President Kris Kimel said. The next ideaFestival will take place in various venues throughout Louisville, Oct. 12-14, 2006. Past festival presenters include Oliver Sacks, noted neurologist and author; Twyla Tharp, Emmy-Award winning choreographer; Alex Britton, Europe-based serial international entrepreneur, designer, inventor; Dr. Ben Carson, head of pediatric neurosurgery at Johns Hopkins; Nancy Kress, a leading science fiction author; and BrainStore, an idea development company in Switzerland. LOUISVILLE Eclipse Bank has exceeded its goal of raising $15 million in capital to get the new bank off the ground. The bank’s initial public offering resulted in investor commitments of nearly $16.5 million, $1.5 million more than than the maximum amount of capital authorized in the bank’s offering circular. Company officials said the subscriptions in excess of the $15 million maximum are being returned to investors, whose names will be placed on a waiting list for consideration in future stock offerings. According to the Kentucky Department of Financial Institutions, $15 million is the largest amount of capital raised in Kentucky for the formation of a new bank. “The enthusiastic response to our stock offering from local investors confirms our belief that a locally owned and managed bank offers real advantages to banking customers as well as to investors,” said John Pendergrass, president and CEO of Eclipse Bank. The majority of the shares have been purchased by local investors and others with ties to the Louisville community. The organizing group, which includes many prominent Louisville business and community leaders, has purchased over a third of the $15 million maximum. LOUISVILLE Citing the benefits of working together as a unified healthcare system, Jewish Hospital HealthCare Services (JHHS) and Caritas Health Services (CHS) have announced plans to merge their operations. The merger will become official Nov. 1, at which time the new organization will become Jewish Hospital and St. Mary’s HealthCare. The new organization will operate 17 facilities in Louisville and surrounding communities. Robert L. Shircliff, chief executive officer of JHHS, will become the president and CEO of the new organization. In addition to approving the merger of Caritas and JHHS, the Caritas board approved name changes for Caritas Health Services facilities, effective Dec. 1. Caritas Medical Center will be renamed Sts. Mary & Elizabeth Hospital, a part of Jewish Hospital & St. Mary’s HealthCare. Caritas Peace Center will be renamed Our Lady of Peace, a part of Jewish Hospital & St. Mary’s HealthCare. (The names were originally used at the two facilities prior to the merger of Sts. Mary & Elizabeth Hospital and Our Lady of Peace, along with Nazareth Home Health, into Caritas Health Services in 1994. The three facilities joined the Catholic Health Initiatives in 1997.) The merger will not include JHHS-managed hospitals or the JHHS Four Courts Senior Center. There are no plans to close facilities or discontinue service lines as a result of the merger. Jewish Hospital and St. Mary’s Health Care will function as a not-for-profit organization jointly owned by JHHS and Catholic Health Initiatives. According to the merger agreement, JHHS will initially have 75 percent ownership in the new company, with CHI owning 25 percent. CHI will have the option of increasing its ownership to 50 percent in the future. The Caritas facilities will continue to operate as Catholic health care providers, retaining their Catholic identity, mission and values and complying with the Ethical and Religious Directives for Catholic Health Care Services. Likewise, Jewish Hospital HealthCare Services will retain its Jewish identity, heritage, mission and religious beliefs and practices. LEXINGTON
Buyers spent a total of $384,349,900, far eclipsing the previous record of $324,904,300 set last year in September. The long list of records spanned many categories:
“The records have fallen one after the other,” said Director of Sales Geoffrey Russell. “With buyers here from all parts of the United States and every corner of the world, Keeneland September has firmly established itself as truly the global marketplace of Thoroughbred sales.” LEXINGTON Allylix, Inc., a Lexington-based biotechnology firm, has secured $1.5 million in capital that will be utilized to fund the development and scale-up of its first products. Allylix’s technology is based on research developed at the University of Kentucky and the Salk Institute for Biological Studies in California. The company was founded by Dr. Joseph Chappell at UK and Dr. Joseph Noel of the Salk Institute, along with Tom Jurgensen, a corporate and intellectual property attorney. Leading the Series A funding is the Bluegrass Angels, a group of Kentucky investors that seeks to develop start-up companies in the region by providing entrepreneurs with seed capital. Other contributors include California angel investors, the Commonwealth Seed Fund of Kentucky, a state-managed venture capital fund, and the Kentucky Commercialization Fund, a state initiative administered by the Kentucky Science and Technology Corporation. “This funding is a major step towards the realization of our goal to bring these natural chemicals to market,” said Carolyn Fritz, who was recently named as president and CEO of Allylix. “With this technology, we are able to provide vital compounds to our customers, enabling the development of products that would have otherwise been too costly.” LEXINGTON The Equine Drug Research Institute (EDRI) has partnered with the Grayson-Jockey Club Research Foundation to develop new tests for drugs that pose significant risk of potential abuse in Thoroughbred racing. Former Ambassador William S. Farish of Lane’s End Farm and Keeneland President and CEO Nick Nicholson have been named EDRI’s co-chairman. “The fundamental concept behind the Equine Drug Research Institute is to concentrate a significant and well-funded initiative with a dream team of scientists from both human and equine drug testing laboratories whose sole mission is to develop new equine drug tests,” said Farish, who will oversee the group’s fundraising efforts. EDRI is seeking initially to raise $3 million dollars. Dr. Don Catlin, well known for devising cutting-edge tests for the United States Olympics governing body, will lead the EDRI’s lab efforts from the UCLA Olympic Analytical Lab he founded. A group of leading equine drug researchers and laboratories will join Catlin in the research effort. “It is important to note that we are not establishing a new lab,” Nicholson said. “It is equally important to note that the newly devised tests will be made available to sanctioned labs all across the country at no charge.” LEXINGTON
As one of only 12 Udall Centers in the nation, UK represents the leading edge of research into Parkinson’s disease, which at this point remains an incurable condition. UK’s research on glial cell line-derived neurotrophic factor (GDNF) shows that it differs from other Parkinson’s therapies in that it has demonstrated potential to halt or perhaps reverse the neurodegenerative condition. Current treatments only provide temporary relief from symptoms. Greg Gerhardt, Ph.D., professor, Department of Anatomy and Neurobiology and Department of Neurology, director of the Morris K. Udall Parkinson’s Disease Research Center of Excellence, and director of the Center for Sensor Technology, has headed the Udall Center at UK since its inception six years ago. Gerhardt and his colleagues will spend the next five years investigating potential negative effects of GDNF, and how to fine tune dosing and administration techniques to make the therapy a safer and more viable alternative. At the end of this five-year funding cycle UK researchers plan to be ready to move GDNF or a related compound once again into human clinical trials – a timetable considered ambitious by industry standards, but which Gerhardt says is realistic. OHIO
A great many of the job losses are the result of integrating Federated staff with May’s corporate employees. The majority of the positions will be eliminated by the end of 2006, according to company officials. In addition, Federated said it will begin phasing out the Marshall Field’s name, which was acquired as part of its acquisition of May. In addition to Marshall Fields, May also operates stores under the Filene’s, Kaufmann’s and Hecht’s monikers as well as Lord & Taylor. With the exception of Lord & Taylor, most of the recently acquired May locations will be converted to Federated’s Macy nameplate. INDIANA Transpoint LLC, an Indianapolis logistics and inventory management company, has announced plans for a container management system that will create 251 new jobs with an average wage of more than $18 per hour. The company is investing more than $3.1 million in the new operation, which includes the lease of 44,000 square feet of a cargo facility at Indianapolis International Airport “With our new location at the airport, in addition to our existing facility nearby, we will be able to offer ‘production-to-consumption’ supply chain management and implementation services,” said Scott Tegarden, co-chairman of Transpoint. “We will focus on container management from country of origin all the way through the supply chain—including distribution, warehousing and fulfillment.” Transpoint has also partnered with Purdue University to develop software for the logistics industry to monitor air and sea container shipments from the Far East and the status of ground shipments and port and shipping activity. “Using innovative concepts and software, Transpoint will reduce the links in our customers’ supply chains. And we’ll become the first company in Indianapolis to focus on managing containers from their origins in Asia and elsewhere all the way through to delivery to end users,” Transpoint CEO Pete Witczak said.
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Copyright 1996-2005, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2005, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
The Kentucky Economic Development Finance Authority (KEDFA) has launched a new loan program to assist Kentucky’s small businesses. The program specifically targets companies with 50 or fewer employees. 
The Newport City Council has approved plans for a $165 million luxury condominium and office tower development along the Northern Kentucky riverfront.
The National Trust for Historic Preservation has selected Central Kentucky’s Heartland region as one of two rural pilot regions to participate in its Rural Heritage Development Initiative. The focus of the new program is to help rural regions implement preservation-based economic development strategies by enabling state and local partners to work collaboratively to develop cultural and heritage assets.
The Southern Kentucky Economic Development Corporation (SKED) is expanding its 27-county service area to include 42 counties in southern and eastern Kentucky. As a result of the expansion, the organization is changing its name to Southeast Kentucky Economic Development Corporation. 
In an effort to promote tourism throughout the state, the Bed & Breakfast Association of Kentucky has launched a new agritourism program called “Kentucky Farm Stays.”
The Center for Rural Development, in partnership with Eastern Kentucky University’s College of Business and Technology and Kentucky Highlands Investment Corporation, has announced the winners of the 2005 Excellence in Entrepreneurship Awards. 
Eastern Kentucky’s U.S. Hwy. 23, the “Country Music Highway,” is the subject of a new heritage driving tour produced by the Kentucky Folklife Program, a program of the Kentucky Historical Society and the Kentucky Arts Council. The tour is part of the state’s effort to increase tourism in Eastern Kentucky.
The University of Louisville is receiving a federal grant of nearly $22 million to build a research lab geared toward developing new vaccines to fight bioterrorism and emerging infectious diseases.
The Kentucky Science and Technology Corporation has announced plans to move its ideaFestival from Lexington to Louisville in order to accommodate the event’s growth.
Keeneland’s September Yearling Sale wound up its 14-day run as the highest-grossing Thoroughbred auction in the world, with numerous other industry and sale records falling by the wayside during the course of the event.
Allylix focuses on the development and commercialization of terpenes, a class of natural chemicals found in plants. These natural chemicals are of significant interest to the food, agriculture and pharmaceutical markets as a result of their use as fragrances, flavors, agricultural products and new medicines. Historically, these natural chemicals have been too costly for most applications because of the expense of extracting them from plants, but technology developed by Allylix enables the company to cost effectively produce a wide range of these natural chemicals, making the compounds available to many new market applications. 
The University of Kentucky Morris K. Udall Parkinson’s Disease Research Center of Excellence has been awarded nearly $6 million from National Institutes of Health and National Institute of Neurological Disorders and Stroke to continue work on a promising new drug for Parkinson’s Disease.
Cincinnati-based Federated Department Stores Inc. has announced that it is eliminating some 6,200 positions as part of the streamlining resulting from the company’s acquisition of May Department Stores earlier this year. 
Struggling with financial woes made worse by escalating fuel costs, Delta Air Lines has announced that it is cutting its flight service at the Greater Cincinnati/Northern Kentucky International Airport by 26 percent. Daily departures from Cincinnati will drop from 600 to 442. The cutback will affect some 1,000 workers, although transfers may mean there are no layoffs.
Kentucky American Water Co. has acquired the City of Owenton’s water system, which provides water service to 1,100 customers and serves another 600 through its wastewater plant and collection system. Owenton Mayor David ‘Milkweed’ Wotier said his city has been working on the deal for quite some time. “This is the most historic step in 70 years to bring water quality and quantity to where it needs to be,” Wotier said. 
The Central Kentucky Blood Center has broken ground on a new donor center and processing lab that will provide the not-for-profit community blood bank with twice the space of its existing facility. The new $8.2 million facility is being built in southwest Lexington and is expected to open in early 2007. The Central Kentucky Blood Center serves 59 counties in the state’s eastern and central regions to meet the demand of 67 hospitals. The center also operates donor centers in Somerset, Pikeville and Prestonsburg. 
DHL, a leader in the express delivery and logistics industry, has announced plans to invest $4 million over the next five years in the buildout and expansion of its logistics facility near Columbus, Ohio. The expansion is expected to create approximately 150 new jobs that will pump some $4.2 million annually into the local economy. 
International Paper, which is in the process of moving its global headquarters from Connecticut to Memphis, has signed an agreement to acquire the majority share of a Moroccan corrugated packaging company. IP will acquire approximately 65 percent of Compagnie Marocaine des Cartons et des Papiers for approximately $80 million in cash.