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FAST LANE - March 2001
Fluor Corporation – former owner of Martin County Coal – announced to shareholders an expected cost of $46.5 million to clean up the remnants of the coal slurry spill near Inez last fall. According to Fluor’s financial statement, cited by the Associated Press, $43.5 million of that total, as well as possible damages from lawsuits, will be covered by the company’s insurance carrier. Among the attorneys involved in the various lawsuits will be Jan Schlichtmann, whose efforts on behalf of Massachusetts residents victimized by environmental pollution were chronicled in the well-known book and movie A Civil Action. In the meantime, the state’s Environmental Quality Commission has recommended phasing out all slurry ponds in the state, replacing the method with new technology that dries out the mining waste. LOUISVILLE
Atlanta-based Vacation Express, the passenger charter partner with UPS Airlines, has announced weekly service to Punta Cana, Dominican Republic, adding to its menu of weekly round trip flights to Aruba and Cancun from international airports in both Louisville and Northern Kentucky. The company uses Boeing 727-100 aircraft for the charter flights, which UPS converts to passenger use in approximately four hours. Atlanta-based UPS also announced it will buy Fritz Companies, a freight forwarder and customer broker, for $450 million. And the company will purchase First International Bancorp for $78 million. The bank will become part of subsidiary UPS Capital Corp., a branch of the company’s logistics services division. LOUISVILLE The pursuit of landmarks and public art symbolic of the city has left Louisville licking its wounds. First came the failure of the fleur-de-lis fountain, which would have been so expensive to repair (over $500,000) that the city chose instead to sell the hulking machinery for its scrap value to Mobile Maintenance and Repair of Borden, Indiana for $15,750. Next came the short-lived proposal for giant neon alphabet letters spelling out “Louisville,” which many observers dismissed as beneath the city’s dignity. The city will still pay over $110,000 for the work done on that project, whose abandoned materials were also sold for scrap. But Louisville’s neighborhood murals are one medium that has built momentum over the years – intricate and charming examples adorn walls throughout town. So the latest proposal, from the Kentucky Transporation Cabinet, was to paint murals on the inside of the Cochran Hill tunnels. But after pleas by motorists, Scenic Kentucky, the city's legislative delegation and even the city's mural artists themselves, the Cabinet has agreed to drop that project before another scrap ensued. Objectors cited the danger of distraction to drivers, as well as the difficulty in viewing and maintaining the murals. However, the state is going ahead with an overall $10 million project most of which is funded by federal dollars, that will pay for repaving of I-64 from the Watterson Expressway to the tunnels. LEXINGTON After surprising much of the community by voting in a new parallel runway proposal that many thought had been tabled long ago, the Urban County Airport Board reconsidered, consultants rechecked the numbers, and that plan was hastily revised. The chosen solution will merely add safety areas to both ends of the current 7,000-ft. runway, as well as lengthen it by 340 feet. The cost for the new parallel runway would have run as high as $80 million, while the current proposal – still subject to FAA approval and property negotiations with one landowner – will cost around $25 million. Meanwhile, concern lingers about the airport’s need for redundancy in the future, as both a capacity and a service continuity issue. Several board members expressed the need to continue looking for ways to add another runway, even if that means doing so at another location. LOUISVILLE
Kentucky Utilities and Louisville Gas & Electric merged in 1998 to form LG&E Energy, which was purchased by British company PowerGen in a $3.2 billion deal that was finalized in December. Now PowerGen, while still looking to buy further U.S. utility companies, is also looking to be bought, perhaps by Germany’s E.ON AG or RWE, the favorites according to market watchers. Other potential buyers hail from Spain and Italy. MOREHEAD The Morehead State University campus recently played host for two weeks of a six-week sojourn by a delegation of 20 Chinese educators and university administrators. The group experienced firsthand the tenor of campus life at the school, as well as at the University of Arizona and Harvard, among others. Delegates also saw applied distance learning through Morehead’s extended campus in Ashland. In another development, with the initial help of a $2 million SBA research grant, Morehead State will soon welcome the arrival of a former NASA satellite tracking station, currently in Virginia. The nine-story facility will aid in regional weather forecasting as well as educational and commercial research. LEXINGTON
At the Greater Lexington Chamber of Commerce’s annual gathering, “Vision 20/20,” incoming chairman Bill Thomason of Mill Ridge Farm talked of building consensus, and promised to continue the organization’s efforts in the areas of local education, minority business development, downtown and legislative affairs. The following Year 2000 awards were also presented: Top Producer – Abby Vaughan of Central Bank (27 new members); Ambassador – Shannon Elam of Qualex Manufacturing in Georgetown; Volunteer – George Lillis of Thrifty Car Rental. LOUISVILLE Warranty and service management company Service Net Inc. has sold a 51 percent stake in the firm to Illinois-based Kemper Insurance Companies, giving Service Net the new name Service Net Solutions LLC. Both companies expect the deal will enable greater entry into the homeowner insurance market, including warranty coverage for home durable goods, a Service Net niche. The Louisville-based company – which reported revenue of $32 million for 2000 – will relocate into new headquarters in Jeffersonville, Indiana in May. “We are excited to have the backing and support of one of the most respected and trusted insurance brands, “ said Lansdon Robbins, CEO of Service Net, a company that has grown by a cumulative 330 percent since being launched in 1996 and was recently named Louisville’s fourth-fastest-growing company. Kemper Insurance Companies reported 1999 revenue of $3 billion. STATE According to the newest figures from Site Selection magazine (www.siteselection.com), Kentucky ranks second in the U.S. in the number of jobs created per one million population between 1998 and 2000. Kentucky finished fourteenth out of the 50 United States in the total number of new and expanded corporate facilities, with a total number of 218. According to the Kentucky Cabinet for Economic Development, 1,017 companies located or expanded in Kentucky in 2000, resulting in 24,351 net new jobs created. Investment was estimated at over $4 billion, an increase of over one and one-half billion in the prior year. Ron Starner, editor of Site Selection stated, “Kentucky followed up an extremely strong 1999 – in which it ranked first in number of new jobs created per one million residents – by taking the No. 2 spot in that category in 2000. As the 14th ranked state for new and expanded corporate facilities in 2000, Kentucky was spurred by the growth of both its large metros and its small towns. In fact, Kentucky placed 10 cities in Site Selection’s annual ranking of the top 100 small towns in America for corporate facility expansion.” STATE In a variety of ways, Kentucky has been making news in the transportation field. Fifth District congressman Hal Rogers has helped bring about $23 million in federal spending for transportation projects. In the state capitol, plans for a $115 million, six-story headquarters for the state’s 1,300 Transportation Cabinet employees were recently unveiled, calling for completion by 2003. And transportation interests were the leading contributors to the state Democratic Party last year. But the latest news to many legislators in Frankfort reveals a discretionary road fund controlled by Transportation Secretary James Codell III that funnels more than $30 million to any road project he deems worthy – and has doled out $200 million since its inception ten years ago. Nineteen percent of the Highway Construction Contingency Account money has gone to Governor Paul Patton’s home territory of Pike County since he took office, and 40 percent of the road work the fund has paid for has been executed by major Patton campaign backer Leonard Lawson’s company, Mountain Enterprises of Lexington. According to the Associated Press, the account has never before been audited. Republican leaders have pledged to police the fund more closely, and to make sure its monies are directed toward the emergency repairs for which it was originally intended. FLORENCE For those unwilling to make the trek to and pay the money for a baseball outing at Cinergy Field, local leaders are working on a deal to bring in a Frontier League minor league baseball team, provided a small stadium can be built on a feasible budget. Gary Enzweiler of Cincinnati has already procured franchise rights in the league, and now work is underway to arrange sponsorship and financing for a proposed $10 land and stadium deal. According to the Associated Press, Frontier League Commissioner Bill Lee has favorably compared the area to St. Louis, where two Frontier franchises perform well in the shadow of Major League Baseball’s storied Cardinal franchise. The league, based in Zanesville, Ohio, once had teams in Ashland and Pikeville, both of which have since relocated to other cities. LEXINGTON
The Kentucky TriModal Transpark board will seek $16 million from the state and the balance in local bond issues to support the $80 million project, after the Federal Aviation Administration indicated that airport expansion for the transportation and distribution facility and industrial park was not necessary to handle current traffic. Seed funding of $6 million was awarded to the project by the state in 1998. Proponents plan to focus on the industrial park first, which some hope will stoke the need for the additional airline service that will in turn provoke more substantial FAA backing. According to the project’s financial plan, developed by Baird, Kurtz & Dobson, the board of the transpark would issue $43.5 million in “bond anticipation notes” backed by the city and Warren County. The first $25 million of that total will be issued this year. NATION LOUISVILLE resident Elaine Chao, wife of U.S. Senator Mitch McConnell, has been named to serve as Secretary of Labor, the first time an Asian-American has served in a presidential cabinet. Her nomination received little opposition during the approval process, unlike the experience of preceding nominee Linda Chavez, who went down after the “nanny question” arose from her past. Since beginning her professional career as a banker, Chao has headed the United Way of America and the Peace Corps, and has held upper level positions with the Federal Maritime Administration and the federal Transporation Department under the “first” President Bush. She and McConnell married in 1993. The most recent Kentuckian member of the Presidential cabinet was Juanita Kreps of Lynch, who served as President Carter’s Secretary of Commerce from 1977 to 1981. SOMERSET
LOUISVILLE Both the Jewish Hospital Heart and Lung Institute and LG&E Energy have chosen to outsource their Internet server functions with Xodiax Internet Data Centers, a Louisville-based web hosting company that’s gaining an increasingly prominent national profile as one of 13 IBM-certified “Hosting Advantage” business partners. Fellow Louisville server farm Lightyear Technology Center announced its first collocation customer, eRoute, Inc., another locally-based company that specializes in employee and customer connectivity programs. Lightyear recently received state incentives of up to $2.16 million to back a planned $2.7 million expansion that will add 82 jobs. Business Briefs BEDFORD
BUCKNER
COVINGTON
CYNTHIANA
DANVILLE
DRY RIDGE
EASTERN KENTUCKY
FLORENCE
LAWRENCEBURG
LEXINGTON
LOUISVILLE
MIDWAY
MONTICELLO
NORTHERN KENTUCKY
OWENSBORO
PADUCAH
VERSAILLES
STATE
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Copyright 1996-2001, by Kentucky Business Online. All rights reserved. Editorial
content is copyright 2001, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
Lee Todd –
Hopkins County native, UK engineering professor, founder
of successful company Databeam, and most recently an
executive with Lotus Development Corporation – has
been selected as the 11th president of the University of
Kentucky, a job he will officially undertake in July.
While some academicians reserve doubt about his
overweaning entrepreneurial bent, Todd has pledged to
keep the institution focused on its land-grant mission,
allowing state residents – and their life and career
opportunities – to feed off the momentum generated
by the university’s pursuit of Top 20 status.
United Parcel
Service has followed up on the addition of 30 air
freighters since 1998 by ordering 60 more, worth $6
billion, from Airbus Industrie. Third quarter 2000
figures revealed a 23 percent climb in the company’s
international export business since the same period in
1999. The new order – expected to be filled over a
nine-year period – contains an option for 50 more
planes.
An early
retirement buyout package offered by LG&E Energy is
expected to reduce its overall workforce by about 700
people over the coming year. Company leaders hope that
the move will negate the need for layoffs, but
haven’t ruled them out. Meanwhile, they expect many
of the “retired” workers to possible go to work
for contractors that work with LG&E on a regular
basis. 
In her state of
the merged government address, Lexington Mayor Pam Miller
touted the community’s Rural Land Plan (or purchase
of development rights program), which to date has
received 36 applications from farmers wanting to preserve
6,700 acres. The city’s Rural Land Board will begin
making appraisals and offers by mid-March, planning to
offer landowners the difference between what the land
would be worth developed and undeveloped. So far, the
program is supported by $25 million in city bonds and $15
million in money from the state’s portion of the
tobacco settlement fund.
As for the 180
acres downtown, Miller pointed to the changing skyline as
new circuit and district courthouses are opened, as well
as a much-needed parking garage. Building on the $50
million invested in affordable housing since 1993, Miller
is hoping to reorganize divisions in her forthcoming
budget in order to establish a city housing department.
Former Kentucky
governor Wallace Wilkinson, whose latest venture has been
the online textbook company ecampus.com, has been forced
to seek out bankruptcy protection under Chapter 11 after
a group of creditors sought Chapter 7 involuntary
bankruptcy status in seeking debts totaling over $300
million. U.S. Judge William S. Howard granted Wilkinson
Chapter 11 protection after the initial claim, giving him
time to try to restructure his debts. The creditors
include banker Elmer Whitaker of Lexington, L.D. Gorman
of Hazard, James Patterson of Louisville, and The United
Co. of Bristol, Virginia.
In the wake of
reports and ongoing investigations into carbon monoxide
poisonings, Sumerset Custom Houseboats has offered to
repair 2,500 of its houseboats free of charge in order to
shift dangerous rear exhaust systems to the side of the
boat. Although the company’s vessels have had side
exhausts since 1996, the offer will cover the boats made
by Sumerset and its predecessor from 1953 to 1996. The
company has also extended the offer to owners of other
brands, for the cost of labor and parts. Stardust
Cruisers of Monticello, however, is choosing not to do
anything until the U.S. Coast Guard issues
recommendations. Plant manager Ted Towner told the
Courier-Journal that moving the vents to the side
won’t really fix the problem, which can crop up
again when the vessels link up in groups.