FAST LANE - April 2000

STATE
State’s Newest Area Code Now in Effect

CENTRAL and Northern Kentucky’s new "859" area code goes into effect April 1, but it’s no joke. Until October 1, a permissive period applies, allowing callers to dial either the old "606" or the new code. However, after October 1 only "859" will work in 41 different service areas and 19 different Kentucky counties.

"By starting with the permissive period in April, customers have plenty of time to adapt to the change," said General Manager Mike Reed of GTE, which services nine of those areas. While efforts by Cincinnati Bell and the Northern Kentucky Chamber of Commerce to have the PSC reconsider the change failed, calls between Cincinnati and Northern Kentucky will remain toll-free.

Depending on the timing of their supply orders and marketing efforts last year, companies will spend from hundreds to thousands of dollars to convert letterhead, business cards, phone programming and advertising to the new designation.

SOMERSET
SBA Learns About the "Real" Rural World

A select group of 20 individuals recently gathered at The Center for Rural Development in Somerset for the Small Business Administration’s National Rural Access Capital Roundtable, where attendees discussed SBAprograms that affect rural America.

"There are some great opportunities in rural areas, but we know there are places that need some help," said G. Till Phillips, National Advocate for Rural Affairs in the SBA’s Office of Advocacy.

The SBA’s Office of the Advocacy hosted the roundtable, which included representatives from the Economic Development Administration, Securities and Exchange Commission, Department of Human Health Services, and the U.S.-Mexico Chamber of Commerce.

The Center for Rural Development’s executive director, Hilda Gay Legg, said the choice of The Center as host site played a significant role in the outcome of the two-day discussion. "Participants who are advocates for rural communities had to actually experience the logistics of getting to a rural community," said Legg. "Once here, they were able to see The Center with its state-of-the-art facilities and integrated programming that are a reality in a rural community."

"Technology allows for decentralization," says Jere W. Glover, chief counsel for Advocacy of the SBA. "Businesses that used to be located in metropolitan areas can now be taken out across the states and across the world quickly because of technology."

However, as roundtable participants noted, access to capital, especially venture capital, has always been a problem in rural areas. According to a presentation made by Charles W. Fluharty of the Rural Policy Research Institute, venture capital investments in the U.S. are concentrated in a few regions, namely California and Massachusetts, and in a few industries such as software and information, communications, and healthcare services.

"A big outcome of the roundtable is that we will increase micro-lending in rural areas," said G. Till Phillips. "Building closer partnerships with smaller, rural banks is a must and we will monitor the situation to make sure that happens."

LOUISVILLE
Louisville Mayor Announces New Development Area

IN cooperation with Humana Inc. and Bellarmine College, Louisville Mayor David Armstrong has announced the beginning of eMain USA, a downtown technology park.

The new development district will extend eastward for six blocks from the Clark Memorial at Second Street and will encompass the headquarters of the Presbyterian Church USA, most of Humana’s local facilities, the new Slugger Field baseball park and the proposed extreme games park.

The centerpiece of the development will be the 130,000-square-foot Clocktower Building, a local landmark that the city will renovate in cooperation with Humana. The Clocktower will house a new Bellarmine College program, the Center of eBusiness and eCommerce, and offices for BellSouth and Win.Net as its first tenants. The state will provide $2.5 million for the renovation.

Two other buildings significant to the continuing revitalization of Louisville’s downtown are the focus of private commercial projects.

The Snead Manufacturing Building on Main Street is undergoing an $11 million renovation, and the Old Henry Clay Hotel is to be converted into a $38 million 263-suite hotel and complex.

LOUISVILLE
Merger Plan Goes Through Assembly

A compromise plan to merge the City of Louisville and Jefferson County into one "metropolitan" city has been approved by the state House and Senate, and there will be a ratifying referendum in November.

The merger plan would make the new "Metropolitan City of Louisville" the state’s largest with more than 525,000 residents. It would be the country’s 23rd largest, according to the U.S. Bureau of the Census.

Anew 26-member assembly will replace both the city board of aldermen and the fiscal court. African-American representatives currently comprise one-third of each of those bodies. Plans call for one-quarter to one-third of the Metropolitan City of Louisville’s newly created districts to be in areas with a majority African-American population. The number of at-large representatives to be elected is yet to be determined.

STATE
State’s Public Service Commission Revisits Issue of Utility Rate Cuts

IN January, when the Kentucky Public Service Commission ordered Kentucky Utilities and Louisville Gas & Electric to reduce their rates by a combined $63 million, utility officials and customers howled at the injustice. Now, as the company undergoes workforce reductions and a sale to Powergen plc for $3.2 billion, the complaints are being heard and reheard.

KU customer savings, originally slated to total $36.4 million annually, will be reduced by $2.5 million. The PSC is rehearing other parts of the case that may result in an additional $5 million reduction in the initial rate cut, which went into effect in March.

Meanwhile, in a move that barely preceded and perhaps only served to further attract the buyout by Powergen, LG&E is further integrating its two utility operations – Louisville Gas and Electric and Kentucky Utilities – eliminating 250 of its 5,500 positions over the next several months.

In a recent letter to the Louisville Courier-Journal, author Wade Hall reminded readers that the City of Louisville, under the leadership of Mayor Wilson Wyatt Sr. during World War II, once had the financing and SEC approval in place to buy LG&E for $85 million. But a last-minute plea from a supporter of Thomas Dewey for president convinced the board of aldermen to change its collective mind in the name of politics. Wyatt told Hall that the purchase would have supplied one-half of the city’s needed income and would have made the occupational tax unnecessary.

LEXINGTON
Airport Board Hires Consultants to Explore Runway Alternatives

AIRPORT neighbors and concerned citizens mixed with Blue Grass Airport officials and consultants at a Lexington workshop in February. The event was designed to present possible alternatives to the airport’s runway deficiencies and to elicit public comment for the continuing environmental impact study being conducted by the FAA. The current runway length (7,000 feet) and its proximity to the taxiway don’t meet current FAA regulations, though the facility is grandfathered.

The current study has been ongoing for two years. A second study was initiated in December to evaluate options that might gain approval even though they don’t meet current FAA guidelines either.

"The airport is grandfathered so that until they take an action improving the existing runway, they’re not required to do anything," said Peggy Kelley, an FAA official.

"The airport board has hired some consultants to look at alternatives that might not be what we would define as fully meeting the purpose and need. But our purpose and need was drafted on the initial action, and it involves fully meeting FAA standards. They’re going to look at maximizing what they can get by working on the existing runway, and minimizing the associated impacts.

"With these types of studies, there isn’t a norm," said Kelley when asked about the time-consuming process. "They are usually quite lengthy. A lot depends on the impacts involved. I’d say that we’re on track."

LOUISVILLE
Churchill Downs Encountering Competition for Indiana Subsidy

CHURCHILL Downs, which has had a monopoly on thoroughbred racing in Indiana with its Hoosier Downs track in Anderson, is facing a competitor for the multi-million state subsidy it now has to itself.

A group to build the new Indianapolis Downs track has asked the Indiana Horse Racing Commission for one-half of the $10 million subsidy generated by taxes on admissions to the state’s riverboat casinos. Churchill has filed a counterproposal seeking at least 80 percent of the subsidy, citing its $32 million investment in the track that it opened in late 1994.

In a related development, Churchill also announced it has sold a 26 percent interest in the track to its current partner, Centaur Inc. The transaction will reduce Churchill’s holding to 51 percent of Hoosier Park and increase Centaur’s to 39 percent. The remaining 10 percent is held by Conseco HHP, LLC, a subsidy of the Indiana insurance company. The change may affect the eventual ruling of the state Horse Racing Commission by raising the total ownership of the track to 49 percent by Indiana companies.

LOUISVILLE
UofL Program Earns Recognition for Entrepreneurial Studies

THE University of Louisville’s College of Business and Public Administration’s MBA program earned second place in a national competition focused on promoting entrepreneurship.

The U.S. Association for Small Business and Entrepreneurship voted the University of Texas in Austin as the best in the country. U of L was ranked number seven in 1998 among a list of the top 25 business schools for entrepreneurs published by Success magazine.

In another development, the University of Louisville will begin this fall offering a master of urban planning degree, the only program of its kind in the state. The course of study will offer three areas of specialization: land use and environmental planning; administration of planning organizations; and spatial analysis for planning.

LOUISVILLE
Ford Motor Co. Settles Gender Discrimination Lawsuit for $2 Million

FORD Motor Company has settled a discrimination complaint filed by the U.S. Department of Labor, agreeing to pay $2 million to more than 300 women in the Louisville area.

The women claimed they were not hired because of their gender when the company expanded its workforce at the Kentucky Truck Plant in 1993. As part of the settlement, Ford also agreed to hire 25 of them at either its truck plant or its Louisville Assembly Plant.

The local agreement is the largest element in a national settlement of $3.8 million that will also be shared by Ford plants in eight other cities.

LOUISVILLE
High Speed Access to Build Customer Care Center in Louisville

KENT Oyler, one of the founders of High Speed Access Corporation and its chief strategist, has announced that his company will locate a new national customer-care center in the Louisville area that will eventually employ five hundred persons. The new positions, with an average wage of $31,000, will be added to the 95-member staff already in place locally.

The company plans to build a new 100,000-square-foot facility in the Hurstbourne Green business park. The expansion will be financed in part by state tax incentives of $9 million over a 10-year period.

High Speed Access Corporation was born one year ago through a merger of CATV.net, co-founded by Oyler, and HSA.net of Denver. It provides high-speed Internet access to cable systems in 27 states.

STATE
NISource Acquires Columbia Energy in Friendly Merger

INDIANA-based NiSource Inc., a holding company that distributes electricity, natural gas and water throughout the Midwest and Northeast U.S., has acquired Columbia Energy Group of Herndon, Virginia for $6 billion, plus $2.5 billion in assumed debt. The combined value of the companies exceeds $13.5 billion.

The new holding company will have access to 30 percent of the U.S. population, which accounts for 40 percent of the nation’s energy consumption.

One expected innovation due to come within a year is the development of fuel cell technology that converts natural gas into hydrogen and electricity.

After an earlier, unsuccessful hostile takeover attempt, market conditions and a lack of alternate suitors convinced Columbia’s board to accept the current price, a full $100 million less than the previous offer.

STATE
Survey of Business Executives Shows Increased Optimism

THE Kentucky Senior Management Survey, performed biennially by Frankfort-based pro-business research center Kentucky Forward, reveals the insights of over 200 executives into the state’s business climate:

In 1995, 54 percent of the respondents said the state’s business climate was poorer than that of surrounding states. Today’s optimistic outlook has reduced that displeased proportion to 34 percent. Not surprisingly, a nearly identical change – from 53 percent to only 30 percent – characterized the sample’s feelings about state government "ineffectiveness."

Sixty-nine percent said the availability of skilled labor was "much poorer" than in surrounding states. Primary and secondary school improvement were the top priority issues for respondents when it comes to supporting political candidates.

LOUISVILLE
ResCare Management Prepares to Buy "Undervalued" Company

ONE year after posting its highest price, the stock of ResCare Inc. fell to a low following reports of a management plan to buy the company and take it private. The fast-growing health services company, which is approaching $1 billion in annual revenues, may also be changing its announced strategy of growth through acquisition.

According to statements by its chairman, Ronald Geary, and its investment advisory firm, J.C. Bradford & Co., both quoted in the Courier-Journal, ResCare’s management is concerned that the company is "undervalued" and is preparing an offer to buy the company. Both believe, a company spokesman stated, that ResCare is an "excellent company (even if) the stock price is not showing it" at this time.

ResCare is categorized with other out-of-favor healthcare stocks, many of which have been adversely affected by dependence on Medicare funding. While ResCare itself is not, that fact is not commonly known and its announced plans to shift focus on internal growth rather than acquisitions may mean that there "isn’t a requirement to be a public company" anymore, one analyst reported.

BUSINESS BRIEFS

STATE

• Business Ethics magazine named Fifth Third Bank among its "100 Best Corporate Citizens" out of the nation’s top 650 "socially responsible" public firms. Coming in at 49th, the bank was the only financial services firm in the top 50. Bank President George A. Schaefer, Jr. credited the company’s $9 billion community development program, charitable giving and a commitment to employees exemplified by longstanding profit-sharing and flexible scheduling. IBM was ranked first on the list.

• According to Wells Fargo and the National Federation of Independent Businesses, three million businesses started up in the United States in 1998. While the Western region led the nation on a per capita basis, the South (including Kentucky) led in total business starts, with over one million.

• Six Kentuckians will be inducted into the Kentucky Journalism Hall of Fame at a luncheon April 10: Lexington Herald-Leader publisher Tim Kelly; John Lewis Hampton, former Miami Herald editor and 1959 UK graduate; the late John Michael Barry, longtime editor of The Irish American in Louisville; 1981 WKU graduate Mary Jeffries, known for her work with WHAS radio in Louisville; the late Ted Poston of Hopkinsville, one of the first black journalists to "cross over" to a predominantly white newsroom in the 1930s; and Oscar L. Combs, founder of The Cats’ Pause sports tabloid.

ASHLAND

• At the opening meeting of the annual National Automobile Dealers Association convention in Orlando, Ashland resident Kenneth B. Blanton, vice president and general manager of Don Hall Chevrolet Oldsmobile GMC and president of Boyd County Ford-Mazda, received the Quality Dealer Award. Out of 64 dealers nominated from over 20,000 across the nation, Blanton was chosen for his combination of outstanding dealership performance and exemplary community service.

BOWLING GREEN

• The National Corvette Museum has reported a significant increase in attendance, from 154,595 in 1998 to 200,240 in 1999. Museum officials point to special exhibits and events as the reason for the climb in visitors.

CENTRAL CITY

• Millennium Teleservices, an affiliate of CDG Management LLC, will employ over 200 people at a call center to be built in Muhlenberg County. It will be the company’s fourth Kentucky facility, and first in the western part of the state. According to the Cabinet for Economic Development, the firm has consistently been rated as one of the top providers of integrated direct marketing.

FLEMINGSBURG

• Late February storms unleashed severe flooding in northeastern Kentucky, damaging 200-plus homes and causing more than $3 million in damage. Over five inches of rain in 24 hours caused states of emergency to be issued in six counties

FRANKFORT

• AFL-CIO President John Sweeney and UAW Vice President Elizabeth Bunn were joined by Teamsters Secretary Treasurer Tom Keegel, Governor Patton and other state organized labor officials for a rally on the Capitol steps in February to support the organization’s legislative priorities and kick off the union movement’s Labor 2000 political program in the state.

• The Kentucky Arts Council awarded its Al Smith, Brown-Forman and Irwin Pickett Fellowship Awards of $5,000 each to 20 individual visual and media artists. Twenty other artists were presented with $1,000 Professional Assistance Awards for continued development of their work. Next year’s awards will go to writers, composers and choreographers.

• Fourteen Kentucky companies – among them Churchill Weavers from Berea, Heartwood Industries from Utica, and Panacron Inc. from Irvine – are showing their wares and experiencing the global marketplace firsthand at the month-long Daily Mall Ideal Home Show in London, England. More than 150 businesses from 11 Appalachian states make up the exhibit.

GHENT

• Since it came to this small riverside town in 1990, North American Stainless had invested over $600 million in its steel rolling and finishing operation. That total grew last month when the company announced a $200 million expansion, which will add a melt shop and 150 more workers to the current payroll of 412 people. "This project will allow NAS the capacity to produce 800,000 tons of stainless steel slabs annually," said José Luis Lejeune, NAS president. The melt shop component will be completed by the end of 2002. NAS is primarily owned by Acerinox, S.A. of Madrid, Spain.

HARLAN COUNTY

• The Kentucky Economic Development Finance Authority, the body that helps new companies with state grant money, is asking for some of it back. The Authority has filed a lawsuit against the Sunshine Valley Farms biscuit factory and county officials, asking for over $1.2 million – a combination of the original grant amount, interest, and compensation for the failure of the company to create the jobs it said it would create. The original agreement called for 106 new jobs, but the plant employs only seven people.

HOPKINSVILLE

• Hopkinsville businesses led the way in receiving training grants from the Bluegrass State Skills Corporation last month. Of the over $790,000 in funds going toward 40 training projects statewide, more than $133,000 will go toward initiatives underway at Dana Corporation, Douglas AutoTech and Emhart Fastening Technologies. Guess?, Inc. of Louisville received the largest grant of $53,810, to train 230 entry-level employees.

• Exterior home trim manufacturer ABTCo closed its plant and released 60 employees in late March after choosing to focus on wooden products instead of the extruded plastic trim made at the 30-year-old Kentucky plant.

LEXINGTON

• Barney Miller’s Home Electronics, in business since 1922, was named as a Top 10 Custom Installer in AudioVideo magazine’s "Retailers of the Year" competition for 1999.

• On the heels of a complete remodeling of its restaurant, Phil Dunn’s Cookshop recently broke ground on a location in the Chevy Chase area that will feature dine-to-go, a bakery, catering services and a cooking institute.

• Integrated Software & Solutions has changed its name to TrinSoft. The company, founded by John Stucky in 1996, has also completed the certification process as a Navision Solution Center. Navision is an accounting management software firm.

• Keeneland will catalog 245 horses for its ninth annual April Two-Year-Olds in Training Sale, to be held April 18. Last year’s auction boasted gross sales of over $18 million and this year’s list of sires is the strongest in the sale’s history.

• At her state of the merged government address, Lexington Mayor Pam Miller noted that the city must now turn its attention from nagging infrastructure needs, many of which are now being addressed, to pressing quality of life issues. Among the topics on her agenda: the voluntary purchase of development rights program and the 40-acre minimum size of farm lots, and creating incentives for downtown "brown field" redevelopment, as well as drawing high-tech entrepreneurs to the city’s "cool, funky" spaces in order to develop "dotcom hotels."

• The gleaming new Embassy Suites Lexington received the highest guest satisfaction ratings of any of the hotel chain’s 140-plus worldwide operations during a recent three-month period. The 230-suite hotel, which boasts 14,000 square feet of meeting space, is managed by Cincinnati-based Winegardner & Hammons, Inc.

• Dr. William R. Markesbery, director of the UK Sanders-Brown Center on Aging and a renowned expert on Alzheimer’s disease, received the Community Health Leadership Award from Community Health Charities of Kentucky.

• Ground was broken in March for the Linda and Jack Gill building at the University of Kentucky Chandler Medical Center. Housing the Gill Heart Institute as well as the UK Center for Advanced Surgery, the building, along with the UK College of Allied Health Professions Building, will form a new gateway to the medical center complex.

• The Blood-Horse, Inc. has announced a new book division, Eclipse Press. The top equine publishing company is extending its reach toward more mainstream readers and horse enthusiasts.

• A 30-second commercial for Internet services provider Microtec earned the best TV commercial and "Best of Show" awards for Hart Video Services in an annual competition sponsored by the Lexington Advertising Club, beating out more than 580 other entries.

• BellSouth won an injunction against a city lawsuit seeking to bar the company from laying fiber optic cable without paying a franchise fee. While the lawsuit is still under consideration, BellSouth will be able to continue with its plans to lay several loops of the cable throughout Lexington’s rights-of-way, thanks to an 1886 law granting it a "permanent statewide franchise."

MIDWAY

• The James Graham Brown Foundation, named after the prominent lumberman, horseman and entrepreneur, has awarded a $300,000 grant to Midway College toward the expected summer groundbreaking for the Ann Hart Raymond Center for Mathematics, Science and Technology.The 46,000-square-foot facility will house a 450-seat auditorium as well as the Center for Women and Leadership and the Women’s Enterprise Institute, recently established with a grant from the U.S. Small Business Administration.

NICHOLASVILLE

• Alltech Inc., a biotechnology firm noted for its livestock diet research, has purchased the Siebel Institute of Technology, a well-established brewer’s school in Chicago, for around $1 million, announced Alltech president T. Pearse Lyons. The announcement comes on the heels of the company’s purchase of Lexington Brewing Company’s equipment and building last fall. Alltech will soon begin producing the brewery’s signature beverage, Limestone Ale, and plans to use the respected Siebel name to market brewing products.

NORTHERN KENTUCKY

• Toyota Motor Manufacturing North America awarded its Superior award – the organization’s highest recognition of supplier quality – to Ambrake Corporation of Elizabethtown. Two other Kentucky suppliers – Louisville Forge and Gear Works of Georgetown and Sumit Polymers of Mt. Sterling – earned the Excellent designation. Out of approximately 500 North American suppliers to Toyota (who ring up $8.65 billion a year in sales to the company), 60 do business in Kentucky.

OWENSBORO

• Daviess County executives are considering the purchase of a half-block of downtown Owensboro property – which contains the city’s oldest historic structure, the Smith-Werner building – for possible redevelopment into a multi-use facility that would contain more parking spaces among other amenities. Property owner Al Arnold has offered to sell the property to the county for $575,000, and the county has purchased a 120-day option. County commissioners are considering possible uses of the property as well as mulling the general issue of dealing with speculative real estate.

PADUCAH

• Computer Services, Inc., the Paducah-based community bank processor, added 40 new Internet banking customers to its client roster, making it the top reseller of the products of its strategic partner, Digital Insight Corporation. CSI has also made an equity investment in Digital Insight. Of CSI’s over 350 community bank partners in 12 states, six chose to offer Internet banking in 1998 and that number increased to 46 in 1999. CSI President and CEO Steven Powless alluded to the seamless integration of Digital’s services with CSI’s suite of products and compared the growth of Internet banking to the ATM revolution of the 1980s.

VERSAILLES

• Five hundred jobs will vanish by August, 2001 when Texas Instruments finishes closing its Versailles plant, a mainstay of the area economy since 1954. Layoffs will begin this June, though some 70 non-production employees will be offered transfers to the company’s facility in Attleboro, Massachusetts. The company’s 1999 revenues were up 10 percent over the previous year, while its income doubled. Production will move to Mexico.

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