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FAST LANE - August 2001
In the past few weeks, Kentuckians have been informed of tourism spending in the state’s nine tourist zones. They’ve been told of special characteristics of the Commonwealth’s nine economic zones. And a continuing flow of information keeps us up to date on the news from the state’s 15 Area Development Districts. It comes as no surprise to veterans of economic development that none of these zones are one and the same, but re-engineered in order to place the best sheen on the topic at hand. The latest study, authored by University of Louisville professors Michael Price and Paul Coomes, divides the state into nine economic regions in order to compare those regions with similar areas in other states. For instance, the Lexington region compares favorably to similar zones in Columbia, Mo., and Knoxville; Louisville compares to such cities as Omaha and Indianapolis; and the Mountain region was doing much better in creating manufacturing jobs than similar regions in the Ozarks or the rest of Appalachia. “Of course, I like my nine regions as I think they correspond closely to market areas (labor, housing, shopping, entertainment) – or at least the Kentucky portions of the many bi-state economic areas we live, work and shop in,” says Paul Coomes. “They are probably too large for some purposes though, as there are certainly smaller labor markets for local retail and services – for example, Danville has some thin markets that are separate from Lexington.” One note of interest to private company owners: The Louisville and Northern Kentucky regions are paying in taxes for much more than they receive from the state. For the year 1997, Louisville sent more than $2 billion to the state, but only got back $1.3 billion in projects and funds. Northern Kentucky paid $727 million and received only $439 million in return. The best news was that manufacturing jobs overall in the state increased at double the national rate between 1992 and 1998. Picking which years to study can be as fine an art as picking where to draw the lines. LOUISVILLE
Founded in 1996 and purchased by Kemper Companies last year, Service Net creates, markets and administers warranties and service contracts for manufacturers, retailers and distributors of durable goods, from HVAC to electronics and computer peripherals. Service Net was the fourth-fastest-growing company in Louisville in 2000, and will move into a new 45,000-s.f. headquarters in Jeffersonville in August. With call centers already in New Albany, Indiana and Florida, plans call for a third to be located soon in either Florida or Arizona. Robbins forecasts sales to exceed $500 million within the next five years. Among his biggest competitive advantages, said Robbins, was attracting and keeping a dynamic work force. “We focus a lot of attention on developing a positive company culture,” he says, citing benefits like 16 hours of paid work time to spend on the employee’s choice of community service. So why the move to Indiana? “We have most of our employees in New Albany today,” says Robbins, who also appreciates the character of the new building itself, formerly home to a railcar manufacturing operation. “We wanted to combine corporate headquarters with production, and we felt that we would risk losing a lot of people if we moved across the river. People seem to like to go from Kentucky to Indiana to work, but not the other way around. They also had a better single location, with a whole lot of square feet on a single level, and it was hard to find something similar in a location over here in Kentucky.” PADUCAH In the latest step to fix a variety of problems emanating from the Paducah Gaseous Diffusion Plant, the federal labor and energy departments have opened the first of 10 resource centers for former employees as part of the Energy Employees Occupational Injury Compensation Program Act. Initial payments to workers claiming sickness from working in plants like the Paducah uranium enrichment facility are expected to begin arriving in August. Among the other resource centers will be one in Portsmouth, Ohio, in order to serve the former workers at the U.S. Enrichment Corporation’s other plant there. The U.S. Justice Department and the Department of Energy have received an extension in deciding whether to join a lawsuit against USEC’s operators brought by the Natural Resources Defense Council and former plant employees. The suit alleges that Lockheed Martin and its predecessor Martin Marietta knew about and covered up evidence of significant radioactive contamination. The Portsmouth and Paducah plants received further black marks in May when the Courier-Journal reported that their leaky pipes had emitted more ozone-eating CFCs than any other polluters over the past decade. According to figures from the EPA’s Toxic Release Inventory, each plant emits nearly 10 times as much CFC-114 as the next-worst offender, DuPont Chamber Works in New Jersey. FRANKFORT Before leasing 1,203 lottery ticket vending machines from a company headed by a friend of the two of its members who championed the idea, the Kentucky Lottery Corporation (KLC) board chose to reconsider the move. This was done in light of concerns that the immediate effect of such a large deal would cut into the education dividend the Lottery was designed to create for the state. A third-party consultant has been hired to study the move. The company in question is Interlott Technologies, chaired by former state finance cabinet secretary L. Rogers Wells Jr. His friends are board members Bobby Bartley and Teddy Colley.
“We have a charge to maximize revenues for the Commonwealth so that the money the Lottery earns can support worthwhile programs like scholarships and need-based grants,” board chairman Bill Covington said. According to KLC, this year 32 percent of Lottery dividends to the state will go to need-based grants, while 15 percent will go to merit based scholarships. The law directs $3 million of Lottery dividends annually to literacy programs. By 2006, after the $3 million for literacy programs comes off the top, fifty-five percent of remaining Lottery dividends will go toward need-based grants, while 45 percent will go toward merit-based scholarships. Sales for the current fiscal year are expected to reach $589 million, with dividends of around $159 million. STATE The New Economy is brightening horizons across the state. In Whitesburg in late July, Governor Paul Patton launched a Save the Children PowerUp lab, one of 13 founded by a partnership between state and federal governments, as well as the Appalachian Regional Commission, to help bridge the digital divide. In Covington, the Madison Avenue E-Zone has received $650,000 in grants (including $500,000 from the Kentucky Economic Development Finance Authority, to build the infrastructure and hire the personnel for its Regional Innovation and Commercialization Center, one of several to be located around the state as part of the Kentucky Innovation Act’s provisions. Other financial commitments for Covington’s center have come from Fifth Third Bank, Tri-ED and the Covington Business Council. In Lexington, Nashville-based 2nd Generation Capital and Massachusetts-based Village Ventures announced at the second annual Silicon Central eConference their plans to establish a Central Kentucky venture capital fund worth from $15 to $25 million to back startups in healthcare and high-tech. NICHOLASVILLE Jackson Plastics Inc. owner Henry Jackson – whose plants operate in Nicholasville, Morristown, Ind., and Danville, Ill. – has entered into a joint venture with Toyota Tsusho called Millennium Steel Service LLC. The company will operate out of Tsusho’s plant across from Toyota’s Princeton, Ind., plant for the purpose of receiving and delivering steel to the OEM.
In other plastics news, the Kentucky Plastics Industry Consortium has received $42,000 from the Bluegrass State Skills Corporation to fund the national Society of the Plastics Industry’s Plastics Learning Network. KET will transmit the organization’s injection molding course to up to 120 students in high schools and colleges across the state. “SPI applauds those states that have reached out to its plastics processors to help provide solutions to their training and certification problems,” said SPI director of workforce development Gary Moore. BOWLING
GREEN CTS CarTopSystems N.A. Inc. – a subsidiary of a joint venture between DaimlerChrysler and Porsche called CTS Fahrzeug-Dachsysteme GmbH – will locate a 27,000-s.f., $5 million facility in the South Central Kentucky Industrial Park. The company, which supplies retractable hardtops for the Cadillac Evoq and removable targa tops and soft tops for the 2004 Corvette, will employ 75 people. The facility is expected to be up and running by next spring. “Bowling Green was selected as the choice for our first U.S. manufacturing operation over sites in Tennessee,” said CTS N.A. chairman Dr. J¸rgen Bohm. “It is located right in the heart where most of the U.S.-based OEM automotive manufacturing operations take place and therefore provides for CTS N.A. Inc. additional strategic opportunities for further business development.” LEXINGTON
Just over a month later, the Executive Committee of the UK Board of Trustees authorized the first stage of an administrative reorganization presented by the new president. Expected to save the school $1.25 million per year, the new structure will employ a provost and three vice presidents, instead of the former “sector system” of eight chancellors and vice presidents. Among the new appointees are provost Michael Nietzel and the school’s first vice president of corporate relations and economic outreach, Joe Fink, long lauded for his work as director of UK’s Advanced Science and Technology Commercialization Center (ASTeCC), a department that helps faculty members develop start-up companies from research developed at UK. Todd also established a commission on the status of women and a commission on diversity, both reporting directly to him. STATE Indiana-based Anthem Insurance Cos. Inc. is changing its ownership structure from policyholders to stockholders in order to gain access to capital. Current members will be eligible to receive either stock in the public company or cash in exchange for their membership if two-thirds of policyholders approve the change. Of Anthem’s 7.5 million policyholders, 1.1 million live in Kentucky. “The Plan of Conversion is fair and equitable. It proposes to distribute the entire value of the company to our eligible members,” said Larry C. Glasscock, Anthem president and CEO. “We are confident that conversion to a stock company will advance our efforts to provide access to high quality health care benefits and services through enhanced financial flexibility, access to capital and growth opportunities.” Information on the proposed demutualization plan will be available on Anthem’s website (www.Anthem.com) and through a toll-free phone information line; 1-866-299-9628. For the year ending Dec. 31, 2000, Anthem reported consolidated earnings of $226.0 million, with total revenue of $8.8 billion. NORTHERN
KENTUCKY After a pilot strike that lasted 13 weeks, Comair was offering air service again the first week in July. Full service to the 95 cities the airline was serving prior to the strike’s settlement in late June will be restored gradually over the next 15 months. According to local officials, hotel occupancy in Northern Kentucky was down 18 percent in April. Comair parent corporation Delta Air Lines recently ratified a five-year contract with its pilots, making them the highest-paid in the business. More than 70 percent of Delta’s 9,800 pilots voted in favor of the contract. The average Delta pilot makes $158,500. IRVINE
As
president of the Kentucky Press Association in 1998, he
was the first to personally visit each of the
state’s 162 newspapers. LOUISVILLE The Regional Airport Authority of Louisville and Jefferson County is still on track to voluntarily relocate over 850 households to quieter neighborhoods by 2004. Offers are being made to approximately 284 property owners per year over the next few years. “The airport has committed $98 million over the Authority’s four fiscal years from a combination of revenue sources, such as federal Part 150 funds, Airport Improvement Program grants, airport use fees … bonds and other airport revenues,” said airport general manager Jim DeLong in the organization’s newsletter. “In addition, the airport is seeking state government support for a final $20 million to meet the airport’s aggressive relocation timeline.” “Although the entire community benefits from airport expansion, our nearest neighbors pay the highest price – significant aircraft noise,” added board chairman J. Michael Brown. “We want to provide them with relief from the noise as quickly and efficiently as possible.” Almost 2,900 families have relocated since 1989. The Authority recently received an $18.7-million federal grant to help buy land and move people. STATE Kentucky tobacco growers will receive around $33 million in Tobacco Loss Assistance Program payments after the U.S. House of Representatives approved a total of $129 million in aid for the crop’s farmers nationwide. Meanwhile, the Kentucky Cattlemen’s Association has benefited from the Phase I Tobacco Master Settlement Agreement, garnering $1.8 million in funds to establish the Kentucky Beef Network (KBN). Designed as a comprehensive resource for the biggest state cattle-producing market east of the Mississippi, the network will both facilitate partnerships with various agencies and individuals and work with previously tobacco-dependent farmers. “The opportunities available to us must be taken advantage of through cooperative producer efforts that will give us the leverage in the marketplace that we have been lacking,” said KBN steering committee chairman Charles Miller. LOUISVILLE
“We are very excited to be partnering with a large, innovative city like Los Angeles,” said Telemics president Scott Roussell. The company’s wireless networks and systems also serve utilities, transportation departments, electric co-ops, universities and commercial property owners. SHEPHERDSVILLE Nationwide home fashion superstore chain Linens ‘n Things will open a 600,000-s.f. distribution facility here next spring. It will be the 300-store company’s biggest distribution facility and is expected to employ around 250 workers. The company is slated to get up to $6 million in tax credits. Linens ‘n Things operates a store in Lexington and just opened a store in Louisville. “Adding a third distribution center to our operation enables us to continue to expand and strengthen our infrastructure so that we can support our next phase of growth,” said company chairman and CEO Norman Axelrod. Other centers are located in Greensboro, N.C. and Swedesboro, N.J. LOUISVILLE Carl F. Pollard, a former executive at Humana Inc., has been named chairman of the board for Churchill Downs Inc., replacing William Farish, who resigned on Monday in order to become the U.S. ambassador to Great Britain and Northern Ireland. Farish, the owner of Lane’s End Farm in Versailles, was finally confirmed as ambassador in mid-July, almost a full six months after his nomination by President George W. Bush. Pollard has served on CDI’s board since 1985 and is the owner and operator of Hermitage Farm in Oldham County. “We are very pleased that Mr. Pollard accepted the position as chairman of CDI,” said Tom Meeker, CDI president and CEO. “Through his involvement in the industry as an owner and breeder as well as his extensive business experience, he has established himself as an important guiding force for our Company.” “Horse racing is a very important part of my life,” said Pollard, “and I look forward to serving CDI and its shareholders in this new capacity.” OWENSBORO Toyotetsu America plans to locate a $12 million auto parts facility in the MidAmerica Airpark under a new name: Toyotetsu MidAmerica LLC. The 174,000-s.f. facility would employ 120 during its first year of operation. The new facility would complement the company’s other operation in Somerset, which employs 466. The parent of both companies is Toyoda Iron Works Co., Ltd. of Japan. “Having just met with representatives from Toyoda Iron Works during my latest trip to Japan, I was hopeful they would choose to expand their operations in the Commonwealth,” said Gov. Paul Patton. “We believe that when you combine the quality product that Toyotetsu is known for with the quality workforce which we have in Daviess County, success is assured,” said Daviess County Judge Executive Reid Hare. LOUISVILLE A $20 million museum will open on Main Street and will attract visitors from around the world, says recently retired Brown-Forman executive Owsley Brown Frazier, whose announced Frazier Historical Arms Museum is scheduled to open in late 2002 or early 2003. While much of the collection will come directly from Frazier’s personal collection, there will also be an exhibit donated by Great Britain’s Royal Armouries Museum. Queen Elizabeth II is not only a frequent visitor to the state because of her interest in Thoroughbreds, but is a personal friend of Frazier’s. At a price in the neighborhood of $2 million, Frazier recently bought the building that will house the museum. Business Briefs BEECHMONT
CATLETTSBURG
CORBIN
EDDYVILLE
FRANKLIN
FRANKFORT
HARRODSBURG
LEXINGTON
LONDON
LOUISVILLE
McKEE
MORGANFIELD
NEWPORT
NORTHERN KENTUCKY
OWENSBORO
STATE
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. |
The following have
been named Ernst & Young 2001 Kentucky-Southern
Indiana Entrepreneurs of the Year: James Fugitte,
president and CEO of Fort Knox National Company in
Elizabethtown; Steven Foster, founder and CEO, and Dan
Smith, president and COO, of Jillian’s Entertainment
in Louisville; Michael Stinson, CEO of Ready Staffing
Services in Louisville; and Lansdon B. Robbins, CEO of
service contract firm Service Net, now of Louisville
… but soon of Jeffersonville, Ind. All will now
compete for the national title next November, an honor
bestowed in the past on such luminaries as AOL’s
Steve Case, Starbucks’ Howard Schultz and
Louisville’s own John Schnatter, founder of Papa
John’s.
KLC funding helped
31,172 Kentucky students receive financial assistance for
post-secondary education through the Kentucky Educational
Excellence Scholarship (KEES) program in fiscal year
2001. Thousands more received financial help from Lottery
dollars that fund need-based grant programs.
Jackson’s
plastics firm is among many contributing to a vibrant
industry in the state. According to the Society of the
Plastics Industry’s new report detailing resin
consumption, facility expansion and equipment use by
state found that Kentucky’s facilities (including
Jackson Plastics) ranked 10th in high-density
polyethylene (HDPE) consumption and 9th in the number of
rotomolding machines in use. Among national leaders in
several categories are Texas, California, Ohio and
Illinois.
The change in
tenure from former University of Kentucky president
Charles Wethington to new chief Lee Todd Jr. was briefly
overshadowed by billowing smoke as the university’s
119-year-old administration building fell victim to a
two-alarm fire, destroying the building’s roof and
top floor. The cause was thought to be a worker’s
torch from the $1.3-million exterior renovation project
that was being conducted by Midland Engineering of South
Bend, Ind. The worker suffered burns, but no other
injuries were reported. Estimates of total damage and
costs to rebuild are still being made.
The Eastern
Kentucky University College of Business and Technology
has awarded its first-ever Excellence in Entrepreneurship
Award to 51-year-old newspaper publisher Guy Hatfield,
who only weeks before was inducted into the Kentucky
Journalism Hall of Fame. Hatfield launched the Citizen
Voice & Times in 1973, adding the Clay City Times in
1994 and the Flemingsburg Gazette in 1999. Numerous
health problems have not prevented him from serving as
three-time president of the Kentucky Weekly Newspaper
Association and for four years as state chairman of the
National Newspaper Association.
Telemics, Inc. has
been chosen by the City of Los Angeles’ Bureau of
Street Lighting to implement its wireless monitoring
network in a section of Hollywood, allowing city
officials to proactively monitor the lights from a
desktop computer, as opposed to the reactive mode of
responding to citizen reports. “Telemics’
Verifier Program will save us time and money,” said
L.A.’s assistant director of the Bureau of Street
Lighting Phil Reed. “Their wireless networks
introduce positive changes to the methods cities and
utilities use when monitoring and maintaining streetlight
infrastructures.”
The
Kentucky Bar Association named Julia Hylton Adams
of Winchester as Kentucky’s outstanding
judge and Robert J. Turley of Lexington as
Kentucky’s outstanding lawyer. London
resident J. Warren Keller of Taylor, Keller &
Dunaway received the Donated Legal Services
award. Lexington’s Jack R. Cunningham
received the association’s Kentucky Bar
Service award. Herbert D. Sledd of Winchester, a
senior member with Wyatt, Tarrant & Combs,
was presented with the association’s
President’s Special Service Award for
service benefiting citizens of the Commonwealth
– including his community service, church
involvement and his 49 years of practicing law.