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Insiders: Leaked GLI list indicates more than 1,300 companies have dropped memberships since 2009

by Staff

(Editor’s note: Terry Boyd and other Insider Louisville reporters contributed to this post.)

At a time when President and CEO Joe Reagan and other top executives were being paid six-figure annual salaries, Greater Louisville Inc., the Metro Chamber of Commerce appears to have been bleeding dues revenue, with more than 1,300 companies dropping memberships from 2009 through 2011.

Sources submitted an internal GLI dropped-membership document to Insider Louisville, a document that shows a chamber/economic development organization that appears to have been hard hit by the Great Recession.

Because of the holidays, Insider Louisville reporters had a difficult time reaching top executives at the listed companies.

But the majority of dropped memberships seem to be related to budgeting, not to a repudiation of GLI or Reagan, who has been criticized for GLI’s high salaries and modest accomplishments.

(Reagan announced December 12 he was resigning to become president and CEO at the St. Louis Regional Chamber and Growth Association.)

The dropped-membership document tracks mostly small-to-medium-sized companies. But in aggregate, they have about 12,000 employees, and had been paying a total of about $700,000 in annual GLI membership fees.

The document does not include any drops by GLI’s “Top Investors,” the large companies that pay between $2,500 and $100,000 in annual dues and account for much of the operating revenue.

But several business owners appear to have dropped memberships because of disagreements with GLI including Colin Underhill, who is listed as a GLI board member.

The drop notation for Underhill’s successful Westport Village retail development states, “Disagrees with Chamber on issues.”

Underhill Associates, the family real estate development and management firm, also dropped its GLI membership, and that drop has the notation, “Found no value in membership.”

Jeff Underhill told Insider Louisville that Colin Underhill, his brother, is overseas and unavailable for comment till January.

But Jeff Underhill emphasized the family firm did not drop its GLI membership due to a disagreement with Reagan or with his staff.

“We have great respect for Joe, and he was a great help when we were trying to get Westport Road widened to increase traffic count (past Westport Village),” Underhill said.

“But we’re developers, and we’re just happy to survive. I don’t want to ‘poor me’ it, but we had to make some changes.”

When Underhill Associates had downtown offices, Jeff Underhill said, firm members were more involved in GLI and attended more meetings. Now that they’ve relocated to offices at Westport Village in eastern Jefferson County, “we’re not as active. It’s no slam on GLI.”

GLI officials did not acknowledge calls and emails for comment.

The dropped-membership document has more than a dozen categories for the “drop code description” of why each company left, from deceased owners to “other.”

The vast majority of drops are marked with the notation, “Doesn’t Respond to Contact from Staff.”

The second largest number of withdrawals are annotated, “Cash Flow Problems/Not in the Budget,” and together, the  two categories account for about 80 percent of the dropped memberships.

But about 135 companies, or about 10 percent, were classified as having dropped GLI under, “Found no value in membership” or “Lack of quality customer services.”

About 10 owners dropped their GLI membership when they dropped Health Solutions, an health insurance policy offered by Humana through GLI.

By far, the majority of businesses listed in the document as giving up their GLI memberships are small businesses, with less than 20 employees, according to the document.

One small-business owner, who asked that his company not be identified, confirmed management cut the $320 membership as part of a cost-cutting effort.

“Please don’t just write, ‘The company was having cash-flow problems,’ but  … things have been tight, no question, and (the GLI membership) was an expense it didn’t cause us any pain to cut.  So, read into  that what you will.”

At least one membership drop was inadvertent.

Andy Blieden, who developed the Butchertown Market shops and offices, said he wasn’t aware his memberships had lapsed. “This is an accounting oversight,” Blieden said. “I like Joe (Reagan) and GLI. I think they do a good job.”

Many of the companies dropping their memberships were in hard-hit business categories such as mortgage brokers, residential real estate, construction and contracting.

Moreover, a number of large employers closed including fabricator Stiglitz Corp.,which paid $1,115 in dues its last year and Stauble Machine & Tool Co., which paid $1,085.

In addition, a number of companies left the chamber due to mergers.

For example, Franciscan Health Care System, which had paid $2,165 as a member, became part of Triology Healthcare Systems, according to an employee there.

Trilogy remains a “Trustee Member” according to the GLI website.

A number of corporate offices outside Louisville made the decision to drop GLI, such as Cook Compression, A Dover Co., which paid $1,795 in dues.

What all this means is difficult to determine because it’s unclear whether the organization was able to replace the memberships, or whether some businesses rejoined as the Great Recession faded.

On its website, GLI executives claim the organization represents more than 2,300 businesses, and that one in every three Louisville workers is currently employed by a GLI member.

Also unclear is what effect the declining membership had on the organization in terms of GLI finances.

But more than one insider noted that according to GLI documents, Reagan’s base salary decreased 20 percent during the period, to $295,880 for 2010, down from $369,268 in 2009.

“Is that the reason he … left?” one insider asked.

Only Joe knows.

Large or notable companies by name, dues, number of employees and the year they dropped GLI membership:

Caldwell Industries, $1,740, 150 employees, 2009

Bill Collins Ford Lincoln Mercury Inc., $1,740, 160 employees, 2009

Cook Compression, A Dover Co., $1,795, 175 employees, 2011

First Harrison Bank, $1,465, 124 employees, 2010

Fischer-Klosterman Inc., $1,115, 75 employees, 2009

Industrial Disposal Co., $1465, 143 employees, 2010

Ivy Hill Packaging, $2,165, 263 employees, 2010

Kentucky Bankers Association, $570, 22 employees, 2009

Kentucky Derby Museum, $845, 34 employees, 2009

Kentucky Telco Federal Credit Union, $1,115, 93 employees, 2010

Lantech, $2,100, 270 employees, 2009

National Tobacco, $2,100, 200 employees, 2009

Oxmoor Auto Group, $2,425, 300 employees, 2009

Ralcorp Frozen Bakery Products, $2,425 320 employees, 2009

Shorewood Packaging – A Business of International Paper, $1,465, 124 employees, 2011

Westport Logistics, $1,465, 144 employees, 2011

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