(Editor’s note: This post was updated at 11:30 a.m. on Mon., March 4. The original version misstated which apartment building would be demolished to make way for the planned Willow Grande luxury condominium tower.)
Welcome to the March 4 edition of the top-secret, always confidential Monday Business Briefing.
These are biz tips Insider Louisville staff and contributors have collected during the past few days, a few of which are NOT double-verified as with our daily reporting.
But this is the news you’ll be reading about next week or even next month in the conventional media.
This week, our scoop is … a sneak peek at the Louisville of the future, which is headed west, young man:
• This could be the story of 2013. When we went to the big Louisville Downtown Development Corp. meeting last week, we thought it ironic that attendees were not talking about the next Downtown Master Plan, but about what private investor/developer Gill Holland has planned for Portland. Which everyone described with one word: “Ambitious.” So, we asked a few questions and reached out to a few sources. And we were able to confirm enough to tell us most of what we heard at the LDDC meeting was (close to) accurate. Holland and a group of investors just launched the project and are hoping to raise about $22 million to buy a number of properties in Portland, which starts on 10th Street, just two blocks west of 21c Museum Hotel. The group is aiming to raise $10 million to buy and rehab properties on the east side of Portland around 15th Street where Grasshoppers Distribution and other farm-to-table operations are now. (We are hearing something about an “East Portland Warehouse District.”) In addition, they’re planning to raise $10 million that would enable them to acquire large buildings where they’d created a shopping district, also termed the “Portland stroll district.” Finally $2 million will go to buy over time about 100 small shotgun houses from 16th Street to 23rd Street. When we ran this past Gill, he didn’t deny it. But he begged off until more of the properties close. We’re hoping to have the details for a major post this week.
It would be easy to be skeptical about such a plan except for two tiny details:
First, Gill Holland, Augusta Brown Holland, Tim Peters, Lois Mateus, William Mapother and other investors did it all before with NuLu – the most successful private urban renewal project in the history of Louisville. In less than four years, East Market Street went from Skid Row to the hottest retail and restaurant corridor in the city.
Second, Gill Holland has been plotting this for years, as we told you back in late 2011. That said, we see few similarities between the two areas. For one thing, Portland is huge – three time as large as Butchertown. Portland is one of the poorest areas of Louisville, with an average household income of about $22,000. Yet, one can argue that Portland has a lot more going for it than East Market, including existing retail, solid buildings and housing stock. It also doesn’t need one of those cutesy portmanteau names everyone has come to hate. But it will need a fresh identity, which makes it closer to a Butchertown-style project than NuLu.
• Speaking of NuLu, Canoe just moved to NuLu at 216 S. Shelby St., Shelby at East Market Street. This is the exotic home furnishings gallery Lynn Seiller ran for years at Butchertown Market. We told you back in November this was in the works. Now Seiller has the first floor in the building that had been Salvo Collective furnishings until last summer. The building was renovated by Shine Contracting, located nearby in NuLu at 727 E. Jefferson St. We counted, and the arrival of Canoe makes a total of 40 retailers, offices, restaurants, coffee shops and art galleries packed into the 4-block NuLu neighborhood.
• We predict one of the bigger stories of the month will be New Directions Health Systems, which apparently is in the middle of a meltdown. This is a story we’ve covered for more than two years. But we’ve heard during the past six months that fallout from the possible failure of Louisville-based New Direction’s Cleveland Regional Medical Center outside Houston could have reverberations back to Kentucky. As we reported Saturday, the media in Texas are reporting CRMC employees didn’t get paid Friday. We’re also getting emails like this, with insiders telling us what’s going on.
- CRMC executives have not been paying vendors including utilities, with many unpaid since April 2012
- Directors and administrative staff have had to purchase out of pocket supplies such as paper towels and copier paper
- New Directions hasn’t paid the 2012 property taxes on the hospital
- New Directions is behind on employee health insurance premium payments
- New Directions is behind on employee 401K deposits
- New Directions is not paying payroll taxes or state unemployment taxes
“They do, however, pay themselves almost weekly,” writes one source.
• Several weeks ago, we told you about Boston-based tech recycler Gazelle looking at Louisville. For the record, we were on the money. Gazelle executives have applied for state economic development incentives, stating they’ll hire 125 workers right away with an annual payroll of more than $3.6 million. Total employment could exceed 400 people, and we hear the average wage will be more than $70,000. KEDFA granted Gazelle preliminary approval for $3 million in state tax incentives for up to 10 years … if they come.
• Our most vigilant insiders are talking about a billion-dollar entertainment industry deal that likely will have ramifications for Louisville. Anschutz Entertainment Group is on the block, according to Reuters. As you’ll recall, last July, AEG took over management of KFC Yum! Center after Harold Workman and Kentucky Fair Board officials put all their friends and kissin’ cousins on the the arena staff, losing millions. Colony Capital LLC, Guggenheim Partners LLC and Los Angeles biotech billionaire Patrick Soon-Shiong made second-round bids in February for AEG and remain in discussions about a potential deal, Reuters reports. AEG is a multi-billion dollar prize, with sports teams, arenas and a music touring business. We’re guessing any new owners would take a hard look at all the company’s deals including the one with the Louisville Arena Authority, which guarantees AEG will pay a $1 million “profit” every year. If AEG decides to use the change in management to walk away, does that mean Harold Workman gets to come back?
• Last week, we posted that Tafel Motors, which sells Mercedes-Benz and Mini Coopers at MINI of Louisville in two complexes in the 4000 block of Shelbyville Road, might fold into the giant Oxmoor Automotive Group. We heard from Tom Ice at Middleton Reutlinger, Tafel’s attorney, saying no way. There is no deal. So we said, “You’re saying there are no discussions – formal or informal –between Tafel and OAG?” After consultation with Tafel owner David Peterson, Ice said, “There are no discussions, formal or informal, about Oxmoor Automotive Group acquiring Tafel.” So, we called our sources, who were just as adamant they’d been told by sources inside OAG that the giant dealership is buying Tafel and the Mini dealership. We left calls for comment with Oxmoor Automotive Group, and are waiting for a call back for clarification. This is important, because acquiring Tafel/Mini of Louisville would give Farmer a near monopoly along the Shelbyville Road retail corridor, the busiest in the city. Farmer Auto Group has Oxmoor Chrysler Dodge Jeep Ram, at 4520 Shelbyville Road. The company also operates Oxmoor Toyota and Oxmoor Scion, 8003 Shelbyville Road; Oxmoor Ford and Oxmoor Lincoln, 100 Oxmoor Lane; Oxmoor Hyundai, 7913 Shelbyville Road and Oxmoor Mazda, 8107 Shelbyville Road. Farmer also owns Hyundai of Louisville at 6633 Dixie Highway.
• We were at the Louisville AdFed’s Louie Awards February 22 at the Seelbach Hilton, and as one insider described it, it was “the Red7e show.” Just a few days after we profiled Red7e’s Director of Account Planning Pip Pullen. A coincidence? We think not. For the record, Red7e won 17 Gold Louies; Power Creative was a close second with 14 Golds and Nimbus was third with 4 Golds. By the way, we profiled Nimbus CEO Stacey Wade back in December, which explains his success. We think. Until someone proves differently.
• Kevin Cogan’s proposed Willow Grande condominium project appears to be moving forward. There are signs announcing a Metro Planning & Design Services meeting April 4 for a requested zoning change at what is now the Bordeaux Apartments, 1418 Willow Ave. The Cherokee Triangle property is at Baringer Avenue near the intersection with Eastern Parkway. Cogan’s plan is to demolish the Bordeaux and replace it with a 17-story luxury condo, which would have one fewer unit than the 1960s-era Bordeaux. As we reported last October, Willow Grande has made it through years of Landmarks Commission reviews, neighborhood meetings, public input and appeals, with the commission ruling it appropriate for the surrounding area. We had casual conversations with Cogan about the project, and he assured Insider Louisville he has the backing to complete the project, which is ambitious, after a rough financial stretch during the Great Recession. It’s difficult to understand how a fourth luxury residential tower isn’t appropriate in an area that already has three including 1400 Willow, now the most expensive residential property in Louisville.