Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.

National Trust’s Green Lab seeking to intervene for Water Company building

Old Water Company Building
Old Water Company Building

As Mayor Greg Fischer unveiled the design of the 30-story Omni Louisville on Wednesday afternoon, Washington, D.C.-based Preservation Green Lab was working to finalize plans to hold a charrette — a meeting of design professionals, preservationists and other local stakeholders — as a way to intervene in and possibly determine the fate of the former Water Company building, which Fischer has said must be either moved or demolished to make way for the $289 million luxury hotel and tower.

Preservation Green Lab, a division of the National Trust for Historic Preservation, explores the effects of older buildings on local economies and advocates for ways to include historic preservation in economic progress. The group has been researching the old stock in Louisville since November, working toward a broader report on the economic potential of the city’s smaller, older structures.

But as Fischer’s 30-day deadline for proposals from private entities to move the building approaches, the entrance of the national entity suggests a bigger push to preserve the structure could be in the works.

“One of the ways we thought we could be most productive and helpful was to talk about the process,” said Margaret O’Neal, senior manager at Green Lab. “The process you engage in when you want to figure out what to do with a building is you bring in professionals and experts, and have a conversation.”

The charrette, from which O’Neal hopes to develop at least three concrete proposals for moving the main portion of the Water Company building, is slated for June 17 and will include Develop Louisville, Metro’s economic development department. The organization is currently reaching out to prospective participants and declined to speculate on who might attend; the initiative requires a quick turnaround because the June 22 deadline for proposals is so soon.

Fischer announced last month his administration would contribute $1 million toward the effort to preserve part or all of the building. In soliciting private interest and contributions to what would be a multimillion-dollar effort to move the structure, however, Fischer’s administration has not provided a direct way for the public to provide input. City government is contributing 48 percent, or roughly $139 million, of the project’s overall cost. It is required to deliver a cleared site — excluding the Odd Fellows Hall, another historic structure on the block — to Omni by Jan. 1, 2016.

Gretchen Milliken, director of advanced planning for Develop Louisville, said the charrette could help determine the outcome for this building and improve the process going forward.

“The charrette will bring together a range of design and preservation professionals along with community stakeholders to explore viable options for the future relocation of the building,” she told IL. “The charrette will also initiate a larger conversation about how we as a community can effectively and transparently tackle preservation issues in the future.”

The Fischer administration has yet to receive serious financial interest in preserving the building, a spokesman confirmed this week. In the absence of a viable plan, the administration has said it will move the building’s portico to a publicly owned site elsewhere in the city.

Is an exit strategy the right strategy for Louisville startups?

Photo via Kelley Construction Portfolio
Photo via Kelley Construction Portfolio

The reports late last week that Humana is contemplating a sale have rattled this city. With one Humana employee here for every 58 Louisvillians, the degrees of separation are far fewer than even Bacon would demand.

If it sells, Humana would be the third city-defining company here to sell to an outsider in the past year, including GE Appliances and Louisville Slugger. With that as a table-setter, then, the announcement earlier this week that homegrown communications data firm Indatus had sold to Texas-based RealPage for $49 million stung a little more than it might otherwise have. The startup community celebrated the occasion, as IL reported this week.

And rightfully so: It’s a big win for a local company who says it’s keeping its 80 jobs in town. And let’s be real: This is much, much different from Humana.

Still, perhaps because of the Humana news, the question was on people’s minds: Whose win is it? And more pointedly, should the essential startup strategy include selling out?

Local firm PRG Investments, along with Merrill Lynch and BridgeTrust Title Group, hosted a symposium Wednesday night featuring big-ticket developers Gill Holland and Steve Poe. IL was granted one question, near the end of an otherwise fascinating discussion that veered from economic development and historic preservation policies to pro soccer and how to build responsibly in the West End, so we asked for their thoughts on the possibility of Humana selling to an outside company.

Both echoed the concerns many have already voiced, from the impact on workforce and civic philanthropy to the company’s massive real estate portfolio. The discussion eventually led Holland to this:

“In the investment community and the startup community, there’s a philosophy — the question investors are always asking is, what’s your exit strategy?” he said. “I’m like, what about not having an exit strategy and having a family-controlled, publicly traded company like Brown-Forman that’s still around in 150 years contributing to the local economy. I feel like everybody thinks they’re supposed to sell their company.”

Holland, of course, is part of the Brown family, so the B-F nod isn’t surprising. But his point is worth a full stop. Do companies that start here have an obligation to grow here, and to ultimately give back?

We ran that past Terry Gill, who heads up EnterpriseCorp, GLI’s startup adviser. He said the city needs both, but there’s no question startups — which often have to look outside the city for funding — need to have an exit strategy to gain investors.

“The hope is that the wealth that these transactions create stays local and builds a density of capital that can be redeployed into the next promising startup,” Gill said. “We need more transactions to build greater local wealth and a deeper bench of active investors vs passive investors.”

Gill said a seller’s exit capital could be the funding that goes toward community initiatives — Holland mentioned flipping affordable housing in west Louisville, for example.

“This allows the community to lessen its dependence on a handful of traditional sources of financing, such as foundations and corporate entities,” Gill said. “These sources have been very generous, but we can’t rely on them forever. The potential sale of Humana is a good example of the danger of relying on things to stay the same forever.”

Here here.

Investors such as Access Ventures and groups like Endeavor are seeking to direct capital toward civic-minded businesses and organizations, as high-impact investing continues to expand in Louisville (and GLI is most certainly on board). Read a little more about that below.

Brown-Forman talks Irish whiskey pickup; stock a great investment opportunity?

The_Unforgettable_FireMore details spilled out late this week about Brown-Forman’s newest big news: the firm’s acquisition of Slane Castle Irish Whiskey (which, one intrepid reader noted, was also the magical, mystical womb of the seminal U2 album The Unforgettable Fire). IL recently reported how Brown-Forman purchased all the brand’s shares and plans to invest $50 million to build a distillery and visitor experience on the site.

In the firm’s most recent conference call with analysts, CEO Paul Varga explained why it’s a good time to be in the Irish whiskey business. He said premium-plus Irish whiskey shares many of the positive characteristics of the premium American whiskey segment, among them excellent category momentum, high gross margins, and strong heritage — with a contemporary flair.

Varga also likes that Irish whiskey has fewer competitors than either Scotch or American whiskeys. And he explained why Brown-Forman is building a new brand at Slane Castle versus buying a premium Irish whiskey label: Few, if any, Irish whiskeys have any interest in selling, so Brown-Forman is planning to grow Slane Castle the way it’s grown Woodford Reserve.

And in other Brown-Forman news: The investing site Seeking Alpha had some exciting Brown-Forman investing ideas for you stock-picking daredevils. B-F has two classes of stock, A shares and B shares. The A shares are mostly controlled by Brown-Forman insiders, including the Brown family. The B shares are for the general public. Usually these two classes of shares trade at prices close to one another, but not right now. A is trading at a premium to B, so Seeking Alpha recommends an easy way to profit right now: Short the A shares and go long the B, as the gap between the prices inevitably closes.

In Brief

Philly firm buys The Grove at Lyndon, plans renovation: Here’s a big-time flip: Philadelphia real estate investment firm PRG Real Estate, not to be confused with Louisville-based PRG Investments referenced above, has bought The Grove at Lyndon, a 254-unit apartment complex in the eastern Jefferson County neighborhood. The company says it plans to spend $2.1 million — or about $8,000 per unit — gussying up the place inside and out, adding faux wood floors, stainless appliances, and washers and dryers. Outside, the company says it will paint, renovate the fitness center and clubhouse, and add a dog park. PRG Real Estate has been in the market since 2007, when it bought River Oak Apartments on Mellwood Avenue. The company owns more than 50 of these apartment communities around the country. It’s also yet another in a stretch of large out-of-state investors buying up local properties, albeit not downtown. No terms were disclosed.

GLI’s next Signature keynote is an impact investor, and that’s a great thing: Ross Baird, executive director of Village Capital, will be the keynote speaker at Greater Louisville Inc.’s annual Signature event on July 13 at the Mercury Ballroom. Which is interesting, not only because Baird is a rockstar in the social-good impact investing community, or because Village has strong Louisville ties and bases its agriculture-tech accelerator here, or even because the burgeoning impact capital community here — led by Access Ventures, Radicle Capital, and the Ogle Foundation, although they’re not alone — will get more time in the spotlight. It shows GLI putting serious focus on investing directed at building up communities at a time when exits big and small are an emerging trend here. There’s also this: On the matter of defining your startup scene, Baird is staunchly in the “Nobody else is going to be Silicon Valley so stop trying” camp (read his Forbes piece on this last year). That’s been a topic of much recent — and healthy — debate, and Baird’s is a clarifying voice.

Startup US Chia is scaling back: Zack Pennington, CEO of US Chia, is scaling back the horse supplement company and will be joining Collabra as COO. US Chia will continue to operate, but on a much smaller scale and as more of a distributor and marketer of chia seeds to the equine industry. The company no longer seeks to grow and process the seeds. Pennington is a local star who is ubiquitous in the startup community. He’s also a certified Startup Weekend facilitator and helps with the XLerateHealth accelerator program. And he’s generally regarded as one of the nicest people in the startup scene. Collabra is a platform used by music instructors to track their students’ practice sessions. Pennington is also a musician. CEO Ron Karroll told the Velocity Demo Day audience that he’d long admired Pennington’s business and said they promised that if either of their companies didn’t work out, they’d go work for the other person. —Melissa Chipman

The LoDi Index is up a lot. What is the LoDi Index? In case you’re like us and started humming CCR when you read that headline, the LoDi Index forecasts activity in the logistics and distribution sectors every month, based on what’s happening via air, trucking, railway, and barge systems. And the forecast is good for June. According to the latest figures from the University of Louisville and Oklahoma State University, the Greater Louisville area is primed for a good month, with a LoDi score that is nearly equivalent to the national score. It’s also the highest LoDi figure this area has had since June 2008, after which point the recession wreaked havoc on the industry. If you’re brave enough to spend some time in LoDi, click here for the background and here for the St. Louis Fed’s graph of LoDi activity in recent years.

Your new Kentucky Opera Board President: Kentucky Opera announced this week that attorney Bill Blodgett would head up its board of directors. Blodgett, who practices at Dinsmore & Shohl, has a long history in corporate compliance and labor and employment law. Prior to D&S, he was deputy general counsel and chief compliance officer at Brown-Forman. He’s also been a member of the Opera’s board. “The trajectory Kentucky Opera is taking with the new Repertory Plan is both exciting and motivating,” Blodgett said. “I cannot wait to see how the board will come together to pursue this plan even further.”

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Stephen George
Stephen George is news editor of Insider Louisville. He is a former editor of LEO Weekly and the Nashville City Paper, and a former news editor of the Nashville Scene. He has written for various other news and culture publications and is happy to be back in Louisville.