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.

The latest rendering from Omni shows the proposed "urban lifestyle market." | HKS Architects/Metro government
The latest rendering from Omni shows the proposed “urban lifestyle market.” | HKS Architects/Metro government

Buried between disputes over the design of the proposed Omni Hotel and Residences during a crowded and rambunctious public meeting of the Downtown Development Review Overlay Committee on Wednesday was a nugget of new economic development news.

During an exchange with a committee member, Omni Chief Financial Officer Mike Garcia revealed his company would be the operator of a planned 20,000-square-foot “urban lifestyle market,” a cornerstone of the 30-story tower and a central part of Mayor Greg Fischer’s pitch to sell downtown residents on the development. That’s a big change from earlier discussions, in which Metro and Omni officials indicated the hotelier was on the hunt for a tenant — something along the lines of a Trader Joe’s, Whole Foods or other higher-end brand that operates in an urban setting.

Jeff Mosley, deputy chief of Louisville Forward and city government’s lead official on the project, confirmed to IL on Thursday that Omni would operate the market. He said it would be a new concept for the company based on two existing boutique brands.

One is Eataly, a high-end Italian eatery, coffeeshop, wine bar and market with locations in New York City and Chicago. According to its website, the market portion of Eataly is the kind of place you’d buy the makings of that evening’s Italian dinner. Generalist it is not; however, the company clearly puts a high value on the food and wares it sells. (Eataly NYC boasts it has the “only Nutella bar in New York.”)

The other concept is Eatzis, a Dallas-based market and bakery chain that offers casual dining and pastries, sushi, wine and beer, a coffee bar, and specialty cheeses. The menu shows offerings that compare with a common deli, including a variety of sandwiches and “artisan breads,” as well as guacamole and grilled flank steak.

Mosley did not provide further details. For months, Fischer has indicated the Omni would be home to the kind of full-service grocery downtown residents have long said they want. But with a focus on food service, a smaller footprint than even the scaled-down urban markets from national grocery brands, and comparables that appear to cater to a more exclusive audience, the Omni might not fulfill those hopes.

The latest designs show the market — which is now 5,000 square feet smaller than its first iteration — anchoring the corner of Third and Liberty streets. It is expected to feature a significant outdoor dining presence on the Liberty side, as well as various additional amenities, like an attached coffeeshop. During a presentation to the committee Wednesday, lead designer Eddie Abeyta of HKS Architects said the market would also provide food service for guests, shedding a little more light on what the concept — once presented as a full-service grocery store — has evolved into behind closed doors.

Omni operates small food markets in other developments, including the Marche Burette Deli at its resort in Fenandina Beach, Fla., which Garcia used as an example in a WDRB story earlier this year. That store is clearly geared toward a vacationing clientele, who are not the patrons who might shop at a downtown grocery here.

Local commercial real estate firm TRIO listed the Omni grocery space for $12 per square foot earlier this year. A broker there didn’t respond to IL’s request for a comment on its status, but the listing hasn’t been updated since the winter. IL also sought comment from a spokesperson for Omni, who did not respond.

According to the development agreement between Metro and Omni, the hotelier has the right to lease the space to any business it wants if it fails to land a grocery store within six months of the hotel’s opening date.

Analyst: Humana’s share price drop reflects market uncertainty about Aetna deal

Screen Shot 2015-07-16 at 12.11.03 PM Since the news broke that Louisville’s Humana has entered an agreement to be purchased by Aetna, Humana’s stock has dropped close to 3 percent, and Aetna’s is down closer to 11 percent. Meanwhile, U.S. stock markets are up a touch.

IL asked Steven Halper, a health care industry analyst with New York’s FBR & Co., to explain the market’s response to the deal.

He said Humana’s recent share action reflects a few factors. One is the stock already had a sizable runup prior to the announcement of the deal. The stock traded at close to $220 by early June, whereas it had been in the high $170s prior to the speculation about an acquisition. It was trading at $186 as of Thursday afternoon.

Second, the deal will face intense regulatory scrutiny, not only from the U.S. Department of Justice, but from insurance regulators in every state where the two operate. Humana-Aetna is part of a larger tableau of health care consolidation among the five-biggest insurers. There is currently an outstanding offer from Anthem to purchase Cigna. If the two companies combine, it would make yet another mega-firm, which would also attract regulatory attention. Regulators have indicated they would consider the two deals, at least in part, in the broader context of industry consolidation.

Third, Humana’s ultimate purchase price is contingent, in part, upon Aetna’s share price. The deal valued Humana at $125 per share cash, and 0.84 Aetna share for each Humana share. As the value of Aetna’s shares has dropped, the deal now values Humana at close to $220 per share, Halper said. When the deal was announced, Humana was valued at $230 per share. Harper said the markets are expressing some skepticism about whether Humana’s stock will pay that premium a year from now, when the deal is expected to close.

Still, Halper believes the deal will go through, with some modifications.

“We think there is a good likelihood of approval, with some markets having to divest certain health plans,” he said, pointing to the firms’ combined Medicare rolls as one likely target. —David Serchuk

In Brief

Downtown office market still a dog in the second quarter: Ouch. According to Cushman & Wakefield’s latest research on the downtown office market, the bad start to 2015 has continued through the second quarter, with total mid-year leasing activity at less than half of what it was last year. There are a couple reasons for this, according to the analysts at C&W. The effects of the harsh winter that curbed activity during the first quarter have lingered. As well, some of the big lease-ups of 2014 — MedSynergies at the former Brown & Williamson tower, for example — that pumped last year’s numbers haven’t happened this year. Still, there was some good (OK, better) news: The overall vacancy rate in the central business district is at 14.4 percent, down nearly one-and-a-half percent year over year. Meanwhile, the suburbs continue to outdraw the urban core, with leasing activity there at nearly 250,000 square feet, up just a bit over mid-year 2014. Also, while there’s zero new office construction happening downtown — and there aren’t any signs there should be, to be clear — there’s 228,959 square feet of new office space under construction in the ‘burbs. Expect some counterpressure to the negative CBD trend to come from the renovation of the Starks Building, however. As tenants move out and the space goes off the office market, the numbers should pick up. For instance, a source told IL the law firm O’Bryan Brown and Toner is taking its shop from Starks to the B&W, where it will lease two floors and 28,000 square feet of space. That’ll offer a nice bump on the next quarterly report.

New home for River City Networks: River City Networks, a tech and web service for small businesses, has new digs: The company recently moved into the building at the corner of Barret and Broadway that has been undergoing extensive renovations for the past couple months. Vice president and COO Jessica Bledsoe tells IL that property management group AllTrade has done good work revitalizing the space (we told you about that work in April). River City Networks made the move because they needed the space, she says, and want the visibility that corner affords. “The building renovation is going wonderfully, and while I know there have been talks with a lot of potential tenants, I have not heard who will be moving in or exactly when,” Bledsoe says. “The apartments on the second floor are nearing completion, however, and I would imagine those will be on the market within the coming months.” —Melissa Chipman

Louisville-based importer/distributor of Zig-Zag Cigarette Papers cracks down on counterfeiters: South End-based North Atlantic Trading Co., the exclusive U.S. distributor and importer of the famed Zig-Zag Cigarette Papers, recently seized loads of counterfeit Zig-Zag products from its merchants and wholesalers. The aggressive crackdown is part of the company’s new strategy to block counterfeit goods coming into the U.S. Marcella Ballard, a New York-based intellectual property attorney at the firm Venable LLP, told the trade publication Convenience Store and Fuel News that three seizures have led to prison sentences against wrongdoers, multimillion-dollar judgements, and deportation. Ballard was not immediately available for additional comment.

Zig-Zag papers went into business in 1894 and came into prominence when, according to the company’s official history, “they were awarded a gold medal at the Universal Exposition in Paris.” Which shows you that 115 years ago, you could get a big deal gold medal for making rolling papers. —David Serchuk

Beech Tech roadshow: Beech Technologies, the startup from a group of students who met through a coding class at the Beecher Terrace public housing complex, is taking its workshop to help businesses get Google-verified on the road. The company, whose oldest employee is 18, is scheduled to hold its next session at the Iroquois Library at 601 W. Woodlawn Ave. on Wednesday, July 22 at 6 p.m. If you don’t know what Google-verified is, it’s this: When someone Googles the name of your business, the vitals — such as a description, reviews and contact information — appear on the right side of the screen. Metro government, which helped the Beech startup get going, has partnered with Google to help expedite this process. More here.

Chef Maria’s to open in Old Louisville on Friday: We’ve been following the boomlet of restaurants and retail in Old Louisville this year, and one of the biggest questions has been what will come to the corner of First and Oak streets, home of the former Carly Rae’s. We’ve known since February that Chef Maria’s Bistro is one tenant. The Greek tapas restaurant is hosting its grand opening tonight at 5 p.m., offering free appetizers and half-off select glasses of wine. And the kitchen will be serving until 9 p.m. The restaurant is catercorner to the Toonerville Deli and Old Louisville Pizza Co., the superb newish offerings from Dan Borsch (of The Tavern and Burger Boy). Kim Mowder, whose MTA Capital owns the former Carly Rae’s building, tells IL to expect a second new restaurant in the space by the end of this year.

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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.