(Editor’s note: This post was updated at 10:20 a.m. on Mon., Oct. 14. The original version failed to note that Brown-Forman executive Marshall Farrer is a member of the Brown family.)
Welcome to the October 14 Monday Business Briefing.
This is your private business intelligence briefing, with Insider Louisville staff and contributors vetting tips collected during the past few days, hours and minutes before we post at 7 a.m.
As we prepare for our Insider’s Meetup this afternoon at Vincenzo’s, we’ll have multiple topics for discussion.
This weekend, everyone is still weighing whether Greater Louisville Inc. will move forward with Advantage Louisville, or whether damage done under the former leadership will be fatal to the econ-dev/Chamber of Commerce organization.
What we know for sure is, the private sector is alive and well in Louisville, and we have a major scoop to prove it.
This is the “Is Fourth Street where the action is, or what?” edition of Monday Business Briefing.
• Late last week, several sources confirmed to MBB that Kindred Healthcare, the Louisville-based chain of long-term, acute care hospitals, had bought up the entire west side of Theatre Square next to its headquarters at 680 S. Fourth St.
The acquisition of an estimated 20,000 square feet of space one block north of Broadway includes at least two buildings. Though not the building that has housed several hip-hop clubs over the years.
Those bars have been the bane of neighboring businesses including BBC and Yafa Cafe, as we reported last year. (This link includes video of several fights.)
Jefferson County Property Valuation records show 20 Theatre Square, which remains a nightclub, is still owned by Fouad Mohammad and Hassan Mohammad through FMEE Properties.
Kentucky Shakespeare made a run at acquiring the building for its headquarters but couldn’t secure sufficient funding.
The rest of the Theatre Square addresses on the west side of the crescent – 1 Theatre Square through 26 Theatre Square – are owned by 7701 Properties, according to PVA records.
That entity was formed by Louisville real estate attorney David Buechler on June 20, according to Kentucky Secretary of State documents.
Just what the end game will be for Kindred isn’t clear. We left several messages with Kindred’s media relations people, but got no response. It’s our experience that Kindred executives rarely speak directly to the media, preferring to control the flow of information through news releases.
Here’s what we know: Building tenants, including at Yafa Cafe and BBC, received letters notifying them former owner Jimmy Fox, a partner in FBM Properties, had sold the buildings to Kindred, but that all leases would remain valid.
Whether Kindred is negotiating for the club property isn’t clear. But if they were, it could solve a problem that’s delayed the complete redevelopment of that end of Fourth Street, a Fischer Administration priority.
But the big question hanging in the air is, “Will Kindred remove the buildings and expand its headquarters complex?”
• Staying on Fourth Street, we can’t quite get full granularity on this, but there is a tentative agreement between city officials and executives with Jewish Hospital & St. Mary’s HealthCare officials.
The agreement could lead to the former JC Penney building and the long-vacant Walgreen space in the 500 block of Fourth Street – owned by JHSMH – being converted back to retail.
Multiple sources confirmed the city is close – very, very close – to a big announcement that Jewish Hospital would relocate its call center in the former Penney space at 539 S. Fourth.
Downtown retail advocates keep urging us to revisit the story we broke back in July that CVS is going into the former Stewart’s Dry Goods building a block north. (Hotelier Mary Moseley is converting the building into a 289-room Embassy Suites.) They say CVS plans to use much of the former Penney space. More as we know more ….
• Speaking of downtown retail, insiders told MBB last week – and we quote – “Well, you won’t have Alan DeLisle to kick around any more ….” To which we replied, “We didn’t know we ever ‘kicked around’ Alan DeLisle.”
Insider Louisville merely raised questions back in August 2011 when DeLisle, director of Louisville Downtown Development Corp., hired Anchorage-based consultant Rick Hill of Village Solutions to revive retail on Fourth Street from Muhammad Ali Boulevard south to Theatre Square, a plan we dubbed “FouLou.”
(In a piece of cosmic irony, Hill’s own development in Anchorage, Bellegrove Business Park, went into foreclosure about a year later. Not exactly a glowing endorsement of Village Solution’s visionary acumen.)
DeLisle was out-of-town and unavailable for comment, according to LDDC employees. But LDDC insiders and city officials double-confirmed Friday that DeLisle will announce this week he’s leaving the public/private redevelopment organization.
DeLisle has had his ups and (serious) downs in Louisville. He was nearly killed in March 2009 when he and fellow LDDC executive Patti Clare fell three stories after a stairway collapsed in the Fort Nelson Building at Eighth and Main streets.
IL got sideways with DeLisle when he and Hill announced their NuLu-esque plan for a radical re-do of Fourth Street without any actual money, buildings or even support from a newly elected Mayor Greg Fischer or big investors in the area.
If DeLisle exits, the timing is somewhat curious. LDDC just merged with the Louisville Downtown Management District to form the Louisville Downtown Partnership.
The two organizations now are co-located in space at 560 S. Fourth St., with DeLisle as executive director of both.
LDDC just helped attract new retail to the block of Fourth Street between Muhammad Ali and Chestnut Street.
But our sources say DeLisle never moved his family to Louisville from his former gig in North Carolina. Is he leaving for a bigger, better job in a prettier city? Stay tuned …..
• We’ll have an update this week on progress at the 4-acre compound businessman George Stinson assembled last April on Floyd Street in Smoketown, just south of the medical complex. Stinson has acquired seven buildings on separate parcels bounded by Breckenridge Street to the south and Brook Street on the west.
The rough outline of an entertainment complex with a hotel/apartment building, retail, a night club, and restaurant is already taking shape.
• If we could wish for anything, we’d wish for one reporter dedicated to covering Brown-Forman and only Brown-Forman. Our sources say the Louisville-based (this week) global spirits company is undergoing a total corporate restructuring far beyond the recently announced Louisville jobs going to BF’s new European headquarters in Amsterdam.
The good news is, we hear a number of major Brown-Forman executives in Australia, BF’s No. 2 market behind the United States, are relocating back to Louisville. We got some confirmation of that in a news release posted on the Wall Street Journal website last Thursday about Brown-Forman’s Asia operations:
Brown-Forman (NYSE: BFA) (NYSE: BFB) announced today the restructuring of its Asia Pacific (APAC) region into two new regions, effective November 1, 2013. The existing Asia Pacific region will be restructured into the Australia, New Zealand, and Southeast Asia region (ANZSEA) and the North Asia region (NA). Michael McShane will serve as managing director, ANZSEA, based in Sydney, and Trevor Smith as managing director, NA, based in Hong Kong.
In that release, it states Marshall Farrer, current managing director of Australia, New Zealand, will return to Louisville later this year “after four successful years at the helm of the company’s second largest market as measured by net sales.” (Farrer is a Brown family member. He is the son of Dace Brown Stubbs and her first husband Bruce Farrer.) We also hear a second Brown family member will return … and that there’s big news to come.
• In related news, Brown-Forman appears to be focusing on its Woodford Reserve bourbon. AdAge reports that BF has chosen Fallon, an advertising firm based in Minneapolis, for the creative work. Funny, but Woodford seems like a major bourbon brand to us since everyone we know pours it. But in reality, the 20-year-old brand has never really caught fire. It could be because BF has never spent the money to market it. Brown-Forman regularly spends $10 million just on its Jack Daniel’s Christmas campaigns.
But Jack Daniel’s owns a 23 share … it accounts for 23 percent of the domestic whiskey sales! The top seller moves 10 million cases per year, or $1.32 billion worth at $22 per 750-ml bottle, according to a Wall Street Journal story. By comparison, Woodford Reserve has doubled its share of the U.S. bourbon category to a miniscule 0.8 percent in 2012 from teeny 0.4 percent in 2006, according to Euromonitor International.
From that post:
Woodford Reserve’s long-term trend is impressive, with the brand posting double-digit volume growth for 17 consecutive years, according to Fallon and Brown-Forman. The brand’s sales volume grew by 27.9% in the three months ending in June compared with the year-prior period, according to a recent report from Bernstein Research, which noted that it was among several smaller Brown-Forman brands that are gaining share, including Finlandia and El Jimador.
• We’ve tried keeping up with the dispute over Kosair Children’s Hospital, but all lines to sources at the University of Louisville and Norton Health Care have gone mysteriously silent. (Several key sources are out of the country. Ouch.)
That said, we did find out the talks are three-way talks between U of L, Norton and University of Kentucky, Norton’s erstwhile partner at Kosair Hospital downtown.
Back in August, Norton and UK officials announced they’d signed a letter of intent to “co-manage” Kosair Children’s Hospital in downtown Louisville and Kentucky Children’s Hospital in Lexington, the state’s only two pediatric hospitals.
U of L officials were, to put it mildly, concerned that any such alliance would push out U of L docs. By mid-September, U of L and Norton were at the negotiating table. Then crickets.
Of course, in the effort to track one story, we found two others.
One is that Steven MacLauchlan, president of Norton Audubon Hospital, may be leaving that position. The second is Bob Shaw, president of Norton Cancer Center, is retiring.
• In that same vein, we’re hearing from multiple sources to expect major changes at Yum! Brands sooner rather than later. We wanted to post the details including the exits of two long-time executives, but our legal beagles said, “Not until you have a Form 8k, a Form 4 or a 10b5-1 in your hot little hands.”
• Courier-Journal watchers are getting ready for the upcoming trial over former CJ circulation executive Mike Huot’s charges he was fired by CJ parent Gannett Co. Inc. for being too old … and well paid.
Huot was 62 at the time and made more than $300,000 per year when he was told his position was being eliminated … only to find a younger executive was brought in to do his job. Allegedly, of course. Our insiders are betting heavily that Gannett settles just before the November court date.