Welcome to the June 27 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Analyst: Brexit-imposed market volatility to continue for months
Two financial analysts expect the Brexit-induced stock market volatility to continue for months.
Markets on Friday reacted badly to the UK’s unexpected vote to leave the European Union, with the Dow Jones plunging 611 points, or 3.4 percent.
Humana’s shares slid 2.4 percent, Brown-Forman’s fell more than 4 percent, while Ford’s declined more than 6.5 percent.
Markets across the globe got hammered after the vote. The FTSE 100 in London fell as much as 8.7 percent in early trading, though the index recovered and ended the day down just over 3 percent.
Beyond the immediate effects on markets, the economy and UK politics (with British Prime Minister David Cameron saying he would step down within months), the process of splitting the UK from the EU will take years. And given no country has ever left the union, the global economy is facing a situation of unprecedented uncertainty. And that’s never good for markets.
“There is going to be a lot of uncertainty remaining,” said Gus Faucher, deputy chief economist for PNC Financial Services Group.
Faucher told Insider Louisville that he expects “increased volatility … on the order of months, rather than weeks.”
Andy Means, director of Investments for Hilliard Lyons Trust Co., said traders’ severe reaction on Friday to the Brexit vote was a result of unmet expectations.
Leading up to the vote, oddsmakers, polls and surveys of experts indicated that the “remain” side would win, and those sentiments had, in the days before the vote, caused markets to rise and the British pound to gain value compared to other currencies.
Traders had positioned themselves to take advantage of a vote for the UK to stay, Means said. When UK voters surprised the traders, their angst produced a dramatic reaction.
Upscale sports bar and restaurant coming to Frankfort Avenue
Just more than a week ago, IL mentioned in The Closing Bell that a restaurant called The Manhattan Project was coming to 2101 Frankfort Ave. in Clifton.
Since then, the owners filed an application for a 4 a.m. liquor license, and IL was able to track down one of the project’s partners, Erick Strnatka, who is a co-owner of Baxter’s 942 Bar & Grill on Baxter Avenue in the Highlands. He, along with two other Baxter’s 942 owners and businessman Fred Pizzonia, are renovating the 3,325-square-foot space behind Nancy’s Bagel Grounds. Pizzonia used to be the landlord for Baxter’s 942.
Strnatka described The Manhattan Project as an upscale bourbon and sports bar, adding that upscale referred to the service and food quality more than price.
After running restaurant and late-night bar Baxter’s 942 for years, Strnatka said he was ready to try something different.
“I wanted something a little more upscale,” he said. “Less of a party bar.”
The group has hired chef Kyle Schwan to craft its menu, Strnatka said, which will feature traditional American fare “done up a little bit.”
The Frankfort Avenue space, which is currently in the demolition phase, will eventually have a small lounge, booth seating, a raised outdoor patio, and an inside bar and an outside bar. Although occupancy is still fluid, Strnatka estimated that The Manhattan Project will seat roughly 150 people.
The Manhattan Project will have an “industrial, rustic” look, with exposed wood beams on the ceiling and bricked wall, Strnatka said. They are working with Lindsey Stoughton, owner of Louisville-based LMS Design.
“It’s still early,” he added. “We are still developing quite a bit. We are trying to fit into the neighborhood.”
Workers are under an aggressive timeline to complete The Manhattan Project in time for an end of August or early September opening.
As for the name the sports bar shares with the creation of the atomic bomb, Strnatka said he likes to watch The History Channel and thought it would make a good bar name. After all, the Manhattan is a classic whiskey drink.
A 126-year-old NuLu property no longer faces demolition
Louisvillians have become familiar with stabilization poles during the last year. They were prominently placed in the middle of Main Street up until last week to hold up the buildings that comprise 111 Whiskey Row after a fire.
Now, a building at 632 E. Market St. is facing its own destabilization problems but on a much smaller scale. As construction workers tried to renovate the former catering building for the Bristol Bar & Grille, the structure’s east wall became unstable, said owner Chad Givens.
Givens bought the property back in 2015 for $500,000. He plans to renovate it and find a tenant to fill the space.
Givens said he isn’t seeking out any particular type of tenant, such as a retail shop or restaurant. “I’m pretty open right right now.”
In fact, he thought he had a tenant lined up, but the deal fell through. Now, workers are focusing on stabilizing the building by constructing new walls that span both floors and rebuilding the east wall.
Louisville-Jefferson County Metro Government had issued a notice of emergency demolition, deeming it structurally compromised and a public safety hazard. But the city took the 126-year-old building off its demolition consideration list on June 21 once stabilization poles were in place.
The stabilization work has set the renovations back a month or two, Givens said, but he is hopeful that the poles will come down in the next three weeks, and regular renovation can resume. —Caitlin Bowling
Aetna, Humana formally extend merger deadline
Health insurance giants Aetna and Humana have amended their merger agreement to extend the deal’s end date to Dec. 31. The agreement previously called for an end date of June 30.
The companies announced last summer that they have agreed to have Aetna, based in Hartford, Conn., buy Louisville-based Humana for $37 billion.
Both companies have said for months that they expect the deal to close in the second half of this year. While the companies have obtained approval for the merger in most of the 20 states in which they do business, they still need the go-ahead from federal antitrust regulators who want to make sure the deal does not materially reduce competition.
Highlands restaurateur died at age 69
Nancy Shepherd, “a ground breaker in the Louisville restaurant scene,” died last week.
After teaching high school for 11 years, Shepherd founded the fine dining restaurant Café Metro in 1980 on Bardstown Road, before the strip was the shopping and dining destination it is today. Although Café Metro closed during the recession, her second restaurant Uptown Café, which opened in 1985, still operates today.
Shepherd’s daughter Kelley Ledford now manages the casual dining restaurant.
“Nancy’s love of people, food, wine, and spirits inspired generations of food lovers and restaurateurs. Her graciousness, irreverence, and indomitable spirit will be remembered by all who knew her,” according to her obituary.
Louisville chef Fernando Martinez shared the obituary and posted “Wow sad day for the restaurant community in Louisville.” Others offered their condolences on Uptown Café’s Facebook page.
Visitation will begin at 3 p.m. Tuesday, July 5, and a memorial service will be held after at 4:30 p.m. at the Nazareth Home, 2000 Newburg Road. A reception at Uptown Café will follow. Additional parking will be located in The Passionist lot between St. Agnes Catholic Community and the Nazareth Home. —Caitlin Bowling
Forbes names best places to retire, includes Lexington — not Louisville
Forbes has named its Best Places to Retire in 2016, and one Kentucky city made the list. Alas, it’s not Louisville.
Instead, the magazine included Lexington, thanks to a high number of physicians, good air quality, walkability and low serious-crime rate.
Forbes also highlighted the city’s strong economy, “good tax environment” and cost of living, which is 5 percent below the U.S. average.
The magazine said that to gather its list of retirement havens, it also looked at opportunities for an active lifestyle, economic data “for those eying a ‘working’ retirement,” and interesting trivia about the towns (for example: Brevard, N.C. celebrates unusual local rodents with an Annual White Squirrel Festival).
Forbes’ list included cities as small as Brevard (8,000) and as large as Pittsburgh, which has about 304,000 residents — though its metro area includes about 2.4 million. Four of the cities were in Florida, three in Texas. Though climate played a role in Forbes’ selection, eight of the 25 cities were north of Louisville. —Boris Ladwig
Buffalo Trace distills its first homegrown corn for farm-to-table bourbon
It’s really no surprise the farm-to-table ethos has trickled down to bourbon. It’s kinda how the whole industry started — you distilled from the grains you had. Do you think Farmer Jim was able to purchase rye in bulk from a German super-producer back in 1892?
It’s along this line of thinking that Buffalo Trace Distillery wants to create its own farm-to-table bourbon, growing everything you need to go into the whiskey on their own land. Last year, master distiller Harlen Wheatley and his team decided to plant some historical White Mastodon corn (also called “Boone County White”), which dates back to 1876, on some land they recently purchased for more rick houses.
The corn sprouted late last summer, and after drying all winter long, the distillery recently fermented and distilled the corn, producing a batch of bourbon filling 117 barrels. According to a press release, the team plans on tasting it periodically throughout the next few years, and if it meets the distillery’s standards, will be released as a limited-edition product.
This year, the distillery is experimenting with Japonica Striped Corn, which is originally from Japan and dates back to the 1890s. Both corns were plentiful in the era of Buffalo Trace’s pioneer distiller, Col. E.H. Taylor. —Sara Havens
Evolve KY, an electric vehicle group, gains nonprofit status
EVolve KY, a group of electric vehicle enthusiasts, has been granted nonprofit status thanks to a donation by an anonymous supporter. Funds donated to the group helped pay for the application fee.
EVolve KY has been responsible for helping get three public electric car charging stations installed around the city. The most recent station was unveiled last week at the Highland Green Building, 1401 Bardstown Road. There also are stations in NuLu and Portland.
The group, which is the Louisville chapter of the Electric Auto Association, meets regularly.
“We are a local group with a local mission,” said EVolve KY president Stuart Ungar in a newsletter. “Having our own tax-exempt status speaks to our deep commitment to our community and to our desire to promote green transportation options here in our own backyard.”
The group hopes to have at least a dozen stations around the city by the end of the year. They work together to identify sites where an EV charger might be called for, and then try to identify appropriate donors for each site. The typical cost is between $5,000-$9,000 for a Level 2 dual charger (charges two cars).
“The chargers are very visible and have been seeing steady use,” said Ungar. “It’s wonderful that it makes financial sense and is also such a boon for the environment. Having more zero-emission vehicles on the road will go a long way toward improving our air quality.” —Melissa Chipman
GE Appliances introduces smart window A/C units
GE Appliances has introduced window air conditioners that can be turned on and off with smartphones.
The Louisville-based appliance maker said that most people with window units leave them off during the day to cut utility costs, but then arrive in “sauna-like heat” after a day at work. Consumers can use their smartphones to turn on GE’s new AEC12AV and AED10AV units before they get home, which will increase their comfort without wasting energy during the whole day.
The company’s Comfort app also allows consumers to set a cooling schedule, monitor their air conditioners from anywhere and get reminders to clean or change filters.
“Connectivity is on the minds of many consumers, and we saw a need to offer this in our window air conditioners,” Mark Evans, product manager for room air products, said in a press release. “Our new 115-Volt window air conditioners are the largest connected residential units on the market that offer free app connectivity, making it easy to control the temperature of a room from anywhere.”
Both units, which cost between $350 and $440, are ENERGY STAR compliant and also come with a remote control. —Boris Ladwig