Welcome to the Dec. 17 Monday Business Briefing, your weekly business intelligence digest from Insider Louisville.
New York firm buys former PNC Plaza, takes advantage of Opportunity Zone
An out-of-town company has purchased the former PNC Plaza, saving Louisville’s third tallest downtown office tower from the courthouse steps.
New York-based real estate investment firm Somera Road bought the building, located at 500. W. Market St., for 100 pretty pennies in a deed in lieu of foreclosure, and according to a spokeswoman, the firm plans to invest heavily in upgrades and take advantage of its location in an federally designated Opportunity Zone.
Hope Wheeler, a spokeswoman for Somera Road, told Insider in an email that the investment qualifies under the Opportunity Zone program. “The deal was structured so that it meets the requirements of OZ regulations,” she wrote.
Somera Road announced in a news release on Oct. 28 that it was raising money for an Opportunity Zone fund that would allow the company to benefit from significant tax breaks for investing in Opportunity Zones. Louisville’s Opportunity Zones encompass large portions of west Louisville, downtown and the area surround the airport.
“As a company, their whole business plan is to buy value-add distressed assets,” Wheeler said in a phone
Somera Road plans to “inject an enormous amount of capital into the building” to restore the office tower’s Class A status, which includes paying for upgrades such as replacing the elevators, Wheeler said. “It seemed like a lot of the updates had been languishing.”
Wheeler said in the follow-up email that Somera Road will invest $4.5 million just to modernize the elevators but also will pay for a fitness center, conference center, tenant lounge, updates to the lobby and deferred maintenance. Work has already started on the elevators, she said, but other construction work will begin in early 2019.
Doug Owen, a senior vice president with real estate firm JLL in Louisville, said Somera Road is a good owner that seems to know what it’s doing, and the purchase “shows that Louisville is a city that is viewed very positively.”
“In general, I think it is a very positive move. No one likes to see when you have a building in dire financial straits. It affects the whole downtown,” Owen said.
This fall, a report from JLL noted that the 556,042-square-foot former PNC Plaza was almost half empty with an occupancy rate of 55.5 percent. Its current occupancy is 65 percent, Wheeler said.
Owen told Insider Friday that he expects downtown vacancy rates to remain somewhat depressed as companies are finding ways to use less space more
“I think that is a trend you could track nationally,” he said.
The building was previously owned by Florida-based Optima 500 LLC. The tower started to fall after PNC Financial Services Group left in 2016, consolidating its operations in National City Tower. Before PNC’s departure, the property was 91 percent occupied, Insider reported.
Jewish, Sts. Mary & Elizabeth hospitals looking for 100+ nurses
KentuckyOne Health last week was looking for more than 100 registered nurses — including in emergency rooms and intensive care units — at its financially struggling Jewish and Sts. Mary and Elizabeth hospitals, offering sign-up bonuses of up to $6,000.
For comparison, Norton Healthcare, which is larger than all of the KentuckyOne facilities combined, was looking for only 20 registered nurses across its entire system. A KentuckyOne spokesman, though, said that its vacancy rate is on par with 2017 and the comparison with Norton might be skewed as some health organizations advertise for positions differently.
KentuckyOne is looking to sell the two hospitals and other Louisville medical facilities as it focuses on other Kentucky areas. For about a year, the health system has negotiated exclusively with New York-based alternative asset management firm BlueMountain Capital Management. While sources have told Insider that the deal is in trouble and that some parties are preparing for the closing of Jewish Hospital, both KentuckyOne and BlueMountain Capital have said their negotiations are continuing.
Jewish and Sts. Mary and
KentuckyOne last week was looking for nurses for emergency rooms at Sts. Mary and Elizabeth Hospital as well as at Jewish, Jewish Medical Center South and Jewish Medical Center Southwest. The system also was looking for nurses in other units, including intensive care, surgeries, orthopedics, neurology/oncology, endoscopy
On its website, KentuckyOne said that new registered nurse hires for eligible full-time positions migh receive student loan payback of up to $24,000 or a signing bonus for up to $6,000. Beyond health insurance and a 401(k) plan, the health system said it was also offering “generous paid time off.”
KentuckyOne spokesman David McArthur told Insider via email that the system is offering incentives “for select positions with a limited supply of qualified candidates.”
“KentuckyOne Health Louisville Region posts positions currently needed and those we anticipate needing in the future,” he said.
“It is also worth noting that each post is for a specific position versus representing multiple identical positions, as some organizations do,” McArthur said.
KentuckyOne last week also said that it was bringing in two health care veterans to provide interim leadership to replace two departing executives in the Louisville market and at Sts. Mary and Elizabeth Hospital.
Deborah Lee-Eddie will join KentuckyOne Jan. 14 as interim CEO for the Louisville market. Lee-Eddie is a Catholic Health Initiatives veteran who, according to a KentuckyOne news release, has held senior leadership roles at large health systems, including St. Luke’s Health System in Houston. Lee-Eddie will succeed current market CEO Chuck Neumann, who last month announced his retirement.
KentuckyOne also said that Rica Lewis-Payton, a consultant and former leader in the U.S. Department of Veterans Affairs, will serve as interim president of Sts. Mary and Elizabeth Hospital. Lewis-Payton will succeed Charlie Powell, president of Sts. Mary and Elizabeth Hospital and the KentuckyOne Medical Group, the system’s physician organization, which will be led by Dr. Ron Waldridge, who also is interim president of Jewish Hospital. —Boris Ladwig
Home sales slightly down in 2018
The number of houses sold in the Louisville MLS may end the year down slightly compared to 2017, though likely not by much.
The Greater Louisville Association of Realtors released its November home sales data last Monday, and from Jan. 1 through Nov. 30, the number of houses sold in the Louisville MLS declined 1.3 percent, to 16,586. In Jefferson County alone, the number dipped nearly 1.4 percent, to 11,391.
Looking strictly at November, home sales decreased more than 9 percent in both the Louisville MLS and in Jefferson County, according to GLAR.
Meanwhile, the average sale price for January through November rose 5.4 percent, to $218,728 in the Louisville MLS, and 5.8 percent, to $218,782 in Jefferson County, GLAR reported.
Low inventory, notably, has been a source of market strain in the Louisville MLS and nationwide, but the region is seeing improvement. The Louisville MLS had 0.7 percent more homes actively listed for sales on Nov. 15 this year compared to the same day in 2017; that number increased 3.4 percent in Jefferson County.
“Our members are reporting a normalizing market with the total number of homes sold, and available for sale, similar to that of last year,” GLAR President Karen Story said in a news release. “In today’s market, it’s important for sellers to have their property in move-in ready condition and priced competitively.” —Caitlin Bowling
Vital Sites seeking partners for Brennan House reuse
Preservation nonprofit Vital Sites wants to find partners and/or tenants interested in revitalizing the historic Ronald-Brennan House, located at 631 S. Fifth St.
The nonprofit has issued a Request for Interest that includes background on the building, guidance from the National Trust for Historic Preservation, suggestions of potential future uses and reply requirements. The house is open for tours from noon to 2 p.m. on Jan. 11, and responses are due Jan. 21.
Brennan House was built in 1868 and is one of the only Victorian houses that is still standing downtown. It currently operates as a historic house museum, but Vital Sites wants to “bring new life to the Brennan House and ensure its long-term sustainability,” the nonprofit stated.
This is the second project for Vital Sites since its inception last year. The nonprofit has rehabilitated five historic houses on Broadway and is seeking to sell them. —Caitlin Bowling
New Booker’s release celebrates 30 years of the brand
Nothing like saving the best for the last release of the year. Jim Beam has now come out with a new Booker’s expression, this one celebrating a milestone anniversary of the brand.
Booker’s 30th Anniversary Bourbon is a nod to the late Booker Noe and his idea to come out with a premium, small-batch release back in 1988 when bourbon wasn’t flying off the shelves like it is now.
The special release was chosen by Booker’s son and current master distiller, Fred Noe.
“When we first started talking about an anniversary batch, I knew it would have to be something special, and during my final tasting of this extra-aged liquid, I knew Dad would have been pleased,” Noe said in a news release. “I’m proud to carry on his legacy every day and to share this special release in honor of the damn fine whiskey he created 30 years ago.”
Noe chose to blend a 9-year-old bourbon (70 percent) with a 16-year-old bourbon (30 percent) to give it that robust but sweet flavor his father loved. It’ll be bottled at a kickin’ 125.8 proof, and suggested retail is $199.99. —Sara Havens
The University of Louisville’s basketball practice facility, formerly nicknamed the “Little Yum! Center,” will now be known as the Planet Fitness Kueber Center, trustees decided Thursday. Local Planet Fitness franchisees and UofL donors, Rick and David Kueber donated $3 million to expand the facility.