Welcome to the February 20 top secret, always confidential Monday Business Briefing.
These are biz tips Insider Louisville staff and contributors have collected during the past few days, some of which are NOT double-verified like Insider Louisville’s daily reporting.
But as we always say, these items are insider info from sources with direct knowledge of the deals.
This week’s big scoop is confirmation by insiders the big remake of Whiskey Row is, at best, in limbo.
Insiders are telling us contractors have found problems with stabilizing the historic buildings in the 100 block of West Main Street, a half-block away from the KFC Yum! Arena, that may render any renovation project financially impractical.
Stephanie Greene, spokesman for the Brown family interests at 21C Museum Hotel, sent us an email reply to our request for an interview with Craig Greenberg, one of the investors.
Craig Greenberg, Valle Jones, the investor group, and the City are working day and night to put the project’s redevelopment plan together. They will be in touch when there is news to discuss.
Developer Bill Weyland, who already invested on the block, returned our call from the Cleveland airport last week as we were intitially pursuing this story, saying he didn’t have sufficient information about the situation to comment.
Until they get back to us (we are at this moment collectively holding our breath at Insider Louisville), insiders are telling us there’s a meeting scheduled this week during which the investor group will be briefed on problems related to Whiskey Row.
Stabilization work was scheduled to have started last month. But when the project went to bid in November, contractors said the buildings are too unstable to risk having crews start work.
Our sources say 113 W. Main was supposed to be in good condition, but turned out to be unsalvageable. Ditto with 119 W. Main.
Under Mayor Greg Fischer, the city had agreed to help stabilize the decaying buildings, investing $100,000 for every $1 million invested by the investment group up to $1.5 million. But our sources say it’s unlikely the buildings can be stabilized at all, and the city’s unlikely to participate because of budget cuts.
“Why is this part of the Monday Morning Business Briefing?” you ask.
Because this is not good news for all the people who’ve already invested millions on the block including Valle Jones and Weyland, who have something like $20 million in Whiskey Row Lofts on the west end of the block. Not to mention all the restaurant owners. Not to mention the impact on the city’s ability to service the arena debt should the buildings sit empty, a persistent drag on downtown instead of enhancing the surrounding entertainment district.
One source told us the majority of members of the investor group are hoping someone will either take the buildings off their hands, or come aboard to raise the tens of millions necessary to do something, though no one is quite sure what.
Last August, a group of investors that includes Brown-Forman heir Laura Lee Brown and her husband, Steve Wilson, bought five of the seven decaying Victorian- era, iron-facade buildings from developer Todd Blue.
Blue had sued the city for the right to tear them down after his Iron Quarter development went nowhere. He had argued, and the courts agreed, the buildings were a public hazard, in danger of falling down.
Shortly after his election, Fischer brokered a deal to settle the suit, a step that would have cleared the way for Blue to demolish several of the buildings for a surface parking lot.
Then in April last year, a group of preservationist business leaders including Brown, Wilson and others (some members of the group have never been identified publicly) came forward to purchase the properties. The group paid Blue $4.8 million for the five buildings, one of which was donated to the city.
Suddenly, the buildings weren’t falling down anymore! Allah be praised, a miracle!
But details were sketchy, as they tend to be in this town. It wasn’t until last September that anything like “a plan” was revealed. But the “plan” turned out to be no plan.
It was then that Wilson told Wall Street Journal reporter A. D. Pruitt that he and Brown weren’t initially interested in the block because they already have a huge project going in the national expansion of their 21c Museum Hotel project.
In the WSJ story, Wilson confirmed Whiskey Row investors had no master plan, but were sorta, kinda considering investing about $40 million to create something along the lines of a distillery or something. He wasn’t sure.
Mr. Wilson said they don’t even have a master plan for the site, but are eying a big bourbon distillery that will be part of a “bourbon trail” of six distilleries across the state where tourists can sip different brands of bourbon.
Cue the happy ending.
And will Todd Blue refund the money?
We’re guessing this saga will drag on for years.
• And speaking of Bill Weyland, details are hazy, but look for look for glass artist and businessman Brooke White to move his Flame Run glassworks and gallery/retail shop from 828 E. Market St. in NuLu to Weyland’s Glassworks Building at 815 W. Market St. We’re being told it has nothing to do with lack of success in NuLu. Rather, other factors are requiring the move. Though when you think about it, consoldating the city’s big glass art operations makes sense. This is another big change at Glassworks. Back in May, Weyland bought out Kenneth VonRoenn in their Glassworks Gallery partnership.
• This is a titilating tidbit from insiders: We told you last November ago that Chicago-based food ingredient giant Newly Weds Foods is looking at Louisville for a new facility. The global food company needs a new domestic facility in the Midwest to take pressure off its Chicago and Tennessee operations.
Then last month, we found out Newly Weds Foods was on the verge of leasing 200,000 square feet of production space in Louisville. Newly Weds executives had filed for Kentucky Economic Development Finance Authority tax incentives, stating the project in Kentucky could mean a $55 million investment.
Now, Insiders are saying, “Not so fast” … that Indiana Gov. Mitch Daniels hosted Charles Angell, president and chairman of the privately held company, at the Super Bowl! Daniels apparently made the pitch to Angell that if Newly Weds is going to locate in the area, they needed to be on the Sunny Side of Louisville in Southern Indiana.
Which tells you how competitive economic development is right now, how big a prize Newly Weds and those employee taxes are … and how dadgum underhanded and sneaky those Hoosiers can be.
Newly Weds sells custom batters, breadings, coatings, spices, seasonings, capsicums and functional ingredients for food manufacturers and the food service industries in 68 countries, according to their website. They currently operate 15 North American plants and 9 international production facilities.
More as we know more ….
• Our hotel sources tell us Schulte Hospitality Group is expanding, and saying adieu to its current offices on Shelbyville Road to buy a building in the Old Henry Road area. Schulte Hospitality, which has contracts to manage hotels in Ohio, Indiana and Illinois, has a number of openings including internal auditor, staff accountants, managers and sales staffs.
* Our real estate sources are telling Insider Louisville one of Louisville’s great white elephants has been rebranded.
Seminary Woods, that 14-floor, $60-some-odd million condo tower on U.S. 42 is now “Regency Tower.”
Norm Risen started building Seminary Woods in 2003, way before the Great Recession despite neighborhood opposition. At the time, Risen told Business First there was “an unbelievable demand” for the upscale condos, and obviously, the U.S. 42/22 Brownsboro Road corridor was supposed to draw from the area’s wealthiest neighborhoods, from Glenview to Prospect.
Didn’t quite work out that way.
By 2009, Risen was ‘fessing up to John Karmen that he was struggling to refinance his loan and secure an extension for the $18.6 million he still owed National City, now PNC Bank, “allowing him to allay any fears that potential condo buyers might have about the long-term viability of the project.”
Kentucky Secretary of State records indicate Risen still controls Seminary Woods LLC, which owns Regency Tower, according to the Jefferson County Property Valuation Administrator.