Editor’s note: Due to reporter error, David Doctor’s name was misspelled in the first version of this post.
Welcome to the May 5 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.
A reminder: This afternoon we’ll host an all-star line-up of local food and farm-to-table experts at our Insiders Meetup from 4:30-6 p.m. at Doc Crow’s Southern Smokehouse and Raw Bar, 127 W. Main St. downtown.
They’ll give us the overview about where Louisville is headed in this increasingly important business sector. The event is free, and you can get your tickets here.
This is the “spent more time partying than working” edition of MBB, abbreviated a bit due to Derby socializing. But we were still out there … sort of.
• We like to think this is the weekend a lot of prospects cruise into town in their Gulfstream IVs and Sabres and scout out Derby City as a place to start operations, or even relocate their businesses. (For the record, all you out-of-towners, it was 72 degrees with about 12 percent humidity when the Kentucky Derby went off Saturday evening. Trust us. It’s like this all year. Seriously. (You locals: ixnay on the interway.)
Of course, IL broke the story last week that the whole economic-development dynamic is changing, with the Fischer Administration scheduled to take over GLI’s econ-dev duties, including business attraction, after July 1. With Greater Louisville Inc. parked up on blocks in the backyard, who was representing Louisville this year?
Our sources are telling us Louisville-based private-equity exec Jonathan Blue, managing director of Blue Equity, has a Chicago-based logistics company interested in Louisville, a company considering moving 250 jobs into the central business district office space. And let’s face it … with building vacancies as high as 50 percent, the downtown office towers could use some good news right about now.
Jonathan declined to comment, as did city officials. But we worked our downtown office real estate sources, and we’ll have some perspective – as well as some names – later today.
• The University of Louisville had yet another very bad week, with Courier-Journal medical reporter Laura Ungar reporting Saturday the continuing medical education program for doctors has been placed on probation. This comes about six weeks after a different agency – the accrediting organization for medical schools – put U of L on probation, citing a litany of problems. U of L’s medical school is one of only three medical schools on accreditation probation, along with a school in Puerto Rico, and one in North Chicago.
Ungar reported a doctor working for a pharmaceutical company taught a CME class, a serious no-no in the education world because – surprise! – such instruction comes with a big plug for the instructor’s company and its products.
Ungar quotes a spokeswoman for the CME accreditation agency, the Accreditation Council for Continuing Medical Eduction, saying probation is “given to accredited providers that have serious problems meeting ACCME requirements.”
We’ll say it again: In isolation, this penalty could be seen as a technicality, which is the way U of L officials are spinning it. But in aggregate, since 2009, there have been endless academic issues at U of L, which does not compare well by any measure with other schools even in the region, much less the nation.
Last Friday, U of L Business School Dean Caroline Callahan stepped down after what our sources say was an acrimonious staff meeting. Later today, we’ll have an in-depth look at issues at the Louis D. Brandeis School of Law and its ongoing search for a new dean to replace Jim Chen. Chen was fired two years ago for, in part, contending a law degree from a mediocre university means the recipient is increasingly unlikely to earn enough money to buy even a modest home.
• THE story of the week, though, remains GLI, with a lot of collateral chatter about how unexpected it was. (We disagree, since we told you a consolidation was coming in the April 7 Monday Business Briefing.)
We’re sure GLI’s board thinks IL picks on the organization. But their media policy for years has been willful deception, enabled by Business First’s willingness to publish whatever Kerry Stemler says as gospel. When the big announcement came last Wednesday, GLI officials could have used the moment to announce their CFO — their second in six months – had left. Bob DeRossett resigned this week to go to work for Nucleus and the University of Louisville.
It’s never been about schadenfreude for IL. All we want is for Louisville to become the 21st century city it has the potential to be. But even the handout for Wednesday’s follow-up GLI press conference clings to the narrative “nearly every significant economic development milestone our region has experienced over the past 25 years came about in part because of the support and leadership of GLI ….”
The handout goes on to take credit for UPS WorldPort, Yum! Center, the GE and Ford expansions, the Ohio River Bridges, and Louisville’s nascent startup/tech scene. Which makes you wonder what in the world Mayor Greg Fischer was thinking when he pulled the plug ….
There certainly were dramatic coups under previous GLI CEOs Doug Cobb and Steve Higdon, who is a former UPS executive. But insiders have told us for years GLI stopped being an effective economic-development organization after now-departed CEO Joe Reagan took over in 2005. Everyone knew this, especially insiders.
One insider, too close to the fray to identify, sent us this missive:
It all comes down to the poor calibre of leadership, from Reagan forward to the current crop. What sticks in my crawl are these fantastical statements by Stemler and his crew that all is well, this was not unexpected, we’re okay financially, Richard left to pursue other opportunities, we have plenty of good CEO candidates, etc—–absolutely no credibility for an organization that needs it badly. Does Stemler and his spin doctors really believe that we believe that stuff?
If so, it’s insulting that they think so little of us that they won’t present the facts and let us make up our own minds, in an objective fashion. True leadership communicates both the good and the bad on a timely basis. You’d think they would have learned by now from the ongoing blastings they’ve taken from IL on previous occasions. Since they obviously haven’t, I’d say there is some blind arrogance in the air, one of the worst leadership attributes I can think of….
We’re down to a run of the mill chamber, at this point. Not good for a city aspiring to be more.
I’m waiting for the next blow:
- state of membership revenues
- how much we’re paying Richard for being fired
- cost of this advocacy position
- when do we see the results of the expensive Advantage Louisville plan …. wasn’t a stage due (Thursday)?
- Will the state continue to support EnterpriseCorp, given the current state of affairs at GLI?
• One of the most surprising claims that came out of Mayor Fischer’s GLI presser was that a company opens operations in Louisville about every two weeks because of UPS World Port. When we asked city officials about the source of that data nugget, they referred us to GLI, from whence it came. That begs the question: Does anyone really know what’s going on with economic development in Louisville? Is there – at the moment – even an active business attraction effort?
• While we’re on a roll, add another name to those interviewed to become GLI CEO: David Doctor. Doctor would be a huge get as he’s director of Engagement and Administration, Duke University Energy Initiative at Duke University. But it was while he was in Louisville that he built his reputation.
Check out this resume from LinkedIn:
Of the more than 8,000 Ernst & Young Entrepreneur of the Year award winners, David is among the fewer than 50 who have won twice; in 1990 for EnTrade Corporation, a natural gas marketing and trading company and in 2003 for Genscape, Inc., an energy information company. He has been CEO of SaaS, online collaboration and energy trading, midstream and information companies. He’s set strategy for two Fortune 500s.
He grew a start-up to a $1 billion+ in sales and another from R&D to international commercialization in 30 months. The cumulative sales of companies he’s led exceed $10 billion. He has founded or fostered 16 start-ups and has served on the boards of seven companies. David was named 1998 Graduate Educator of the Year by the University of Louisville’s College of Business for creating and teaching its New Venture Finance curriculum while serving as its Bank One Entrepreneur in Residence.
On that same topic, we hear Mary Pat Reagan, former GLI chairwoman, withdrew from consideration for the top job last week after the city grabbed economic-development.
• We’ve been telling you for a year the U.S. economy will swing sharply and quickly to a labor shortage from the current chronic unemployment situation. The current debate in economic circles is just how many people are sitting on the sidelines in the U.S. labor market. A new report by Gad Levanon and Ben Cheng of The Conference Board say, “Probably not enough in the long run.”
Levanon and Cheng argue the 3.3 percentage point decline in the U.S. unemployment rate from its 2009 peak happened in a weak economic expansion, meaning rate decline is not solely due to a cyclical recovery, according to the Wall Street Journal.
What happens, they ask, when Baby Boomers are all retired by 2030? Levanon and Cheng forecast the jobless rate will hit its “natural” rate of 5.5 percent by the end of 2015! Then, look out … wages are forced up across the United States.
Some sweet, sweet Monday Business Briefs:
• One of the many, many big stories this week was David Novak stepping down as Yum! Brands CEO to become part of a triumvirate ruling the Louisville-based global brand of fast-food brands. At the same time, Yum! Brands’ Taco Bell is picking a fight with McDonalds, trying to take a big share of the breakfast market with a new breakfast menu.
Taco Bell launched a third round of TV advertisements to promote the chain’s new breakfast menu, part of the largest media blitz in the faux Mexican chain’s history. Here’s one of the ads:
• Sources tell us a Comfy Cow is planned for Middletown Commons, the mega-development we told you about last week. This would make six total Cows around the region as Chip Hamm leads a franchising effort. The latest store just opened last Thursday at Eastern Parkway and Bardstown Road in the former Heine Brothers’ Coffee space.
• More good retail news. Downtown (well, at least the edge of downtown) has a new store. It looks like Alchemy is ready to open at 415 E. Market St. in the Falls City Lofts building. From what we can see through the windows, it looks like Alchemy sells interior accents and collectables. On their website, it says, “magical olde worlde emporium.” Interesting.
• Not too far from Alchemy, it looks like Spectrum Sight & Sound is moving into new NuLu digs at 723 E. Main St. Spectrum installs cutting-edge video and audio systems in high-end homes.