Welcome to the May 6 edition of the top-secret, always confidential Monday Business Briefing.
This is your private business intelligence briefing, with Insider Louisville staff and contributors vetting tips collected during the past few days and hours.
A few of which are NOT double-verified as with our daily reporting.
Just like last year, we swore we’d give MBB Derby off. It never happens simply because there’s too much going on … this is the news about business and trends you’ll be reading about in the coming days in the conventional media.
• Okay, here’s the part of Derby week we actually care about – new business! Several coups from Derby parties. At his City Hall Derby party Friday night, Mayor Greg Fischer announced that Gazelle, the Boston-based reCommerce company, is a done deal. “He announced, ‘They just signed the lease today,’ ” said our source. Then Fischer introduced Gazelle executives. Gazelle will hire 100 employees initially at a facility in Jefferson Riverport International in the southwest part of Louisville. We broke this story back in early February, but the information we got from city econ-dev officials was sketchy, simply because they didn’t have all the facts. Now, we hear Gazelle’s investment here will be bold. We checked the Kentucky Cabinet for Economic Development data base and got a shocker. Gazelle has preliminary approved for up to $3 million in tax credits on a project estimated to be worth $22.3 million. Which we knew. But notice the number “438” in the data bar … that’s the number of jobs over 10 years.
Gazelle, Inc. KBI JEFFERSON N Prelim Approval $22,300,000 $3,000,000 – NA 438 $14.00 2/28/2013
The rate of pay isn’t great at $14 per hour, but better than a poke in the eye with a sharp stick. Unlike a lot of big deals announced recently, Gazelle appears to be real, with some of the nation’s largest VC firms backing the management team, who have spent time at eBay, PayPal and Rue La La.
• Some more good Derby news, this on the urban bourbon front – Angel’s Envy owners were not shy in telling customers at its Derby pop-up bar that they’re about a month away from announcing (finally) their plans for a downtown facility. But they’re playing their cards very close to their vests. They won’t say where in Louisville they’re going, but our econ-dev sources say it’s the Vermont American building on Main Street across from Slugger Field. Or the half that’s still standing. What Angel’s Envy execs did confirm is they’ll close the Bardstown facility and move all production to Louisville. Awesome news.
• A major downtown Louisville project is about to be officially under way. Louisville Metro Government’s Division of Purchasing is accepting sealed proposals for design services for the NuLu/Nucleus Connector streetscape project. This fully funded $13 million project includes dramatic street improvements on East Market Street – from Brook Street to Baxter Avenue – including Nucleus Urban Research Park at Floyd and Market and the Home of the Innocents at the far east end of Market. The idea being to entice pedestrians, shoppers and workers to explore Louisville’s most vital urban corridor. You can see the RFQ for yourself here. The due date is June 17, and the bid number is: RFQ-3058-0-2013/TB
Here’s the meat of the RFQ:
5.1 BACKGROUND: Over the past decade, the East Market District area has seen a remarkable transformation into a vibrant urban village of shops, restaurants and housing. Simultaneously, the University of Louisville has begun work on Nucleus, a project of enormous economic potential impact to the city. LDDC sponsored a connectivity study to look at how physical improvements could positively impact the success of that project. The NuLu/East Market district and its positive connection to Nucleus was identified as critical. The NuLu Business Association (NBA) (then the East Market District Association) had already worked to establish goals of how they envisioned their neighborhood and identified key improvements that needed to be made. Working with LDDC, a conceptual plan was developed that involved improving the street to make it more pedestrian friendly, sustainable, and connected with adjoining neighborhoods and downtown. The area also provides an opportunity for the Metropolitan Sewer District (MSD) to make gains in fulfilling their consent decree.
5.2. Scope: The selected consultant is required to provide landscape architecture and design services as well as engineering, and environmental services (anticipated Categorical Exclusion Level 1) for Phase I (schematic design & design development) and Phase II (construction documents) Design. Design services shall adhere to all Federal, State and local design standards and shall include surveys, vault surveys, utility surveys, tree and landscaping recommendations, sidewalk and street design, recommendations of sustainable elements, storm water management recommendations and an integration of areas suitable for public art. Field surveys will include vertical and horizontal locations of above ground utilities, existing sidewalks with special details at curb ramps, drainage features, curb cuts, trees and wells, etc. as well as underground vaults, coal chutes, or basements within the public right-of-way. Tree inventory services will include identification of the existing trees, caliper, and condition. Design services will include preliminary design, final design and construction documents (final construction drawings, layout sheets, utility plan sheets, signage & marking sheets, streetscape furnishing details, structural details at vaults, traffic control sheets, and specifications of all streetscape improvements including materials and placement as necessary for construction per local, KYTC, MUTCD and ADA requirements.
• Big news on Dutchmans Lane. We heard a deal is closer that would put a second Martini Italian Bistro into the space at 6201 Dutchmans. The large building began life as Oldenburg Brewery back in the late 1990s. We’ve known about this deal – pretty much everyone has known about it – for months. But now we hear work will start on the interior this month. As we told you back in March, the building has never really had a viable tenant since the long-departed Richard Reeves’ Superior Development Group partnership built the $2.6 million Oldenberg restaurant and microbrewery way back in 1997. And as we noted, the location has everything going for it, at least on paper – heavy residential density, hospitals and huge office buildings, all within a half-mile radius. Every other restaurant in the neighborhood, including a Panera Bread store and a Texas Roadhouse, are SRO seven days per week.
• In the last few weeks, we’ve heard sources talking about the huge outlet malls planned for the Simpsonville exit off Interstate-64 in Shelby County. Since we rarely leave 40202, we totally missed this. But two developers plan a total of 800,000 square feet of outlet stores practically next to each other. We did find stories by the Sentinel News in Shelby County, laying out what’s going on. Louisville-based TRIO Commercial Property Group is working with Paragon, part of the Indianapolis-based Simon Property Group mall and shopping center empire. Paragon plans a 400,000-square-foot outlet center on 47 acres. If you travel to Indy or Chicago, you may have shopped Paragon’s outlet center in Edinburgh, Ind., about 30 miles south of Indianapolis. Norton Shores, Mich.-based Horizon Group Properties’ plans a 364,000-square-foot outlet mall on 55 acres. We called Simpsonville City Administrator David Eaton, and Eaton confirmed preliminary site work has begun on the Horizon project. We must say we’re puzzled by the geography of the projects. Typically, outlet mall developers select off-the-interstate sites in the middle of nowhere that are easy stops for travelers. But locations far from cities ensures outlet malls don’t cannibalize business from retailers in first-run malls and shopping centers. Both Horizon and Paragon have Ralph Lauren Polo, Nautica, Tommy Hilfiger and other national and international apparel companies. Competing against an outlet mall 10 miles east up Shelbyville Road cannot be a happy prospect for General Growth Properties, which owns both Mall St. Matthews and Oxmoor Center. This will be interesting. More as we know more.
• So, what’s the story with St. Matthew Feed & Seed? In March, St. Matthews Feed & Seed owner Mary Ann Dallenbach told Business First her company was taking some of the inventory of Bunton Seed, which closed at 939 E. Jefferson St. in NuLu after almost 90 years in business. But an astute insider sent us a Grisanti Group listing for the St. Matthews Feed & Seed property at 225 Chenoweth Lane, which states it will be available June 1. Does that mean St. Mathew Feed & Seed will move to NuLu?
• At MBB, we have a lot of fun breaking big stories such as the Gazelle scoop and the NuLu/Nucleus Connectivity project. But one of the many things that drives us crazy is our business community’s lack of big picture attentiveness. This weekend, while everyone was watching Kid Rock party at the Barnstable-Brown Party, the New York Times magazine had a long story, “Silicon Valley’s Startup Machine,” about Y Combinator, the ultra-successful Silicon Valley business accelerator in Mountain View, Calif. While Louisville’s startup community is growing dramatically, it’s sobering to realize that we’re a flea on the elephant’s behind.
From the post by Nathaniel Rich:
The Mountain View investors are the partners of Y Combinator, an organization that can be likened to a sleep-away camp for start-up companies. Y.C. holds two three-month sessions every year. During that time, campers, or founders, have regular meetings with each of Y.C.’s counselors, or partners, at which they receive technical advice, emotional support and, most critical, lessons on the art of the sale. There is no campus, only a nondescript office building in Mountain View — on Pioneer Way, around the corner from Easy Street. Founders are advised to rent apartments nearby, so that they can run to the office in minutes should an important investor pay a visit.
Among the eight start-ups that graduated Y.C.’s first class, in the summer of 2005, were the social-news site Reddit, recently valued at $400 million; Loopt, a location-tracking application, which at its peak was valued at $500 million; and Infogami, the Web-site builder created by the tech martyr Aaron Swartz, which merged with Reddit. Other Y.C. success stories include Dropbox (file-sharing service, $4 billion), Airbnb (online market for vacation rentals, $1.3 billion) and Stripe (Web-based credit-card-payment software, $500 million). In Y.C.’s first six years, 72 percent of its 249 start-ups raised money after Demo Day. Today the average value of a Y.C.-financed start-up is $22.4 million. For the most recent term, which ran from January through March, Y Combinator received 2,633 applications. Wevorce, Strikingly and Teespring were three of the 47 groups invited.
We see Louisville as over-dependent on Old Line manufacturing companies and a vision of itself where we’re all changing bedpans for old people. This story captures an ultra-exciting business culture where all things are possible.
• We’re trying to be better about recognizing stars instead of just beating up on the slackers. Park Community Credit Union has gotten national industry recognition for its great performance. Louisville-based Park was just ranked by SNL Financial, the Charlottesville, Va.-based global business intelligence firm, as one of the Top 50 best-performing credit unions in the United States in 2012. Park is ranked No. 17 in SNL’s asset category of $500 million and over – the only Kentucky credit union to make the list, according to a Park news release. In 2011, Park Community was ranked No. 47 on the list.