Welcome to the April 7 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, our Insiders Meetup returns to the urban core with a women and leadership event at Bourbon’s Bistro, 2255 Frankfort Ave. in Clifton.
Pioneering technology executive Joan Coleman, former AT&T-Kentucky state president and current business consultant, will talk about her experience as a female engineer and her career path to ultimately lead a technology company. Holly Houston, family law attorney, will talk about Louisville Girls Leadership, a development program for 10th grade girls, and the Girls IdeaFestival coming up April 26.
This is another “more news than we can get to” edition of the Morning Business Briefing. If you’re burned out on GLI, just skip to the middle to this week’s scoops. But will Louisville’s economy really reach escape velocity during the ongoing economic boom until the GLI mess gets resolved?
• We’re less than one month out from the Kentucky Derby. Traditionally, Greater Louisville Inc. and city officials have used the Derby to romance out-of-town companies considering opening operations in Louisville. How much Derby mingling figures into the final decisions is anyone’s guess. But what could it hurt, right? This year, insiders tell us, GLI’s board is scrambling to get a new CEO in place by the first Saturday in May, but so far they’re not having a lot of success persuading anyone to take the job. (For the record, no GLI officials were in Frankfort lobbying at the General Assembly session; there was only a contract lobbyist.) As a city insider said, “Would you want the job?”
Instead, we’re sticking by this conclusion from our Feb. 3 MBB post examining all the tumult in the econ-dev sector: A major reset is coming.
In February, Craig Richard exited GLI after a long, drawn-out process that included vague references to his being on “personal leave” when everyone on the planet knew Richard was being shown the door.
(One of our favorite GLI blunders had to be NOT informing the Metro Council that Richard was leaving. Metro Council President Jim King, who has advocated killing GLI’s million-dollar econ-dev contract with the city, sent a letter to GLI board members asking why he only learned of Richard’s imminent departure through the media. “The Metro Council approves a significant investment in GLI annually and expects to be kept informed of significant organizational changes such as this,” King wrote to Kerry Stemler.)
Since then, of course, Tendai Charasika, the charismatic executive director of EnterpriseCorp — the part of GLI that actually works — announced he’s leaving, with his job scheduled to be posted today, according to insiders. A number of young entrepreneurs are interested. But who will they work for?
We’ve heard from countless sources that Ted Smith, director of the Department of Economic Growth and Innovation under the Fischer Administration, is thinking of either pulling EnterpriseCorp into the city, or filling either the GLI CEO position or Tendai’s job himself. That said, we’re being assured by city insiders nothing is decided, and none of the budgeting to realign economic development efforts has started.
Still, the phrase we’ve heard over and over again is, “What does GLI actually do? And what should they do?”
Last month, Jeffersontown Chamber of Commerce President John Cosby told IL his eastern Jefferson County city benefits from GLI bringing potential clients to the sprawling Bluegrass Industrial and Research Park. Yet, GLI announces few big coups. The last we can remember was Beam moving its Global Shared Business Center to Fourth Street Live in 2012. And GLI does play an important role in helping with state tax incentive documents and other administrative tasks.
What’s missing is the vision thing. One of the biggest economic-development events of the year in 2013 was GE inviting in entrepreneurs, engineers and tech people, which was not a GLI initiative.
One insider helped us focus yesterday by saying Louisville has a golden opportunity to pivot from a conventional econ-dev department/chamber, moving away from legacy thinking that’s 20 years old … and 10 years out of date. Everything has changed since GLI was forged out of the old Louisville Chamber, from the economic development partnership down to the technology that allows you to read this post on your wireless device.
“Ask yourself this: ‘Who will be running GLI? Will it be the Old Guard, or the people who really make things happen?’ And let’s face it – the Old Guard made a huge mess out of GLI.”
Think about this: With the exception of Kent Oyler, serious, successful entrepreneurs such as Lee Leet, Sterling Lapinski, Lou Kelmanson and others aren’t involved. Instead, the driving force in GLI is Kerry Stemler, who runs a conventional contracting firm. In New Albany.
• Sources are telling us Forbes will have an in-depth look at the ultra-successful Angel’s Envy premium bourbon in the April 14 edition of Forbes Life lifestyle magazine. So, what will the NYC-based financial mag reveal? Well, industry insiders are telling us Angels’ Envy is being circled by more than one large spirits company, including Bacardi, based in Bermuda.
Since Suntory bought Beam and its fabulous bourbon portfolio for $16 billion, Suntory’s global competitors are countering, looking to fill out their portfolios with top whiskeys, and Angel’s Envy is certainly that. So, we’re guessing the Hendersons have had conversations with executives from many, many companies.
It also appears the much-ballyhooed deal to put Angel’s Envy into a cool $12 million distillery in the old Vermont-American building at Main and Jackson streets is dead. That deal was announced nine months ago and nothing has happened on the property. Instead, operations are shifting west on Main Street, where the company is about to transfer bottling operations.
• Speaking of tumult in the spirits world, Brown-Forman is back in the news after blogs and business wire services started reporting the Louisville-based spirits giant may make a play for Rémy Cointreau, based (of course) in Cognac, France. Rémy Cointreau shares shot up 3.6 percent Friday after Bloomberg reported basically second-hand news from several blogs. Bloomberg reported on Betaville reporting that Brown-Forman is working with Goldman Sachs Group Inc. and other banks to consider a possible purchase of the maker of Rémy Martin cognac.
As a publicly traded company, BF doesn’t comment on deals before they’re announced. And Oily Wehring at Just-Drinks.com poo-pooed the deal as not making any sense. Though, if Brown-Forman acquired Rémy Cointreau, it would give them not only the No. 8 best-selling cognac, but also Mount Gay Rum. Interestingly, Mount Gay stopped production last month, with the entire workforce laid off after mysterious negotiations broke down. This all makes our heads hurt.
• The AC Hotel effort keeps moving forward. Ron Turnier, the Creation Garden founder behind the proposed AC Hotel in NuLu, has filed a new application with Louisville Metro Planning & Design Services.
The application states the developer is going for a zoning change to commercial from light manufacturing, as well as a change in the building height.
From the LMPDS notification:
You are invited to attend a review of a proposal for a CHANGE IN ZONING from M-2 to C-2, a REVISED DETAILED DISTRICT DEVELOPMENT PLAN with a building height and rear setback variance are also being requested.
Subject Property: 729 East Market Street
Case Number: 13ZONE1028
Case Manager: CHRISTOPHER BROWN ([email protected])
Meeting Type: PLANNING COMMISSION
Date: THURSDAY, APRIL 17, 2014
Time: Meeting will begin at 1:00 PM and continue until all cases are heard
Location: MEMORIAL AUDITORIUM, 970 SOUTH FOURTH STREET
• It appears Steve Poe’s Aloft Hotel project is about to move forward. “Notice of Intent to Demolish” signs were up last week at 102 W. Main., just across from Whiskey Row. The signs state the building facade on Main Street will remain.
When Poe announced the project last November, preservationist attorney Steve Porter moved to save the buildings on the property, which had been part of Marine Electric, a contractor. Poe agreed to keep the Main Street facade, but told IL at the time keeping all the buildings on the property was a deal breaker.
City leadership including Metro Council members David Tandy and Ken Fleming immediately intervened to keep the project going.
We tried to interview Porter at the time, but he didn’t respond to calls and emails. He did post this on our comment section for our story Friday about his opposition to a proposed FedEx ground hub east of Jeffersontown:
For the record, I never “threatened to sue” to stop the Aloft Hotel. All I did was inquire to Louisville Metro about the three historic properties that were proposed to be demolished. After receiving information, I met with the developer, Steve Poe, and we worked out an agreeable compromise to save parts of the historic facades. He was gracious, straightforward and cooperative. After that, I supported the development. That is a perfect example of how public participation in the development process can work to reach good conclusions.
The eight-floor, $25 million Aloft project would add about 175 rooms to the downtown inventory.
• More details about the Gilt.com popup store for 2014 in our fashion-starved little city: The dates will be April 25 through May 21 at what is known as the “Best Buy Center” at 5055 Shelbyville Road, across from Mall St. Matthews. The popup will be in an end-cap space that used to be K & G Fashion Superstore, a discount mens suits store. This year, the Gilt.com space is roughly the same size as last year at Gilt’s first popup at Shelbyville Road Plaza, about a mile away.
This year’s space is 20,250 square feet, said Bruce Shinbach, managing partner in Dixie Associates, the Louisville commercial real estate partnership that owns the center. Gilt.com ships tempting luxury items from Zegna suits to Frette sheets to the far corners of the globe from Louisville.
Last year, Gilt.com, which is based in New York City, but has its fulfillment operation in Shepherdsville, invited us to its big VIP wingding. It was the first time the e-tailer had done a popup bricks and mortar store. This year, Gilt execs won’t return our calls. Go figure.
• Dixie Associate’s Shinbach passed on another tip. He told MBB that Kmart just notified Dixie Associates they won’t renew their lease at their shopping center at 4915 Dixie Hwy. in Pleasure Ridge Park. The lease expires in May, which is when Kmart is likely to close. But Shinbach, who started in the movie business back in the 1960s, tells IL this is a bad news/good news situation.
The bad news is, Dixie Associates will have a 121,000-square-foot vacancy. The good news is, as of Friday, it looks like he has another national credit tenant to fill that vacancy almost immediately. Asked who that might be, Shinbach replied, “You know I’d like to say, but I can’t.” Though he added the thinks an announcement is forthcoming. Kmart leaving also allows him to build out lots on the property, Shinbach said, which wasn’t allowed with the retailer as the main tenant.
Kmart, which is owned by LA-based private equity mogul Eddie Lampert, is closing dozens of stores across the United States as leases expire. Lampert’s ESL Investments hedge fund first bought Kmart out of bankruptcy in 2003, then bought Sears in 2005. Now, both Americana brands are dying slow but apparently irreversible deaths, according to financial news sites.
There are at least four Kmart stores in Louisville, including on Poplar Level Road and Taylorsville Road. There are three Sears locations, including an anchor store at Oxmoor Center. We calculate if they all close, that would leave about 1.1 million square feet of vacant space.
• Alex Frommeyer moves BEAM Technologies to Germantown and it starts to bust loose. Is there a correlation? We don’t know. But talking to Germantown-Paristown Neighborhood Association leaders this weekend about Underhill Associates’ Goss Avenue Apartment project, it’s clear a lot is going on in that corner of the city.
Colin Underhill told Business First last week the project is stalled due to “historic hiccups” related to approvals by historic-preservation agencies. Or sources tell us construction work has stopped, but the Underhills have architects and others at the complex. No fears, because that’s just one of dozens of projects.
Part of it comes from the energy of Sojourn Community Church, which bought the St. Vincent DePaul Church on Shelby Street in 2011, then added a $3.5 million addition by A. L. Post, the Louisville-based contractor. Since then, Sojourn’s youngish, well-educated members have moved into Germantown, Smoketown and the Shelby Park area, as have businesses. We’ll have a round-up post this week about everything going on.
• Monday Business Briefing has been teasing this for awhile. But now it’s proceeding. Heine Brothers’ Coffee is starting a major overhaul of the Louisville coffee shop chain’s three oldest stores. Work already is under way to renovate the Chenoweth Lane store, with work starting last week. The work at Chenoweth is on the exterior, and is mostly complete, Mays said; a full Chenoweth Lane store remodel is scheduled for after Derby.
But the big deal is that the Frankfort Avenue store closed last night, and will remain closed this week for a complete renovation. (By the way, Fat Jimmy’s pizza joint next door at 2712 is closed. We don’t know if there is connection.)
Mike Mays told us Friday that Heine Brothers employees will be handing out free coffee, trying to ease the shock of the store closing (briefly) after all these years. The free coffee will be served from 7-9 a.m. and is weather dependent. After Frankfort Avenue is complete, Mays & Co. will close the original Longest Avenue store in the Highlands for a renovation/expansion. We’ll have more this week on the plans.
Now for some actual briefs:
• Scoop: Insiders tell us Fund for the Arts officials will announce this week a new director to replace Barbara Sexton Smith. Our insiders say consultant Christen Boone is the most likely successor to Sexton Smith.
• Commercial Kentucky has found a tenant for a huge amount of first floor space at Fleur de Lis condos at Preston and Main streets. The brokerage won’t say who’s taking the space, but we hear it’s an events company. More as we know more.
• We hate putting this in the briefs, but yet another downtown mega-project is in the works. It’s a brief because we’re sworn to secrecy. But if it happens, it will keep alive a string of potentially city-changing projects that started in 2009 with planning for Bill Weyland’s Hilton Garden Inn at Fourth and Chestnuts streets.
• Sources are telling Insider Louisville the Cincinnati-based Jeff Wyler Automotive may have a deal brewing to acquire Bob Montgomery Chevrolet/Honda in Louisville. The Wyler empire includes dealerships in the Cincy area, Columbus area, Lexington, Clarksville, Lawrenceburg, Ind., Shelbyville, Ky. and Louisville. We called Rodney Carter at Jeff Wyler and Steve Montgomery, but no call backs.
• Another sign Brown-Forman’s urban bourbon project at Whiskey Row may be moving forward: The General Assembly voted to expand historic preservation tax credits. Developers of Whiskey Row in Louisville plan to use the credit. The expansion would assist 21c Museum Hotels, which is expanding to Lexington. The expansion was inserted late in the session.
• U of L Physicians – Family Medicine has been recognized for quality primary care by the National Committee for Quality Assurance. The docs group is one of the first in Kentucky to meet rigorous criteria to earn a Level 3 rating as a Patient-Centered Medical Home, according to a news release.
PCHM is a way of organizing primary care that emphasizes coordination and communication to transform primary care into “what patients want it to be,” according to the NCQA. “Medical homes” can lead to higher quality and lower costs, and improve patients’ and providers’ experience of care.
The NCQA recognizes outpatient primary care practices as Level 1, 2 or 3, with Level 3 being the most difficult to achieve.