Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.
First comes retail, then residential: Demand for apartments in New Albany attracts developers
The city of New Albany developed unconventionally.
“Retail (usually) chases rooftops,” said Southern Indiana developer Matt Chalfant. “In this case, the rooftops are chasing retail.”
New Albany’s downtown has flourished in recent years, with shops and restaurants opening, and a farmers market drawing residents and visitors downtown twice a week. But there aren’t many places near the central business district for people looking to rent an apartment.
That shouldn’t be the case for much longer, as Indianapolis-based residential real estate company Flaherty and Collins Properties plans to build a 191-unit, market-rate apartment complex at the old Coyle Chevrolet dealership on Spring Street between Fifth and Sixth streets.
In addition, in-town developer Chalfant has his own small-scale upscale housing project under construction. Chalfant plans 19 loft apartments in downtown New Albany, a dozen of which are currently under construction at 148 E. Market St. Tenants are expected to move in in November.
“I am very bullish on downtown New Albany,” Chalfant said. “It’s fun seeing this side of the river really grow.”
The revitalization of downtown New Albany began with the opening of the new YMCA on Main Street in 2008, and from there, the city has become “eclectic” and “very vibrant,” said David Duggins, New Albany’s director of economic development and redevelopment. “I credit the restaurants with coming in and saying, ‘Look, not only are there people here, you can actually make money here.’ ”
Duggins noted that he’d like New Albany to have the energy and culture of Asheville, N.C., or Waynesville, a thriving small town just west of Asheville.
“I would love to see our little city continue to move that way,” he said.
Austin Carmony, a developer with Flaherty and Collins Properties, said his company was drawn to New Albany because of the number of businesses and nearby jobs as well as the demand for downtown housing, particularly for millennials and baby boomers.
“It is one of the most unique downtowns for a small town,” Carmony said. “People want to be downtown. It’s walkable; it’s bikeable. …(But) housing hasn’t kept pace.”
It also should be noted that another Indianapolis real estate company, Herman & Kittle Properties Inc., wants to erect a $12.6 million, 93-unit affordable housing building at the former Caldwell Moser Tannery at Silver and East Main streets. While it would be a ways to walk, the complex would still be less than 2 miles outside of the central business district.
Herman & Kittle is re-applying for low-income housing tax credits from the state of Indiana in November after failing to secure the funds earlier this year. The project is dependent on the credits.
The company expects to hear back in February, Erika Scott, vice president of development in the Midwest for Herman & Kittle, told IL via email.
Meanwhile, Flaherty and Collins Properties plans to start construction on its $26 million apartment complex this fall with a target opening of late 2016 to early 2017, Carmony said. The project also will include a small restaurant or retail space in the old Coyle showroom, which dates back to 1910.
Carmony said he thinks the apartment complex, which will include amenities such as a pool, lounge area and modern furnishings, will bring new residents to New Albany as well as other apartment projects. “The goal is to set the market, and hopefully, it will bring more development downtown.” —Caitlin Bowling
American Medical Association opposes Humana/Aetna deal
Yet another large medical organization has come out against the proposed mega-mergers in the health insurance industry: The American Medical Association says the proposed mergers — including Humana/Aetna — would exceed federal antitrust guidelines designed to preserve competition in up to 97 metropolitan areas within 17 states.
The American Hospital Association also recently sounded the alarm about Humana/Aetna and Anthem/Cigna, the other proposed merger.
In a press release accompanying the American Medical Association’s Sept. 8 report (which includes a deep-dive analysis containing Louisville-area information), AMA president Steven J. Stack said a lack of competition in health insurance markets is not in the best interest of patients or physicians.
According to the AMA, the “mergers would enhance market power,” meaning it would encourage one or more firms to raise prices, reduce output, diminish innovation, or otherwise harm customers due to reduced competition.
The AMA also focused specifically on Humana/Aetna and said the merger would enhance market power in 15 metro areas in seven states: Florida, Georgia, Illinois, Kentucky, Ohio, Texas and Utah. The merger also would diminish competition in up to 58 metro areas within 14 states, again including Kentucky.
A recent AMA study specifically about the Humana/Aetna merger showed it would concentrate market power in Louisville. To show this, the AMA used an index of market concentration called the Herfindahl-Hirschman Index (HHI). An HHI score of 10,000 shows total market concentration, and zero shows perfect competition.
According to the AMA, U.S. Department of Justice and Federal Trade Commission guidelines warn that if an area sees its HHI score jump by over 200 points after a merger, that raises concerns about competition.
Developer: Plumbing regulation, state tax policy delays development in downtown Louisville
Insider Louisville recently sat down with developer Steve Poe for a wide-ranging interview about the Aloft hotel his business Poe Companies is opening in downtown Louisville, along with the decision to put four of his Louisville apartment complexes on the market.
While IL had his attention, we also wanted his thoughts on how Louisville compares to other cities he’s worked in, and what he considers local and state barriers to development.
“Louisville has as pro-business attitude, which I think is very helpful,” Poe said. But “from a growth standpoint, we aren’t keeping up with Nashville and Denver and Austin.”
State tax policy is partly to blame, he said, adding that cities like Louisville should be able to enact initiatives such as the LIFT tax, a 1-cent local option sales tax, without Frankfort’s approval. The tax would have been collected by Metro Government to pay for various city projects.
“We’re still, as a state, trying to figure out that we are no longer dominated by rural economy, and our cities need to be dealt with differently,” Poe said. “The fact that the city has to ask permission for everything they do from the state can sometimes slow us down.”
Another policy issue affecting development, Poe said, is a state regulation that requires buildings taller than 45 feet to use cast iron pipes and fittings, which is more costly than some of its counterparts.
“One thing that state government and local government could do to help stimulate more development downtown is to change that law,” he said.
Poe noted that the plumbing in the Aloft hotel cost $700,000, and plumbing in a single 14-story building at RiverPark Place cost $3 million. The high cost can deter developers. “It is a major obstacle.” — Caitlin Bowling
Barret Avenue storefront next to former Speier Hardware for lease
In March, we wrote about entrepreneur Joda Pyle purchasing the venerable Speier Ace Hardware site at 992 Barret Ave. Now Pyle is trying to lease the adjacent property, which he also owns, at 994 Barret Ave., though he told IL he’s open to the idea of potentially leasing both spaces.
Right now, 994 Barret Ave. is mostly being used for storage, said Pyle, who would like to see something interesting — like a restaurant, coffee shop or other hospitality use — move in there. “Something needs to change on that block, dude,” said Pyle said. The space that’s for lease is about 2,000 square feet.
If the right person came along and wanted to take over both 992 — now called Goomby and operating as a hardware store and a skate shop — and 994, Pyle said he would be open to leasing both spaces. The combined total space is 4,500 square feet.
While there are other dining establishments on that block, including the Monkey Wrench and Barret Bar, they don’t open until after 5 p.m. So he would like to see some kind of restaurant that opens earlier in the day. “It will help us generate more income on the block for everybody,” he said. — David Serchuk
Louisville Vegan Jerky Co. moving to larger production facility
Typical reasons a business moves include outgrowing their space or the termination of a lease. The reason Louisville Vegan Jerky Co. is moving: Its new oven wouldn’t work in the old space.
Louisville Vegan Jerky Co. owner Stanley Chase III bought a $40,000 oven, which will make more than double the jerky in one-fourth the time, he said. But they couldn’t install it at their kitchen at 1164 S. Brook St., a mostly residential area, because it didn’t have the necessary electrical wiring and electricity to power the oven.
“The people we bought the oven from didn’t take returns,” Chase said. “I never even would have started looking for this place if we didn’t buy an oven that didn’t fit.”
It was serendipitous that he did, however. Not long after securing a new production facility and office space at 4708 Pinewood Road, off Bishop Lane, Chase said he received a call from a New York distributor who wanted to introduce the product into the 1,000 stores it works with in New York state.
“We are at capacity for cooking jerky” at the 1,200-square-foot kitchen at Brook Street, he said. “We can grow huge in here.”
Its new headquarters is 4,200 square feet and includes an office, a kitchen, a storage and pallet preparation area, and a break room. To help pay for new office and renovations, Chase raised money via Bolstr.com, a private online fundraising website that connects credible investors with businesses. Louisville Vegan Jerky Co. was able to raise $25,000 from three investors in less than 24 hours.
The first day of production at its new headquarters will be Oct. 5, and the vegan jerky company is poised for more rapid growth.
The product is currently sold online and in 250 stores, including one in Australia and not including the new stores it soon will enter in New York. Chase also is talking to a distributor in the United Kingdom about entering the European market.
Louisville Vegan Jerky Co. last month made and sold 14,000 bags of jerk, up from 6,000 bags at the beginning of this year, Chase said. He expected to produce 25,000 to 30,000 bags starting the first quarter of 2016 to keep up with demand from new distributors.
The growing demand also means a need for more employees. Chase recently added his middle brother to the payroll and plans to hire one to two more people before the end of the year.
Louisville Vegan Jerky Co. still has 17 months left on its Brook Street lease, but in a cool Louisville twist, the company plans to sublease the kitchen to another local start-up, Louisville Cream.
Louisville Cream owners said they were slammed with work and couldn’t chat for this story, but they’ve previously said the small-batch ice creamery has struggled to meet demand for its product. The new kitchen will allow them to make more ice cream and focus on getting the brand into stores, Chase said.
Coming soon to a liquor store near you … if you’re lucky
With the cooler temperature comes the release of some new premium bourbons, along with an apple brandy. Let’s start with the brandy, shall we?
Copper & Kings is producing its first aged apple brandy just as those fall flavors like pumpkin and apple invade everything from coffee to lipstick. This release sounds much better than a pumpkin-spiced latte from Starbucks. Aged in used bourbon barrels with Oloroso sherry butts and sherry casks, the apple-brandy blend has a minimum age of four years and is 100 proof — which should provide a nice kick.
The C&K Craft Distilled American Apple Brandy hits store shelves this month with a $40 price tag.
Next up is announcement of Buffalo Trace Distillery‘s release of its 2015 Antique Collection later this month. The highly anticipated collection (read: good luck finding one) features five limited edition whiskeys of various ages, recipes and proofs. Here’s a rundown:
George T. Stagg — Past releases have won numerous awards, and this one comes in at 138.2 proof. The bourbon went into the barrels in 2000, but unfortunately, those angels were a bit thirsty, because 84 percent of the 128 barrels was lost to evaporation (also called the angel’s share).
William Larue Weller — This wheated bourbon also took numerous awards in the past, and this year’s release has been aged 12 years and is 134.6 proof — yowza!
Thomas H. Handy Sazerac Rye — Last year’s straight rye whiskey was named the “World’s Best American Whiskey” at the World Whiskies Awards. It was distilled in 2009 and comes in at 126.9 proof.
Eagle Rare 17 Year Old — What is there to say about a 17-year-old bourbon besides, “Give me a bottle!”? Last year’s release won the gold medal at the International Wine and Spirits Competition, and the proof, sadly, isn’t listed.
Sazerac Rye 18 Year Old — This is the last of Buffalo Trace’s 18-year-old straight rye whiskey, which was put into a stainless steel tank a few years back to prevent further aging. And no proof is listed.
The Antique Collection was first introduced in 2000 and is partly to blame for the hard-to-find, limited-edition bourbons. The suggested retail price for each starts at $80, and they will “be available” at “stores” near you later this month and early October.
Finally, Michter’s is releasing its Michter’s Toasted Barrel Finish Bourbon, which takes fully aged Michter’s bourbon and finishes it off in another barrel that has been toasted but not charred. This enhances the delectable flavors of vanilla and caramel already present in the bourbon. It comes in at 91.4 proof and sells for about $53 per 750ml bottle. —Sara Havens
Hellhouse — Hell, yeah!
For the better part of the past five minutes I have been muttering some seriously foul curse words (in my head out of respect for my co-workers). Turns out, what could be the hottest party of the year is scheduled on the same night as my dear friend (and fellow Insider) Christine’s wedding. Damn you, Christine.
For the rest of you: Via Studio and Jim Beam present “Hellhouse: An evening of Dancing and Debauchery” on Halloween night from 7 p.m. to 1 a.m., with an after party to follow. This elaborate event is being held underneath the Second Street Bridge and will feature a roster of professional DJs, including (how cool is this?) Rock and Roll Hall-of-Famer Mix Master Mike of the Beastie Boys.
Profits will benefit the National MS Society Kentucky-Southeast Indiana Chapter. The event also will be the consumer launch party for Jim Beam Apple Whiskey. We’ll have more info for you — including ticket prices — soon. But mark your calendar now. — Melissa Chipman