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.
Affordable housing units coming to Norton Commons
Architect Steve Kersey is planning to bring 21 three-bedroom affordable housing apartments to the upscale, high-priced Norton Commons neighborhood.
“I’m excited,” Kersey said. “I think it’s going to be a great project.”
Kersey was just approved for funding from the city’s Louisville CARES program and has applied for $314,926 in tax credits from the state to help cover some of the project’s cost, estimated at $2.96 million. Now, he and his partners on the project need to figure how out much debt versus equity they want to use to fund the project.
He said the Louisville CARES fund is “pivotal” to getting the project done. “It fills a gap that was otherwise challenging for us.”
The units will be built on Delphinium Street in Norton Commons, and Kersey said he expects to close on the property in the fall.
This won’t be the first affordable housing project in Norton Commons, but it will be the first aimed at families. The 48-unit Norton Commons Senior Residences is an affordable housing property, too.
“The thing that pushed our thinking in that direction is the Kentucky housing administration identified areas of opportunity,” Kersey said. Areas of opportunity are neighborhoods with “great schools” where affordable housing isn’t normally found.
Residents of the 21 units will need to meet certain income requirements.
“There are (heads of) young families that work in Norton Commons as waitresses or grounds keepers,” Kersey said. “We are going to be able to provide those young families with an affordable housing option.”
Kersey is co-owner of Kersey & Kersey Architects as well as owner of Integrated Services here in Louisville. Notably, he also is involved in the redevelopment of the former Charles D. Jacob Elementary School. St. Louis-based Bywater Development Group is transforming the school into affordable and energy-efficient apartments for senior citizens. —Caitlin Bowling
Bristol patrons petition Kroger to rethink decision to boot restaurant
People feel strongly about their green chili wontons.
An IL reader brought to our attention the fact that customers at the Bristol Bar & Grille’s Prospect location have started a petition asking Kroger Co. to allow the local restaurant chain to continue operating at 6051 Timber Ridge Drive. As IL previously reported, the restaurant will close its Prospect store on May 29 after Kroger declined to renew its lease.
“We are very flattered they would go to such lengths to try to keep Bristol in its current location in Prospect,” T.J. Oakley, vice president of operations at the Bristol, said in a statement emailed to IL. “Bristol did its due diligence to renew the lease of that property, but was not afforded the opportunity to negotiate with the owners. By the time we let the public know we were leaving the property, there was nothing more that could be done to change the situation.”
However, Kroger Co. tells a slightly different story.
“The current tenant’s representatives communicated to Kroger that they were not profitable in Prospect and were considering closing the restaurant. That was followed with a very low offer to renew the lease. With that much uncertainty, Kroger was forced to begin seeking a new tenant,” the company told IL in an emailed statement. The company noted that it had received the petition.
Oakley countered that Kroger’s statement was untrue.
“This was our most profitable year to date. It was making money. We were not considering closing. We wanted to negotiate to renew the lease, but they never responded,” Oakley said.
Since the announcement, the Bristol has received calls from multiple people willing to sell or lease property in Prospect to the restaurant, according to Oakley. However, the company plans to focus on closing the store before deciding its next move.
“We hope to re-evaluate our options for bringing Bristol Bar & Grille back to that part of town once the closing of the current Prospect store is complete,” Oakley said.
Louisville Originals posted on Facebook that those who received or bought a web certificate to the Bristol in Prospect should call Powercard at 877-229-7299 to receive a gift card that can be used at any Louisville Originals restaurant. —Caitlin Bowling
Is a restaurant headed to O’Malley’s Corner?
With construction underway on the 30-story Omni Hotel and Residences, interest in the former O’Malley’s Corner/Coyote’s building has peaked, according to Ward Plauche, who ran the businesses with Don Blackburn.
The property sits catty-corner to the future Omni and once housed five different clubs that were connected. Once upon a time before Fourth Street Live and the downtown revitalization, it was the center of downtown nightlife.
However, 27,000 square feet is still available for lease. The space can either be taken for one business or subdivided, according to a listing on KCREA.
“We’ve got a lot of interest in it lately,” Plauche said, adding that he’s been talking to “a couple groups.”
One possible tenant is a restaurant. Plauche told IL he is in negotiations with a restaurant group, but he declined to provide more details, noting that a lease agreement hasn’t been signed.
The block has sat mostly empty since 2009, with the exception of Bader’s and the adult goods store, but it’s unlikely to remain that way with such a large and high-end development as the Omni Hotel set to open sometime in 2018. —Caitlin Bowling
Report: Change in antitrust strategy presents challenges for health care mergers
Aetna, Humana and other health insurance giants are facing a tougher battle than before to get their mergers approved because antitrust regulators have changed the way they look at competition, a report by Bloomberg suggests.
The antitrust regulators — the U.S. Department of Justice and Federal Trade Commission — previously looked at how mergers affect competition at the city, regional and state levels. But that seems to have changed under the Obama administration.
The agencies “have opposed a string of proposed combinations between big rivals — like the merger of American Airlines and US Airways, and Comcast Corp.’s failed deal for Time Warner Cable — when they see harm to competition nationally, not just locally,” Bloomberg wrote.
The new approach suggests a tough battle for the health insurers, given that Aetna is trying to buy Humana at the same time Anthem is trying to buy Cigna.
The DoJ’s antitrust chief said in March that the mergers are “transformational,” that they will be scrutinized “very, very carefully,” and that the agency is weighing how the mergers would affect competition in local, statewide and national markets.
Fiona Scott Morton, a Yale economics professor and former antitrust economist, told Bloomberg that the regulators’ new approach “presents challenges” for companies that are under review.
“The standard solution of offering some isolated divestitures in the worst-affected cities or states may not satisfy a regulator that is looking to see competition preserved at the national level,” she said. —Boris Ladwig.
Humana CEO tells graduates to value family, altruism
Humana CEO Bruce Broussard told some Georgetown University graduates that they must not confuse succeeding at work with succeeding at life.
After his mother died in a car wreck, Broussard said, he realized that he should have spent more time with family than at work.
“I … regretted that I defined life success as career success,” he said, according to The Hoya, the university’s oldest and largest student newspaper.
Broussard on Saturday gave the commencement address to 341 undergrads at the university’s McDonough School of Business.
Among other life lessons, Broussard told the students that altruism provided a path to success and that loneliness among the elderly played a significant role in their health. The CEO told the students how he recently accompanied a nurse to visit an elderly patient.
“I asked, ‘What else can we do for you?’” Broussard said, according to The Hoya.
“This individual … answered the question ‘I’m lonely,’” Broussard said. “For me, loneliness resulted in the identification of a health problem. And asking that simple question, that I would not have been able to understand in the boardroom, in management reports or in meetings, it allowed me to identify that a health problem is a loneliness problem.”
The comment showed some overlap in the philosophies of Broussard and Mark Bertolini, the CEO of Aetna, the insurer that wants to buy Humana.
Bertolini said this year that spending money on social programs — for example by providing an Uber ride to an elderly customer, allowing for social interaction and reducing loneliness — is a better investment than providing health care when somebody has gotten sick. —Boris Ladwig
Buffalo Trace Distillery invests another $200 million in more land and barrel warehouses
It’s certainly no secret we’re amid a great bourbon boom, and Kentucky distilleries are keeping up as best they can. Sometimes that means allocating products to ensure equal opportunity for all states and countries, and sometimes that means growing your distillery in every aspect from production to storage. In Buffalo Trace Distillery‘s case, that means a little bit of both.
The Sazerac-owned distillery in Frankfort, Ky., recently invested another $200 million to expand distilling operations in cooking, fermenting, bottling, more land and additional barrel warehouses throughout the next decade. In fact, next month, two new barrel warehouses — which were converted from offices back into rick houses — will be ready to fill with 50,000 barrels each, and two more will go through the same transformation later this year.
In 2017, new warehouses will be built on 200 acres of farmland the distillery purchased a few years ago, and — get this — a total of 30 warehouses are planned, meaning one new warehouse being built every five months for the next 10 years, if all goes as planned.
Distillery spokesperson Kris Comstock says this is all due to the high demand of their brands — including Pappy, W.L. Weller, Elmer T. Lee, Buffalo Trace, Blanton’s, etc. — but their supply is marginally better than it was three years ago.
“We’re still looking at shortages across the board for all of brands, and although the volumes are increasing, allocations will continue,” he says. “This is not some marketing tactic to scare consumers to buy more, or something we are making up. We wish we had distilled more years ago. The shortage is a real problem. … Believe me, I wish we had more to sell, too.”
As an avid fan of Weller 12, I’ve got my fingers crossed it’ll become more readily available in the future. With new rick houses being built every five months, hopefully I will get my wish. —Sara Havens
METCO awards $111,000 in loans to two redevelopment projects
The Louisville Metropolitan Business Development Corp. announced Thursday it awarded three loans to two separate redevelopment projects in Louisville.
The first is located at 1604 Story Ave. near Frankfort Avenue. Owners Scott Howe, Nick Phelps, Mitchell Kersting and Tyler Watkins plan to stabilize the vacant structure and improve the storefront, doors and windows, and paint the exterior. They hope to lease the first floor to a commercial business and find a residential tenant for a second-story apartment.
“It’s a rough piece of property,” Howe told IL, adding that he didn’t know the total cost of the project because it will depend on what type of business the future tenant is. Louisville-based Work Architecture + Design is helping with the renovations.
The partners received two loans — a $60,000 façade loan and $30,000 Kentucky Economic Opportunity Zone loan — to help cover some of the improvement costs, according to a news release from METCO.
The third METCO loan went to Michael Brohm and Robin Brohm for renovations to 1024 W. Market St. The couple currently operates a photography studio there, but the first and second floors are vacant, according to the release.
Homes sales continue to rise as inventory dips in Louisville
It’s unclear how long this seller’s market will last, but so far, there is no end in sight.
Again last month, the Greater Louisville Association of Realtors reported that home sales in the MLS have risen and housing inventory has dropped compared to April 2015. Sales were up 4.9 percent in April 2016 with 1,437 homes sold. The median sale price also increased 4.5 percent to $156,000.
At the same time, inventory in the MLS was 21.8 percent lower on April 15 this year compared to the same day the year prior. In Jefferson County alone, inventory was down 25.6 percent, according to GLAR.
For the year so far, home sales jumped 12.9 percent and the median price rose 3.4 percent.
“Sellers whose homes are in move-in condition typically receive multiple offers,” GLAR President Greg Taylor said in a news release. “The median price year-to-date has advanced 3 percent to 4 percent with both low inventory and low mortgage rates.”
As IL contributor Tre Pryor noted this week, depending on the neighborhood, some homes are selling in as few as 27 days, and many are selling in under three months. —Caitlin Bowling
New Chinese restaurant opens in Norton Commons
Former Heumann Environmental VP Gary Keefer has teamed up with his wife Huiqin Luo on a new business venture.
Luo and Keefer earlier this month opened Legend of China in Norton Commons.
“She likes to cook, and I like to do dishes,” joked Keefer, who lived in Shanghai for six years and met his wife during that time.
After moving back to the United States, the pair discussed opening a restaurant using Luo’s recipes and homemade spice blends. And the location only made sense since the couple lives above it.
“We have one of those work-live spaces,” Keefer said. “That kind of mirrors how a lot of the small businesses in China are set up.”
Legend of China had a low-key opening on May 13 and plans to host a grand opening in the next week. The restaurant is still looking for a couple more staff members. Those interested can call 502-528-3269.
While searching for additional staff, Legend of China has focused mostly on take-out business but would rather most its customers eat-in at the 50-seat restaurant.
The lunch menu is fairly simple. For about $10, customers can opt for chicken, beef or pork with either rice, noodles or dumplings. The dinner menu is an expansion of that, with items such as stir fry and barbecued lamb.
E-commerce company to invest $15 million, create 100 jobs in Shepherdsville
An e-commerce company plans to invest $15 million to expand its Shepherdsville operations and create about 100 jobs, according to filings with the state.
Retail Convergence.com, which specializes in flash sales for high-end fashion and merchandise, said it wants to expand its Bullitt County distribution and media production operation, which employs 311, to meet current demand and to accommodate growth.
The new employees would earn $20 per hour, including benefits.
The Boston-based company said in filings with the Kentucky Cabinet for Economic Development that it plans to spend $10.5 million on equipment, $3 million on the building and $1.5 million on other start-up costs.
Retail Convergence.com’s sites include ruelala.com, which sells apparel, furniture and food.
The state provided the company with preliminary approval for $2.25 million in tax incentives. —Boris Ladwig.
Y’all get yer sox here
Our friends at Kentucky for Kentucky, the unofficial booster club for the commonwealth, have long had a strong sock game. Now they’ve rolled their sock sales into a separate company called Southern Socks.
Currently the inventory is pretty limited, but there are more designs to come.
Today they are launching a red, white and blue sock with a map of Kentucky on it, ostensibly to celebrate Memorial Day weekend.
Both my boyfriend and I have their “Y’ALL” socks; Paul also has their socks depicting two horses making sweet, sweet love (one hopes). I’m still not sure how I feel about that.
Order them, or their other designs here. —Melissa Chipman
CLOUT: Funding for affordable housing a start, but ‘a small down payment’
In his budget on Thursday, Louisville Mayor Greg Fischer allocated $2.5 million to the Louisville Affordable Housing Trust Fund — the first allocation to the fund since its founding in 2008.
Calls to fund the trust fund have grown stronger this year with the religious-based group CLOUT (Citizens of Louisville Organized and United Together) rallying to voice concerns about the lack of funding and need for 60,000 more affordable home in the city. CLOUT asked the mayor for $5 million in funding this year for LAHTF.
Following Fischer’s budget announcement, CLOUT president Beverly Duncan praised his decision to include LAHTF in the budget but noted that there is more work to be done.
“Two weeks ago, 1,200 citizens signed cards calling on Mayor Fischer to make housing a priority — and today, he listened,” Duncan said in a news release. “This allocation helps us start to catch up with Lexington and Nashville, who both have committed dedicated annual revenue for their Trust Funds.”
“But $2.5 million is a small down payment, and it is nowhere near enough to meet the current need in our community for affordable housing, especially as more federal housing funding expires,” her statement continued. “We’re counting on Metro Council to get the Trust Fund the full $5 million it needs this year, and to establish a dedicated annual revenue source in the coming months.”
Christie McCravy, the newly appointed executive director of LAHTF, could not be reached for comment by press time, but she previously told IL that getting money for the trust fund was her number one priority. —Caitlin Bowling