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.
Humana cuts staff in home-based care division
Humana has cut jobs in its home-based care division, primarily in Florida and Ohio.
According to various tips IL obtained, the layoffs affected hundreds of employees, including nurses — though Humana declined to provide information about how many people were let go.
Spokesman Tom Noland said in an email that the cuts occurred with Humana At Home, a program that identifies patients with significant and often multiple health conditions that are likely to require additional intervention, especially if not treated properly.
The program pairs health professionals with patients to help them learn about and take advantage of their health benefits and to give them personalized guidance to reduce their risk for serious medical procedures. While the program improves patients’ health, it also boosts Humana’s profits and its ability to offer other services because it cuts health expenditures for the most costly patients.
Noland said most of the affected employees are in Florida and Ohio, and that the company’s total employment in the Louisville area remains the same, at about 12,500.
He said leaders of the Humana At Home team said the decision was difficult and “the result of what they’ve learned in the eight years since we started Humana At Home.”
The insurer is providing affected employees with at least 60 days’ notice, severance benefits and job placement assistance, Noland said. “In some cases, these Humana At Home associates will be eligible for new roles within Humana.”
Despite the cutbacks, Noland said that “helping our members living with chronic conditions maintain their highest possible quality of life remains the goal of Humana At Home and a critical element of Humana’s strategy going forward.” —Boris Ladwig
Kentucky real estate industry breaks home sales records in 2016
According to a report from the Kentucky Association of Realtors, 2016 was a year of records for the real estate industry in Kentucky — even when compared to the pre-recession housing boom.
The number of homes sold reached 52,123 in 2016, outstripping the prior year by more than 3,800 homes, according to KAR, and total home sales volume statewide reached $9.17 billion, an 11.7 percent increase over 2015. Both are record numbers for the state, KAR noted.
The big question is: How long will it last?
KAR leaders said they wish they knew. “It looks like sustainable, manageable growth thus far,” Lamont Breland, the 2016 KAR president, told Insider Louisville. “I’m encouraged. I think if every year can be like last year, that’d be awesome.”
Housing demand in the state is high, and if home values were rising rapidly as a result, that could be a sign of unsustainable growth. But they aren’t, Breland said.
Looking at demand in Louisville, one might expect to see home values jump 15 percent, he said. However, the average selling price in 2016 was $196,901, up just more than 3 percent compared to 2015, according to the Greater Louisville Association of Realtors.
The demand has grown as some existing homeowners are looking to upgrade and as millennials are entering the market. Millennials overall have waited longer to buy homes, which gave rise to misconceptions that millennials weren’t buying after seeing their family go through debt problems or divorces, Breland said.
“As part of our research we found, millennials aren’t as bad as we were told. They actually want to own homes,” he said. “They want to be able to afford a home. They’re not going to rush into it.”
Some construction companies have returned to speculative home building, but others haven’t after being devastated by the recession and losing quality craftsmen. Homebuilders can’t keep up with current demand, and available inventory remains low.
Mike Becker, the 2017 KAR president, said low interest rates also are playing a role in keeping housing inventory low. In Northern Kentucky, he said, active home listings used to stay around 4,000, but during the past 18 months, the number of listings remained under 2,000.
“When the interest rate was really low, a lot of people refinanced or remodeled and refinanced, and they don’t want to walk away from that 3 percent interest rate,” Becker said, even though interest rates remain relatively low at 4.5 percent.
Existing homeowners may be able to sell their home a good price, but then they will have to pay a higher interest rate on their mortgage and face a market with limited housing options.
“People want to buy a house, and there’s not a lot to choose from, so they scoop up the best that they can find at the time. They don’t have the time to go look for weeks and months,” said Hunt Cooper, KAR’s director of communications, marketing and member services. “By the time they come back, it’s gone, so they have to move quickly.” —Caitlin Bowling
KFC teases Super Bowl commercial with dueling Colonels
The moment has finally come. During Super Bowl LI, two KFC Colonels will face off.
When Louisville-based chicken chain KFC replaced its first Colonel, Darrell Hammond, with Norm Macdonald in August 2015, there was a question about when the Colonels would have a showdown.
A year and five months and many Colonels later, comedian Rob Riggle’s Col. Harland Sanders will battle the newest Colonel, actor Billy Zane. KFC has been teasing the fight this week with a series of commercials, such as the one below, posted to its YouTube channel.
Based on the commercial above, it seems that Zane’s gold-plated Colonel has a solid advantage.
In a news release about the new ads, KFC stated that a 15-second commercial would air during the fourth quarter of the Super Bowl, which the company said is the first time it has ever paid for an in-game ad.
“KFC is back — back to making chicken the way our founder, Colonel Harland Sanders made it, and back in pop culture — so we’re celebrating on the biggest advertising stage of the year: the Super Bowl,” Kevin Hochman, KFC U.S. chief marketing officer, said in the release.
Fellow Louisville-based chain Papa John’s International is the official pizza sponsor of the NFL, but it doesn’t typically run ads during the Super Bowl. The company announced that it would run a 60-second advertisement a few hours before the Super Bowl kickoff to introduce the pizza chain’s new logo and its new “Pizza Family” branding campaign.
“Super Bowl Sunday is our No. 1 sales and delivery day, so it seemed fitting to unveil our new ‘Pizza Family’ brand campaign ahead of our biggest day of the year,” John Schnatter, Papa John’s founder, chairman and CEO, said in a news release. “From our pizza makers and delivery drivers to our trusted ingredient suppliers and our loyal customers around the world — this is the Pizza Family that makes it all possible.” —Caitlin Bowling
For sale: Commercial Kentucky lists 712-acre parcel in Bullitt County
In Jefferson County, it’s difficult to find large swaths of land even in the far reaches of the county that aren’t already developed or protected from development.
Nearby Bullitt County still has plenty of undeveloped land, however, as evidenced by a new listing from Commercial Kentucky. The real estate firm is advertising a 712-acre plot of land about one mile east of Interstate 65 in Shepherdsville.
The parcel features 486 acres of “raw land” with fields, wooded areas, rock outcroppings and the Salt River, as well as the 226-acre Heritage Hill golf course. Although other regional golf courses have shuttered, the par-72 public golf course is still in operation.
The land originally was intended to be redeveloped into a high-end single family home subdivision, with the golf course as an amenity. Commercial Kentucky is advertising the land to investors, single-family home developers and “even individuals desiring a private residence with substantial acreage.”
Indiana apartment developer submits plans for new Louisville complex
Indianapolis-based Cityscape Residential continues to invest in development in Louisville.
The company filed plans this week for a 370-unit apartment building at 1411 Tucker Station Road near Blankenbaker Station Business Park, Xscape Theatres and Main Event entertainment center. If the current plans are approved, roughly 39 acres will be developed into multiple three-story apartment buildings, a dog park, a car-washing station and a clubhouse with a pool.
“It is a very good idea from the standpoint of reducing vehicle miles traveled (with its resulting positive impact on air quality) to have housing located in close proximity to large workplace centers,” states a letter submitted to Louisville-Jefferson County Metro Government.
Cityscape Residential developed the 312-unit Apex on Preston and is wrapping up construction on the 300-unit Axis on Lexington. The company also has a 249-unit apartment complex in development across from The Paddock Shops. —Caitlin Bowling
Jury still deliberating in Texas Roadhouse v. EEOC
The age discrimination trial against Louisville-based Texas Roadhouse continues in federal court in Boston.
U.S. District Judge Denise Casper Wednesday sent the jury back to the deliberation room after they said they couldn’t reach a unanimous decision, according to a report from Law360. The eight-person jury started deliberating Monday afternoon.
The Equal Employment Opportunity Commission filed a lawsuit against Texas Roadhouse in 2011, asserting that the steakhouse chain discriminated against job applicants who were 40 and older.
During the trial, the EEOC presented evidence including job applications with stickers that read “old,” “super old,” and “old and chubby,” Law360 reported. The EEOC also claimed that only 1.6 percent of the employees hired for front-of-house positions from 2007 to 2014 were older than 40, which violates the Age Discrimination in Employment Act.
Texas Roadhouse argued during the trial that it did not discriminate against older job applicants and that the EEOC could not legally file a lawsuit claiming systematic discrimination.
Typically, the EEOC responds to complaints from individuals and works with them to file a lawsuit. However, in this instance, EEOC brought the lawsuit itself. In a countersuit, Texas Roadhouse has called the lawsuit an “unprovoked attack.”
“The EEOC recently admitted in court that it began its investigation leading to the filing of the case without any complaint from anyone 40 or over who claimed they suffered discrimination due to their age,” according to the countersuit.
Depending on the outcome, the case could set a precedent. If the jury sides with the EEOC, then it would open the door for the agency to pursue other discrimination claims without first receiving complaints regarding specific companies. News site ProPublica said the case against Texas Roadhouse is “the largest age discrimination case the EEOC has brought to trial in more than three decades.” —Caitlin Bowling
Two ‘million dollar babies’ already in 2017
EnterpriseCorp has made a mission to up the number of “million dollar babies” in Louisville in 2017. Those are local startups that have raised $1 million or more. As of the end of January, Louisville already has two.
At the Venture Connectors Luncheon on Feb. 1, Executive Director Lisa Bajorinas announced that Rabbit Hole Distillery has closed a $5 million round from local and angel investors.
Rabbit Hole is a craft distillery in NuLu that will be making bourbon, rye and other spirits as well as housing barrels for other distillers.
CEO Kaveh Zamanian told IL, “we actually raised $8.5m from local and angel investors. The funds will be used for operations and infrastructure of the distillery.”
The other “million dollar baby” was announced at the January Venture Connectors’ luncheon, Ben Reno-Webber’s MobileServe, an app that lets businesses track employee’s service hours and helps nonprofits track volunteers, closed on a $1 million round.
Also crushing it this month is Elizabethtown’s Schedule It, which is a software platform for insurance adjusters. The company received a $700,000 investment last month from the Enterprise Angels, Mike and Dana Bowers, Marshall Ventures and the Sequel Fund.
PolyGroup, from Southern Indiana, which creates Nouvex, anti-microbial copolymers that can be used on operating room instruments, also raised $125,000 from local angels. —Melissa Chipman
SummerWorks applications open early; program gets a lift from a donation
The Mayor’s SummerWorks program is hoping to break enrollment records this year, boosted by a $250,000 donation from former Kindred CEO Paul Diaz and his family, which will be divided over several years. Applications are open earlier than usual in hopes that even more youth and employers will sign up for the initiative that pairs applicants to open summer jobs.
In 2011, the first year of the program, 200 youth found jobs. Last year, 140 companies hired more than 5,100 students for summer jobs through the program. Louisville’s major employers like GE, Humana and Kindred have participated in the program as well as a number of area small businesses.
People can also sponsor a job at a city agency or nonprofit for $2,500.
Youth age 16 to 21 can apply. The program allows participants to earn a paycheck, explore career opportunities and learn job skills. Job seekers and employers can sign up on the website now. —Melissa Chipman
It’s better in the Bluegrass: Louisville and Lexington top 2 cities for early retirement
Hey, we’re no Boca, for sure, but according to SmartAssist, Louisville is No. 1 among the nation’s largest 80 cities when it comes to early retirement. Believe it or not, our little brother Lexington scooped up No. 2. Lexington’s key differentiator was its higher income tax.
SmartAssist heaped fiscal praise on our fair city: “The Gateway to the South is… an excellent option for people looking for a city where they can retire early. Louisville has low housing costs, annual health care costs of less than $6,000 on average and an average effective income tax rate of only 12 percent. Plus the sales tax is a relatively low 6 percent. While living cheaply is certainly a perk, Louisville does come with a few drawbacks that retirees will want to know about. For one, it’s ranked 48th in our study for number of medical facilities per resident.”
Unless you’re rolling in dough, don’t plan on retiring as a “coastal elite;” the highest ranking city in the Northeast is Boston at No. 43. If you have your heart set on making like Dorothy and the girls and spending your golden years hanging out on a Florida lanai, your best bet is St. Petersburg at No. 9. —Melissa Chipman
Ford reports strong demand for Louisville-made vehicles
Ford Motor Co. reported strong demand for the Louisville-made Escape and Super Duty in January, though overall sales fell slightly compared to January 2016.
The Dearborn, Mich.-based automaker said sales in January fell to 172,612 vehicles, down 0.6 percent from a year earlier. General Motors said sales were down 3.8 percent.
Ford said SUV sales improved 5 percent in January, with demand for the Escape, made at Louisville Plant, improving 7.1 percent.
Truck sales rose 5.5 percent, “supported by strong retail gains from both F-150 and Super Duty,” Ford said.
Car sales fell 20 percent.
Erich Merkle, Ford’s head sales analyst, said that the company’s January results were a “win” because retail sales increased 6 percent, while the average transaction price rose $2,500 at a time that the industry as a whole booked a decline. In addition, Merkle said, overall sales comparisons to the early part of last year are skewed because fleet customers — rental, commercial and government — front-loaded their sales in 2016.
Ford’s sales fell less than 1 percent in January even though fleet sales fell 13 percent, Merkle said. —Boris Ladwig