Todd Blue is serious about business. About being politically correct, not so much.
The founder and chairman of Cobalt Ventures, a real estate investment and development firm, is leaving, moving his family and business operations to Houston. Blue says he’s not leaving in protest. But he makes no secret of the fact that he doesn’t see this town as business focused.
In an interview Friday, he acknowledged he was being provocative, “but I like to get people thinking.”
Blue says his departure is more about Louisville than it is about him.
“‘Do we want to lose young, aggressive entrepreneurs?’ is a different question than about Todd Blue leaving town,” he said.
Love him or hate him – there doesn’t seem to be much middle ground – Blue has helped build Louisville, converting several historic buildings into condos and offices, and building Preston Pointe.
He has also proposed to tear down parts of it for surface parking, most notably back in 2011 when Mayor Greg Fischer intervened after Blue got a demolition permit to take down the Whiskey Row buildings he owned. Which garnered the scorn of preservationists.
Not surprisingly, Blue says Louisville is not business friendly, and is starting to pay for its lack of support for the private sector at a time when the rest of the nation is booming.
At the heart of Blue’s current criticism is the fact that the University of Louisville has turned into one of the largest developers. U of L Development Co., a business run by the University of Louisville Foundation, is currently Louisville’s largest builder of speculative office buildings. Blue pointed to the growth of U of L and its campus as correlating directly to the decline of Louisville’s private business sector: “It’s a documented fact.”
In other cities Louisville’s size, the skylines are dotted with construction cranes, he said. There hasn’t been a new skyscraper built in Louisville since the ZirMed Towers in 2008. The last major central business district office tower was Aegon Center, built in 1993. Since then, Aegon has left Louisville, with Mercer, the New York City-based financial consulting firm, now the main tenant.
Blue said the state has taken all those resources and instead of diverting some to private industry, “we built U of L’s campus. We could’ve built 10 high-rises with those resources… It’s not a slight to U of L. Bravo to them for having the strongest, most active and most knowledgeable lobby in the state.”
Executives with at least six developers have complained to Insider Louisville in background conversations about trying to compete against U of L, which is a state-funded university with a tax-exempt foundation that claims to have raised $1 billion. None of those sources agreed to be interviewed for this post.
Only Blue has agreed to go on the record. And as expected, U of L officials declined comment.
This is not the first time Blue has jousted with U of L officials. In 2012, Blue resigned from the Louisville Arena Authority board after arguing U of L’s contract as tenant at KFC Yum! Center is overly generous. U of L keeps about 88 percent of the revenue from basketball games at a time when overall arena finances don’t cover servicing the $348 million arena debt. Without the $9.8 million Louisville Metro Government pays each year, the arena authority would default.
One of Louisville’s weaknesses, according to Blue, is that too few people have too much power, chief among them U of L President James Ramsey. “We may say we don’t want to, but we have an economic development model built around institutions, not individuals,” Blue said.
He singled out Ramsey in particular as having built a cult of personality: “I’ve never been to a city our size and seen so many billboards with the college president’s face on them. His face is everywhere.
“He’s like Putin.”
Blue’s move to Houston dates back to 2006, when he created indiGO Auto Group. In 2010, he bought Porsche of North Houston, one of the highest-volume Porsche dealerships in the United States. He bought Lamborghini Houston in 2011.
In 2012, he formed Blue Ltd. as the holding company for all his businesses, including Cobalt Ventures and Auto Group Texas, which includes indiGO Auto Group. The dealerships include Maserati, Lamborghini, Audi, Aston Martin, Porsche, Land Rover and Jaguar.
In Texas and California, unlike in Louisville, Blue has been embraced by the local media.
In a 2013 profile by the Houston Business Journal, a sister publication of Business First, Blue is credited with rescuing Houston’s exotic car business when the industry was at rock bottom:
When Blue put Porsche of North Houston under contract in mid-2009, the economy — and especially the automobile industry — was in a slump.
But Blue, an avid car collector who owns a 1973 Ferrari Daytona convertible, a 1957 BMW 503 convertible and a 1966 Lamborghini 350 GT, had heard that Houston’s economy was faring better than most and decided to take a chance.
“Not only was Houston a pro-entrepreneurship city, it was a car town and a Tier 1 city with a growing population and a diverse and heavily successful employment base,” he said. “Based on that, I thought the Porsche dealership was an undervalued asset, despite the economy. We were entering the industry at a low point.”
Now, with his operational focus completely on Texas and California, Blue said he will not be building the Louisville Maserati dealership near Hurstbourne Parkway and Shelbyville Road he announced in early 2013: “Another dealer/operator will do it. It will happen.”
The abandoned former restaurant on the site at 340 Whittington Pkwy was demolished last month.
At the same time his business focus was shifting west, Blue was becoming a target of preservationists in his hometown after he bought a cluster of vacant historic Main Street buildings. In 2010, he announced seven Main Street buildings he owned along historic Whiskey Row were too deteriorated to preserve. His plan was to demolish the buildings, but preserve or recreate the historic cast iron facades in a $50 million hotel and retail project he dubbed Iron Quarter.
At the time, Blue was in discussions with Louisville-based Musselman Hotels.
Iron Quarter had debuted in 2007 after Blue redeveloped several historic Main and Market street buildings, including Mercantile Gallery Lofts. He also was part of the group that developed Preston Pointe office building and condos along with his brother Jonathan Blue and others. But Iron Quarter, like many Louisville projects, went into hiatus during the Great Recession.
By May, 2011, the newly arrived Fischer Administration introduced a plan to save the buildings, including recruiting a group of investors led by Brown-Forman heirs to buy five of the seven buildings from Blue. That plan is still under development, and Blue has demolished his two buildings – but not the facades – for a surface parking lot.
Blue said his family is sorry to be leaving. “But Louisville will always be a part of our family, and we’ll always be part of Louisville. We’ve been here since 1913.”
He added, “This city is gorgeous. It has so much going for it. It just needs to believe in itself. But it’s hard to believe in oneself when you have so much power in so few hands.
“It’s a beautiful, beautiful community. But there is nothing to gain by being politically correct.”