TLR_C1-C4.indd 1 Lane Report ’S BUSINESS NEWSSOURCE FOR27YEARS The Yearling pricesshow early signsof industry recovery; recovery; Thoroughbred industry big betmadeonCalumetFarm PICKING UP THE PACE Page 30 LANE ONE-ON-ONE: GREG FISCHER LANE ONE-ON-ONE: GREG FISCHER AUGUST 2012$4.50 Louisville Metro Mayor Louisville Metro Mayor 8/3/12 12:21PM

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Kentucky Department of Agriculture Kentucky’s New Brand of Agriculture

t is 6am, and while most of us are just of Agriculture. Comer, Kentucky’s newly- pressing the snooze button, James elected Commissioner of Agriculture and a IComer is already at the office, calling beef cattle farmer himself, is no stranger to staff, reading market reports and setting long hours and hard work. That was not the about his mission: to restore the public impression Kentuckians had of the scandal- confidence in the Kentucky Department ridden previous administration at the KDA.

Kentucky Department of Agriculture

Comer insert 2JM.indd 1 8/3/12 10:39 AM “I haven’t sugarcoated the challenge ahead of us… protection body in the state,” Comer said. “We regulate we are raising the Titanic here,” Comer has said. everything from the fuel pumps to the scanners at By now, it is no secret that Comer’s predecessor, the grocery stores. This department touches every Richie Farmer, exercised questionable judgment. Kentuckian everyday, so if we fail at our jobs, every That may be putting it lightly. As one of his first acts Kentuckian suffer s .” in office, Comer bravely took on a scandal involving And to be clear, Comer wants to represent every a member of his own political party and requested a thorough and sweeping audit of the operations of the KDA’s previous administration. His marketing department is “My first day on the job, employees were lined down the hall, all wanting to blow the whistle on the working on a 100% Kentucky waste, abuse of power and mismanagement they had Proud program that will set strict endured,” said Comer. “I had two options at that standards for Kentucky-grown point: I could sweep it under the rug or I could clean agricultural products. out the closet.” Comer chose the latter, and that decision may well save a Department on the brink of disaster. Just this month, Comer appointed a task force to address the Kentuckian, regardless of political party. And that is Department’s fuel lab, which the audit found was reflected in the makeup of his staff. Comer is the only losing taxpayers roughly $900,000 per year. This is constitutional officer to appoint a truly multi-partisan just one of many serious problems Comer will have to team. Most recently, he brought on former Democrat fix quickly. State Representative Fred Nesler, also a farmer, to help “People don’t realize we are the largest consumer with budget, legislative and operations matters. The

Kentucky Department of Agriculture

Comer insert 2JM.indd 2 8/3/12 10:39 AM move raised some eyebrows among the political elites, into progress on some major agriculture initiatives. but Comer says it creates an idea-rich working group. He has been an ardent and steadfast supporter of “I don’t care about partisanship,” Comer says. “I want Kentucky’s horse industry and he believes the people, talent. I want experience and ideas. I am not arrogant not politicians, should decide the issue of expanded enough to believe that these qualities exist only in gaming. And at this year’s State Fair, Comer will stand members of my political party.” with Republican U.S. Senator Rand Paul and Democrat Ironically, it is this non-partisan approach that has State Senator Joey Pendleton for a major announcement branded him a rising star. He recently made his national in support of industrial hemp. media debut on Fox Business Channel, discussing “I’m not going to be owned, used or co-opted by Kentucky’s drought crisis and relief that is available anyone or any group,” Comer says. “I am my own to farmers. And this year, Comer was chosen to serve man. If I believe an issue is right for Kentucky and as emcee of the Fancy Farm Picnic, the world-famous right for our agriculture family, I’m going to push it.” political speaking event that marks the official kick-off And Comer is pushing a lot of ideas right now. to campaign season in Kentucky. This honor is typically With the audit in the rearview mirror, he is sinking reserved to Kentucky’s elder statesmen, but Comer was his teeth into some substantial new initiatives. the ideal choice, according to the Picnic’s organizers. His marketing department is working on a 100% “The man got more votes than any other person on Kentucky Proud program that will set strict standards the ballot last year,” said Fancy Farm planner Mark for Kentucky-grown agricultural products. His Office Wilson. “He is humble and he is not afraid to get dirt on of the State Veterinarian is working on a partnership his shoes. Everybody who meets him loves him.” with First Lady Jane Beshear’s Office to put together Comer hopes to parlay this publicity and good will legislation that will address Kentucky’s growing

Kentucky Department of Agriculture

Comer insert 2JM.indd 3 8/3/12 10:39 AM equine abuse problem. program hopes to secure the proper infrastructure Additionally, Comer has embraced the sustainability improvements needed to place fresh produce on the movement and is completely overhauling the menu for school lunches, an effort to combat childhood Department’s organics program. He is working obesity and find a new market for local farmers. with Louisville Mayor Greg Fischer to create a true “He’s got a lot on his plate,” said Agri-business partnership between urban centers and rural farm legend Wayne Hunt, a Comer supporter from communities. Comer has placed a great emphasis on Western Kentucky and the Chair of Comer’s transition team. “But just like in private business, a strong work ethic will determine the “I’m not going to be owned, used or accomplishments. And Comer has work ethic, there co-opted by anyone or any group, I is no doubt about it.” In just his first six months in office, Comer has am my own man. If I believe an issue visited 90 of Kentucky’s 120 counties. He hopes to is right for Kentucky and right for get to them all by the end of the year. He speaks to our agriculture family, I’m going to Kentucky’s business leaders, from chamber groups to pork, poultry, dairy, grain, cattle and soybean push it.” producers to pesticides managers. He does constant promotion for Kentucky’s agriculture industry, a group facing serious consequences from the worst drought Kentucky has seen in decades. the promotion of Farmers’ Markets and community He may not be able to make it rain, but at 6am supported agriculture (CSAs), a program in which tomorrow morning, you can bet James Comer individuals share both the bounty and the risk of a farm and the Department of Agriculture will be up and or group of farms. Finally, Comer’s Farm to School running, giving it their very best try.

WHAT IS EXCEPTIONAL, LOCAL AND SEASONAL?

FARMS TO FINE DINING. KENTUCKY PROUD.

Kentucky Proud is a program of the Kentucky Department of Agriculture - James R. Comer, Commissioner.

Kentucky Department of Agriculture

Comer insert 2JM.indd 4 8/3/12 10:39 AM AUGUST LaneThe Report 2012 Kentucky’s Business News Source For 27 Years Volume 27 Number 8

26 GREAT EXPECTATIONS GET SCORCHED Drought and record heat rewriting the initial forecast for record 2012 Kentucky farm receipts 30 COVER STORY PICKING UP THE PACE Yearling prices show early signs of Thoroughbred industry recovery; big bet made on Calumet Farm 35 WORTHY OF NOTE Women who are making a difference in the commercial and public life of Kentucky 38 AN ENVIRONMENT FOR INNOVATION Another IdeaFestival lineup of inter-disciplinary creativity aims to fertilize Kentucky’s entrepreneurial foundations 40 $2.6B BRIDGES PROJECT BEGINS Construction jobs and contractor cash flow are just the beginning of the expected economic benefits 42 ULTRA-HIGH-SPEED DATA Build-out comes slowly as market watches for signs service is financially sustainable

Departments 8 Perspective 44 Opinion 10 Fast Lane 46 The Lane List 18 Interstate Lane 47 Spotlight on the Arts 19 Kentucky Intelligencer 48 Exploring Kentucky 20 Corporate Moves 50 Passing Lane 21 On the Boards 52 Kentucky People

22 Lane One-on-One: Greg Fischer Mayor of Louisville

lanereport.com Kentucky Business News Online Read up-to-the-minute Kentucky business news stories, On the Cover current and archived copies of The Lane Report, Grooms at Three Chimneys Farm Market Review, BG – A way of life, Next – Your Future After hand walk Thoroughbred yearlings High School in Kentucky, Health Kentucky, Prep Magazine, special reports, white papers and community profiles. each morning to instill proper gait and posture habits and to familiarize them Faster Lane with being handled and taking training Email news bulletin instruction. In 2012, the Woodford Three or more times a week, the editors of The Lane County farm is preparing about 120 Report publish the Faster Lane email bulletin of fast yearlings for the sales ring. breaking and important business and economic news (Mathea Kelley photo) from across Kentucky. Visit lanereport.com to sign-up for this free, must-have, at-your-fingertips news service.

August Lane 1-24.indd 6 8/3/12 12:15 PM August Lane 1-24.indd 7 8/3/12 11:40 AM The PERSPECTIVE Lane Report ® Kentucky’s Business News Source for 27 Years

EDITORIAL DIRECTOR Mark Green • Education and Worker Training: Ken- ASSOCIATE EDITORS READY FOR JOBS? Karen Baird tucky’s performance on such key rankings Lorie Hailey Report shows how Kentucky as college and career preparation, overall education attainment and others. CREATIVE DIRECTOR stacks up as business place Jessica Merriman • Quality of Life: How health and well- being in Kentucky ranks with other states. CORRESPONDENTS BY DAVE ADKISSON Amanda Arnold; Rena Baer; • Infrastructure: The condition of Katherine Tandy Brown; Anne Charles Doolin; the state’s roads and bridges. Debra Gibson; Susan Gosselin; Robert Hadley; • Government Policy: State govern- Anne Sabatino Hardy; Feoshia Henderson; OMPETITION is fierce – in ment spending trends and debt levels. Kara Keeton; Meredith Lane; Abby Laub; sports and many aspects of daily We wanted to provide a look at Ken- Nancy Miller; Greg Paeth; Eddie Sheridan; Clife. But in today’s economy, tucky from the point of view of current Mariam Williams; Gary Wollenhaupt competition matters most in business – and potential employers, using indica- SYNDICATED COLUMNS and Kentucky is in a serious contest for tors to show how well Kentucky is doing Creators Syndicate economic growth and jobs. in providing a business climate that DESIGN How Kentucky fares in that competi- encourages job growth through busi- Stone Advisory tion has a lot to do with where it ranks ness creation, expansion and invest-

PRINTING, OUTPUT & PRE-PRESS SERVICES as a place to do business. States with a ment. The report also includes Publishers Printing Co. good business climate have greater suggestions for improving performance ■ opportunities to attract investment, cre- and moving the state – and its economy ate jobs and build more robust econo- – forward. The full report can be found PUBLISHER Ed Lane mies than states that rank poorly. at kychamber.com/readyforjobs. A good business climate that spurs The data and rankings used in the ASSOCIATE PUBLISHERS Dick Kelly economic growth benefits the state as a report come primarily from national Donna Hodsdon whole by generating more revenue organizations and government agencies. from the taxes paid by growing busi- The results are not always flattering. CHIEF FINANCIAL OFFICER Steve Rohlfing, CPA nesses and their employees. While Kentucky compares well in some To determine how the common- areas, in many others we are falling COMPTROLLER wealth compares with other states, the behind as shown in the following chart Jeromie Kirk Kentucky Chamber has prepared a that summarizes the key findings. CIRCULATION new report, “Ready for Jobs?,” that The report shows we have serious P&B Services reviews the key elements we believe work to do to make Kentucky a more WEB MARKETING & PUBLISHING make up the commonwealth’s business competitive place to do business and WebMedley climate: achieve economic prosperity. IT SERVICES • Economic Climate: An overview of The Kentucky Chamber stands ready NetGain Technologies Kentucky’s economy and the cost of to work in a constructive partnership with doing business. policymakers, businesses and organiza- • Regulatory and Tax Environment: tions to achieve our shared goal of mov- Lane Communications Group Rankings of Kentucky tax and regulatory ing the state forward. ■ is a member of policies that have an impact on business. • Employment Climate: How Ken- tucky compares with other states on Dave Adkisson is president and CEO workers’ compensation, unemploy- of the Kentucky Chamber of Commerce The Lane Report is published monthly by: ment insurance, right-to-work legisla- Lane Communications Group tion and other indicators. 201 East Main Street 14th Floor Lexington, KY 40507-2003 AREA STRENGTHS WEAKNESSES [email protected] Economic Climate • Cost of doing business • Poverty rate (5th) For more information and • Cost of living • Unemployment rate (39th) advertising rates contact: • Energy Costs (7th) • Economic mobility PHONE: 859-244-3500 Regulatory • Tax climate (22nd) • Regulatory environment (30th) & Tax Environment • Tort liability The annual subscription rate is $29. • Total tax burden as a % of income (30th) (Kentucky residents add $1.74 sales tax.) Newsstand price is $4.50. Workforce Issues • Health insurance costs (41st) • No right-to-work law Send check or money order to: • Workers’ compensation rates (31st) • Unemployment insurance rates Circulation Manager Education • Increasing college enrollment • Low overall education attainment (45th) The Lane RepoRT and degrees • Low but improving ACT scores 201 East Main Street 14th Floor • Improvement in national ranking Lexington, Kentucky 40507-2003 (14th) The Lane RepoRT corrects all significant errors that Quality of Life • Low cost of living • Health status (43rd) are brought to the editors’ attention. • Low crime rate • Well-being ranking (49th) © 2012 Lane Communications Group Infrastructure • Highways (14th) • Urban interstate congestion All editorial material is fully protected and must not be • Fuel taxes • Fatality rates reproduced in any manner without prior permission. Government • Progress in limiting spending for • State spending per capita (20th) Spending & Debt corrections, Medicaid, public • State debt (12th as % of income) employee health insurance • Pension debt (8th as % of income)

8 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 8 8/3/12 11:40 AM August Lane 1-24.indd 9 8/3/12 11:40 AM FAST LANE A compilation of economic news from across Kentucky

LOUISVILLE: GE ADDS 380 WORKERS TO MEET DEMAND FOR ERLANGER: COMAIR TO END REFRIGERATORS; MORE APPLIANCE LINES COMING IN ’13 OPERATIONS ON SEPT. 29,

GE photo 700 KENTUCKY JOBS LOST ENERAL Electric has announced plans to add 380 second-shift employees by the end of the Gsummer as the company increases production of ELTA Air Lines has announced a new line of French door bottom-freezer refrigerators that Erlanger-based Comair Inc., at its Louisville manufacturing plant. Dits wholly owned subsidiary that “Bottom-freezer refrigerators are the fastest growing operates as a Delta Connection carrier, configuration of refrigerators on the market today, so we will cease operations effective Sept. 29. had contingency plans for a two-shift operation,” said The July 27 announcement came as a Paul Surowiec, refrigeration product general manager at blow to the Northern Kentucky/Cincin- nati region and affects some 1,000 area GE Appliances. “We are adding additional production capacity to ensure we can meet the demand.” residents, approximately 700 of whom GE had originally projected having 600 production live in Kentucky. employees working at the facility, but recently revised Delta’s decision to end Comair opera- that number to 772. In addition to the 772 new produc- tions stems from its recently announced tion positions, GE has also added about 100 salaried intent to reduce the overall number of jobs to support the new plant and product. The work 50-seat regional jets in its network from force expansion is part of GE’s planned $800 million nearly 350 to 125 or fewer. That decision investment in the company’s Louisville operations by had a huge impact on Comair, which 2014. As of the end of June, GE had already hired a operates some of the oldest 50-seat air- total of 1,000 new employees in 2012 to support the craft in the Delta Connection fleet – expansion. and the highest unit cost per flight hour. Zenobia Williams, a GE production In February of this year, GE Appliances opened its employee, works on doors for the company’s popular French door GeoSpring Hybrid Water Heater facility in Louisville, bottom-freezer refrigerators. kicking off the $1 billion investment GE plans to make by 2014 to upgrade all its product lines and create new Comair photo factories for products not previously made in the , such as the GeoSpring Hybrid Water Heater, bottom-freezer refrigera- tors and frontload washing machines. In addition to the hybrid water heaters and bottom-freezer refrigerators now being produced in Louisville, preparation is under way to open another plant to make frontload washing machines and matching dryers in early 2013. Extensive investment also is being made in Louisville to enhance product offerings in top-load washing machines and dishwashers. Erlanger-based Comair Inc. was founded in 1977 and became a wholly owned subsidiary of Delta Air Lines in 2000. At its peak, Comair employed 6,700 ERLANGER: NEW LOGISTICS COMPANY INVESTING $13.7M, but now has only 1,600. WILL CREATE 700 JOBS AT NKY E-COMMERCE CENTER In a letter written to Comair employ- new logistics company has announced plans to locate its e-commerce center in ees announcing Delta’s decision, Comair Boone County, creating nearly 700 new jobs. CEO Ryan Gumm noted that Delta had A Elovations Services Group LLC is leasing the former Square D plant in decided to remove the remaining 16 Boone County to serve as its parcel grading and processing center for e-commerce Comair 50-seaters from the Delta net- and is investing $13.7 million to renovate the space. The facility will receive parcels work, leaving Comair with only 28 aircraft sold to international buyers, validate, repackage and manage the required customs in scheduled service. That move, Gumm processing. said, equated “to a business model that is Arthur Maxwell, Elovations’ founder and chairman, said the opportunity to lever- no longer sustainable in this competitive age Northern Kentucky’s availability of modern facilities and the area’s proximity to regional environment.” key shipping corridors were significant factors in the company’s decision to locate in Currently, Comair accounts for only Boone County. 1 percent of Delta’s network capacity Elovations CEO Michael DuGally noted that the new location puts the young and Delta plans to contract Comair’s company close to some of the nation’s largest e-commerce companies that also have flights among its other eight airline part- operations in the commonwealth, such as Amazon, Zappos and GSI Commerce. ners that operate under the Delta Con- “We figured if they’re here, there’s a reason why,” DuGally said. nection umbrella. In addition, the Kentucky Economic Development Finance Authority approved Delta said airline passengers would the company for up to $7 million in tax incentives through the Kentucky Business not notice any disruption of service and Investment program, which allows a company to keep a portion of its investment that the Cincinnati/Northern Kentucky over the term of the agreement through corporate income tax credits and wage International Airport “would continue assessments if it meets jobs and investment targets. to be an important market in Delta’s DuGally told The Kentucky Post that the company already had 100 employees on worldwide network.” board as of the end of June and plans to begin operations by Oct. 15. He said he The Northern Kentucky Chamber of hopes to have another 200 hired by Dec. 15 and up to two shifts of 300 to 350 by the Commerce is working to help Comair third quarter of 2123. employees secure employment elsewhere.

10 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 10 8/3/12 11:40 AM SPLIT Pages.indd 1 8/3/12 11:12 AM FAST LANE

BUSINESS BRIEFS LEXINGTON: UK TO BEGIN NIGHT BUSINESS LEADERSHIP PROGRAM FOR EXECUTIVES ELIZABETHTOWN ■ Lentus LLC, a distributor of Dow Corning Sealant products, is HE Executive Education establishing a 28,000-s.f. distribution facility in Elizabethtown, where it Center in the Univer- will package and ship sealant products. The new facility will create 14 Tsity of Kentucky’s jobs. Lentus is a subsidiary of Accumetric, an Elizabethtown company that produces, packages and markets adhesives, sealants and lubricants Gatton College of Busi- for more than 2,500 companies around the world. ness and Economics is launching an Institute for FRANKFORT/HAZARD Business Management & ■ Kentucky First Federal Bancorp, the holding company for First Leadership Excellence at the Federal Savings and Loan Association of Hazard and First Federal end of August with the goal of Savings Bank of Frankfort, and CKF Bancorp Inc., the holding com- providing educational oppor- pany for Central Kentucky Federal Savings Bank, have announced a tunities for executives trying UK Gatton College of Business merger of Kentucky First, CKF Bancorp and Central Kentucky Federal and Economics Savings. The merged company will have an office in Hazard, three Frank- to juggle time constraints and fort locations, two Danville offices and a branch in Lancaster. commitments. Beginning Aug. 29 with Series 1: Professional Business Man- GEORGETOWN agement, the institute will offer an 11-session evening program ■ The Toyota Camry meeting for three hours (5:30 to 8:30 p.m.) each week. Utiliz- claimed the top spot for ing faculty and guest speakers from the college coupled with the fourth consecutive Toyota photo Toyota hands-on experiential training, the program provides partici- year in the annual Cars. com American-Made pants the strategic framework necessary for making informed Index, an annual ranking business decisions. Topics to be covered include Organiza- of vehicles deemed most tional Design & Environment, Accounting Measurement and American based on domestic parts content, final assembly point of Reporting, Lean Supply Chain Management and others. Series vehicles and American sales volume. The Camry is assembled at Toyo- 1 runs through Nov. 15. ta’s plant in Georgetown and at the Subaru of Indiana Automotive Series 2: Executive Business Management & Leadership is plant in Lafayette, Ind. being offered during the spring of 2013, from March 21 through DHL photo HEBRON May 30. Over the course of the 11 weeks, subjects to be addressed ■ International express service feature Communicating with Emotional Intelligence, Managing carrier DHL has added a new Social Capital, Entrepreneurship and more. direct flight between its DHL Participants who complete the program will receive 30 hours Americas hub at the Cincinnati/ of continuing education credit (CEU) for each series and a total Northern Kentucky Interna- of 60 hours of CEUs for completing both Series 1 and 2. Upon tional Airport and the Austra- completion of an individual series, participants will receive a UK lian cities of Sydney and Melbourne. As a result of the new twice-weekly service, shipments picked up on Friday in the United States will be delivered Gatton College Executive Education Center certificate. by Monday in all of Australia’s major cities. The flight returns to Cincinnati For more information and to register online, go to gatton. via Hong Kong, further expanding capacity for customers shipping from uky.edu/Institute or call (800) 284-6407. Asia to the Americas. DHL is using B747-400 aircraft operated by Polar Air Cargo Worldwide on the route, which adds 110 tons of capacity to help STATE: UK AND MINOVA DEVELOP QUICK accommodate a projected 20 percent volume increase in 2012 between the United States and Canada to Australia. Australia is currently one of the larg- CURING CONCRETE FOR DISASTER USES est export markets for DHL Express out of the United States. ESEARCHERS at the Center LEBANON for Applied Energy Research have teamed with ■ Joy Mining Machinery has laid off 37 of its 175 Lebanon employees, RGeorgetown-based Minova North America to develop citing “an unstable market due to competition from natural gas suppli- a quick-curing sprayed concrete that can be used to reinforce ers, lower domestic demands of coal and decreasing coal prices.” The a damaged structure such as a building, runway, tunnel, company, a division of Joy Global, said it would work to bring as many bridge or dam before it causes catastrophic results. products to the Lebanon plant as possible to help “negate the effect this The products, called Tekcrete will have on our workforce and the community.” Fast and Tekcrete Fast M (with a ■ AAR Precision Systems has closed its Lebanon plant, resulting in specific application for mining the loss of 61 jobs. AAR provided products and services to the aerospace safety), have been licensed by and defense industry. Minova. Minova has licensed the technology for application in the LEITCHFIELD underground mining, civil and tunneling industries. ■ A $3.7 million equipment expansion project at Modern Transmis- “This is a great example of how a modern research university sion Development’s (MTD) plant in Leitchfield will result in the addi- tion of 61 full-time jobs. The Ohio-based company is adding new engages in the economic development process by bringing trans- injection molding machinery that will make plastic parts for the com- formative research and advanced technology to the marketplace,” pany’s lawn and garden tool lines, which are sold under the MTD, Yard- said UK President Eli Capilouto. “Lending our intellectual capital Man, Yard Machines, Bolens and Remington brand names. MTD has and scientific expertise, in partnership with industry leaders such operated the Leitchfield plant since 1995 and currently employs as Minova, is a vital element of the Kentucky Promise. This collab- approximately 250 workers there. oration yields innovations that advance Kentucky’s economy and impacts critical national policy applications.” LEXINGTON Minova North America is a part of , ■ Fasig-Tipton’s Kentucky July sale of selected yearlings saw a 15.1 Minova International percent increase in receipts over last year’s sale, despite having 1 per- a company that provides mechanical, structural and chemi- cent fewer sold this year. The average sale price rose 16.3 per- cal-based solutions for underground mining, infrastructure, cent, from $69,890 in 2011 to $81, 291 this year. tunneling and civil engineering initiatives.

12 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 12 8/3/12 11:39 AM HEBRON: ZF RUBBER & PLASTICS ADDING BUSINESS BRIEFS 60 JOBS TO SUPPORT $18M EXPANSION LONDON F Rubber & Plastics Hebron LLC is investing nearly ■ Hearthside Food Solutions is investing $1.4 million to add a pro- $18 million to expand its manufacturing operation in duction line to its facility in London, where it produces baked goods for ZNorthern Kentucky and will add more than 60 new jobs numerous food companies. The expansion will create 80 new jobs. to support the expansion. LOUISVILLE The company currently has some 206 employees at its ■ Louisville-based spirits maker Hebron plant. Brown-Forman has announced plans The project will add 52,000 s.f. to the existing plant to to build a new cooperage to craft bar- make room for the purchase of new equipment to manufac- rels in Decatur, Ala., to meet growing ture bushings, engine mounts, anti-vibra- worldwide demand for its Jack Daniel’s tion products and plastic components Tennessee Whiskey. The Jack Daniel Louisville CVB photo for the automotive industry. Cooperage is expected to be opera- tional in May 2014 and will employ ZF Rubber & Plastics Hebron, which approximately 200 workers. The facility began operations in Hebron in 1994, is will be the second cooperage owned by one of ZF Friedrichshafen AG’s (ZF) Brown-Forman – the company’s other 121 global production facilities. German- cooperage is located in Louisville – and owned ZF, a leading automotive supplier will double the company’s barrel-mak- for driveline and chassis technology with a presence in 27 ing capacity. countries, has nearly 71,500 employees worldwide and is ■ -based entertainment company has final- among the world’s top 10 largest automotive suppliers. AEG Facilities ized a 10-year contract to manage the KFC Yum! Center in downtown Sam Sato, managing director of ZF Rubber & Plastics Louisville. AEG replaces the Kentucky State Fair Board, which has Hebron LLC, said the expansion was the result of the com- handled management of the facility since the Yum! Center opened in pany recently acquiring new business that “created capacity October 2010. The Louisville Arena Authority chose to replace the constraints, which is good news for our company and the fair board after a review of the Yum! Center’s financial performance fell community.” short of expectations. According to The (Louisville) Courier-Journal, Sato said construction has already begun and is expected AEG’s contract requires the company to guarantee a profit of at least $1 million each year; the arena’s profit for 2011 was $353,000 under the to be complete in the fourth quarter of 2012. fair board management.

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 13

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BUSINESS BRIEFS STATE: KY EXPANDS ’07 FORD INCENTIVES LAW TO DRIVE MORE AUTO INVESTMENT LOUISVILLE ■ Triple-digit temperatures ENTUCKY has prompted to enacted a new law cancel the track’s racing pro- Kdesigned to spur gram on June 28, the first time job creation and signifi- in the track’s 138-year history that races were scrapped due cant financial invest- to heat. Racing programs for ment in the state’s June 29-30 were moved to automotive and nighttime schedules in an parts manufacturing effort to avoid the worst of the facilities. record-shattering heat wave. Churchill Downs photo Kentucky is currently home to 440 automo- Motor Co. photo Sam VarnHagen/Ford ■ The U.S. Department of Veterans Affairs has selected a site adja- Ford Motor Co. invested $600 million to cent to the Brownsboro Road/I-264 interchange in Jefferson County on tive-related industries transform its Louisville Assembly Plant into which to build a new medical center that will replace the existing that employ 68,100 peo- a flexible facility capable of producing up to 60-year-old facility. The new facility, which is being built at an estimated ple. The Bluegrass State six different vehicles at the same time. The cost of about $883 million and will serve a 35-county area, will have 110 ranks third highest in company added 1,800 jobs for a second shift inpatient beds and clinics specializing in primary care, surgery and the nation in terms of at the plant earlier this year, and is adding mental health. The new facility will also have a geriatric and extended- auto industry-related another 1,300 for a third shift. care program, a home-based primary care program, and a substance- employment as a percent of total state employment. abuse residential rehabilitation treatment program. Filed by Rep. Larry Clark, of Louisville, House Bill 400 Ford photo ■ Ford Motor Co. amends the 2007 Kentucky Jobs Retention Act (KJRA) to reports that June 2012 allow manufacturers engaged in automobile, automobile sales of the Ford Escape – parts or automobile supplies manufacturing to seek incen- which is built at the com- tives regardless of location in the commonwealth. pany’s Louisville “Given the success Kentucky has seen from the incentive Assembly Plant – were package the General Assembly offered to in 2007, it was up 28 percent over June Ford 2011 sales. The figure rep- only natural to extend this deal to the state’s other assembly resents the best sales plants and large auto parts suppliers,” said Clark. “My hope is month ever for the vehi- that they will all take advantage of it the way Ford has, because it cle and future sales fig- has the potential to generate thousands of new jobs and hun- ures could be even better: Ford says the all-new 2013 Escape is selling on dreds of millions of dollars of investment. Such a move would dealer lots in less than five days. Within two weeks of that announcement, further solidify Kentucky’s already strong standing nationally however, the company issued two recalls of the 2013 Escape, one for mis- and internationally in the automotive industry.” positioned carpet padding that could interfere with braking, the other for faulty fuel lines in vehicles with 1.6 liter engines that could result in an The Kentucky General Assembly enacted KJRA as the engine fire. A Ford spokeswoman told The (Louisville) Courier-Journal that primary tool in an incentive package that helped secure a the fuel line problem was not an issue of the manufacturing process but $1.2 billion investment from Ford Motor Co. to upgrade rather an issue of the company receiving damaged parts. production capability at its two existing Louisville plants. Ford estimates it will hire more than 3,000 employees as a ■ Delta Air Lines has result of the incentives made available by the legislation. launched new daily nonstop The expansion of KJRA opens the door for other Ken- flight service between Louis- tucky auto manufacturers, as well as large-scale battery man- ville International Airport and New York’s John F. Kennedy ufacturers to make significant investments in the state. International Airport. Delta

has also added a second daily Air Lines photo Delta flight from Louisville to New STATE: CEOS SAY KY SHOULD FOCUS York’s LaGuardia Airport. ON BUSINESS REFORM, NOT GAMING ■ Easy Connect LLC, a Louisville-based call cen- ter operator, is adding 8,000 s.f. to its facility in Louis- ENTUCKY dropped from eight spots in Chief Executive’s ville’s Eastpoint Business Center, nearly doubling the eighth annual rankings of the Best State for Busi- existing space. The expansion will help support a new Kness, a survey of CEOs’ opinions as to the best and contract Easy Connect recently signed to become an worst states in which to do business. approved vendor to handle calls for Dish Network’s 3,500 retailers. The survey of 650 chief executive officers asked them to Easy Connect also has contracts to sell numerous entertainment, com- grade the states in which they do business, considering issues munications and home automation/security products. The expansion such as tax and regulation, quality of workforce and living envi- will create 97 new full-time jobs. ronment. Kentucky dropped from its 2011 ranking of 17 to 25 in NEWPORT the 2012 survey. Neighboring Tennessee was ranked No. 4, with ■ Xanodyne Pharmaceuticals Inc. has Indiana right behind at No. 5. Ohio was ranked No. 35. filed paperwork with the Kentucky Office of The eight-position drop from 2011 to 2012 put Kentucky Employment and Training indicated that it in the unfavorable company of being one of five states to see plans to lay off 114 employees. The filing came just weeks after the Newport- a seven- to nine-position decline, joining Nebraska, Minne- based company sold one of its primary drugs, the painkiller Zipsor, to Cali- sota, New Hampshire and Oregon. fornia-based DepoMed Inc. for $26 million. According to local published reports, Xanodyne appears to no longer be marketing most its other prod- The survey noted that Kentucky’s “focus on gambling ucts, which include painkiller Oramorph and a line of prenatal vitamins. The issue robs attention from needed business reforms.” company also remains embroiled in lawsuits stemming from deaths tied to For the eighth consecutive year, Texas pulled the No. 1 the drugs Darvon and Darvocet, which Xanodyne used to distribute. spot, followed by Florida and North Carolina.

14 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 14 8/3/12 11:39 AM LOUISVILLE: CHURCHILL DOWNS PROJECT BUSINESS BRIEFS TO INCLUDE LAVISH GUEST ‘MANSION’

PIKE COUNTY Pike County Fiscal Court photo HURCHILL Downs is ■ Pike County is moving for- investing $9 million ward with plans to establish Cto create a posh new what it says will be the first pub- venue that will offer invita- lic bi-fuel station in the com- monwealth. In addition to tion-only patrons ambience, offering regular gasoline and panoramic views and

Churchill Downs photo diesel fuel for vehicles, the sta- unprecedented levels of tion will also offer compressed personalized service. natural gas (CNG), which costs Guests invited to The approximately half the price of Mansion at Churchill The Mansion at Churchill Downs will be traditional vehicle fuel. According to information released by Pike Downs will be delivered via located on the sixth floor of the Clubhouse County Energy and Community Development Director Charles Carl- in an area that has primarily served as ton, three natural gas transmission lines run across the county, making private elevator and will step it very easy to provide CNG as transportation fuel. into space designed to the track’s media center since 2005. evoke the feel of a stately ■ Tourism officials say the May airing of “Hatfields & McCoys” on The home, complete with dining room, living room, library, parlor History Channel continues to boost interest in Pike County, home of and a veranda offering premium views of the track. Guests will the McCoys. As of mid-July, there had been some 250 brochure requests have access to a private wine cellar and personal concierge ser- a day on the Pike County tourism website and 319,000 hits to the web- vice. Admission prices for those invited to The Mansion will site, up from an average of 5,000 per month; an average of 125 visitors a day to the county tourism office, seven days a week; and escorted tours begin in the thousands of dollars for Oaks and Derby Day of the feud sites of the Hatfields and McCoys have been sold out. events; pricing for other days is still being finalized. The Mansion is the largest of four projects taking place at the ■ The Appalachian News-Express reports that a regional airline could be track in the coming months. Other projects include a new media providing daily flight service in and out of the Pikeville-Pike County center; razing the Paddock Pavilion to create an open gathering Regional Airport as early as next year. Consultant Luke Schmidt told space; and the relocation and expansion of the track’s Gold the newspaper that two regional airlines have expressed interest in con- Room, which serves members of Churchill’s wagering rewards necting Pikeville with one or more of several commercial airline hubs, including Charlotte, Cincinnati, Cleveland and . The airport has program and will open this month. The media center and gath- received a $750,000 small community air service development grant ering space will open in time for the Fall Meet. that can be used to subsidize air service. THINK AGAIN. If you’ve been thinking your career has nowhere to go, encourages you to think again. The Graduate School at Sullivan University offers the largest MBA program in the region, with evening, weekend and online options, small class sizes, seasoned instructors, ongoing career services for graduates and much more — all from a university with a 50-year tradition of success. Find out more at sullivan.edu. Master of Science in Conflict Management Master of Science Human Resource Leadership Executive Master of Business Administration (EMBA) MBA/Master of Science in Managing IT Master of Business Administration (MBA) Ph.D. in Management • Healthcare Management Concentration • Conflict Management Concentration • Hospitality Management Concentration • HR Leadership Concentration • Accounting Concentration • IT Management Concentration • Marketing Concentration • Strategic Management Concentration Master of Public Management Doctor of Pharmacy (Pharm.D.) Master of Science in Management Pharm.D. + MBA Master of Science in Managing IT

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THE LANE REPORT • LANEREPORT.COM AUGUST 2012 15

August Lane 1-24.indd 15 8/3/12 11:39 AM FAST LANE

BUSINESS BRIEFS BOWLING GREEN: CONNECTED NATION TO LAUNCH FOR-PROFIT CONSULTING FIRM RICHMOND ■ Intertape Polymer Group Inc. has announced plans to close its plant OWLING Green will serve as headquarters for a new in Richmond, where it employs some 55 workers. In a company statement independent broadband consulting firm formed by announcing the shutdown, Intertape said the Richmond facility, which , a national nonprofit technol- makes pressure-sensitive tape, was being closed in part due to productivity BConnected Nation Inc. improvements in other production facilities. The majority of production ogy organization that specializes in increasing affordable will be transferred to Intertape’s Carbondale, Ill., facility. The closing is broadband access and computer literacy. scheduled to take place in late 2012 or early 2013. 10/20 Digital will provide broadband assessment, planning and strategies for WINCHESTER companies, communities and institutions ■ Taica North America Corp. plans to locate a manufacturing facility in that are looking for a more competitive Winchester that will create 30 new jobs over the next several years. Taica approach to broadband-based growth. specializes in shock-absorbing material/components, vibration-damping material/components and heat-conductive materials. The Winchester plant Brian Mefford, founder of Connected is expected to begin operations in December and will manufacture Taica’s Nation, will lead the startup of 10/20 Digital. new three-dimensional decoration technology called E-CUBIC. Taica said “Connected Nation leadership saw that the decision to locate a manufacturing plant in the U.S. was driven by an demand for consulting services among broad- anticipated increase in demand for its product by American auto produc- band companies and forward-thinking commu- tion plants. nities was surpassing the non-profit’s mission,” Mefford said. “We want to be responsive to the WINCHESTER Brian Mefford market while also maintaining the charitable mis- ■ Ale-8-One Bottling and Kentucky Eagle have signed a agreement to distrib- sion of the non-profit. The creation of a separate ute Ale-8-One to some 300 restaurant and entity was the best way to achieve this tandem objective.” bar accounts in Fayette, Madison and Unlike Connected Nation, 10/20 Digital will be a for- Scott counties that are serviced by Ken- profit company. While the company will start with a few tucky Eagle, which is widely known as a employees and contracted consultants, Mefford said he beer distributor. Fielding Rogers, presi- expects the staff to quickly grow to around 50 employees and dent of the Winchester-based soft drink company, said that Ale-8-One trucks and very possibly more than that, with satellite offices across the personnel will continue to cover its retail country and perhaps the world. delivery accounts, but that it made sense to partner with Kentucky Eagle, which is already making deliveries to the food and beverage STATE: GOVERNOR ORDERS CREATION OF industry. Restaurants carrying Ale-8-One include Ramsey’s and Texas Roadhouse, among others. INSURANCE EXCHANGE FOR KENTUCKY

STATE OV. Steve Beshear issued an executive order on July ■ Welborn Health Plans, an Evansville, Ind.-based health insurance 17 to establish a state insurance exchange, in accor- company, has announced plans to exit the commercial health insur- dance the federal (ACA), which ance market in Kentucky and Indiana at the end of 2012. In a statement G Affordable Care Act released announcing the decision, Welborn said the decision was due to requires individuals to carry health insurance. “changes in the insurance market and significant investments that Beshear’s order followed a decision by the United States would be needed to continue to provide high-quality services and prod- Supreme Court to uphold the controversial act. ucts.” The company has endorsed Anthem Blue Cross and Blue The Kentucky Health Benefit Exchange will enable indi- Shield as its insurer of choice for its employer groups. viduals who have had difficulty finding or qualifying for health coverage to shop for health coverage plans online. Beshear said ■ Nine Kentucky breweries have partnered to form the the exchange will work with insurers, providers and other groups Kentucky to help citizens find the coverage that best suits their needs. Guild of Brewers, an organiza- tion that will serve to advocate for The exchange will also assist employers in facilitating the the brewing industry in legislative enrollment of their employees in health plans. and government issues and pro-

Kentucky Ale photo Kentucky must demonstrate readiness to operate a state mote the member breweries. The health benefit exchange by the end of 2012 or the responsibility nine founding breweries include will default to the federal government. According to informa- Bluegrass Brewing Co. (Louis- ville), (Louis- tion released by the governor’s office, numerous groups – Against the Grain including the , the ville), Cumberland Brewery Kentucky Hospital Association Kentucky (Louisville), Kentucky Ale (Lex- Chamber of Commerce, Kentucky Voices for Health and ington), Country Boy Brewing (Lexington), West 6th (Lexington), Anthem Blue Cross Blue Shield – have indicated that they Beer Engine (Danville), Lore Brewing (Danville) and Apocalypse prefer the exchange be operated by the state rather than the Brewing (Louisville). federal government. “Kentucky is more in tune with the unique regional and ■ Kentucky has exercised an option to exempt certain healthcare facili- ties from a federal requirement that calls for certified registered nurse economic needs of our citizens, as well as the health insurance anesthetists (CRNA) to be supervised by a physician. Gov. Steve Beshear needs of individuals, Kentucky small businesses and nonprof- said the change “will give many hospitals and ambulatory surgery cen- its,” said Cabinet for Health and Family Services Secretary ters greater flexibility in the use of anesthesia providers and improve Audrey Tayse Haynes. “By establishing a state-operated operating room efficiency without affected quality of care.” However, exchange, we can also better coordinate the new eligibility and the Kentucky Medical Association disagrees with that stance, stating enrollment system within the current Medicaid program.” that “stark differences remain between the education and training of Kentucky has received federal grants totaling $66.4 million physicians and CRNAs – differences that can impact the safe and effec- tive delivery of healthcare.” Kentucky is the 17th state to opt out of the for the planning and implementation of a state exchange. requirement in the 10 years since the federal government gave states Federal law requires that the exchange begin operating on the option to do so. Jan. 1, 2014.

16 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 16 8/3/12 11:39 AM STATE: POSTSECONDARY STUDENT DEBT BUSINESS BRIEFS GROWS FOUR TIMES THE RATE OF GDP STATE HE latest data from the ■ The law firm of Stoll Keenon Kentucky Higher Educa- Ogden has opened an office in Ttion Assistance Authority Canonsburg, Penn., part of the Greater Pittsburgh area. The (KHEAA) show that Kentucky col- Census photo new office, which is the firm’s first location outside Kentucky, will focus lege students borrowed a record its practice on mineral and environmental law. SKO currently employs $1.2 billion to fund their educa- 140 attorneys at its offices in Lexington, Louisville, Frankfort, Hender- tion for the 2010-2011 school year, son and Morganfield. a figure that is creating concern in terms of the economy. ■ A recently released report by the Kaiser Commission on Medicaid “Basically, student debt is grow- Kentucky college students are and Uninsured indicates that Kentucky is the state that will most ben- ing faster than the economy,” said taking out more loans to cope efit from the expansion of Medicaid under the Affordable Care Act with rising tuition costs, but the (ACA). A key element of the ACA is the expansion of Medicaid to Ted Franzeim, senior vice presi- nearly all individuals with incomes up to 138 percent of the federal dent of KHEAA, which adminis- stagnant economy is making it difficult for them to find jobs to poverty level ($15,415 for an individual; $26,344 for a family of three in ters financial aid programs in pay back student loans. 2012) in 2014. As a result, coverage will be extended to large numbers Kentucky. “As student debt of the nation’s uninsured population, especially adults. According to increases, there’s less money available to grow the economy.” the commission’s statistics, the number of uninsured adults earning less KHEAA data presented to the Kentucky Council on Postsec- than 138 percent of the poverty line is expected to decrease in Ken- ondary Education (CPE) showed that college students in Ken- tucky by 57.1 percent – the highest in the nation – when the law is implemented. tucky owe an average of more than $19,000 and that the average student will have to pay $200 a month for 10 years in order to ■ The Kentucky Council on Postsecondary Education’s Project pay off their student loans. Graduate is one of four programs to be selected for a major award from “Student indebtedness is growing at a rate four times national higher ed consulting firm Noel-Levitz for developing one of greater than the state’s gross domestic product, with no end the “most successful, state-of-the-art retention programs in use today.” in sight,” said Franzeim. Project Graduate is Kentucky’s collaborative effort with public universi- Compounding the problem is the fact that unemploy- ties to recruit, retain and graduate former students with 80 or more credit hours but no bachelor’s degree. The program offers a smooth ment for college graduates has been on the rise, growing transition through student services and incentives for working adults from 8.7 percent in 2009 to 9.1 percent in 2010. who want to complete their degree.

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September 22, 2012

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THE LANE REPORT • LANEREPORT.COM AUGUST 2012 17

August Lane 1-24.indd 17 8/3/12 11:39 AM INTERSTATE LANE Business news from Indiana, Ohio, Tennessee and West Virginia

BUSINESS BRIEFS INDIANA: $21M GREENVILLE TECH PLANT WILL BRING 325 JOBS TO ANDERSON

INDIANA UTOMOTIVE sup- ■ Roche Diagnostics Corp. is investing plier $300 million over the next 10 years at its Greenville North American headquarters in Indianapo- Technology Inc.

A Honda photo lis and plans to add 100 new jobs by 2017. has announced plans to The investment will cover facility and equip- locate a new plant in ment upgrades to support the company’s Anderson, Ind., that will growing diagnostics and diabetes care busi- create 325 new jobs by nesses. The company’s campus 2016. produces some 2 billion test strips each year GTI designs and pro- for ACCU-CHEK diabetes products. duces a variety of interior Greenville Technology Inc. (GTI) ■ Ingram Micro Inc., one of the world’s largest technology distribu- and exterior components supplies a variety of components for the tors, has acquired Indianapolis-based Brightpoint Inc. in a deal valued for the automobile indus- Honda CRV and other Honda models. at $840 million. Ingram Micro President and CEO Alain Monié said try and is one of Honda’s The company is one of Honda’s largest that the acquisition of Brightpoint, which distributes mobile devices for largest suppliers of plastic suppliers of plastic parts. phone companies, was a great fit strategically and would immediately components in North expand the company’s presence in the mobility market in a way that America. The Greenville, Ohio-based company produces would have been difficult to achieve otherwise. more than 2 million parts per month, primarily for the ■ The Indianapolis Business Journal reports that J.C. Penney is closing Honda Accord, CRV, Civic and Acura models. its distribution and support center in Plainfield, Ind., in the wake of “This new plant is needed due to capacity limitations and weak financial results in recent months. The closing will result in the a tight labor market in Greenville, Ohio,” said Bill LaFram- loss of 230 jobs. boise, executive vice president of GTI. “It will also provide us with improved efficiencies and flexibilities to meet our cus- ■ Connextions Inc., a technology and business services partner to the tomer’s needs. We chose Indiana, and specifically Anderson, healthcare industry, is adding 300 licensed health insurance agents at its facility in Jeffersonville, Ind., where it currently employs a staff of 500. A because of the availability of a good site, cooperative govern- company spokesperson said the additional jobs are being filled so that the ment and a plentiful workforce.” company will have enough workers for the annual health insurance GTI plans to invest more than $21 million to construct enrollment period, which starts in October for many companies. and equip an injection molding and assembly plant on 25 acres in Anderson’s Flagship Certified Technology Park. ■ Wellpoint Inc., an Indianapolis-based health benefits company, has Construction on the 150,000-s.f. plant is already under way, announced plans to acquire Amerigroup Corp. in a transaction valued with operations scheduled to begin in January 2013. at $4.9 billion. Virginia-based Amerigroup is one of the nation’s leading managed care companies. “We believe “We knew that Honda coming to Indiana would trigger a that this combination will create an host of other new jobs and today is the latest of many exam- industry leader in the government ples,” said Indiana Gov. Mitch Daniels. sector serving Medicaid and Medicare enrollees. This is an opportunity to WEST VIRGINIA: 1.3M-S.F. MACY’S CENTER capitalize on the strengths of both companies to better serve our mem- bers and position our companies for future growth as the health insur- TO HAVE 1,200 PERMANENT EMPLOYEES ance industry changes and as we prepare for health insurance exchanges,” said Angela F. Braly, Wellpoint chair, president and CEO. ACY’S Inc. has opened a 1.3 million-s.f. distribution and fulfillment center in Martinsburg, W. Va., that is TENNESSEE part of the Cincinnati-based company’s “omnichan- ■ TPR Federal-Mogul Tennessee Inc. is locating a manufacturing M plant in Lawrenceburg, Tenn., that will produce cylinder liners for alu- nel” strategy of creating a seamless operation between brick- minum block engines. The facility will house foundry, machining and and-mortar stores and electronic sales. warehousing functions and is expected to operational by May 2013. The At the July 18 ribbon-cutting ceremony, Macy’s Chairman, plant will create 72 new jobs and will serve the North American auto President and CEO Terry J. Lundgren said the company’s manufacturing industry. online sales grew 40 percent last year and have already ■ MGM Industries has launched a $3 million expansion of its facility in Hendersonville, Tenn., where it produces custom painted vinyl windows grown another 30 percent this and doors. The expansion will create 75 jobs over the next three years. year. Macy’s anticipates seeing $2 billion in online sales this year, “and at this rate of growth, it ■ HarperCollins Publishers has com- will soon be $3 and $4 billion,” Lundgren added. pleted its acquisition of Thomas Nelson, At top capacity, the $150 million Martinsburg facility will a Nashville-based company that is a lead- have the capability of packing 15,000 items per hour for ing trade publisher of inspirational and shipping. Christian media. Thomas Nelson will con- tinue to operate as an independent com- Macy’s expects to hire 900 permanent full-time, 300 per- pany and will retain its current focus. manent part-time and 700 temporary seasonal workers Financial details of the transaction were within the next five years to staff the new facility. According not disclosed. to local published reports, the annual payroll is estimated at around $30 million. WEST VIRGINIA Macy’s considered nearly 160 different locations before ■ American Woodmark, a manufacturer and distributor of kitchen selecting Martinsburg, in large part due to its easy access to and bath cabinetry, is investing $15.2 million to expand its manufactur- ing operation in Moorefield, W. Va. The expansion is expected to cre- Interstate 81 and a location central to the Mid-Atlantic ate 187 new jobs within the next three years. region.

18 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 18 8/3/12 11:39 AM KENTUCKY INTELLIGENCER® A sampling of economic development data

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 19

August Lane 1-24.indd 19 8/3/12 11:39 AM CORPORATE MOVES New leadership for Kentucky businesses

BANKING ■ Dr. Michael C. Henson has been named asso- ■ Ted E. ciate vice president for research and dean of the DEPARTURES ■ Ubelhor has graduate school at Morehead State University. Tommy J. Smith, president and chief been named executive officer of Louisville-based Baptist senior vice ENGINEERING Healthcare System Inc., has announced president of ■ Gary S. Keefer and Ryan A. Bruner have plans to retire effective April 2013. mortgage joined Heumann Environmental LLC as vice banking for Ted E. Suzanne presidents of the Louisville firm. First Security Shelbyville. has been Ubelhor Blazar John Smithhisler Bank of GOVERNMENT named market leader Lexington and presi- Owensboro. Suzanne Blazar has been ■ Keith Jackson has been named chief of the dent of Saint Joseph Hospital. Smithhisler will appointed vice president, director of person- Lexington Division of Fire and Emergency have responsibility for the oversight of Saint nel and training for the bank. Services. Joseph Hospital and Saint Joseph East.

■ Porter Bancorp Inc., parent company of PBI ■ Mary Ellen Wiederwohl has been named ■ The American Heart Association has Bank, has named John T. Taylor president chief of strategic initiatives for Louisville-Jef- appointed Alan Daugherty, Ph.D. as editor in and chief executive officer of PBI Bank and ferson County Metro Government. chief of Arteriosclerosis, Thrombosis, and Vascular president of Porter Bancorp and PBI Bank. Biology: Journal of the American Heart Association Maria L. Bouvette, who previously served as ■ Gov. Steve Beshear has appointed John (ATVB), a monthly journal devoted to the president of Porter Bancorp and president Patrick Collins to the office of Lewis County biology, prevention and impact of vascular and CEO of PBI Bank, will continue to serve as judge-executive. diseases. Daugherty is senior associate dean of chief executive officer and chairman of the research in the College of Medicine, director board for Porter Bancorp and chairman of the ■ Carrie Banahan has been appointed execu- of the Saha Cardiovascular Research Center board of PBI Bank. tive director of the Office of the Kentucky and Gill Foundation Chair in Preventive Car- Health Benefit Exchange. diology at the University of Kentucky. BUSINESS DEVELOPMENT ■ Adam Caswell has joined the Northern ■ Col. David E. Thompson has been TECHNOLOGY Kentucky Chamber of Commerce as vice presi- appointed executive director of the Kentucky ■ Jarrett Puckett has been promoted to vice dent of public affairs. Commission on Military Affairs. president of account management for Paducah-based Computer Services Inc.’s ■ Casmir Choppy has joined the Northern HEALTHCARE NuPoint division. Kentucky Tri-County Economic Development ■ Kentucky Corp. as assistant director of the E-zone. One Health UTILITIES has named ■ Kimra H. Cole has joined Columbia Gas of EDUCATION Valinda Rut- Kentucky as operations center manager. ■ T. Wilson Dickinson has been named asso- ledge as mar- ciate dean for religious life at Transylvania ket leader OTHER University. Michelle Rawlings has been Louisville ■ Trox USA has named Larry named registrar for the university. and presi- Hall regional sales manager dent of Jew- Valinda John for the Midwest region of the ■ Patricia Adkins has been named president ish Hospital. Rutledge Smithhisler air conditioning and ventila- of Ashland Community and Technical College. She will have tion company. Hall will be responsibility for the oversight of the Jewish based in Louisville. ■ has been appointed asso- Hospital downtown medical campus, Sts. Mary Thomas H. Kelly Larry ciate dean of research at the University of Ken- & Elizabeth Hospital, Our Lady of Peace and ■ has Connie Van Onselder Hall tucky College of Nursing. Frazier Rehab Institute, all in Louisville, in been named chief financial addition to Flaget Memorial Hospital in Bard- officer at , effective Aug. 27. stown and Jewish Hospital Shelbyville in

August Lane 1-24.indd 20 8/3/12 11:39 AM ON THE BOARDS Kentuckians named to organizational leadership roles

AMERICAN Against the Grain, Louisville; Vice President – Vie Medspa; Community Service Chair – Holly ADVERTISING Phillip Dearner, Bluegrass Brewing Co., Lou- Weidemann, AU Associates; Programs Chair FEDERATION isville; Secretary – Lee Rossman, Lore, – Beverly Clemons, CMI Consulting LLC; ■ John McCafferty, presi- Danville; Treasurer – Ben Self, West Sixth, Corporate & Economic Development Chair – dent of John McCafferty Lexington; and Daniel Harrison, Country Boy Sharon Ison, Mike Ison Insurance Co. Inc.; Advertising in Louisville, has Brewing, Lexington. Finance/Audit Chair – Gwen Riley, Green been elected secretary-trea- Box Heating and Air; Awards Chair – Eileen surer of the American Adver- LEXINGTON ART LEAGUE , Stoll Keenon Ogden; Secretary – John O’Brien tising Federation’s 2012-2013 ■ The following individuals have been named , Kreations by Karen; Public McCafferty Karen Boone Council of Governors. to serve on the board of directors of the Lexing- Relations/Technology Chair – Michelle ton Art League for fiscal year 2013: President – Lowe, Ideally Done Event Planning; Chapter AMERICAN ASSOCIATION Dean Langdon, DeCotto Law Group; Vice Administrator – Hannah Emig. OF STATE CLIMATOLOGISTS President – Erik Carlson, Business Lexington; ■ Stuart Foster, director of the Kentucky Treasurer – Lisa Wilson, Tempur-Pedic; Secre- REGIONAL CANCER CENTER CORP. Climate Center and the Kentucky Mesonet at tary – Elizabeth Deener, Landrum Shouse LLP. ■ C. Edward Glasscock has Western Kentucky University, has been named Sarah Davies, of Sarah Davies Designs, and been elected to the 2012 as the new president of the American Associa- Shaye Rabold, with the Lexington-Fayette board of directors of the tion of State Climatologists. Urban County Government’s Office of the Regional Cancer Center Mayor, have joined the executive committee as Corp., a community advisory AMERICAN ASSOCIATION chair of governance and chair of development, group that provides advocacy OF COLLEGES OF respectively. New board members include and support for the James OSTEOPATHIC MEDICINE Christine Huskisson, John Price Nicol, Graham Brown Cancer Cen- C. Edward ■ Dr. William T. Betz, senior Drura Parrish and Jomo Thompson. ter. Glasscock is chairman associate dean for osteo- emeritus and co-chairman of Glasscock pathic medical education and LOUISVILLE CONVENTION & the mergers and acquisitions practice group of chair of family medicine at VISITORS BUREAU COMMISSION Frost Brown Todd. the University of Pikeville – ■ Michael D. Howerton has been appointed Kentucky College of Osteo- chairman of the Greater Louisville Conven- ARTS AND pathic Medicine, has been tion & Visitors Bureau Commission, the policy- ENTERTAINMENT DISTRICT named to serve on the Health making arm of the Louisville Convention & ■ A subcommittee of the Lexington Center Resources and Services Dr. William Visitors Bureau. Howerton is market vice presi- board of directors has been named to lead the Administration’s Advisory T. Betz dent and general manager of the Louisville Rupp Arena Arts and Entertainment District Committee on Training in Primary Care Medi- Marriott Downtown. in Lexington. The subcommittee includes: cine and Dentistry. Cecil Dunn, executive director of The Hope LOUISVILLE SPORTS COMMISSION Center; Brent Rice, attorney with McBrayer, AMERICAN HEART ASSOCIATION ■ The following individuals have been named McGinnis, Leslie & Kirkland PLLC; Royce ■ Nancy R. Webb, professor of internal med- officers of the Louisville Sports Commission: Pulliam, founder of Urban Active; Craig icine and a member of the faculty of the Uni- Chairman – John Hamilton, The Cost Reduc- Turner, CEO of MedPro Safety Products; versity of Kentucky Saha Cardiovascular tion Group; Vice Chairman – Michael Moll, Holly Wiedemann, president of AU Associ- Research Center, has been appointed to the PNC Bank; Secretary –Tandy Patrick, Bing- ates Inc.; and Bill Owen, CEO of the Lexing- board of directors of the American Heart Asso- ham Greenebaum Doll LLP; Treasurer – ton Center. The project will be managed by ciation Great Rivers Affiliate. Amber Halloran, Louisville Water Co.; Frank Butler, who will retire as executive vice Immediate Past Chairman – Steve Higdon, president of finance and administration at the FIRST CITIZENS BANK Faulkner Real Estate. Newly elected to the University of Kentucky at the end of the year. ■ Dr. Wil- board of directors are: Lacey Lee Baker, liam Nash National Fastpitch Coaches Association; John has been Hudson, Brown-Forman Corp.; Jeffrey Jas- ■ Bridgette Bell, global sustainability man- elected chair- noff, Kindred Healthcare; Dr. LaQuandra ager for Yum! Brands, and Elizabeth Davis, a man of the Nesbitt, Louisville Metro Department of Pub- private investor, philanthropist and commu- board of First lic Health and Wellness; David Phillips, Sin- nity volunteer, have been named to serve on Citizens Bank gle Paint Solutions; Jim Turner, Humana Inc.; the Speed Art Museum’s board of trustees, in Elizabeth- Perrye Turner, FBI – Louisville Field Office; which has fiduciary and legal responsibility for town. Nash Dr. William Terr y and John Willmoth, Chrysalis Ventures. the museum. The museum named the follow- has served on Nash Patterson ing individuals to serve on the newly formed the bank’s board of directors since 2005 and MID-ATLANTIC CONFERENCE board of governors: Lauri Arnold, Julia has been a partner in Elizabethtown Ortho- OF REGULATORY UTILITIES Carstanjen, Tamil Chellaiah, Connie Good- paedic Associates since 1986. Terry Patter- COMMISSIONERS man, Kevin Grangier, Matthew E. Hamel, son, manager of the Hardin County Farm ■ Kentucky Public Service Commission Chair- David James, Sherry Jelsma, Michael L. Bureau, has been elected to chair the board’s man David Armstrong has been elected pres- Judd, Susan Dabney Lavin, L. Joshua Directors Loan Committee. ident of the Mid-Atlantic Conference of Nagel, Kathy Oyler, Patrick Potter, Yas- Regulatory Utilities Commissioners. meen M. Siddiqui, Julianne Corbett Wal- HEUSER HEARING INSTITUTE dron and Cheri Collis White. ■ Dr. Britt Brockman, managing partner of NATIONAL ASSOCIATION OF Louisville-based John-Kenyon American Eye WOMEN BUSINESS OWNERS U.S. CONFERENCE OF MAYORS Institute, has been named to the board of ■ The Lexington chapter of the National ■ Louisville Mayor Greg directors at the Heuser Hearing Institute. The Association of Women Business Owners has Fischer has been named appointment is in affiliation with Brockman’s announced its officers for 2012-2013: chairman of the Metro Econ- position as chairman of the University of Ken- President – Amy Johnson, Britton Osborne omies Standing Committee of tucky Board of Trustees. Johnson PLLC; President-Elect – Rhonda the U.S. Conference of May- Bartlett, RB Design Studio; Past President – ors. The committee focuses KENTUCKY GUILD OF BREWERS Julie McEwen, McEwen Creative; Special on economic issues impor- ■ The Kentucky Guild of Brewers, a new orga- Advisor – Cathy Stafford, Ad-Venture Promo- tant to cities, including fed- nization formed to provide a unifying voice for tions; Treasurer – Diana Hughes, Hisle & Co., eral policies, taxes and the Greg microbrewers and brewpubs in Kentucky, has CPAs; Public Policy Chair – Janey Moores, creation of jobs. Fischer elected the following individuals to its board BJM Staffing & Job Guidance of Kentucky Inc.; of directors: President – Adam Watson, Membership Chair – Lori Ann Taylor, Belle

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 21

August Lane 1-24.indd 21 8/3/12 11:39 AM LANE ONE-ON-ONE Kentucky’s leaders express their opinions

tional efficiencies are projected to be Greg Fischer $15 to $25 million. We are now starting Greg Fischer was elected mayor of Louisville to work out local operating agreements in November 2010. A native of Louisville, Fischer graduated from Trinity High School on our way to full consolidation. and went on to major in economics at . After college, he EL: The MSD is under a consent decree founded SerVend International and co- to improve water quality. How well is invented an ice and beverage dispenser used this effort progressing and how much in fast food restaurants and convenience is the estimated total investment to stores. He and his brothers grew SerVend upgrade Louisville’s sewer and storm into a worldwide corporation with more than 300 employees and $70 million in annual system in order to comply with the EPA sales before selling the company in 1997 to mandate? Manitowoc, a Fortune 500 company. In 1999, GF: The consent decree is an $850 mil - he founded Iceberg Ventures, a private lion commitment, and Louisville is sev - investment firm, and later was a co-founder eral years into that. The good news is of bCatalyst, the first business accelerator in the city is well ahead of its regional com- Louisville. Fischer has been an active investor petitors and is subject to a much less and board member in numerous companies across multiple industries. He is a former costly consent decree. Cincinnati and partner and former CEO of Dant Clayton Indianapolis have consent decrees that Corp., which designs, manufactures and con- both cost north of $2 billion. structs sports stadiums around the country. EL: How is the city planning to fund sewer construction costs and retire any debt incurred? ‘IT’S ALL ABOUT MAKING A BIGGER PIE AND GF: By ordinance, the MSD may raise NOT STEALING PIECES FROM EACH OTHER’ sanitary sewer rates up to 7 percent a year. Louisvillians have been seeing a Louisville Mayor Greg Fischer discusses financial issues facing 6.5 percent increase in rates each of the last six years. Construction work will be Kentucky’s cities and using innovation for economic gain complete in about 13 more years, so it’s a 20-year project. The cost of our sewer upgrades, relatively speaking, are much less than some nearby cities. As much as people are disappointed with the rate Ed Lane: About 40 percent of your first commenced the partial demolition of a increases, from a regional perspective term as mayor is behind you. What was building and preservation of a building Louisville is in pretty good shape. Our the most significant issue you have on Main Street as it widens the bridge’s country needs to address its sewers, faced to date? approach in . So roads, bridges, water lines; America is Greg Fischer: I’m about 19 months into the project is under way. Both bridges getting older, and its infrastructure my four-year term so about 60 percent is are slated to be completed in 2018. needs to be replaced. ahead. The Ohio River Bridges Project The big move was getting the cost of has been a huge milestone for this the project from $4.1 billion down to EL: Occupational and real estate taxes administration and for the states of $2.6 billion. Cost savings made the comprise about 80 percent of Louis - Indiana and Kentucky as well. As you project feasible. ville’s revenue. How have static housing know, the Bridges Project has been values and high unemployment levels worked on for over four decades. Get - EL: Will there be a toll charge for use of over the last three years impacted Louis- ting into a position where it was palat - the bridges? ville government’s revenue trends? able for two governors, the people and GF: There will be tolls, and that’s what GF: The stagnation in real estate prices our state legislatures to get the project made the project financially feasible at obviously has been a significant issue. going is a major accomplishment. the end. The most sensitive area of that We’ve seen a very small growth in Louis- From a jobs perspective, Louisville’s has been the provision for a local “fre - ville’s real estate tax base. had great momentum this last year. quent users” toll for people who just Occupational taxes had a nice With Ford’s opening of its assembly commute back and forth across the rebound this past year. Corporate and plant and GE’s expansion, about 4,500 river. The goal is to still have a dollar net profit taxes have been hit by the jobs have been created in Louisville by toll for a passenger vehicle. recent economy. The tax base is grow - these two corporations. ing, but it’s growing slower than the EL: You recently announced your inten- city’s expenses are increasing because of EL: The Ohio River Bridges Project is tion to merge the Louisville Water Co. pension and healthcare costs. under way. What is the current status of and Metropolitan Sewer District in One recommendation the Blue Rib - this project and the estimated cost? order to create a “stronger, leaner and bon Tax Commission (appointed by GF: Fundamentally, we want to remem- more efficient” public utility system. Gov. Steve Beshear) suggested was that ber it is two bridges and one project. Indi- What are the combined revenues of cities share in the state’s sales taxes. ana is in charge of the East End bridge both utilities, and how much in cost sav- Elsewhere, 38 states share sales taxes at and Kentucky is in charge of the down - ings do you feel can be achieved? the local level, and that provides cities town bridge and Spaghetti Junction. GF: Combined revenue of the two utili- more diversification in tax revenues. Indiana is starting construction on ties is in the neighborhood of $250 to Now, that approach is to be contrasted some of the approaches. Kentucky just $300 million, and savings from opera - with a local-option sales tax.

22 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 22 8/3/12 2:01 PM EL: Would you raise the sales tax, ask growth is due to immigrants. Fr om Louisville to have a broadening and more for a share of the current state sales tax, what areas are your new citizens com- diverse population. or would you have a local-option sales ing, and is Louisville r ecruiting from tax on top of the current sales tax? any of these countries? EL: What impact is UofL’s Nucleus pro- GF: Whether it’s a private business or GF: No. We embrace immigrants and pro- gram having on Louisville’s economy? the business of government, a more mote Louisville as one of the great inter- GF: Nucleus is doing well. Obviously, diversified revenue stream has better national cities in the heartland of America. the city is involved, in terms of the Tax odds of staying level or growing. Ken- Immigrants are everybody: from a refugee Increment Finance program, which is tucky cities do not have a sales tax com- to a Ph.D. It’s hard to paint every immi- helping make these deals financially ponent to their revenue stream. The grant with the same brush. A lot of Louis- feasible. Nucleus’ downtown geo- second possibility is the local-option ville’s entrepreneurial activity involves graphic location is excellent because it sales tax: where the citizens of a city can immigrants. It’s a strategic advantage for bridges our NuLu district with the vote on a specific project, for a specific time period, paid for in a specific way. Most all of our competitive cities have that option as well; Kentucky cities do not. So when you see capital invest- ments being made by other cities in their arts district, recreation center or forensic crime lab, frequently they are funded by a local-option sales tax.

EL: Are you in favor of a local-option sales tax to diversify tax r evenues for Louis- Relationships are built on many things... ville? Would you lower the occupational tax to help offset a new sales tax increase? GF: Absolutely. We’re not looking for more money per se; we’re looking for Like making more revenue diversification.

EL: The Kentucky sales tax is 6 percent. you feel valued What do you feel would be an appropri- ate share for Louisville to receive? GF: Six percent (smiles and laughs). as a client. The issue is, Louisville generates $2.4 billion a year in total state taxes. Louis- ville receives $1.2 billion a year from Crowe Horwath LLP takes pride in the relationships Frankfort after the taxes are redistrib- we have with our clients. In a client relationship uted. I’m not going to complain about that because Louisville has responsibil- survey, our clients said we do a better job than our ity for the rest of the state. But as it competitors of making them feel valued as a client. relates to the local sales tax option, that’s one of the reasons the Kentucky General Assembly should give cities To receive important accounting and regulatory tools – so they can compete with Austin, updates and the very latest banking industry and other major U.S. cities. news sent directly to your inbox, visit www.crowehorwath.com/signup or contact EL: A recent drug bust that ar rested 26 persons and found $4 million in dr ug Jennifer Monaghan at 502.420.4509 or money implies that there is a significant [email protected]. demand for illegal narcotics in the Greater Louisville area. What is your assessment of the severity of this problem? GF: Throughout the United States – whether it’s in rural areas, small or big Jennifer Monaghan, Partner cities – there is illegal activity taking place. At the root of crime there is a lot of drug activity. Louisville uses what we call intelligence-based policing because it’s not just a drug issue; usually there is Follow us some type of violence. Louisville doesn’t have a police unit that is solely focused on drugs; instead it’s focused on the broader issue of crime. Audit | Tax | Advisory | Risk | Performance The Unique Alternative to the Big Four® EL: A recent report suggests that 50 percent of Louisville’s population Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina THE LANE REPORT • LANEREPORT.COM are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. © 2012 CroweAUGUST Horwath LLP2012 23 FW12212C

August Lane 1-24.indd 23 8/3/12 11:39 AM LANE ONE-ON-ONE

waterfront, as well as serves as a 21st- pension contributions have gone from spent. In the next month, Louisville will century job creator. Nucleus is also cre- $32 to $75 million annually. That’s obvi- be putting its performance matrix ating a very useful connecting point in ously a large percentage of Louisville’s online in a program called LouieStat, our built environment in relation to the general fund expense. The city’s pen- which will post the city’s key perfor- UofL campus. sion and healthcare costs are out of con- mance measures in terms of service trol. You’re seeing other cities around delivery as a government. EL: You and Mayor Jim Gray are pro- the country having significant pressure Innovation has been a big part of our moting the Bluegrass Economic Devel - – up to bankruptcy – over this issue. administration. Louisville received a opment Movement to encourage $4.8 million grant from Bloomberg Phi- advanced manufacturing in the metr o EL: What is your general fund r evenue lanthropy. Louisville is one of five cities areas of Louisville and Lexington and projection for the coming year? to receive a grant. The city is doing a lot the I-64 corridor between the two cities. GF: It’s around $515 million. Louisville of work in innovation as it relates to How is BEAM progressing, and what will had an 8 or 9 percent revenue increase, vacant and abandoned properties, be its first major initiative? but it was eaten up by out-of-control rezoning, recycling and animal services. GF: It’s going very well. BEAM is finish- pension and healthcare expenses. Our You’re seeing Louisville being recog- ing up the research stage right now. We healthcare cost forces Louisville to nized as one of the most innovative cit- have to define the area in which we’re reduce services and cut back on other ies. The city has received social media going to be working and the gover- programs and investments that the city awards, so we’re putting that underlay nance, human capital and innovation in has provided in the past. into the business culture of our city as a the developments needed in order to All the stakeholders need to come to place where innovative and progressive further cement the BEAM region area the table. Louisville does not have to activity is happening. as one of the leading U.S. manufactur- look far to imagine what could happen ing centers. The focus is on productiv- here when you project the city’s finan- EL: How did Louisville earn the Bloom- ity, quality and safety. cials out five and 10 years. It’s plain to berg Innovation grant? If BEAM is one of the best advanced- see that there is a serious financial prob- GF: Bloomberg was just looking for cities manufacturing regions in the world, lem. One of the roles of an elected offi- they thought had the capacity to inno- businesses will come. Some of the initial cial is to make sure problems get solved. vate. It saw that attribute in Louisville, work will be directed to human capital Citizens around the country are electing a new mayor with an entrepre- as it relates to preparing the region’s speaking loudly about pension reform neurial background. Then it was more of workforce for the changing needs of the as well. I don’t know if you followed the an interview process with Bloomberg – workplace. recent and San Jose votes – just seeing what your view on the world 66 percent and 70 percent of their citi- was. Mayors feel the federal level is para- EL: Ford Motor Co. has of ficially zens said we’ve got to get the pensions lyzed and at some state levels there is also opened its renovated Louisville Assem- fixed. So, everything needs to be on the not much action going on. Mayors have bly Plant and started manufacturing the table. Louisville participates in the state to figure how to innovate from the city 2013 Ford Escape. What impact will this retirement system, so the city just level up. A city is a smaller unit, and advanced-manufacturing facility have receives an annual notice of how much therefore it is easier to manage change. on Louisville’s unemployment rate and it needs to contribute. The city does not Bloomberg was looking for other cities to occupational tax revenues? have control over its destiny. Louisville help prove that theory. GF: That’s a good question. Louisville is working with its friends in Frankfort One of the things I want point to is has a 2.2 percent occupational tax and, to encourage them to adopt a long-term the partnership between Louisville and of course, as part of the incentive pack- legislative fix to the pension problem. Lexington. Kentucky is one of the age to Ford the city rebates a percentage smaller states, so it needs to be more to the employer, which reduces the rev- EL: Bonds for the KFC! Y um Center flexible, nimble and closer to the cus- enues coming to the city. Occupational where downgraded by Moody’s Inves - tomer. Kentucky’s two biggest cities taxes don’t get the full tax benefits of tors Service Inc. What efforts are being should be a model of that, so I’m very new jobs created with incentives, but in made to improve revenues and bottom honored to have this collaborative work- terms of spin-off jobs it does. What’s the line income for the arena? ing relationship with Mayor Jim Gray. spin-off effect of 3,000-3,100 new jobs? GF: Arena management was changed We knew each other before we were It’s anywhere from three to seven addi- from the State Fair Board to AEG Facili- mayors. We’re both entrepreneurs. Lou- tional new jobs, depending on who you ties, with a 10-year agreement that pro- isville has taken a big chunk of that believe. What percentage of the spin-off vides some guarantees on performance Bloomberg money and dedicated it to jobs are in Jefferson County is another and some up front monies. This is a the BEAM project. Lexington and the question. We expect Ford and GE to state-operated facility. The city is obli- central are actually have half a percent, maybe a little more, gated to pay between $6.5 million to benefiting from the Bloomberg rela- positive effect on the local unemploy- $9.5 million a year, depending on how tionship. Some people say all the ment rate. profitably the arena is managed. The Bloomberg money should have been city is very interested for the new man- focused on Louisville. I think Louis- EL: Many of Kentucky’s counties and ager to meet its performance target so ville’s got to show it’s all about making a cities are experiencing serious financial the city will just need to make its mini- bigger pie and not stealing pieces from pressures due to the cost of defined- mum contribution. each other, so we’re happy in helping benefit pension plans and health insur - this region. ■ ance benefits. How ar e these costs EL: Do you have a closing comment? impacting Louisville’s budget? GF: Another thing that is critical: GF: It’s a serious financial problem, and expense control. The biggest expenses Ed Lane ([email protected]) it really impedes the city’s ability to the city has are people related. All of is chief executive of Lane Consultants, Inc. and publisher of The Lane Report. invest in other areas. Since the merger the city’s finances are online so people nine years ago, the cost of Louisville’s can understand how their money is

24 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 1-24.indd 24 8/3/12 11:39 AM August Lane 25-52.indd 25 8/3/12 1:16 PM AGRIBUSINESS Kara Keeton photo

A Union County, Ky., cornfield that should be ready for harvest instead shows the stress of this year's drought and weeks of scorching heat. At least 16 counties had temperatures topping 105 degrees in Great Expectations June and July. Early in the year, Kentucky farmers were expecting their largest corn crop ever.

105 degrees, according to data from the Kentucky Mesonet system of weather sta- Get Scorched tions operated across the state by Western Kentucky University. The Calloway County Drought and record heat rewriting the initial station in Murray hit 107.2 on June 29. Initial forecasts that forecast for record 2012 Kentucky farm receipts farm receipts would top $5 billion have wilted. BY KARA KEETON Weather conditions are having a significant impact across the board on the Kentucky agri- ALK to any farmer across “It has been a devastating summer culture economy’s bot- Mark Haney, Kentucky and the top chal- for grain farmers, but the heat and dry tom line. President, lenge they have faced this weather has also taken a toll on our hor- Especially hard hit is Kentucky Farm year is weather, the perennial ticulture and livestock operations” said 1.6 million acres of corn Bureau wild card for agribusiness. Mark Haney, Kentucky Farm Bureau that commonwealth farm- TFreezes, drought and record heat are hit- president. “The adverse weather condi- ers planted, a 16 percent increase from ting hard at harvest expectations for tions didn’t begin with the heat of the 2011 and the most Kentucky corn acreage 2012, which began with forecasts of the summer; many farmers were also hit since 1986. Recent assessments rate a highest farm receipts in state history. hard in the spring with the late freeze.” mere 1 percent of the crop Excellent, with Instead, revenues might fall as much Kentucky communities by the dozens 5 percent Good, 17 percent Fair, and 77 as 20 percent. Diversification of many approached, tied or set all-time tempera- percent Poor or Very Poor, according to operations will keep the results from ture records in early summer. At least 16 the National Agriculture Statistics Service being even worse. counties were scorched by highs topping field office in Louisville.

26 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 26 8/3/12 1:16 PM Nationally, 2012 is the worst U.S. are in it year to year but you look at it Kentucky talking to producers. The heat drought year since the 1950s. Portions from the bigger picture. We, the farm- and drought losses farmers are seeing this of Kentucky got rainfall the second half ers, are in this for the long haul. Many year make crop insurance an integral part of July, however. are multigenerational farmers, and we of risk management on the farm. “If we continue to get rain across the do what we can to mitigate the risk and “Crop insurance is a way of life for state like we have had recently, then there is then just ride out the storm.” producers,” he said. “This is why the hope for the soybean crop, tobacco, pas- Farm Bill is so important to our farmers. tures and some of our late vegetables and Weathering a bad year with crop insurance We need to ensure that farmers have fruits,” Haney said. “As for the overall eco- Many horticulture operations, orchards programs like this to provide a safety nomic impact of the weather this year, we and some forage operations faced major net out there and risk management will just have to wait and see what happens.” hardships after a warm spring was followed tools that they can depend on in times by a late freeze. Then in June, when tem- of extreme losses like we are seeing From hopeful to ‘devastating’ peratures started rising and rain eluded across the United States.” In the 2012 Economic Outlook most of the state, farmers watched grain Crop insurance and other assistance released last December, agriculture crops begin to decline, vegetable plants programs do not make up for all the economists estimated Kentucky’s cash drop blooms and pastures dry up, the lat- losses that farmers are facing as a result receipts might have reached a record ter necessitating early feeding of livestock. of the extreme weather this year, but $5 billion last year in 2011. Producers “We are all in the barrel this year, so Haney said farmers today are much bet- saw almost across-the-board improve- to speak. I don’t think any operation ter off than in previous drought years ment in returns for corn, soybeans, has really escaped the impact of the when programs were structured differ- wheat, cattle, horses, hogs and dairy. weather this year,” Haney said. “The ently or did not exist at all. Economists predicted 2011 net farm positive is that farm gate and commod- “I estimate that 88 to 92 percent of row- income would rebound to above $1 bil- ity prices have been pretty good these crop producers have insurance at some lion, an increase of more than 25 percent past couple of years. So if you look at level,” said Cory Walters, UK agricultural from the $780 million netted in 2010. this from a statewide perspective, we are economist. “Much like other insurance “The official data for the 2011 crop in a position to weather a bad year.” policies, the coverage all depends on the year will not be released until late Tough summer weather already has August, but I don’t think we will make resulted in some farmers across the state the expected 5 billion,” said Will Snell, losing entire crops, said Haney, who travels Continued on page 29 UK agricultural economist. “I think we are going to fall a little short due to the timing of some of the sales of com- modities, but I expect that we will exceed the $4.4 billion (in receipts) from 2010.” As recently as early spring, only four or five months ago, Snell said he was hopeful economic growth in Kentucky’s agriculture sector would continue in 2012. That hope is gone.

“Everything was going well as the Agriculture/Katie Pratt photo UK College of growing season began, and then you get hit with a dose of reality that this industry certainly cycles a lot due to factors we can’t control,” Snell said. “I guess we could hit $4 billion in cash receipts, but it is pretty devastating out there right now.” Along with the weather impact, farm- ers this year are seeing no relief on the expense side. Input prices for all areas of farming are climbing, and that trend appears likely to continue. Because of drought condition here and in much of the U.S. midsection, corn prices will go higher and beef is going to go down, which has a negative impact on a lot of Kentucky farmers. “To be honest, it is another year of struggle for all farmers, from fruit and vegetable to cattle and grain,” said Haney. “If you are a farmer though, you

Ears of corn exhibit pollination problems because of drought and heat.

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August Lane 25-52.indd 27 8/3/12 1:16 PM AGRIBUSINESS

Farmers’ Markets: Growing the Local Food Economy ARMERS’ markets are one of the state’s green shoots of commerce. The 147 markets in 100 Kentucky counties this F photo Staff year will generate an estimated $11 million in sales to farmers who reinject it into their local economies. “In 2011 markets reported $10.5 million in gross sales, but I’m sure this number would be very close to, if not over, $11 million,” said Sha- ron Spencer, farmers’ market director with the Kentucky Department of Agriculture. Like many other aspects of the state’s agriculture economy, Kentucky farmers’ mar- kets have seen steady growth over the last few years. In 2009, markets reported sales of $5.6 million, and then sales increased to almost $8 million in 2010. “The weather condi- tions this summer are tak- ing a toll on our farmers at the market. It has not been a good year for beans and corn, but the diversity of products at the market is what has made the differ- Above and right: More and more Kentuckians are Jeff Dabbelt, ence for sales,” said Jeff buying fresh vegetables, fruits, meats and other Executive Dabbelt, Lexington Farm- farm items direct from the producer at 147 farmers’ Director, ers’ Market executive markets in 100 counties, such as this one in Lexington director. “We have great downtown Lexington. Items for sale vary seasonally,

Farmers’ farmers producing niche such as fresh flowers and flats of berries at right. Kara Keeton photo Market products like artisanal cheeses, wines, pasture eggs and organic meats along with a great 2006, the number of permanent market selection of seasonal products that bring cus- structures has nearly doubled from 34 to 62. tomers out to the market each week.” “I see the Kentucky Agricultural Develop- Spencer explained that the diversifica- ment Fund investments made in our farmers’ tion at the farmers’ markets has happened markets as not just investments for our farmers because farmers have had to diversify to stay today, but also long-term investments for agri- on the farm. As farmers started losing culture,” said Roger Thomas, executive director tobacco quotas 10 years ago and began look- of the Governor’s Office of Agriculture Policy. ing for ways to replace tobacco income, many “Farmers’ markets are much more than just a turned to products they could direct market venue for farmers to sell products; they are also to the consumer. one of the best consumer education tools we “This necessity to change, along with the have in agriculture.” trend in the local food movement, has led to They tell customers how products are the growth and diversification in farmers’ raised and made, introduce them to and markets across the state,” Spencer said. share recipes for new products, and explain Summer means typical wide variety at And markets are growing and becoming preservation methods for seasonal items. markets. There are interesting products year permanent parts of their communities “It isn’t just about selling products; the round, though, for consumers willing to try thanks in big part to assistance from the Ken- farmers share with them the stories from the new items: Greens, winter squash, sweet pota- tucky Agriculture Development Fund. Since farm and the customers become friends,” toes, meats, eggs, breads and other value said Stephen Yates, St. Matthew’s farmers’ added-products usually mean strong selec- market manager. “Price of the products isn’t tion in the cold months, too. the determining factor in these relation- “Having a good mix of vendors, both farm-

Staff photo Staff ships. The customers like knowing the ers and processors, have helped the Lexington farmer and how their food is produced. They Farmers’ Market to grow year-round,” said Mac don’t get that when they buy tomatoes or Stone of Elmwood Stock Farm, one of many salsa off the shelf at the grocery store.” family farming operations that sell there all year. The local food movement and farm diver- “We are seeing a lot of new faces, a sification is leading some markets to extend younger crowd at the market, who con- their seasons. Kentucky now has three year- cerned about the food they eat and how it round markets where customers can buy gets from the farm to the plate. I think this fresh meats, eggs, processed foods and pro- growth is not only good for our market, but I duce through the winter months. think it is a positive sign for the local food “We had our best winter market this past economy beyond the market.” this past year,” Dabbelt said. “We had more members participate and according to mem- Finding markets bers many saw sales greater than in years For a complete list of Kentucky’s farmers’ before. I had one producer tell me that he markets, locations and hours of operation, sold $250 in product one winter Saturday visit kyagr.com/marketing/farmmarket/ before 10 a.m. While sales like that are not index.htm. The Lexington Farmers’ Market operates year-round normal for the winter market, we hope that under and near the Fifth Third Pavilion downtown. they are one day.” —Kara Keeton

28 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 28 8/3/12 1:16 PM Continued from page 27 level of liability, and I say most farmers are in the 65 to 75 percent coverage level.” A Kentucky crop insurance compen- sation total following this year’s devas- tating weather is difficult to estimate. Each operation’s payments will depend on the coverage level, insurance type and unit type chosen for its policy. “We are still in the mid- dle of the disaster, so at this time we do not have final numbers for the total devastation or level of crop insurance that will be paid out,” Walters said. “We do know that corn Cory Walters, crop conditions for Ken- Agriculture tucky are not good, and Economist, UK College of Agriculture/Katie Pratt photo UK College of even with crop insurance University some Kentucky farmers of Kentucky “I’m very fortunate that I didn’t pull that A Lyon County cornfield was harvested in July could lose money this year.” trigger this year,” said Gilkison. “The crop for livestock silage rather than grain because of the poor condition of the crop. While weather is landing a hard insurance will help cover our losses, and we punch to agribusiness, it’s far from a can make the silage we salvage from our knockout blow. corn crop work for us on the farm.” “The ag community in Kentucky has Gilkison is hopeful recent rains and always responded well to adversity; we have cooler temperatures will help his soybeans off the plants,” said Evans. “There is no had so much of that in our state. We roll to continue to grow, and at this point his amount of irrigation that will protect from with our punches,” Haney said. “At this burley tobacco is still looking good. the heat, so that just is a double whammy stage of the game, everyone in Kentucky’s “I think what is key to our operation is for the vegetable and berry crops.” ag community is focused on what we can that we are diversified on our farm,” said Weather-impacted crops often create do moving forward through assistance Gilkison. “We have grain, tobacco and further challenges for farmers in meet- programs and education to help mitigate beef cattle. We are diversified enough to ing customers’ retail expectation, Evans this terrible year for the farmers.” manage risk from a failing crop.” said. Despite hard work in difficult weather conditions such as Kentucky Risk management decisions are ongoing Diversification makes has had this summer, farm managers “The weather has totally double whammy survivable can not guarantee products are avail- destroyed the grain part The weather challenges able during their regular season. In of our corn,” said Bren- began in early spring for addition to limiting production, heat nan Gilkison, a Clark Kevan Evans of Evans and lack of rain can impact the quality County farmer. “We have Orchard in Scott County. of products that do make it to market. salvaged some of our crop He saw over half his Kevan Evans, “Our beans this year on a whole have as silage and plan to take peach crop disappear in Evans Orchard not been the quality our customers have advantage of the cheaper Brennan a single night, and a come to expect,” Evans said. “Consumer cattle prices and use the Gilkison, large percentage of his other fruit trees education, really helping people under- Farmer silage as feed.” suffering damage. stand how their food is produced, is espe- Gilkison, like most grain farmers, uses “We were lucky that we didn’t lose cially important during adverse weather several risk management tools in his opera- more trees. There are some farmers out conditions. At times this level of consumer tion to help offset losses, including crop there that lost 80 percent of their crop education can be as big of a challenge for insurance and contracts. While he has crop this year,” Evans said. “Yet with orchards the retail farmer as the challenges we are insurance on his corn acreage this year, all over the (U.S.) Northeast impacted facing in the field.” Gilkison is happy he chose not to go the by the freeze, it is going to be a chal- Evans knows that his overall production contract route this year. lenge for us to find apples and peaches has been hit hard this year by the extreme “Some years we choose to take out to supplement our losses to meet the weather, but he is not sure what the final contracts, but for some reason I didn’t needs of our customers.” impact will be to their bottom line. this year,” he said. If losing more than 50 percent of tree “We have diversified our operation Not all grain farmers are as lucky as production wasn’t enough for Evans with agritourism activities and value-added Gilkison on the contract side. Even Orchard, drought and extreme heat took products, so our bottom line isn’t depen- those who chose to take out conserva- a major toll on its vegetable and berry pro- dent just on the sale of the fruits and veg- tive contracts on their crops are now duction. Evans irrigated vegetables and etables from the farm” said Evans. “Don’t potentially looking at having yields far berries during the drought, but that did get me wrong: This season hasn’t been below their estimated contracts, as a not protect crops from the extreme heat easy, but our diversification efforts on the result of the weather. They are having to of early summer when much of the state farm are what help us survive challenging make hard decisions as to whether they experienced multiple consecutive days of seasons like we are facing.” ■ sell their contracts now at a loss or gam- 100-degree-plus weather. ble on if their crops will produce “There were days when the heat was so Kara Keeton is a correspondent for The Lane Report. enough to meet their contract yields. extreme that the blooms were just falling She can be reached at [email protected].

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 29

August Lane 25-52.indd 29 8/3/12 1:16 PM COVER STORY Picking Up the Pace Yearling prices show early signs of Thoroughbred industry recovery; big bet made on Calumet Farm

BY ANNE CHARLES DOOLIN

ENTUCKY’S beleaguered Thoroughbred industry is starting to see improve- ment after several years of decline, with financial indi- Kcators in most segments of the industry finally pointing in the right direction. Professionals in the breeding and sales sectors of the state’s signature indus- try see the early signs of financial recov- ery, although the racing industry is still facing challenges. The equine real estate market, meanwhile, got a shot in the arm when famed Calumet Farm changed hands for $36 million this spring – and even better, the new owners are commit- ted not only to maintaining Thorough- bred breeding and racing operations but restoring the fortunes of this faded crown jewel with further investment. Yearling sales, the industry’s initial financial litmus test of the year, are just getting under way for 2012. The first, conducted at Fasig-Tipton’s Lexington site in July, showed a healthy 15.1 percent increase in total sales dollars and 16.3 percent higher average. Overall receipts for the 189 auctioned in the one-day ses- sion were $15,364,000, which compares favorably to last year’s $13,349,000 total for 191 sold. The average price was $81,291, up from $69,890 in 2011; the median held steady at $60,000.

A yearling colt by Tapit out of Muir Station and consigned by Gainesway Farm sold for $280,000 to Bradley at the July Fasig-Tipton auction in Lexington. Average prices increased 16.3 percent at that sale, generating optimism for the much larger September Yearling Sale at Keeneland.

30 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 30 8/3/12 1:38 PM “We were very pleased with how the “In 2012, there were still about eight greater, and it’s also broader in its eco- horses sold,” said Executive Vice Presi- times as many Kentucky-bred foals as New nomic advantage. dent and COO Dan Pride. “There is York-bred foals. But that gap is going to “There are fewer mares being bred always some trepidation going into the close,” said Fasig-Tipton’s Pride. overall, and when a mare leaves Ken- first yearling sale of the year, but overall “The advantage of a program like tucky she’s not being replaced,” Pride there was a very positive vibe afterwards.” New York’s is that it’s a three-level equa- continued. “There is the multiplier Next up (after this issue went to press) tion,” he said. “In addition to enhanced effect. For every mare that leaves, that’s was Fasig-Tipton’s sale at Saratoga, N.Y., purses, they have breeder and stallion one less van ride to the breeding farm, then Keeneland’s mammoth September owner awards. Sometimes it’s the same one less stop at the convenient store for Yearling Sale, which will span 12 days and person, but most of the time there are gas for the van, less hay and feed being feature 3,604 yearlings. three different people or groups that bought by the farm, one less horse “In terms of the year- can benefit from that horse. The incen- for the blacksmith to trim, one less ling sales, I feel pretty tive to breed in a state like that is mare that needs checked by a vet. The good,” said Walt Robert- son, Keeneland vice president of sales. “The (November) Mixed Sale last winter went well, as Walt Robertson, did the Two-Year-Olds In Vice President Training Sales this of Sales, spring. People are will- Keeneland ing to pay money for a Association nice horse. There are fewer horses available because we’re producing less. Over the last five or six years, we’re down about half in foal crop size.” Club statistics show the num- ber of Thoroughbred foals registered for racing eligibility in North America has been declining annually for most of the decade. In 2011, approximately 27,000 foals were registered, a 10 percent decrease from 2010 and the largest single-year decline in recent years. Estimates for 2012 are another 8.5 percent drop to 24,700. The only recent year to show an increase was 2005, when 38,361 foals were registered. Thoroughbred industry metrics and financials tend to lag several years behind overall economic trends, how- ever, because of the time involved in breeding, gestation and training for each year’s crop. The annual Report of Mares Bred, also complied by the Jockey Club, will be released this month and is expected to show lower numbers again also. In 2009, there were 45,784 mares bred in the United States by 2,978 active Thoroughbred stallions. The next year’s figures saw mares bred decrease to 40,386 and stallions to 2,629. Totals slid further in 2011, to 35,304 mares bred and 2,095 servicing stallions.

Other states luring horses While Kentucky by far remains the leader by number of resident mares, stallions and foals with more than five times more bloodstock than any one other state, there has been a steady stream of horses moving to other states such as New York that have enhanced racing purses and/or in-state breeder award incentives. Many increased their Thoroughbred monies specifically with alternative gaming revenues.

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 31

August Lane 25-52.indd 31 8/3/12 1:16 PM COVER STORY

economic impact affects so many ancil- lary support industries.” Kentucky’s breeder incentive pro- gram is different from other states, in large part because so many foals are bred specifically for the market. “We produce quality, and it’s a commercial industry,” said David Swit- zer, executive director of the Kentucky Thorough- bred Association/Ken- tucky Thoroughbred David Switzer, Owners & Breeders. “Ken- Executive tucky-bred horses race all Director, over the world, and our Kentucky program does not restrict Thoroughbred Owners & those horses to racing Breeders only in state. The breed- ers receive awards no mat-

ter where the horse races. We also have Mathea Kelley photo purse supplements that award owners who race their Kentucky-sired, Kentucky-foaled “If production con- Grooms at Three Chimneys Farm hand horses in state. tinues at its current rate walk Thoroughbred yearlings each morning to instill proper gait and posture habits and “Our fund is more stable than others,” of average declines of to familiarize them with being handled and he added. “They built their business plan more than 8 percent taking training instruction. on casino money. The danger of that is it’s over the past five years, not permanent. When states are losing what will the available money, and all are, legislators start taking horse population in states and the ongoing flow of Kentucky money back from those programs. That’s Kentucky and other rac- Kevin Flanery, President, horses to those states,” he said. happening in Ontario, Pennsylvania, Indi- ing states look like five Churchill It is encouraging that the breeding ana and West Virginia. It’s like someone years down the road? Downs and sales segments of Kentucky’s horse hooked on oxycontin. What happens Where will those horses industry appear to be stabilizing after a when you take the drug away? You feel a come from?” he asked. period of difficulty, Flanery said, but lot of pain.” There are concerted efforts else- “the landscape for racetracks continues It takes three-plus years from concep- where. As foal crops dwindle, efforts by to be challenging.” tion until a foal is old enough to race, but other racing states to lure horses from the reduced Thoroughbreds production Kentucky continue to grow, Flanery A ripple effect is already being felt at the racetrack. said. The Bluegrass state does not have The reduction in foal crop also impacts Concerns about horse population the same incentive tools as New York, the sales companies. and field size grow in the near term Indiana, West Virginia, Louisiana, Penn- “We’re down 15 percent in yearlings “because of a serious and ongoing sylvania and, very soon, Ohio, to fund to be sold in September,” said Keenel- reduction in the number of horses its purses and breeding programs and and’s Robertson. “Last year, we had just being produced at Kentucky farms and remain competitive. over 4,000.” breeding facilities across North Amer- “Until this is addressed, the major The industry went ica,” said Churchill Downs President issues for Churchill Downs and other through a similar correc- Kevin Flanery. Kentucky tracks will continue to be the tion in the mid-1980s, The 2012 crop total reflects a drop of increasing competitive pressure from said Case Clay, president nearly 10,000 foals over a five-year period. slot-fueled purses in competing racing of Three Chimneys Farm in Midway, owned by his North American Thoroughbred Breeding Decline parents Robert and Ranked by mares bred in 2011 Blythe Clay. Case Clay, “I was in the fifth President, 2010 2011 PERCENT 2010 2011 PERCENT Three STATE/PROVINCE grade,” Clay said. “But by STALLIONS STALLIONS CHANGE MARES BRED MARES BRED CHANGE talking to folks who were Chimneys Farm Kentucky 266 228 -14.3 17,303 15,714 -9.2 active in the business Florida 123 116 -5.7 3,076 2,876 -6.5 then, like my father and his contempo- Louisiana 205 181 -11.7 3,093 2,674 -13.5 raries, they said 2009-2010 was worse California 184 176 -4.3 2,523 2,446 -3.1 than the 1980s.” 78 71 -9.0 1,385 1,396 +0.8 Clay holds a degree in economics and Ontario worked in the corporate world with the Pennsylvania 97 77 -20.6 1,542 1,188 -23.0 Hyatt Corp., Ernst & Young, and Arling- New York 53 51 -3.8 1,291 1,147 -11.2 ton Park. That experience has been “help- New Mexico 118 118 0.0 1,181 1,066 -9.7 ful, especially in a difficult economy,” he Texas 142 137 -3.5 1,046 1,016 -2.9 said. “The past couple of years have pro- vided an invaluable learning experience. Oklahoma 129 98 -24.0 1,207 982 -18.6 Source: Jockey Club Continued on page 34

32 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

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Continued from page 32

“Last year, it felt like our market had hit the bottom. We now have a bit of historical data – the 2011 auctions were better than they were in 2010. I’m guessing this year will be similar to last,” Clay said. “The real barometer is the Keeneland September Sale. As long as the demand remains the same, we’ll be OK. A lot of the supply is now gone, so prices have gone up.” “It generally takes this industry four or five years to get back from the start of a downturn or recession,” Switzer said. “When you look back at last fall, that’s when things started turning around. American buyers are coming back into the selective. I think since we have probably Three Chimneys Farm, a full-service Thoroughbred market, which is encouraging. We were hit the bottom and then saw encourag- farm in Woodford County, is preparing about 120 getting away from our supply and demand ing signs last fall (at the sales) that it’s yearlings for the sales ring in 2012. curve, but that’s evening out now.” easier to value the animals. But it’s Others agree. going to take a while before we get back There are significant to what we consider normal.” everything at Calumet. We’re going to be signs that the U.S. auction Thoroughbred operations are better aggressive and invest a lot of money to market has stabilized or businesses in general today. restore the main house and the ambience. begun to gain ground, Tight credit remains a worry among Hopefully, the racing operation will return mostly because the lower those breeders who survived the recent it to its heyday.” supply is more in line with financial crisis, Oakford said. Tom Biederman, Glenye Cain demand for horses, said “That flushed many right out of the owner, broker and prin- Oakford, Glenye Cain Oakford, the business, and so far I haven’t seen much cipal auctioneer of Bie- Bloodstock Daily Racing Form’s blood- evidence that they are returning,” she derman Real Estate and Business stock business correspon- said. “In addition to facing tighter Auctioneers, said the Correspondent, Daily Racing dent since 1999 and credit, many breeders still in the game equine real estate mar- Form author of “The Home remain intensely practical and conserva- ket is very similar to the Run Horse.” tive in their spending.” Tom auction ring. “That is a good thing, but to really Biederman, “Just like with horses, thrive in coming years, I think the mar- Back to ‘splendor’ Owner, the very, very nice year- ket also has to attract more new invest- Real estate has been Biederman lings and broodmares ment,” she said. “We’re seeing some of another stagnant segment Real Estate and get a lot of attention. So that, but it’s too early yet to call it a of the equine market, but Auctioneers do the very, very nice trend. In the meantime, buyers say like bloodstock, it is show- properties,” Biederman they’re not finding bargains and that ing signs of rebirth. The said. “Our business slowed down, but it the good bloodstock they want – at prime example is storied didn’t come to a screeching halt. It whatever level – is harder to buy than it Charlie Calumet Farm outside Middleton, became harder to get the amount of was two years ago. Trustee, Lexington, which was pur- money you were expecting for a prop- Sellers seem more optimistic and Calumet chased by the Calumet erty, and harder to get buyers to spend secure, she said. They don’t have a “fire Investment Investment Group Trust. confidently, but real estate still moves.” sale” mentality and appear more willing Group The farm, improvements Real estate brokers were hopeful the to hold on to stock if the market doesn’t and its famed red and international attention central Ken- meet their expectations. blue silks have all been leased to business- tucky received during the 2010 World “That’s a sign they’re more confident man Brad Kelley, who owns Hurricane Equestrian Games would spark sales. in the industry’s immediate future,” Hall and Bluegrass Hall farms. The Associ- “We all did a lot of advertising. I Oakford said. ated Press reported a sale price of nearly think people looked at ads but weren’t Financing for equine ventures virtu- $36 million for the 799-acre property. ready to buy at that time. The market ally dried up two years ago with the Louisville attorney Charlie Middle- moves slower than anyone hopes,” Bie- recession, and was aggravated when ton, trustee for the private group, said derman said. PNC Bank ceased equine lending after Calumet will remain a horse farm. “Things are picking up though. Last its 2008 purchase of National City, “It’s not going to be a subdivision or year, we had $40 million in sales, and which had been the largest lender ser- industrial park,” Middleton said. “This we’re on pace to do that again this vicing the equine industry. Access to is one of the most historic farms in the year,” he said. “We sold Clovelly Farm credit now seems to be improving. industry, and we’re going to do our best for $11.5 million and Ardmore Stud in “You’re starting to see some banks to bring it back to its splendor. Woodford County for $4.9 million late sending their sales guys out. You didn’t “We first started looking at it in 2004 last year. The timeframe from October see that in 2009 and 2010,” Clay said. and 2005 after Mr. de Kwiatkowski’s death, through December has traditionally “It is easing up slightly,” Switzer said. but the family wasn’t interested in selling been strong because it’s before a new “But the lending business for everybody then. That changed earlier this year,” he breeding season.” ■ is tough. Fifth Third (Bank) has eased said. “Mr. Kelley has almost 100 mares, back in a bit, and PBI has taken an and we’ll be moving those at Bluegrass Anne Charles Doolin is a correspondent for The Lane active role, but everybody is being very Hall shortly. He’s going to consolidate Report. She can be reached at [email protected].

34 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 34 8/3/12 1:16 PM TOP WOMEN IN BUSINESS

nity was tragic for Kentucky. I’ve never quite overcome the disappointment! My advice to younger women in business: When you think you’ve done your due diligence, there’s always more Worthy of Note you can do. Choose partners wisely. Women still underestimate the power of good ol’ boy networks and Women who are making a difference in they need to anticipate and plan for the the commercial and public life of Kentucky challenges they pose.

UR occasional feature, of every futures and options exchange Top Women in Business, in the world give a portion of their com- highlights some of the missions to CARE. It gave me a big sense women around Kentucky of accomplishment. But, my greatest who are making an sense of accomplishment has come Oimpact in business, the professions, poli- from mentoring younger people. tics and economic development. The Education: BA, University of Kentucky; intent is to recognize not the household Master of International Management, names but those in key roles whose work Denver University ethic and body of work are making important contributions to commerce Native of Vine Grove, Ky. Currently in the commonwealth. reside in Louisville The five women in this issue are Person(s) who most influenced or among the many such women The Lane mentored me: Doug Cain, a leading Report editorial board has identified. attorney in Denver, who gave me the We welcome your suggestions for oth- space to fail and succeed, and taught ers around Kentucky who also are me the importance of superior client deserving of recognition for their service and how to communicate com- efforts to boost Kentucky’s economy. plex issues simply and persuasively. My Send your recommendations to edito- father taught me to find joy and inspira- [email protected]. tion in nature. Terena Bell What inspires/drives me: Creating opportunities for people and communi- Title/Company: CEO, In Every Language ties to improve their quality of life How long at company/position: through job creation and education Seven years • Hobbies: Bicycling, running, walking Previous jobs/positions: Producer for outside. More than anything, I value my CBS and NBC affiliates daily meditation practice; it keeps me Top accomplishment: I literally cre- grounded and aware we’re all in this ated In Every Language from scratch together. and now we have an international repu- Interests: Traveling and spending time tation, with clients in five countries! in other cultures, music and hanging Education: BA in English, Centre Col- out with friends. lege; Masters in French, University of Volunteering: I serve on several start-up Louisville; Post-graduate executive edu- company boards that provide a service or cation, Tuck School of Business at Dart- product that make a difference in peo- mouth College ple’s lives. I am raising scholarship sup- Originally from Sinking Fork, Ky. port for students at Jefferson Community (Christian County), currently live in and Technical College. Louisville. Currently reading and/or recent Person(s) who most influenced or movie/play/concert attended: I am mentored me: My entire family, but reading Ann Patchett’s “Run.” Movies especially my grandmothers, Erline Lynn E. Allen I’ve seen lately include “The Exotic Mari- Cansler and Dorthy Bell gold Hotel” and “Moonrise Bay.” Title/Company: Capital Innovations, Inc. What inspires/drives me: I am creat- My biggest challenge and how I ing jobs. Every day around the world, How long at company/position: overcame it: I worked four years to cre- there is someone whose income is Eight years ate a $100 million venture fund for Ken- greater because a company I created Previous jobs/positions: Director of tucky and finally had all the pieces in exists. That’s a good feeling, knowing Institutional Marketing, AEGON USA place. It would have made a dramatic you’re helping put food on the table for and Director of International Resource difference in Kentucky’s ability to gen- people in more than 50 countries. Development, CARE USA erate jobs and innovation. At the 11th I hour, political influences stopped every- Hobby/interests/volunteer work: Top accomplishment: Launching am blessed by a great group of friends. I thing in its tracks. The loss of opportu- World Trading Day, a day when traders often tell them, “When I’m not with

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 35

August Lane 25-52.indd 35 8/3/12 1:16 PM WOMEN IN BUSINESS

you, I’m working.” They are a delight to be around and restore me so that I have the strength it takes to get back to work. Nation’s Top Business Women Currently reading and/or recent Convening in Louisville movie/play/concert attended: “The Secret Thoughts of Successful Women” N October, one of the nation’s leading ties and lives,” said Diane Tomb, NAWBO by Valerie Young. women’s professional organizations is bring- president and CEO. Iing its annual conference to Louisville. The Louisville chapter will host an open- My biggest challenge and how I over- The National Association of Women ing reception, “All Things Louisville,” at the came it: I have a learning disability. Business Owners (NAWBO), which has Museum on Oct. 4 at 6 p.m. School was very difficult for me and, even more than 7,000 members and 80 chapters Gov. Steve Beshear, Lt. Gov. , as an adult, people have to communicate across the country, bills itself as “the unified Louisville Mayor Greg Fischer and Secretary clearly and precisely for me to fully under- voice of America’s more than 10 million of State Alison Lundergan Grimes are stand them. Humility has taught me to ask women-owned businesses, representing the scheduled to attend. fastest growing segment of the economy.” when I don’t understand and improved Louisville was chosen as a possible con- Women-owned firms employ my communication with clients. All they ference location in 2010. Early last year, the see is me working hard to get it right, and local NAWBO chapter presented the bene- more than 13 million people I often leave a meeting with a better fits of hosting the conference in the River and generate $1.9 trillion in understanding of the client’s need. City to the national executive committee, sales, according to the Center said Lesa Seibert, president of NAWBO Lou- My advice to younger women in busi- isville and Xstreme Media LLC. for Women’s Business ness: Get WBENC-certified as a woman- “Louisville was chosen because of room Research. owned business. Through WBENC, I and meeting space, locale and ‘things to do’ found a strong network of bright, intelli- for the attendees,” Seibert said. “The Other speakers at the convention include gent women and was able to attend Dart- NAWBO Louisville Chapter is very honored Tori Murden McClure, author and president mouth’s WBENC-Tuck program, gaining and excited to be hosting the 2012 NAWBO of Spalding University in Louisville; Terri National Convention and showcasing Louis- McCullough, CEO of the Tory Burch Founda- an Ivy League business school education ville to the attendees.” tion; Dina Powell, president of the Goldman free of charge. Certification opened the The Oct. 3-5 conven- Sachs Foundation; Jim Horan, president and door for In Every Language to sell to For- tion will be headlined by CEO of The One Page Business Plan Co.; Car- tune 500s that want to buy specifically keynote speaker Kathy Ire- oline Dowd-Higgins, professional develop- from women. land, who will share the ment coach and author; and Susan Davis, story of her company’s chair of Vital Voices and recipient of the success during the Friday Global Empowerment Award at the Asian lunchtime general session. Women of Achievement Awards. Founded in 1993, Kathy The conference will cover topics such as: Ireland Worldwide grosses Kathy Ireland, developing new connections to grow business; over $1.9 billion in sales and CEO and focusing on health and wellness; building a has been named the 25th Chief Designer, strong personal brand; growing businesses most powerfully licensed Kathy Ireland using ; mentoring; social media; fur- brand in the world. Worldwide thering women entrepreneurs; public policy; One of the original “supermodels” in taking your business global; and developing a the 1980s and ’90s, Ireland became an great company culture. actress and a fashion entrepreneur, the lat- “Being part of NAWBO has been one of ter role soon squeezing other pursuits out of the best things I have ever done for my busi- her calendar. The CEO and chief designer ness,” Seibert said. “I have met the most tal- of her company’s products will share the ented and successful women business story of how she built her business empire, owners through the organization that I the most important lessons she learned probably would have never met otherwise. It along the way, what things have been critical has given me the opportunity to hone my to her growth, what inspires and motivates leadership skills by serving on the board and her to reach higher, and the balance faced has introduced me to women that have by women in managing family responsibili- become mentors and friends.” ties, career and boundaries. Lexington also has a NAWBO chapter. “From supermodel to supermogul, Ms. For more information about the confer- Ireland’s success story will inspire NAWBO ence and to register, visit nawbo.org/sec- members to innovate, advocate and acceler- tion_231.cfm. — Lorie Hailey Gina H. Greathouse ate their own careers, businesses, communi-

Title/Company: Senior Vice President, Economic Development, Commerce Education: 1988 Graduate of the Uni- and bringing a project to fruition, closing Lexington Inc. versity of Kentucky. Go Cats! the deal. At ribbon cuttings and ground breakings, it is a great joy to stand on the How long at company/position: More Native of Frankfort, currently reside in Lexington sidelines and know our team was part of than five years in the economic develop- creating new jobs and opportunities. ment division with Commerce Lexing- Person(s) who most influenced or ton Inc. – the Greater Lexington mentored me: Bill Lear, managing part- Hobby/interests/volunteer work: Chamber of Commerce ner of Stoll, Keenon Ogden law firm; and ! I’m married to a fabulous Jim Navolio, former commissioner of busi- and talented horseman, John Great- Previous jobs/positions: Senior Proj- house Jr. My husband, his sons (John ect Manager with the Kentucky Cabinet ness development for the Kentucky Cabi- net for Economic Development and Ben) and his family are actively for Economic Development; Policy and involved in Glencrest Farm, a family- Budget Analyst, Governor’s Office for What inspires/drives me: Working with a owned and operated Thoroughbred Policy and Management very diverse consultant and client mixture breeding and sales operation.

36 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 36 8/3/12 1:16 PM Currently reading and/or recent Currently reading and/or recent Born in Maysville, Ky.; currently reside movie/play/concert attended: Just fin- movie/play/concert attended: I am in Lexington ished “One Good Dog,” a tearjerker. John reading “Madame Secretary: A Memoir” Person(s) who most influenced or Grisham’s “Theodore Boone: Kid Law- by Madeline Albright. mentored me: I have been sur- yer,” a young adult book with great My biggest challenge and how I rounded all my life by strong, inspiring insight on the legal process. overcame it: In my career, the biggest women, from my family to mentors My advice to younger women in challenge was being a woman in a male- such as Gov. Martha Lane Collins. They business: Remember that “you don’t dominated field. When I began practic- have proven to me that I can accom- know what you don’t know.” Listen, ask ing, jobs for female attorneys were few plish anything. questions and be open to suggestions. and far between, and those that were What inspires/drives me: Two things available came with obstacles. I had to motivate me every day to work hard for assert myself as a competent and moti- the people of Kentucky. First, I was vated attorney and earn the respect of raised to believe in the importance of my male counterparts. public service. Second, the influence My advice to younger women in busi- of intelligent, compassionate, moti- ness: Stick to it, work hard and do not vated women has been a fact of life for get your back up. me. But I became concerned women were underrepresented in state gov- ernment because 51 percent of Ken- tucky’s population is women, but women comprise less than 20 percent of Kentucky’s constitutional offices. I strive every day to exemplify the strong women whose integral role in the suc- cess of our state is not adequately reflected in Frankfort. Hobby/interests/volunteer work: It is important to be involved in your com- munity. I grew up serving meals for the Salvation Army and continue that. I serve on the board of God’s Pantry Food Bank, which assists more than Taft McKinstry 200,000 each year. I am committed to the Cardinal Hill Rehabilitation Hospi- Title/Company: Managing member of tal in Lexington. Fowler Bell PLLC Currently reading and/or recent How long at company/position: With movie/play/concert attended: Ken- Fowler for 40 years. Managing member tucky has a lot of great performing arts for the past five. venues and I take advantage whenever Alison Lundergan Grimes I have the opportunity. I recently saw Top accomplishment: Selected as a Fellow in the American College of Bank- “Come Fly Away” at the Lexington ruptcy in 1994. Title/Company: Kentucky’s 76th Secre- Opera House, and I look forward to tary of State seeing the Black Jacket Symphony Education: University of Kentucky Juris there soon. Doctorate – 1972; University of Ken- How long at company/position: I was tucky Bachelor of Arts, mathematics elected on Nov. 6, 2011, and took the My biggest challenge and how I major, business minor – 1969 oath of office on Jan. 2, 2012. overcame it: Running for a statewide Business liti- office is a full-time job; it takes a tre- Native of Woodford County, currently Previous jobs/positions: mendous amount of work. It was chal- reside in Fayette County gation associate, Stoll Keenon Ogden PLLC (June 2004-February 2011); presi- lenging to stay focused on the big Person(s) who most influenced or dent, Women Lawyer’s Association of picture and not get lost in day-to-day mentored me: In my professional the Fayette County Bar (January details. Once I realized how much career my father, John McKinstry, 2009-January 2011) other people truly wanted to help taught me the importance of hard work, make a positive difference, it became determination and a focus on achieving Top accomplishment: I was so excited easier, and together, we accomplished my goals. These traits have helped me to be elected in November 2011 as Ken- something great. be a successful attorney. tucky’s 76th Secretary of State, making me Kentucky’s only current female con- My advice to younger women in What inspires/drives me: I am driven stitutional officer and the nation’s business: You cannot achieve your by the satisfaction of solving my clients’ youngest female secretary of state. goals without working hard and taking problems. risks, but you don’t have to do it alone. Education: B.A., political science, Learn from the examples of those who Hobby/interests/volunteer work: I Rhodes College in Memphis, Tenn.; am a member of the University of Ken- have preceded you and never be afraid Juris Doctorate, cum laude, American to ask questions or ask for help. ■ tucky College of Law Alumni Advisory University, Washington College of Law Committee. I host an annual party dur- in Washington, D.C. ing the Keeneland Concours d’Elegance benefiting the UK Children’s Hospital.

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 37

August Lane 25-52.indd 37 8/3/12 1:16 PM ENTREPRENEUR An Environment for Innovation Most of IdeaFestival’s sessions and events take place at the Kentucky Center for the Performing Arts in downtown Louisville.

He is now at the Johann Wolfgang Goethe- Universitat in Frankfurt, Germany. • Maurice Ashley, the first African-American chess international grand- master. Beyond a passion for chess, Ashley is an iPhone app producer, puzzle inventor, ESPN commentator, motiva- Maurice Ashley tional speaker and more. • Richard DeMillo, an expert on the chang- ing nature of U.S. univer- sities. A former chief technology officer at HP, DeMillo was computing dean at Georgia Tech Richard and heads the 21st Cen- DeMillo tury Universities, analyzing the impact of the changing dynamics of learning, tech- nology and economics. • Peter Van Buren, former head of the U.S. reconstruction effort in Iraq. In his book “We Meant Well,” Van Buren Another IdeaFestival lineup of inter-disciplinary creativity provides an insider eye- witness account of the aims to fertilize Kentucky’s entrepreneurial foundations Peter surreally bollixed Van Buren attempt to defeat terror- BY MARK GREEN ism and win over Iraqis by rebuilding a world we had just destroyed. • Baratunde Thur- ston, a tech-loving polit- DEAFESTIVAL and its typical deep shift economic development progress ically active comedian. lineup of creative, forward-thinking, swiftly, bringing job and wealth creation. Thurston formerly was status-quo-busting innovators, artists, IdeaFestival came into existence to foster director of digital for academics, entrepreneurs and social fresh thinking, as an opportunity for net- the scathing, sarcastic, change agents returns to the stage at working and new connections among inventive and hilarious Ithe Kentucky Center for the Performing those who attend and stimulate innova- The Onion website and Baratunde Arts in September. tion among Kentuckians. was host of “Popular Sci- Thurston The event organized by the Kentucky A full agenda and event lineup along ence’s Future Of” on the Discovery Sci- Science and Technology Corp., based in with information about how to attend is ence channel. He founded a black Lexington, is renowned for assembling at ideafestifal.com. The following is only political blog and performs worldwide. one of the world’s most cutting-edge several of the 20 or so presenters com- • Tony Wagner, Har- collections of creativity each year. The ing to Louisville Sept. 19-22 to share vard’s first innovation goal, KSTC President Kris Kimel their dazzling approaches to improvis- education fellow at the explains, is to support and stimulate ing, innovating and achieving progress college’s Technology & innovation and creativity in Kentucky, through unconventional thinking: Entrepreneurship Cen- especially in its business community. • Dr. John H. Barker, a surgical treat- ter. Wagner founded With average state incomes nearly 20 ment pioneer who is trying to find the key and headed for 10-plus percent below the national average, Ken- to regrowing entire human limbs. A for- years the Change Lead- Tony Wagner tucky needs more than steady growth to mer professor, ership Group at Harvard ever catch up, according to Kimel. Entre- Barker lead teams that laid the ground- Graduate School of Education and con- preneurial thinking is a lever that can work for hand and facial tissue transplants. sults widely. He has been a college

38 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 38 8/3/12 1:16 PM . A FIRM OBSESSIVELY an

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teacher-education professor, a K-8 prin- MEAN YOU. cipal and taught high school. • Kevin Colleran, former Facebook execu- tive and pioneering brand strategist. Colle- ran was among the first 10 employees at Face- book, where focus on user experience unham- Kevin pered by intrusive ads Colleran produced unprecedented success. His humorous storytelling manner delivers insight on reimagining and reenergiz- ing sales and marketing strategies. • Nikky Finney, Uni- versity of Kentucky cre- When you visit your law firm and look at them across the table, you should feel ative writing professor and 2011 National Book like the most important person in the room. At Stoll Keenon Ogden, we never Award winner for poetry. A child of activists during lose sight of whom we work for and never stop thinking about how we can best the civil rights movement Nikky who developed under- serve their best interests. As we like to say, there are many sides to the law. standing of the synergy Finney between history and art, Finney has four We’re on yours. Learn more by calling 859-231-3000. published books of poetry and co-founded the Affrilachian Poets group. • Cynthia Lowen, filmmaker who co-cre- ated the riveting docu- mentary “Bully.” This painfully up-close and personal look at bullied kids during the course of the 2009-10 school year Cynthia Lowen defied society’s clichéd view and many of the approaches to dealing with a problem that has sparked a growing movement to change how peers, parents, teachers and administra- tors handle it. ■ LEXINGTON | LOUISVILLE | FRANKFORT | HENDERSON MORGANFIELD | PITTSBURGH | SKOFIRM.COM Mark Green is editorial director of The Lane Report. He can be reached at [email protected].

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 39

August Lane 25-52.indd 39 8/3/12 1:16 PM TRANSPORTATION

Crews began demolishing several decaying, contaminated buildings along East Main Street in downtown Louisville on July 22 to clearing a path for the Ohio River Bridges Project.

State Road 265 approach to the East End Bridge. When the East End Cross- ing opens to traffic, Old Salem Road will be the first Indiana exit north of the new bridge. The bids ranged from $3.19 to $4 mil- lion. Regional contractors will have many dozens of opportunities the next six years to get parts of the $2.3 billion in work that is planned – and much needed. Average daily downtown area traffic was at 293,200 vehicles in a 2006 Ken- tucky Transportation Cabinet count, with 342,000 vehicles per day forecast by 2025 using federal computer simula- tions. At that point, Kennedy Bridge without relief would be handling 142 percent of its designed capacity – it was at 106 percent of capacity back in 2000. The contractors selected to uncrimp this regional bottleneck will be just the first in a wave of financial beneficiaries from the project, said Mike Hancock, secretary of the Kentucky Trans- $2.6 Billion Ohio River portation Cabinet. “Overall, the eco- nomic opportunity for this project is immense, Bridges Project Begins not just for the short-term Mike Hancock, but carrying well into the Secretary, future,” Hancock said. Kentucky Construction jobs and contractor cash flow are just Construction is Transportation expected to create about Cabinet the beginning of the expected economic benefits 4,000 jobs, most of which the state hopes will go to the local workforce. Dozens of subcontractors will complete BY LORIE HAILEY the many components of the project, from landscaping to concrete work and everything in between, Hancock said. ORK on a major Ken- The six-lane bridge will be part of “We’re working with the Cabinet for tucky transportation the $2.6 billion Ohio River Bridges Proj- Workforce Development … to build project decades in the ect, which also includes modernization the kind of training processes for spe- making to alleviate of the Kennedy Interchange in down- cific jobs that we need. We are creating severe traffic conges- town Louisville and the construction of the right kind of curriculum to teach tionW and improve safety in Louisville’s a new East End Crossing into Indiana. people how to do those jobs so that the began last month as con- Kentucky and Indiana have divided workforce is adequate and that the ulti- struction crews demolished several the endeavor’s responsibilities, each mate successful bidders can look to the buildings to make way for a new down- tasked with financing and construction local workforce to supply their needs as town bridge over the Ohio River. half of the project: Indiana the East End opposed to having to look outside the Crossing and Kentucky the downtown region,” he said. The Kentucky Disadvantaged Business bridge and interchange upgrade. Both states’ goals for the use of Dis- Enterprises program reaches out to busi- Later this year, both states will name advantages Business Enterprises (DBE) nesses that have achieved DBE status with managing contractors, and direct con- are higher than 10 percent. DBEs are the Kentucky Transportation Cabinet struction should begin next spring. Ken- for-profit small businesses where (KYTC) and helps pre-certified companies tucky will choose from three design-build socially and economically disadvan- achieve DBE. The program manager also works with firms seeking KYTC prequalifi- teams it has selected as finalists. Indiana taged individuals own at least 51 per- cation for work on the Ohio River Bridges had not announced finalists as of Aug. 1, cent of the company. Project. It is expected that helping busi- but it recently opened bids from six Kentucky also has specific goals for nesses prepare for involvement on the teams for its piece of the project. minority-owned business involvement. project will help them gain experience on The work is a 3,000-foot extension “We’re working very carefully to current and future projects. To learn more, of Old Salem Road, including a 170- establish … workforce employment visit http://bit.ly/Mx9meH. foot bridge that will span the future goals for minorities and women, trying

40 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 40 8/3/12 1:16 PM to make sure that we have the repre- sentation we need in the project from those minority businesses and that the employment opportunities are truly equal for the region,” Hancock said. The long-term economic impact of the project is significant. The massive construction project will “reinvigorate and modernize the downtown bridge area (and) the cross-river flow of traffic … creating a cleaner line, which for the downtown portion of the project bodes very, very well for future economic activ- ity,” he said. The intersection of Interstates 64, 65 and 71 – commonly referred to as “Spa- ghetti Junction” – was named the 11th worst traffic bottleneck in the country by the American Transportation Research Institute. During peak hours, from 6:30 to 9:30 a.m. and 3 to 6 p.m., A rendering depicts the northbound Downtown Crossing bridge (center) that will traffic backs up across the Kennedy be built alongside the present Kennedy Bridge. Its completion is expected in 2018. Bridge, which is over capacity. “The bridge serves over 200,000 peo- ple a day,” said Gary Valentine, Ken- History of the Ohio River Bridges Project tucky’s project manager. There are at least two accidents at HE new bridges have been a long time Kentucky Gov. Steve Beshear, Indiana the Kennedy Interchange each day, he coming. Gov. Mitch Daniels and Louisville Mayor said, plus nearly two additional crashes T State and local officials launched Greg Fischer encouraged the project team an impact study in 1998 for constructing two to look for ways to save money. just outside of the interchange area. new bridges and reconfiguring the Kennedy Transportation officials from both states, The existing Kennedy Bridge will be Interchange, often referred to as Spaghetti alongside federal highway officials, worked reconfigured to serve southbound traf- Junction. Goals include enhancing safety, “24 hours a day, seven days a week,” Valen- fic, while the new Downtown Crossing reducing traffic congestion and improving tine said, on an environmental impact alongside it will convey northbound transportation connections in the area. update that incorporated the costs savings. vehicles. In 2003, the Federal Highway Adminis- The update was completed and approved The East End Crossing also brings tration approved the project, which then in 16 months, which he said is a testimony to had price tag of about $2.5 billion, said Gary the determination of both states and the long-term economic opportunities Valentine, Kentucky’s project manager. level of federal support they received. (The “that will come with the increased The project was set to begin in 2008 and previous environmental impact statement development potential, primarily on be completed by 2024. But in 2007, inflation took nearly five years, Valentine said.) the Indiana side of the river,” Hancock caused the overall costs to steadily increase, The cost-savings plan recommended by said. “But there is terrific opportunity and by 2011, the project was estimated to the governors and Fischer shaved off 35 per- for Louisville Metro to continue to cost $4.1 billion, he said. cent of the project’s costs and sped the con- grow that way.” “Old man inflation got us,” he said. struction timeline to avoid inflation. “That’s when our leaders got together. They Now, the project is set for completion by The four-lane bridge will be built recognized that the $4.1 billion price tag, 2018. about eight miles upstream from Spa- even with adding tolls to the facility, was ghetti Junction, connecting I-265 in going to be very complicated to pay for.” Kentucky and Indiana to complete that interstate loop. It will be wide enough to accommodate six lanes of traffic in the bonds. Operations and maintenance backed by Indiana’s funding commit- future, by restriping the bridge deck will be via a separate contract following ments and its share of the toll-based rev- and reducing the width of shoulders. construction. The method allows the enues from the project. The bridge will cross the Ohio River use of conventional and alternative The scope and multibillion-dollar costs just north of Harrods Creek on the Ken- funding sources. of the project are so immense, tolls were tucky side, connecting to Indiana’s Lee Valentine said Kentucky found this the only way the project could move for- Hamilton Highway/S.R. 265 extension process more economical and to have ward, Valentine said. The two states will just north of Utica. Kentucky’s I-265, less impact on the state’s debt load and evenly split toll revenues on each bridge. also named for a former long-serving credit rating. It was also judged to have Meanwhile, the planned all-electric, local congressman, is known as the fewer legal and legislative obstacles. high-speed collection operation will link Gene Snyder Freeway. Indiana chose an availability pay- up with a transponders that local motorists ment concession model. It will choose a can place on their vehicles. Two bridges, two financing approaches contractor to design, build, operate and “Or it takes a picture of your license Kentucky and Indiana are taking differ- maintain the structure, and the conces- plate and you get a bill,” Valentine said. ing approaches to financing. sionaire is responsible for providing or “Tolls are anticipated to start in 2017. By After studying the Louisville and securing private-sector financing, then, who knows what the technology Southern Indiana Bridges Authority’s including private equity and debt, to will be?” ■ two top recommended options, Ken- support its obligations to deliver the tucky chose design-build construction East End Crossing. Debt payments Lorie Hailey is associate editor of The Lane Report. financed with tax-exempt toll revenue under the concession agreement will be She can be reached at [email protected].

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 41

August Lane 25-52.indd 41 8/3/12 1:16 PM INFORMATION TECHNOLOGY

Most of the main 100-gigabit Internet2 backbone is in place in the United States and elsewhere, but building it out for commercial service is expensive.

After the commonwealth’s two pri- mary research university campuses, next in line for Internet2 links are Kentucky’s other universities, then major commu- nity anchor institutions and finally, busi- ness and residential customers – when public and private officials who’ve been working on the problem can discover a market-based route to financial viability. Crucial elements are a dense enough concentration of high-usage users, with the ability and willingness to pay for premium service, in an area where existing infra- structure and physical characteristics allow cost-efficient installation of a network.

Making the leap to … what? Higher speed equals higher volume, allow- ing exchange of very large databases, com- plex scientific work files and access to remote computing systems – if there is ultra-high-speed Internet connectivity at both ends and all points between. Speeding up computer networks will speed up breakthroughs in science and Ultra-High-Speed Data business, according to IT experts. It is expected to foster economic develop- ment, research collaboration and access to better medical care and education. Inter- Build-out comes slowly as market watches net2 service will mean crystal clear phone calls and other audio, large-format high- for signs that service is financially sustainable definition video stream- ing, and lighting-fast BY MARK GREEN downloads. It will allow instantaneous monitoring of complex networks such as “smart grid” electric LTRA-high-speed Internet bits per second with uploads of 1 Mb. A utility services. Knowledge service gets built … slowly, gigabit is 1 billion bits per second or workers would have no Bo Lowrey, it turns out. Access hun- 1,000 megabits; the general 1 Gb “ultra- need to live physically Assistant dreds of times faster than high-speed” service ambition being pur- near an employer. Director of today’s typical connection sued around the nation is 250 times But the exact impact Communica- can’t be known before- tions Services, Uis, indeed, coming to Kentucky. In fact, faster than basic broadband. University some high-intensity users already have it Those highest-intensity UofL and hand. of Louisville at the University of Kentucky and Uni- UK users? They’re at 2,500 times the “We know it will be Information versity of Louisville, near the state’s only speed of your broadband. Internet2 ser- different,” said Bo Low- Technology node on the national fiber-optic vice will build out to the rest of us when rey, assistant director of 100-gigabit Internet backbone. the marketplace calculates that it is communications services with UofL UofL, which began building its cam- financially sustainable. The nation’s first Information Technology. “We just don’t pus fiber optic network in 1999, is commercial service, a pilot project by know how it will be different.” served by several 10-gigabit connections Google Fiber, is just about to become to the Internet2 backbone access node available. Bits and bytes at a secret (for security purposes) loca- A top option for some business users Digital data speeds are discussed in bits, while data tion in downtown Louisville. An 80-mile today is T3, or DS3, service that oper- storage units – the size of a drive or an individual circuit to UK’s campus provides 10 Gb ates at up to 45Mb speeds, but the cost file – are referenced by the byte, which is 8 bits of access there also. begins at around $1,000 a month for data. Bits are abbreviated with a small b and bytes Many urban home and business cus- customers near a provider and can be with a capital B. For example, a 4MB file would tomers today have basic broadband, several times that. The IT community’s take 8 seconds to download (at full speed) on a 4 which the FCC defines as download vision is that tomorrow’s 1Gb service Mb broadband connection. Data speeds in this article are in bits. transmission speeds of at least 4 mega- will be only about $100 a month.

42 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 42 8/3/12 1:16 PM U.S. Internet2 Network

Exactly what happens technology. The Broadband Technical “The medium doesn’t change, but the will rely on the creativity Opportunity Program (BTOP) was cre- capability of it does based on the equip- of individuals in the state’s ated by the 2009 American Recovery ment at the ends of it,” Lowrey said. He’s business community, said and Reinvestment Act (the federal stim- been at UofL for a year and spent 28 years Vince Killen, chief infor- ulus bill); it paid for Louisville’s node with Jefferson County Public Schools, mation officer at the Uni- on the backbone. The U.S. Unified much of that time working to effect ever versity of Kentucky. Community Anchor Network (USU- faster and better data systems. Vince Killen, Internet2 service, he Chief Informa- CAN) is building a case for connecting The challenge is putting that physi- said, could expand oppor- tion Officer, entities such as law enforcement, hospi- cal infrastructure in place to provide tunities for small to mid- University tals, libraries and school systems. ultra-high-speed access and service for size businesses that need of Kentucky The Kentucky Rural Optical Net- others in a market-based financially sus- to move large amounts of work, a team effort by UofL, UK and the tainable manner. Around the nation data around the nation, or need access to Council of Postsecondary Education, and elsewhere, some communities are stronger, faster computation power. Indi- enables UofL and UK to qualify for seeking to build their own backbones vidual smaller companies lack the major federal research grants and has while others are working to make it eas- resources to create their own high-speed the goal of connectivity for the state’s ier for the private sector. system or to access a distant system. P-20 education community. The New York Times has reported That’s a problem not just in Ken- Part of the problem is that no one that South Korea later this year will tucky, which is why several national level knows what it will cost. Efforts to figure complete an ultra-high-speed system initiatives have been launched in the that out are ongoing, Lowrey said. serving the entire nation. past year or so to generate collabora- In 2011, Google Fiber chose Kansas tion. UofL and UK are participants in The speed of light – if connectivity is right City from eager U.S. applicants as the Gig.U, an effort by U.S. research univer- Lots of fiber-optic cable was laid all over community where it would build a com- sities to accelerate deployment of next the world beginning about 20 years ago; mercial service network, and the IT com- generation networks and services. and it can operate literally at light munity has been waiting and watching A big part of what Gig.U does is speed, transmitting vast amounts of digi- closely since. In late July, Google Fiber gather market information to pitch to tal information. Computers, switching unveiled a service menu that includes 1Gb potential providers to persuade them equipment and other technology that service and Google TV for $120 a month that providing Internet service at data can create, send and receive data ever or gigabit service with four 1Gb ports for speeds of 1 gigabyte a second would be faster are still being created. Even more $70 a month; a two-year contract gains a good investment. Promisingly, a pri- difficult is the matter of getting it waiver of the $300 installation fee. A third vate company calling itself Gigabit deployed. Bridging the “final mile” by low-end option requires the installation Squared announced in May that it had hardwire to end users – whether busi- fee, but then 5Mb upload and 1Mb down- raised $200 million specifically to invest ness, residential or academic – has load service is free. ■ in creating such services. proven to be one of the highest hurdles Other programs are working to for market-based service to clear, espe- Mark Green is editorial director of The Lane Report. advance various pieces of Internet2 cially as speeds increase. He can be reached at [email protected].

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 43

August Lane 25-52.indd 43 8/3/12 1:16 PM OPINION

MILTON FRIEDMAN’S CENTENARY How a young liberal became a conservative icon

BY THOMAS SOWELL

F Milton Friedman were alive today he man’s course, but he made no effort to would be 100 years old. But Professor change my views. He once said that any- IFriedman’s death at age 94 deprived the body who was easily converted was not nation of one of those rare thinkers who worth converting. had both genius and common sense. I was still a Marxist after taking Profes- Most people would not be able to sor Friedman’s class. Working as an econo- understand the complex economic mist in the government converted me. analysis that won him a Nobel Prize, but What Friedman is best known for as Nobel laureate Milton Friedman, left, was people with no knowledge of economics an economist was his opposition to economic adviser to President Reagan. had no trouble understanding his popu- Keynesian economics, which had largely lar books like “Free to Choose” or the swept the economics profession on both TV series of the same name. sides of the Atlantic, with the notable still die-hard Keynesians today who In being able to express himself at exception of the University of , insist that the government’s “stimulus” both the highest level of his profession where Friedman was both trained as a spending would have worked, if only it and at a level that the average person student and later taught. was bigger and lasted longer. could readily understand, Milton Fried- In the heyday of Keynesian economics, Although Friedman became a con- man was like the economist whose theo- many economists believed that inflationary servative icon, he considered himself a ries and persona were most different government policies could reduce unem- liberal in the original sense of the word from his own – John Maynard Keynes. ployment, and early empirical data seemed – someone who believes in the liberty of Like many people who became to support that view. The inference was the individual, free of government prominent as opponents of the left, that the government could make careful intrusions. Far from trying to conserve Professor Friedman began on the left. trade-offs between inflation and unemploy- things as they are, he wrote a book titled Decades later, looking back at a state- ment, and thus “fine tune” the economy. “Tyranny of the Status Quo.” ment of his own from his early years, Friedman challenged this view with Friedman proposed radical changes he said: “The most striking feature of both facts and analysis. He showed that in policies and institutions ranging from this statement is how thoroughly the relationship between inflation and the public schools to the Federal Keynesian it is.” unemployment held only in the short run, Reserve. It is liberals who want to con- No one converted Milton Friedman, when the inflation was unexpected. But serve and expand the welfare state. ■ either in economics or in his views on after everyone got used to inflation, unem- social policy. His own research, analysis ployment could be just as high with high and experience converted him. inflation as it had been with low inflation. As a professor, he did not attempt to When both unemployment and infla- Thomas Sowell is a senior fellow convert students to his political views. I tion rose at the same time in the 1970s, at the Hoover Institution, Stanford University made no secret of the fact that I was a the idea of the government “fine tun- Marxist when I was a student in Fried- ing” the economy faded away. There are

• A muddy 5K run with UK Army ROTC designed obstacles to test your endurance and get you DIRTY! WHEN: Saturday, Sept 22, 2012 • Costumes and fun are encouraged. WHERE: Commonwealth Stadium, • Open to Pro-Athletes and Pro-Couch University of Kentucky Potatoes! • Proceeds benefit WUKY and UK Army ROTC Registration only at www.bluegrassmudrun.com

44 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 44 8/3/12 1:16 PM August Lane 25-52.indd 45 8/3/12 1:16 PM THE LANE LIST

THOROUGHBRED FOAL CROPS BY STATE Ranked by 2010 foal numbers, showing changes since 2000

ENTUCKY remains the leading mits only pari-mutuel track wagering. Thoroughbreds production state States permitting tracks to offer Kbased on the number of foals video slots are Delaware (begun in born, but the state’s percentage of all 1995), Florida (2006), Indiana (2008), U.S. foals born has declined from 29 Iowa (1995), Louisiana (2002), New percent in 2000 to nearly 18 percent in Mexico (1999), New York (2004), Okla- 2010, according to The Jockey Club, the homa (2005), Pennsylvania (2007) and official registry for Thoroughbreds born West Virginia (1990). New York added in the United States, Canada and Puerto electronic table games in 2011, and Rico. The total North American foal average daily purses for Saratoga’s cur- crop, meanwhile, declined nearly 28 rent 40-day season have jumped to an percent during that decade. industry record $900,000. Maryland is States including Louisiana, Pennsyl- using non-track casino slot revenue to vania and New Mexico, with programs increasing purses. Ohio (21st in 2010 to increase race purses and to pay incen- foal crop size) recently OK’d track video tives to locally bred horses, are gaining slots and the first such operation began market share, with incentive dollars in June. generated by allowing other forms of Here are the 15 leading states based gambling at tracks or special taxation of on the number of Thoroughbred foals

non-track casinos. Kentucky now per- born in 2010. Lexington CVB/Kirk Schlea photo

% OF % OF CHANGE RANK STATE (2000 RANK) 2010 FOALS 2000 FOALS U.S. TOTAL U.S. TOTAL 2000-10 1 Kentucky (1) 8,325 33.3% 10,118 29.1% -17.7 2 Florida (2) 2,290 9.1 4,551 13.1 -49.7 3 Louisiana (6) 2,276 9.1 1,247 3.6 82.5 4 California (3) 1,915 7.7 3,618 10.4 -47.1 5 Pennsylvania (11) 1,491 6.0 923 2.7 61.5 6 New York (5) 1,316 5.3 1,556 4.5 -15.4 7 Texas (4) 815 3.3 2,035 5.9 -60.0 8 New Mexico (14) 777 3.1 470 1.4 65.3 9 Oklahoma (8) 765 3.1 1,083 3.1 -29.4 10 Indiana (12) 704 2.8 513 1.5 37.2 11 Illinois (10) 602 2.4 957 2.8 -37.1 12 W. Virginia (15) 511 2.0 287 0.8 78.0 13 Maryland (7) 472 1.9 1,212 3.5 -61.1 14 Washington (9) 350 1.4 981 2.8 -64.3 15 Virginia (12) 276 1.1 513 1.5 -46.2 Total U.S. 25,031 34,728 -27.9

Sources: The Jockey Club Online Fact Book (jockeyclub.com/factbook.asp), The Blood-Horse, Thoroughbred Times, American Gaming Association Kentucky Tourismphoto

46 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 46 8/3/12 1:16 PM SPOTLIGHT ON THE ARTS

Arts Council Awards $1.7 Million in Grants Snipes Receive to Organizations Across Kentucky Prestigious Corey

HE Kentucky Arts Council has Medallion Award awarded more than $1.7 million in HE Children’s Theatre Foundation Toperational support funding to 104 of America has announced that the nonprofit arts and cultural organizations T2012 Corey Medallion Award will be for fiscal year 2013 through the Kentucky presented to Lexington Children’s The- Arts Partnership (KAP) grant. atre and its Artistic Director Vivian Snipes KAP grants provide support to non- and Producing Director Larry Snipes. profit organizations offering year-round Now in its 74th season, Lexington Chil- arts services and programs directly for the dren’s Theatre is one of the oldest contin- benefit of the public. Its competitive grant uously operating theaters for young process funds applicants based on operat- people in the United States and serves ing revenues, a panel review of applica- Paramount Arts Center in Ashland more than 130,000 children annually. tions and funds available for the program. The Fund for the Arts, based in Louis- “KAP organizations from small to large work tire- ville, is also a ’12 Corey Medallion recipient. lessly to provide diverse cultural experiences and Established in 1949, the Fund for the participation in the arts for Kentuckians who live in Arts is the oldest united arts fund in the their immediate regions and across the state,” said country, which has raised millions of dol- Lori Meadows, executive director of the Arts Coun- lars to support arts groups and programs cil. “Providing support to help these groups is one of in Kentucky and Southern Indiana. the main functions of the arts council. We remain For more information, visit childrens- grateful to the Kentucky General Assembly for its theatre foundation.org. The Children’s continued support of the arts.” Theatre Foundation of America challenges KAP agencies vary in size and are located in and supports theatre artists to achieve rural, suburban and urban communities. In fiscal excellence in service to young people. year 2012, the arts council provided 100 agencies with KAP funding. Arts Events Lexington Ballet Theatre Around the State Chamber Music Festival Governor Appoints New Members of Lexington Fasig-Tipton Pavilion, Lexington Aug. 31, Sept. 1-2 to Kentucky Arts Council Board chambermusiclex.com/information

OV. Steve Beshear appointed two new members to KY.7 Biennial, Lexington the Kentucky Arts Council board and reappointed Lexington Art League, Lexington four current board members. through Sept. 9 G [email protected] Kathleen T. Setterman, of Ashland, and Helen Mount- (859) 254-7024 joy, of Utica, will serve the remainder of unexpired terms ending Feb. 1, 2013, and Feb. 1, 2015, respectively. Pat McKinney to Demonstrate Setterman is executive director of the Paramount Kathleen Helen Tape Loom Weaving Arts Center in Ashland, where she has worked since Setterman Mountjoy Kentucky Artisan Center at Berea 1988. A member of numerous professional organiza- 10:30 a.m. – 3:30 p.m., Aug. 25 tions, Setterman has served on many boards, including the Kentucky Arts Presenters kentuckyartisancenter.ky.gov Network, the Arts Council of Northeastern Kentucky, Ashland Main Street and The (859) 985-5448 League of Historic American Theatres. Her many recognitions include the East Ken- Candlebox tucky Leadership Foundation Culture/Arts Award in 2010. SkyPac, Bowling Green Mountjoy is a former secretary of the Education and Workforce Development 6 p.m. Sept. 6 Cabinet, and a former vice president of the Greater Owensboro Economic Develop- theskypac.com ment Corp. She served on the Kentucky Board of Education for 15 years and chaired (270) 904-1880 the board from 1998 to 2004. Mountjoy is a member of the Prichard Committee for Academic Excellence. Inside|Out Exhibit The Speed Art Museum, Louisville The four board members reappointed to terms that will expire Feb. 1, 2016, are: Through Sept. 23 • Everett D. McCorvey, Lexington (vice chairman) speedmuseum.org • Paul E. Fourshee, Cadiz (502) 634-2700 • Ronald E. Johnson, Fort Mitchell • Sonya G. Baker, Murray. The Kentucky Arts Council board chairman is Todd P. Lowe, of Louisville. Other members of the board are: Carla Bass Miller, Louisville; Wilma Brown, Danville; John Lori Meadows is executive director S. Hockensmith, Georgetown; Henrietta Kemp, Hopkinsville; Josephine Richardson, of the Kentucky Arts Council. Whitesburg; Andrea Rudloff, Bowling Green; Randall C. Vaughn, Lexington; Roanne Victor, Louisville; and Jayne Moore Waldrop, Lexington.

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 47

August Lane 25-52.indd 47 8/3/12 1:17 PM EXPLORING KENTUCKY

Kentucky Bourbon Festival photo Chef Albert Schmid of Sullivan University, author of "The Kentucky Bourbon Cookbook," prepared cuisine samples featuring Jim Beam bourbons during the 2011 Kentucky Bourbon Festival Cooking School event.

for the first time this year will be six Ken- tucky craft distillers that represent the state’s evolving micro-distillery industry. Several of last year’s new festival events drew enough interest to prompt officials to expand their offerings. Joy Perrine, the “Bad Girl of Bourbon” and author of “The Kentucky Bourbon Cocktail Book,” puts a raucous spin on the art of bringing out bourbon’s best during Bourbon Cocktail Mixology. Wickland, Home of Three Governors hosts A Half Pint of Whiskey with a Shot of Humor, which divulges the history of bourbon – legal and otherwise. While at Anyway She Likes It, you can sample and sip foods and bourbons that complement each other, and you can taste the “Not Your Pink Drink” cocktail finalists with former Master Bourbon Taster Peggy Noe Stevens. At the Wild Turkey Sit n Sip Saloon during Boots and Bourbon, you’ll chow down on fine vittles, shake a leg on the dance floor and if you’re brave enough, ride the mechanical bull. Bourbon lovers may choose Bourbon, Cigars and Jazz, a casual-cocktail-attired evening of Camacho cigars; select Heaven Hill Bourbons, including Evan Williams Single Barrel and Elijah Craig 12-year-old and 18-year-old, among others; and scrumptious food with a side of New Roll Out the Barrel Orleans music to add a Mardi Gras flavor. Take home your newfound culinary The Kentucky Bourbon Festival offers a spirited week of events skills from Bourbon-Style Cooking School; talk bourbon over breakfast BY KATHERINE TANDY BROWN with Four Roses Master Distiller Jim Rut- ledge; learn from a cooper how oak bar- rels are made; watch bourbon being HETHER you’re a true bour- Last year’s festival lured nearly 50,000 born on distillery tours; and bid on vin- bon aficionado, enjoy the occa- revelers from 43 states and 13 countries. tage and unusual bourbon-related items Wsional sip or don’t have a clue “I believe our phenomenal growth is at the Master Distiller’s Auction. what all the fuss over Kentucky’s state due to two factors,” said Linda Harri- On Saturday night, KBF’s signature beverage is about but are curious to find son, the event’s executive director. “The event is the Great Kentucky Bourbon out, you’ll want to head for Bardstown first is Bardstown’s Southern hospitality. Tasting and Gala, a black-tie do for 1,200 come September 11th for the 21st annual The second is the terrific job the Master with heavy hors d’oeuvres, a gourmet din- Kentucky Bourbon Festival (KBF). Distillers and Bourbon Ambassadors do of ner, dancing and “any kind of bourbon Three years after Jim Beam Master Dis- promoting bourbon around the world. you could dream of,” says Harrison. tiller Emeritus Booker Noe introduced the They introduce bourbon to people who As with many festivals, this one offers concept of small-batch bourbon in 1988, may not know about it. People ask them plenty of arts and crafts, food booths this totally Kentucky celebration began as questions. People want their autographs. and free music, including a Dierks Bent- one evening of dinner and bourbon tast- They’re the rock stars of bourbon.” ley concert. There’s even a golf tourna- ing. This year’s renewal packs 38 events You can meet the rock stars from distill- ment, horseshoe pitch, poker run and into six educational, fun-filled days in ery members of the Kentucky Distillers scads of downtown bourbon-related win- Bardstown, the Bourbon Capital of the Association – Maker’s Mark, Woodford dow displays. World. The city comes by its moniker hon- Reserve, Jim Beam, Wild Turkey, Four Kids can even get in on the action, as estly, for 69 percent of the world’s bour- Roses and Heaven Hill – at the Kentucky parts of the festival are family-oriented. bon is made in and around the Nelson Bourbon All-Star Sampler on the evening In addition to a family fun area rife with County area, five distilleries lie within 25 Sept. 12, sample their renowned bourbons interactive games and inflatables, miles of the town square, and folks have and collect an autograph or two for your- there’s a “train robbery” at the Kentucky been making bourbon here since 1776. self. Joining those distinguished experts Railway Museum; a historic walking tour

48 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 48 8/3/12 1:17 PM with certified ghost hunter Patti Starr to Bourbon Barrel Relay, where fit com- Go sip for yourself at the Bourbon unearth the Ghostly Spirits of Bard- petitors with exceptional upper body Festival’s new website, kybourbonfesti- stown; a Balloon Glow that last year strength roll 500-pound barrels in a race val.com, or call (800) 638-4877. ■ drew a crowd of 3,000; the Oscar Getz against time and accuracy. Museum of Whiskey History, with tales While you’re in town, be sure to stop Katherine Tandy Brown is a correspondent for The Lane of moonshiners and a real still; and the by Kurtz’s Restaurant for fried chicken, Report. She can be reached at [email protected]. wildly popular World Championship cornbread and Bourbon Biscuit Pudding.

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 49

August Lane 25-52.indd 49 8/3/12 1:17 PM PASSING LANE Commentary on Kentucky

Bardstown and Murray are ‘Best Small Towns in America’

T’S official. Kentucky’s small towns ence Kentucky’s scenic beauty and its rock! warm hospitality. Congratulations to I Bardstown, site of My Old Ken- the Kentucky towns recognized as ‘Best tucky Home State Park, was selected the of the Road.’ ” most beautiful small town in the United With several distilleries, Bardstown States last in a Rand McNally and USA calls itself the Bourbon Capital of the Today contest. Murray was named the World and draws tens of thousands for nation’s friendliest small town for its its Kentucky Bourbon Festival each Sep- down-home charm. tember (see page 48). Federal Hill man- Danville was a runner-up in the “most sion at My Old Kentucky Home State beautiful” category won by Bardstown. Park inspired the state song, which is They were among nearly 700 towns one of many musical numbers crowds nominated for judging. Teams of amateur enjoy every summer at “The Stephen travelers visited the finalists in each of six Foster Story” outdoor drama about the Farmers’ Market in Murray “Best of the Road” contest categories. composer. Other scenic and historic “Kentuckians already know what sites that welcome travelers include Tal- My Old Kentucky Home, the “Ste- friendly people we count as neighbors bott Tavern, the Basilica of St. Joseph phen Foster Story,” Land Between the and what beautiful cities and towns we Proto-Cathedral and the nearby Abbey Lakes and the Great American Doll- have to live in and visit,” Gov. Steve Bes- of Gethsemani. house Museum are all part of the Ken- hear said. “We’re happy to share that On the edge of the Land Between tucky Department of Travel and news and welcome visitors to experi- the Lakes National Recreational Area, Tourism’s “There’s Only One” cam- Murray offers outsized outdoor recre- paign to call attention to the one-of-a- ational opportunities with fishing, boat- kind places people can visit in Kentucky. ing and other fun. It’s home to Murray “Residents of Bardstown, Murray and State University, the Wrather West Ken- Danville should be proud of this special tucky Museum, “Playhouse in the Park” designation,” said Tourism, Arts and in its Central Park and more. Heritage Secretary Marcheta Sparrow. Danville, site of Kentucky’s historic “These communities embody the very Constitution Square, has the annual best of what Kentucky communities are Great American Brass Band Festival, known for – hometown pride and great Norton Center for the Arts at Centre hospitality.” College, the Great American Dollhouse Travel Channel aired an hour-long Museum and other attractions such as a “Best of the Road” television special on My Old Kentucky Home, Bardstown winery and craft beer makers. July 25. Celebrating a Century of County Extension Agents

N the fall of 1912, through, see both sides of the ques- and most agents still have weekly news- Charles Mahan was tion, give wise council and leadership paper columns and make farm visits. Ihired as Kentucky’s to their fellow men.” They also use social media and YouTube first full-time county Cooperative Extension philosophy to provide farmers with the most cur- agriculture agent in today is a direct extension of Mahan’s rent information. Henderson County. It vision: that agents’ function should be “Even though we are 100 years old, was two years before primarily education, offering unbi- the University of Kentucky Cooperative Charles Congress’ Smith-Lever Mahan ased, research-based information to Extension Service is seeking to find and Act of 1914 established their clients. serve people where they are and in ways the Cooperative Exten- Warren Thompson grew up in Ful- they want to receive information,” said sion Service. ton County determined to become an Jimmy Henning, director of the Ken- Mahan’s $1,400 salary was split extension agent and did so in 1943 in tucky Cooperative Extension Service. between the county and the USDA Hickman County. He worked with pro- “Today, that includes the farm visit and Office of Farm Management. After a ducers to cross-breed cattle to improve the smartphone.” year working by horse and buggy, local genetics and milk production, and used We can’t even guess what modes of leaders bought him a red motorcycle to tall fescue for erosion control and plant communication Kentuckians will have visit farmers. hybrid corn – with on-farm demonstra- another century from now, but we can Mahan left briefly for extension tions next to roadways so others could guess that Cooperative Extension Ser- jobs in Indiana and Ohio but returned see for themselves, too. The communi- vice agents will still be respected and in 1920 to be supervisor of Kentucky cation link the service provides between valued by commonwealth ag producers Cooperative Extension county agents. UK experts and farmers is invaluable, because of their contribution to the bet- Soon after, in a speech, Mahan said Thompson found. terment of our state’s agribusiness. one of his job’s biggest functions was Communication modes today are to “develop sane, safe, local leaders much improved, but UK extension spe- (Based on an article by UK agriculture news who can be trusted to think things cialists still have on-farm research trials, specialist Katie Pratt)

50 JULY 2012 LANEREPORT.COM • THE LANE REPORT

August Lane 25-52.indd 50 8/3/12 1:17 PM Murray State Has Nation’s Best Financial Aid

OULD the timing be any better for Murray State University? Just as the nation’s collective focus has discovered college is difficult to pay for, U.S. News ranked Cour lovely Western Kentucky school as the best in the country at helping out students who don’t qualify for typical financial aid. U.S. News’ just released “Short List” rankings put Murray State at the top among the 10 schools where merit aid awards are most common. MSU awards non- need-based scholarships and grants to nearly 77 per- cent of its undergrads. That is far – very far – above the 13 percent national average and even 30 percent- age points better than the 10th best “Short List” school. U.S. News said it bases its “Short List” on information from schools it recognizes in its annual “America’s Best Colleges” rankings, which have included Murray for 21 consecutive years. “Obviously, we’re delighted to receive this recognition, which again firmly establishes Murray State University as a national bench- mark institution for quality and affordability” MSU President Dr. Randy J. Dunn said. “I couldn’t be prouder of the hard work of our Dr. Randy faculty and staff and the generosity of our alumni and donors with J. Dunn whom we share this distinction.” Rocket Science Already one of its hallmarks, Murray’s student aid is about to get better still. The university is concluding a comprehensive multiyear fundraising campaign to benefit Simple for student scholarships, academic programs and campus enhancements at the end of 2012. More than $67 million has been raised. Some People HE Kentucky Space program Not a Bad Finish just continues to impress. It’s Tcome up with the compact CubeSat satellite, which has gone ENTUCKY finished its fiscal 2012 into space with experiments several on June 30 with a budget surplus times. The latest project was to Kof around $46 million. Happy whip up a flight-control electronics days are not quite here again, but it was board for satellites called FireFly. another small yet clearly positive sign It’s for sale for $159. the economy is improving. Wow, just wow. State revenue grew 3.8 percent, bet- Although the non-profit Ken- tering estimates of 3.3 percent growth tucky Space team mostly works with when the budget was enacted. Also entrepreneurial space professionals encouraging, strong June collections and the DIY space community, the offset declines in April and May. Total new lightweight board, is suggested revenue was just over $9.09 billion, as a great platform parents, stu- which was some $331 million better dents, and teachers can use for a than fiscal 2011. The state road fund variety of projects. finished with a $50 million surplus, They worked with Mike Doorn- another positive economic sign. bos of Evadot, a space flight news The road fund surplus goes into the blog, to create a “standard” mission state construction account and the general A $50 million road fund surplus rolled over into the state construction account. command board with components fund surplus to the state rainy day fund. for tasks common to many projects, “General fund revenues reflect eco- Among them: nomic recovery,” State Budget Director rent economic realities. The • A small computer with an easy Mary Lassiter told an interim joint legis- commonwealth has had to make multi- programming interface. lative Committee on Appropriations ple midyear adjustments, all downward • Battery power with charging and Revenue. “We’ve weathered the due to shortfalls, the past four years – circuits. recession better than many states.” after having enacted austere spending • Long range communications. That’s true. The Great Recession and plans to begin with. Many states, how- • The ability to use existing add its aftermath have been brutal on state ever, still are trying to bridge multibil- on hardware. budgets. The Center on Budget and lion-dollar gaps in their budgets for this • Some software you can borrow, Policy Priorities estimates total U.S. state year and next. reuse, and share. budget shortfalls in recent years to have State officials deserve some credit for • A place to talk about what been $110 billion in 2009, $191 billion playing a tough hand relatively well. If you’re building to get help. in 2010, $130 billion in 2011 and $107 they can manage also to make serious Should you need one, the Fire- billion this year. tax and pension system reforms in the Fly mission command board is Kentucky compares well because oth- next year, the state will enter true eco- available at evadot.com. ers are doing worse at adjusting to cur- nomic good times.

THE LANE REPORT • LANEREPORT.COM AUGUST 2012 51

August Lane 25-52.indd 51 8/3/12 1:17 PM KENTUCKY PEOPLE

SOMERSET: McCONNELL MEETS WITH CINCINNATI: ERNST & YOUNG PRESENTS AREA HOSPITAL ADMINISTRATORS ENTREPRENEUR OF THE YEAR AWARDS Ernst & Young photo Young Ernst & Cumberland Regional Hospital photo

Sen. Mitch McConnell was at Lake Cumberland Regional Hospital on July 3 to talk Ernst & Young announced the recipients of the 2012 Entrepreneur of the Year with area hospital administrators about the Patient Protection and Affordable Award for the South Central Ohio & Kentucky Region on June 28 at a gala held Care Act, which was upheld in a landmark ruling by the U.S. Supreme Court in at the Hyatt Regency Cincinnati. This year’s recipients were (pictured left to June. Pictured here are (left to right) David Critchlow, vice president of govern- right) Timothy McCarthy - Summit Holdings Ltd., Columbus, Ohio; Christo- ment relations, LifePoint Hospitals; Tom Weiss, president-continental division, Life- pher Wyse - Projects Unlimited, Dayton, Ohio; Mark Hogg - EDGE Outreach, Point Hospitals; Don Moss, chair- board of trustees, Lake Cumberland Regional Louisville, Ky.; Jim Salters - The Business Backer, Cincinnati, Ohio; Tom Feeney Hospital; U.S. Senate Republican Leader Mitch McConnell; Bill Carpenter, chair- - Safelite AutoGlass, Columbus, Ohio; Dr. Wayne Mortenson - Mortenson Fam- man and chief executive officer, LifePoint Hospitals; Mark Brenzel, chief executive ily Dental, Louisville, Ky.; Bruce Blue - Freedom Metals, Louisville, Ky.; Jay officer, Lake Cumberland Regional Hospital; Mike Citak, M.D., chief medical offi- Schottenstein - Schottenstein Stores Corp., Columbus, Ohio; Mark Sarvary - cer, Lake Cumberland Regional Hospital; Sheryl Glasscock, RN, MSN, chief nurs- Tempur-Pedic International, Lexington, Ky.; David Schoettmer - Navigator ing officer, Lake Cumberland Regional Hospital; and Mike Everett, CMRP, Management Partners, Columbus, Ohio; and Gary Mitchell - Divisions Mainte- assistant administrator, Lake Cumberland Regional Hospital. nance Group, Newport, Ky.

PIKEVILLE: MEDICAL CENTER HONORED HOPKINSVILLE: AMERICASMART HONORS AS NATIONAL HOSPITAL OF THE YEAR RETAILER’S COMMUNITY CONTRIBUTION PMC photo

Representatives of Pikeville Medical Center celebrated the hospital being named Gracious Me!, a Hopkinsville home décor store, was presented with the Icon as the National Hospital of the Year by the American Alliance of Healthcare Honor for Contribution and Community Influence at AmericasMart ’s Providers for the third consecutive year. PMC is the only repeat winner in the third annual Icon Awards on July 14. The awards are presented each year to 10-year history of the awards, which recognizes hospitals that provide excellent celebrate creative expression and champion independent business. Pictured here customer service. Pictured here, from left to right, are: Pam May, Cheryl Hick- representing Gracious Me! are, from left to right, Evan Weatherup, Krin Mims, man, Patty Thompson, Kathy Khoshreza, Dr. Mary Simpson, Sheila Belcher Sandy Hancock, Gracious Me! owner Sherry Calhoun, Ann Mabry, Mary Ann and Greg Donithan. Milligan, Kim Williams and Lauren Holloway.

52 AUGUST 2012 LANEREPORT.COM • THE LANE REPORT

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