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REAL ESTATE, CONSTRUCTION & GREEN DEVELOPMENT The LaneReport ® KENTUCKY’S BUSINESS NEWS SOURCE FOR 25 YEARS JUNE 2010 $4.50

A LOT ON THE BALL Ball Homes manages to climb national Builder 100 list – up 41 spots in 3 years – during worst economic downturn in generations Page 24 lanereport.com

LANE ONE-ON-ONE: RETROSPECTIVE Looking back into the future June Lane Covers.qk:Layout 1 6/7/10 2:50 PM Page 992 June Lane 1-17.qk:Layout 1 6/8/10 8:38 AM Page 1 June Lane 1-17.qk:Layout 1 6/8/10 8:38 AM Page 2

JUNE The 2010 Lane Report ® Kentucky’s Business News Source For 25 Years Volume 25 Number 6

FEATURES 24 COVER STORY: A LOT ON THE BALL Ball Homes manages to climb the national Builder 100 list – up 41 spots in three years – during the worst downturn in generations 28 REAL ESTATE DEALS GO DIGITAL Buyers and sellers can take a transaction up to closing without handling, signing or crossing out any paper

30 TURNING HERITAGE INTO PROFIT 30 Incentives help make rehabbing Kentucky’s historic buildings pay off for developers, communities and taxpayers DEPARTMENTS 4 Perspective 6 Fast Lane 14 Interstate Lane 15 Kentucky Intelligencer 16 Corporate Moves 17 On the Boards 18 Lane One-on-One: Looking Back into the Future Excerpts from past One-on-One interviews with Kentucky leaders 32 Going Green 34 Opinion 35 Sales 36 Leadership 37 Economic Development 38 Staff 39 25th Anniversary 40 Spotlight on the Arts 41 The Lane List 42 Exploring Kentucky 44 Kentucky People ON THE COVER Family owned and operated Ball Homes of Lexington has managed its way through a difficult economic crisis to climb 41 spots in three years up the Builder 100 list of top U.S. home construction companies. Mira and Donald Ball, front, founded Ball Homes in 1959. It is operated today by their children, (rear, from left) Ray Ball, Lisa Sharp Ball and Mike Ball. KENTUCKY BUSINESS NEWS (Shaun Ring photo) AVAILABLE ONLINE

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The PERSPECTIVE Lane Report ® Kentucky’s Business News Source for 25 Years EDITORIAL DIRECTOR German Chancellor Angela Merkel’s Mark Green WAKE UP – party during recent local elections. ASSOCIATE EDITOR HERE IT COMES The U.S. government, even in the face Karen Baird of grumbling from its own American citi- CREATIVE DIRECTOR Economic situation in Greece zens, pressured Merkel’s German govern- Jessica Merriman is a cautionary tale for U.S. ment to increase its donations for CORRESPONDENTS Greece. The United States is sending Amanda Arnold; Rena Baer; Katherine Tandy Brown; Patrice Bucciarelli; BY PAT FREIBERT financial assistance with money it does Shannon Leonard Clinton; not have, but that seems not to be a prob- Anne Charles Doolin; Debra Gibson; lem in Washington. The U.S. must bor- Susan Gosselin; Robert Hadley; Carl Heltzel; OR a glimpse of what future Amer- row from China and pay interest on its Feoshia Henderson; Kara Keeton; ica could look like for our children loan before it can send money to Greece. Meredith Lane; Nancy Miller; What are the oil rich countries doing to Robin Roenker; Robyn Sekula; Eddie Sheridan; and grandchildren if we don’t Fchange national policies, take a close help out Greece? Don Ray Smith; Gary Wollenhaupt look at what is now occurring in present- These are the logical and inevitable SYNDICATED COLUMNS Creators Syndicate day Greece. After decades of the Greek consequences of ever deepening debt with no hope of repaying that debt. DESIGN Stone Advisory Now, state and local governments in Pat Freibert America are getting into the act and are PRINTING, OUTPUT & PRE-PRESS SERVICES Publishers Printing Co. (patfreibert@ experiencing the pain of overspending ■ lanereport.com) on pensions, benefits and projects pop- is a former Kentucky ular with favored groups. Much of the PUBLISHER Federal Stimulus Funds went to state Ed G. Lane state representative from Lexington and local governments so they would ASSOCIATE PUBLISHERS not be forced to cut back. Dick Kelly Donna Hodsdon Syndicated columnist Thomas Fried- government spending money it did not man observes that Greece must emphasize BUSINESS MANAGER Jim Curry have, decades of cradle to grave govern- “changing the incentive system there from ment benefits for Greek citizens and one that focused way too many Greeks on CHIEF FINANCIAL OFFICER Steve Rohlfing, CPA decades of increased government power getting a lifetime government job to one and control over all of its society, Greece focused on stimulating private initiative.” CIRCULATION P&B Services is in crisis. It is completely dependent on Greece, or any other country (including other countries to come to its rescue to the U.S.), cannot continue a Santa Claus COMPTROLLER Alma Kajtazovic prevent collapse. government economy without collapsing As its citizens have become totally the entire economic system. dependent on government for their daily Greece is not a system America should Lane Communications Group benefits in life, they have necessarily sur - emulate. In contrast to the scenario in is a member of rendered the liberty necessary to be self- Greece, it is inspiring to look at the citi- sustaining. Too many beneficiaries of zens of Nashville following their recent government largess, and too few produc- floods. Those floods represent Nashville’s ers in the private sector, result in economic worst disaster since the Civil War, and the The Lane Report is published monthly by: crisis for any nation. After all, government photo journalism coming out of that city Lane Communications Group cannot create wealth; government can is inspiring indeed. It shows neighbors 201 East Main Street 14th Floor only use up your personal wealth. This helping neighbors and most residents Lexington, KY 40507-2003 should be fresh in our minds so soon after pitching in to shovel mud, removing [email protected] April 15th, when we paid our income taxes uprooted trees and boulders, rescuing For more information and knowing that nearly half of our citizens floating structures and vehicles and clean- advertising rates contact: PHONE: 859-244-3500 paid no income taxes whatever. ing up the entire city. We saw no hand FAX: 859-244-3555 Presently, Greece has union protests wringing or demands and inquiries on The annual subscription rate is $29. and people rioting in the streets, insisting “Where is the federal government?” or (Kentucky residents add $1.74 sales tax.) on continuing the current level of govern- “Where is the help from Washington?” Newsstand price is $4.50. ment entitlements. Citizens of the Euro- What a reassuring example of the Ameri- Send check or money order to: pean Union and the United States are can “can-do” spirit. Circulation Manager THE LANE REPORT expected to make fundamental sacrifices It is not good for our countr y when 201 East Main Street 14th Floor to bail out Greece. Even in the face of sys- our federal government has control and Lexington, Kentucky 40507-2003 tem collapse, Greek protesters are insist- ownership of banks, insurance compa- THE LANE REPORT corrects all significant errors that ing on keeping all current benefits. nies, student loans, automobile manu- are brought to the editors’ attention. German citizens have been reluctant facturers, the healthcare system and © 2010 Lane Communications Group to send generous financial assistance to other traditionally private businesses. It All editorial material is fully protected and must not be a country whose citizens work far fewer is not in America’s best interest to have reproduced in any manner without prior permission. days annually than Germans and with “czars” in the White House to rule on more lavish guaranteed benefits. Ger- how to manage our businesses and mans expressed their displeasure at bail- decide how much salary private-sector ing out Greece by defeating many in citizens should be paid. ■

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FAST LANE A compilation of economic news from across Kentucky

LEXINGTON: GALMONT CONSULTING TO OPEN SOFTWARE HAZARD: STATE OK’S 50 MW TESTING FACILITY TO PROVIDE ‘NEARSHORE’ IT SERVICE BIOMASS FUEL ELECTRIC ALMONT Consulting, a Chicago-based technology firm, has announced plans POWER GENERATING PLANT to open a software testing and quality assurance facility in Lexington. The company expects to hire 90 people within three years to test and deliver soft- HE Kentucky State Board on Gware for its global clientele, which include companies such as Blue Cross Blue Shield, Electric Generation and Trans- CNA, CVS Caremark, US Cellular and NYSE Euronext. mission Siting has granted a cer- Ttificate allowing the construction of an “For years, U.S. companies looked ‘off- shore’ for highly trained, reasonably priced electric generating plant in northern IT talent to manage technical quality assur - Perry County. ance and software development projects The certificate allows ecoPower Gen- because the cost advantages appeared to be eration-Hazard, LLC to build a 50- quite good. But as companies assigned local megawatt merchant generating plant on managers to run the projects, the realities of time differences, language hurdles and a 125-acre site in the Coal Fields cultural barriers emerged,” said Galmont President Jeri Smith. “Many companies Regional Industrial Park, located about ‘gutted it out,’ but leadership began questioning the true overseas cost advantage. 10 miles north of Hazard. The site is a Now, Galmont is providing an alternative, a ‘nearshore’ solution. W e are locating reclaimed coal mine. this facility in Kentucky because the universities in the area are graduating signifi- The biomass fuel for the plant is to cant IT talent, the cost of living and labor is reasonable, and Lexington is centrally come from nearby wood industry facili- located. We see this ‘nearshore’ software testing and development solution as a cost- ties and forest product operations and effective option for our U.S.-based clients. And they are excited.” will include low-grade logs and wood Galmont will locate its new testing center in a 4,000-s.f. facility in downtown Lex- wastes such as sawdust, wood chips, ington that offers room for growth. Annual wages for the new employees will range bark and sawmill wastes. The wood from $44,000 to $46,000, exclusive of benefits. material will be burned to produce The company is also in talks to form a partnership with the University of Kentucky steam, which will power turbines that College of Engineering to hire and train computer science graduates. A co-op program is produce electricity. also being discussed. The plant will be connected to the UK President Lee Todd said the Galmont positions are “the type of creative and grid through a substation owned by innovative jobs that are crucial to the growth and development of our economy as American Electric Power Co., and the well as keeping our best and brightest in the commonwealth.” electricity will be sold on the open wholesale market. The Siting Board order also approved construction of a HEBRON: PEMCO WORLD AIR SERVICES ANNOUNCES 1.54-mile-long transmission line that will BASE AT CVG TO MAINTAIN REGIONAL AIRLINE FLEETS connect the plant to the substation. According to ecoPower-Hazard’s EMCO World Air Ser vices has application, the plant will cost about announced plans to establish an air- $150 million to build. During the two- craft maintenance and repair opera- year construction process, the impact

Ption at the Cincinnati/Northern Pemco photo on the local economy is estimated at Kentucky International Airport (CVG), $82.5 million, with an average of 200 creating up to 300 new jobs. workers on the site. The Dothan, Ala.-based company Once in operation, the plant will plans to utilize an existing hangar vacated employ about 40 people, with a total by Mesaba Airlines in 2008 as the home annual payroll of more than $2.6 mil- for its new regional aircraft operations lion and an operating budget of $16 and anticipates beginning operations by million in its first year. the end of this summer. Pemco specializes in aircraft maintenance and repair. The announcement follows Pemco’s recent purchase of substantially all of the tooling, equipment, and inventory of Exel- SUBMISSIONS WELCOME Tech Canada, one of the largest North American providers of maintenance and To submit news and photographs for repair services to the regional airline industr y. The Exeltech asset acquisition has publication in Fast Lane, please mail given Pemco the physical equipment necessary to provide comprehensive repair serv- information to: The Lane Report, 201 ices to operators of Embraer E-Jets and 135/145s, Bombardier CRJ, Q-series, Dash 8, East Main Street, 14th Floor, Lexing- ATR, and Saab regional aircraft. ton, KY 40507-2003 or send via e-mail Pemco specializes in all levels of airframe heavy maintenance checks, as well as interior, to [email protected]. avionics, structural and cargo modifications. A leading aircraft maintenance and repair Color photographs are preferred, services provider for a wide variety of aircraft types, Pemco has maintenance bases in either in standard form or digital. For Dothan, Ala., and Tampa, Fla., as well as partner operations in Southeast Asia. digital photographs, a resolution of “CVG is an excellent, centrally located airport served by many of the nation’s lead- 300 dpi is required, formatted in either ing regional carriers,” said Pemco CEO Wake Smith. “We are eager to get this hangar jpeg or tif. humming again so we can offer those carriers top-quality maintenance services.”

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FRANKFORT: BEAM GLOBAL’S EXPANSION BUSINESS BRIEFS TO DOUBLE PRODUCTION, ADD 120 JOBS

EAM Global Spirits & ASHLAND Wine Inc. has ■ Ashland Community and Technical College has completed embarked on a $28 a $35 million expansion of its campus in the EastPark Indus- Bmillion expansion of its plant trial Park. The expansion has added approximately 127,500 in Frankfort that will double s.f. of space for academic and technical programs, student the facility’s production size Beam Global photo services and faculty/staff offices. and capacity and bring 120 new jobs to the area. BOWLING GREEN When completed in ■ Western Kentucky University’s board of regents has approved new bachelor’s 2011, a total of 365 employ- Jeff Conder, vice president-Americas ees are expected to be operations for Beam Global Spirits & degrees in art history, film, Asian religions employed at the facility and Wine, showcased a commemorative and cultures, and organizational leadership nearly 3 million additional bottle of Jim Beam® Bourbon Whiskey as well as an associate’s degree in water cases will be produced. Prod- in commemoration of the Beam Global resource management. ucts bottled at the Frankfort Frankfort plant expansion. facility are shipped throughout the United States and 43 coun- COVINGTON tries globally. ■ Some 68 jobs are being eliminated as a result of Overhead Under the expansion plan, the Frankfort plant will produce Door Corp.’s decision to close its Covington manufacturing 160 products and have an annual capacity of 10 million cases. plant. Layoffs are set to begin in July and will continue until The project, which includes the addition of four new bottling the plant’s operations end in December. lines and approximately 65 new tanks, will assume production and bottling of DeKuyper® cordials from Beam Global’s existing ELIZABETHTOWN facility in Cincinnati. Additional brands bottled at the facility ■ Elizabethtown Community and Technical College has unveiled include Sauza®, the world’s No. 2-selling tequila, and Canadian a new educational training program designed to help meet the Club®, one of the world’s leading Canadian whiskies. region’s growing needs in green construction. Intended to be “Beam Global is one of our signature companies in Ken- developed as a work in progress, new students participating in the tucky that has shown its commitment to our state time and ECO House Project will contribute to the construction each time again,” said Gov. Steve Beshear. “The expansion of the semester, incorporating emerging technologies into the model Beam Global plant in Frankfort will provide a lasting, posi- house. The project is made possible by a group of area businesses tive economic impact in the community.” and provides training in green construction technologies, professional development for college and high school faculty, and an STATE: KAFC OFFERS LOW-COST LOANS opportunity for workers in the construction industr y to learn TO QUALIFIED ‘AGRI-ENTREPRENEURS’ more about state-of-the-art green construction technologies. HEBRON HE Kentucky Agricultural Finance Corp. has launched ■ Pomeroy IT Solutions is adding a new loan program to provide low-interest financing approximately 68 positions to its to beginning agri-entrepreneurs who are attempting to Hebron workforce. The new jobs will Tdiversify their farming operations through non-traditional support new and expanding multiyear, agricultural production or services. infrastructure services contracts. The Diversification through Entrepreneurship in Agribusi- ness Loans (DEAL) will provide up to $100,000, not to exceed HENDERSON 50 percent of a project’s costs. Eligible applicants must receive ■ A new partnership between Methodist Hospital in Hen- the majority of their household income from farming with less derson and The Stroke Center at University of Louisville than $100,000 annually coming from off-farm sources. Hospital will enable UofL stroke neurologists to examine “This program combines features of KAFC’ s infrastruc- Methodist Hospital patients via a high-tech robotic network. ture and beginning farmer loan programs to provide a The UofL Health Care network was started in 2007 and now financing option for agri-entrepreneurs,” said Roger includes 12 hospitals throughout Kentucky. In 2009, more Thomas, chief executive officer for KAFC. “This program than 1,000 people benefited from the enhanced care pro- addresses capital needs of ventures that may not fit in tradi- vided through the robot network. tional agriculture production programs.” The program may provide financing for equipment pur- LEXINGTON chases, facilities, permanent working capital, real estate, invest- ■ The Kentucky Horse Racing Commission has approved a pro- ment into an existing agribusiness or other investments at the posal for a race this October at Keeneland Racetrack with Ara- discretion of the KAFC board. The program does require the bian horses sponsored by equine officials from Abu Dhabi. The applicant to have a mentor and provide a five-year business plan. proposal, offered by Keeneland Association officials, is designed Potential agri-entrepreneurs can contact Bill McCloskey, to attract further international attention to Kentucky and the director of financial services, at (502) 564-4627 or visit the horse industry during the World Equestrian Games. KAFC Web page at kafc.ky.gov.

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BUSINESS BRIEFS LEXINGTON: BIODIAGNOSTICS COMPANY CREATES 65 NEW HIGH-TECH POSITIONS Central Baptist photo LEXINGTON new laboratory and biodiognostics company has ■ Central Baptist opened in Lexington and expects to soon add 65 new Hospital has opened high-tech jobs with an average annual wage of $50,000, its second building at Aexclusive of benefits. the Central Baptist Laboratory and BioDiagnostics LLC (LabDx) is a start-up Medical Plaza in firm that specializes in testing and delivery of lab results to elec- northern Jessamine tronic medical record systems. The company is employing tech- County. With the nology to permit transferring lab results directly from the addition of the new company’s new medical laboratory to customers’ electronic $7 million facility, medical records systems. Their laborator y and reporting serv- the medical plaza ices are marketed to physicians and medical facilities to help now offers urgent eliminate errors while improving reporting speed. The com- care treatment; CT, pany’s initial target market will be non-hospital based patient ultrasound and X-ray services; screening mammography; and care providers currently using independent laboratories. primary care physician offices. MRI, diagnostic mammogra- LabDx is a client of the Lexington Innovation and Com- phy services and physical and occupational therapy ser vices mercialization Center, one of six statewide Innovation and are slated to be added in the months head. Commercialization Centers (ICCs) providing locally accessi- ble, business-building consulting and related services to Ken- ■ The Toyota USA Foundation has awarded a $500,000 grant tucky’s entrepreneurs and scientists. to a University of Kentucky program designed to help K-12 “This is another example of the importance of education to teachers develop more effective methods of teaching math and local economic development and of the continuing growth in science in 13 central and northern Kentucky urban school dis- our thriving health care industry,” said Lexington Mayor Jim tricts. The Toyota USA Foundation charitable endowment was Newberry. “The founders of LabDx, who were educated at the established in 1987 to support education programs in the University of Kentucky, have created a company with plenty of United States, with an emphasis on mathematics, science and growth potential. Their company will offer good-paying jobs, environmental science. and those jobs will, in turn, help us improve the quality of life in our community.” ■ Sumitomo The Kentucky Economic Development Finance Author - Construction ity has awarded LabDx up to $250,000 from the Cabinet for Machinery Co. Economic Development’s High-Tech Investment Pool. Ltd. (SCM), a leading manufacturer of hydraulic crawler excavators headquartered in Tokyo, Japan, has acquired full ownership of Lexington-based LBX. LBX was originally ELIZABETHTOWN: IPAY TECHNOLOGIES IS formed as part of a global alliance between SCM and Case SOLD TO MISSOURI COMPANY FOR $300M Corp., and holds the manufacturing rights to SCM’s excavator products in North and Latin America. LBX has been market- ACK Henry & Associates Inc., a provider of integrated ing and selling Sumitomo excavators, forestr y, material han- technologies solutions and data processing services for dling and demolition products under the Link-Belt excavator financial institutions, has acquired Elizabethtown-based brand name since the company’s formation. The manage- JiPay Technologies for $300 million in cash. ment team of LBX will remain in place. iPay was founded in 2001 and now employs a staff of 250. The company LONDON currently operates as the one of the ■ The United States Postal Ser vice has made the decision largest independent electronic bill-pay to move all mail processing operations from the London providers in the United States. Through Processing & Distribution Facility to the Lexington Process- partnerships with more than 50 providers of information ing & Distribution Facility. Once the transfer of operations is processing and online banking solutions, iPay supports more completed, the than 3,600 banks and credit unions, a figure that represents London P&DF approximately 40 percent of the nation’s community banks. will be closed. “If you pay your bills online, it’s probably a company like Local mail service ours,” iPay co-founder Dana Bowers said during an August will not be 2009 interview with The (Elizabethtown) News-Enterprise. affected by the move. Kentuckiana District Manager Jim Jack Prim, CEO of Missouri-based Jack Henry & Associates, Kiser said, “Given the drastic decline in mail volume the said, “We have been long-time business partners with iPay and Postal Service has experienced, with a decline of nearly 26 have used its platform to process the electronic bill payments billion pieces this past year, we must take action to reduce initiated with our NetTeller Bill Pay solution used by more than the size of our mail processing network. Consolidating oper- 1,075 banks and credit unions. We pursued this acquisition ations and placing our people where we need them is nec- based on our first-hand experience with iPay’s payments essary if the Postal Service is to remain viable to provide mail expertise and technology, its commitment to consistently service to the nation.” The transition will be completed by deliver best-of-breed solutions, the outstanding service levels it July 1, 2010. Affected career employees will be reassigned to provides, and our consistent corporate cultures.” the Lexington facility or to other vacant positions. The transaction is set to close this month.

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BUSINESS BRIEFS LEXINGTON: UK’S TROSKE APPOINTED TO U.S. FINANCIAL CRISIS OVERSIGHT PANEL LOUISVILLE ENNETH R. Troske, Sturgill Pro- ■ Grand opening ceremonies were held May 26 for the new fessor of Economics and chair of Kosair Children’s Medical Center – Brownsboro in northeast the Department of Economics at Jefferson County. The new facility offers pediatric emergency Kthe University of Kentucky’s Gatton services; a full range of pediatric diagnostic imaging ser vices; College of Business and Economics has full-service laboratory and wide range of pediatric outpatient been appointed to the five-member surgery services. The medical center’s layout, processes and Congressional Oversight Panel (COP), amenities were designed to ease children’s and families’ anxi- which was created 19 months ago in ety about medical experiences. response to the nation’s financial crisis. Troske was selected to ser ve on the ■ The inaugural HullabaLOU Music Festival at Churchill panel by U.S. Senate Republican Kenneth R. Troske Downs Racetrack is expected to generate $37.7 million in eco- Leader Mitch McConnell of Kentucky nomic impact for the Greater Louisville market area, according and replaces former Securities and Exchange Commissioner to an independent study conducted by Scott Ray & Associates of Paul S. Atkins, who recently stepped down from the COP. New Orleans, which specializes in economic impact studies of Troske, who also serves as director of UK’s Center for Business music festivals and special events. The HullabaLOU economic and Economic Research and as co-director of the university’s impact study estimates 30,000 people per day will attend the Sloan Center for a Sustainable Aluminum Industry, has taught at music festival scheduled for July 23-25, with half of the visitors UK since 2005. In addition to his teaching of undergraduate and coming from outside of Louisville. Estimated spending by Hulla- graduate students at UK, Troske is a prolific researcher, having baLOU patrons on local hotels, food and beverage, retail shop- authored and co-authored numerous articles in books and jour - ping, other entertainment and transportation is expected to total nals. He is frequently sought after by the news media on the local, $6.4 million. The event will feature 66 artists per forming a wide state, national and international level for his expertise. variety of musical genres. Troske earned his Ph.D. in economics at the University of

UPS photo Chicago. He lectured at Johns Hopkins University in Balti- ■ After four years, UPS’s expansion of more while serving as an economist for the U.S. Bureau of Worldport, its global all-points air hub the Census’ Center for Economic Studies in the 1990s. He in Louisville, is now complete. The then joined the faculty of the University of Missouri in 1997 expansion enables the hub to process and served for eight years before coming to UK. 416,000 packages per hour, up from 350,000 per hour, and increases to 70 the number of aircraft parking bays at STATE: KY TOURISM’S ECONOMIC IMPACT the facility, helping to optimize the UPS IS $10.8 BILLION IN ’09, ONLY DOWN 1.9% air network by allowing more planes to

use the facility each night. The $1 bil- Kentucky Dept. of Tourism photo HE economic lion expansion increases Worldport’s footprint by 1.1 million s.f. impact of to 5.2 million s.f. – the equivalent of more than 90 football fields tourism in Ken- – and the hub now contains 155 miles of conveyors. The original Ttucky amounted to Worldport facility was completed in 2002. $10.8 billion in ■ 2009, according to Texas Roadhouse Inc. has announced plans to open its first figures released last restaurants outside of the United States in the Middle East. month by the state’s The Louisville-based company, which has 337 restaurants in Tourism, Arts and 46 states, has signed an area development and license agree- Heritage Cabinet. ment with Kuwait-based retailer M. H. Alshaya Co. to build 35 “Kentucky’s Texas Roadhouse restaurants in 10 years. The locations will tourism industry held be spread across eight Middle East countries. The first restau- its own during a dra- rant is expected to open in the first quarter of 2011. M.H. matic downturn in Alshaya operates 1,700 stores in the Middle East, North the national economy,” Tourism, Arts and Heritage Cabinet Africa, Turkey, Cyprus, Russia, Poland, Egypt, Slovakia, the Secretary Marcheta Sparrow said. Czech Republic and Hungary. Compared to the year 2008, the economic impact figure ■ was down 1.9 percent. Hotel occupancy in Kentucky The Presbyterian Church (U.S.A) is eliminating 49 jobs at dropped 2.8 percent in 2009, compared to a national drop its Louisville headquarters as part of a reorganization plan of 8.6 percent, according to Smith Travel Research. “that is adaptive to trends in the church and the world.” The The tourism regions in mostly rural areas saw small gains church has also cut 12 vacant positions and accepted volun- while the tourism regions that include Louisville, Lexington tary separation offers from another 12 employees, bringing and Northern Kentucky experienced declines in economic the total number of positions eliminated to 73. As part of the impact figures. reorganization, the church is reducing spending by 12.2 per- The impact figures are based on such things as tourist cent in 2011 and an additional 2 percent in 2012. The spending at attractions, overnight hotel stays, campgrounds, changes are being implemented in response to a decline in tax data, attendance figures and airline business. The analy- overall membership and decreased contributions. sis was conducted by Certec Inc. of Lexington.

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PIKEVILLE: COLLEGE AND MEDICAL SCHOOL BUSINESS BRIEFS EMBARKS ON $25M EXPANSION PROJECT LOUISVILLE IKEVILLE College Pikeville College photo ■ Louisville-based Kindred has announced a Healthcare continues to $25 million dollar expand with the acquisition Pexpansion project that will of a nursing and rehabilita- provide students in the tion center in the Cleveland, Ohio, area and the purchase of Pikeville College School previously leased facilities in Massachusetts. The company has of Osteopathic Medicine also opened a new 74-bed freestanding long-term acute-care (PCSOM) and the under- hospital in Houston, Texas, and begun construction on a 120- graduate college with a bed transitional care center in Westfield, Ind., that is expected new educational facility to open in the first quarter of 2011. Kindred is a Fortune 500 and an expanded clinical healthcare services company with annual revenues of over skills center. $4.2 billion and approximately 54,100 employees in 41 states. The nine-story struc- Pikeville College’s new facility will house lecture halls, labs, offices and classrooms. ture will include two lec- ■ Two Louisville companies have been named to the Inner ture halls, a gross City 100 list, which each year recognizes the fastest-growing anatomy lab, two research labs, offices, small-group classrooms 100 inner city companies in the United States. Pro-Liquitech and student study space. A clinical skills center will ser ve as a International placed 84th and Consumer Choice Coffee training and testing center using standardized patients and placed 93rd. Both businesses are located in the Park Hill high-fidelity robotic patient simulators. neighborhood of west Louisville, an area the city is helping With construction of the new building, the medical school’s revitalize. Consumers Choice was founded in 1971 and roasts current location will provide for the expansion of faculty offices coffee and supplies coffee and tea to numerous retail stores and classroom space in the undergraduate college. and restaurants in the region. Pro-Liquitech was created in The expansion will enable the college to increase its med- the early 1990s when Dave Dafoe left his corporate position ical school enrollment from 300 to 500 students. at Brown-Forman to start a beverage development company Construction is planned to begin by the end of this year. that now has clients that includes Ocean Spray and Starbucks, The facility will be ready for occupancy by June 2012. among many others. June Lane 1-17.qk:Layout 1 6/8/10 8:38 AM Page 12

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BUSINESS BRIEFS HICKORY: REMINGTON ARMS TO ADD 100 JOBS IN RIFLE PRODUCTION SHIFT MIDWAY EMINGTON Arms Co., one of the largest domestic ■ Midway College has finalized an agreement with the Big Sandy producers of shotguns and rifles, is investing $5 million Community & Technical College to lease space at its Mayo cam- to expand its operations in Hickory. The expansion is pus in downtown Paintsville for Midway’s new School of Phar- Rexpected to add 100 new jobs over the next three years. macy. The two-year agreement provides Midway with the Founded in 1816, Remington is one of the nation’ s oldest necessary classroom and office space it needs to move for ward continuously operating manufacturers of shotguns and rifles. with opening its School of Pharmacy in August 2011. The Mid- The company operates multiple manufacturing facilities within way College School of Pharmacy will accept up to 80 students per the United States and performs all significant R&D at its facility year and serve 320 students annually when fully operational. It is in Elizabethtown, Ky. Remington, which currently employs 91 expected to employ 100 faculty and staff members and have a Kentuckians in Hickory, plans to add 30,000 s.f. to its existing regional annual economic impact of more than $30 million. 44,000-s.f. facility to accommodate the relocation of certain rifle MURRAY production lines from Connecticut. According to Joe Gross, chief operating officer of Freedom ■ The Kentucky Agricultural Development Board has approved Group, Remington Arms’ parent company, Remington’s oper- funding for the Western Regional Center for Emerging Tech- ations in Kentucky contributed $33 million in gross state prod- nology Inc. that will be used to implement a multi-county pro- uct in 2009, supported 268 full-time jobs and generated more gram for the development of western Kentucky’s emerging than $3.7 million in state and local tax revenues. bioenergy industry. The goal of the program is to develop a farm- In announcing the company’s expansion plans, Gross based agri-energy infrastructure and projects in the Murray State praised Kentucky’s “business-friendly environment.” University service region. A key element of the program involves “Their willingness to meet our ambitious time frame farmer exploration of new agricultural biomass and bio-based demonstrates their sensitivity to today’s intensely competi- product ventures. The program will benefit western Kentucky tive business environment and their sincere interest in build- farmers, former tobacco growers and foresters by expanding the ing the economy of western Kentucky,” Gross said acreage of the most profitable bioenergy crops and trees; organ- The Kentucky Economic Development Finance Authority izing business relationships with bioenergy companies to maxi- preliminarily approved Remington Arms for tax incentives up mize profitability for farmers and foresters; and assisting in the to $4.5 million through the Kentucky Business Investment pro- establishment of biomass processing businesses with the highest gram, which can be earned over a 15-year period through cor- likelihood of success. porate income tax credits and wage assessments. NEWPORT ■ Newport-based Xanodyne Phar- LEXINGTON: LEXMARK TO BUY KANSAS maceuticals Inc. has sold the global SOFTWARE COMPANY FOR $280 MILLION rights of women’s health product Lystedal to Ferring Pharmaceuticals, a privately owned specialty EXINGTON-based Lexmark International has biopharmaceutical group headquartered in Switzerland. The sale announced plans to acquire Perceptive Software for is part of Xanodyne’s plan to tighten its focus on the pain man- approximately $280 million. agement market, where it has a decade-long history with brands LPerceptive Software is a leading provider of enterprise such as Darvocet and Roxicodone. The most recent addition to content management (ECM) software and solutions and has the company’s pain portfolio is Zipsor liquid-filled capsules, a significant industry experience in the higher education, non-steroidal anti-inflammatory drug that was approved by the healthcare and government segments. FDA in June 2009. Financial details of the Xanodyne-Ferring Lexmark Chairman and transaction have not been disclosed. CEO Paul J. Curlander said the acquisition of Perceptive SOMERSET “builds upon and strengthens ■ Science Applications International Corp. has announced our current industry workflow solutions, and broadens the plans to expand its operations in Somerset’s Valley Oak Tech- portfolio of offerings to our current customers, including our nology Complex and will add 20 new jobs over the next year. managed print services customers.” SAIC is a Fortune 500 company and is one of the countr y’s Perceptive Software is headquartered in Shawnee, Kan., largest IT contractors. The San Diego-based company has and generated about $84 million in fiscal year 2009 sales, approximately 70 employees in Kentucky, 55 of which work at principally in the United States. The acquisition enables Lex- the Somerset facility to provide corporate help desk and tech- mark to immediately participate in the growing market seg- nical services to customers. ment of ECM software solutions and also provides additional, growing revenue streams in software maintenance and pro- STATE fessional services. ■ Kentucky’s public and independent colleges and universi - “This added software platform provides a core component ties conferred an estimated 57,247 degrees and credentials of Lexmark’s strategy to deliver industr y-focused document during the 2009-10 academic year, according to the Kentucky workflow solutions, software and services that lower our cus- Council on Postsecondary Education. The figure represents tomers’ costs and significantly improve their productivity,” an estimated 9.3 percent increase over last year and includes Curlander added. gains at the associate’s, bachelor’s, master’s and professional Perceptive Software will retain its current name and will doctorate levels. operate as a stand-alone software business within Lexmark.

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GLASGOW: AMNEAL PHARMACEUTICALS BUSINESS BRIEFS CONSOLIDATES EXISTING WORKFORCES STATE MNEAL Pharmaceuti- ■ The Council on cals LLC is expanding its Postsecondary Educa- operation in Glasgow, tion has set tuition and Aadding 48 new jobs to the com- mandatory fee ceilings pany’s existing staff of 35. for in-state undergraduate students for the 2010-11 academic Established in 2002, year, authorizing a 4 percent ceiling for the Kentucky Commu- Amneal Pharmaceuticals nity and Technical College System, a 5 percent ceiling at the six develops, manufactures and

Amneal photo comprehensive universities, and a 6 percent ceiling for the Uni- distributes generic pharma- versity of Kentucky and the University of Louisville. The ceiling ceuticals and is currently the Amneal is a privately held manufacturer of generic pharmaceuticals. for KCTCS would mean an increase of no more than $5 per 10th largest U.S. generic sup- credit hour. For the six comprehensive institutions, the ceiling plier in number of prescrip- results in a range of $288 additional per year atMurray State Uni- tions dispensed, according to March 2010 IMS Health data. versity to $360 at Western Kentucky University. At the University The company plans to consolidate its distribution logistics of Kentucky, the lower division ceiling is limited to $487 per year and sales operations into a significantly larger 115,000-s.f. facility and upper division at $501. The University of Louisville’s ceiling in Glasgow that will combine distribution from the Long Island, would allow no more than $480 year. N.Y., facilities and the current operation in Fountain Run, Ky. “Amneal carefully evaluated relocating our combined sales ■ Facing a $6.8 million deficit for fiscal year 2011, the Ken- operations and distribution center near our headquarters and tucky Court of Justice has implemented a budget reduction manufacturing plants in metro New York or continuing opera- plan and staff cutbacks in an effort to balance the budget. The tions in Glasgow,” said Jim Luce, Amneal executive vice presi- measures will save $6.7 million and eliminate 113 positions. dent, sales and marketing. “In addition to compelling economic The job cuts represent 3.4 percent of the judicial branch’ s incentives, we recognized that the superb quality and dedication non-elected workforce and will affect all four levels of the of Glasgow’s workforce is a key factor in Amneal’s reputation for court system, the Office of Circuit Court Clerk and the service excellence, so the decision to stay and expand operations Administrative Office of the Courts. in Kentucky was an easy one.” June Lane 1-17.qk:Layout 1 6/8/10 8:38 AM Page 14

INTERSTATE LANE Business news from Indiana, Ohio, Tennessee and West Virginia

BUSINESS BRIEFS INDIANA: ARCADIA HEALTHCARE HQ TO EXPAND, ADD 930 PROFESSIONAL JOBS INDIANA ■ General Motors UST three years after relo- Arcadia photo

is investing $11 GM photo cating its headquarters from million to expand Michigan to Indiana, Arca- manufacturing Jdia HealthCare is investing $3.9 operations at its million to expand its national plant in Bedford, headquarters and pharmacy Ind., and plans to operations in Indianapolis. The add 245 new jobs expansion will create up to 930 by 2013. GM Pow- new jobs by 2013. ertrain Bedford is one of the world’s largest aluminum die cast- Arcadia will continue hiring ing facilities and currently manufactures NorthStar engine corporate staff for its headquar- blocks, four-speed transmissions and fuel-efficient six-speed ters as well as managers, pharma- transmissions. The expansion will add a semi-permanent mold cists, pharmacy technicians, cylinder head casting line for small block engines. The company account managers and sales per- currently employs 350 people at the 915,000-s.f. facility. sonnel for its pharmacy business as it prepares to expand ser vices OHIO for clients that include Indiana- ■ General Electric is expanding its lighting plant in Bucyrus, based WellPoint and Health One of Arcadia Healthcare’s Alliance Medical Plans Inc. The products is DailyMed, a drug Ohio, to enable increased production of high-efficiency T8 packaging system that puts pa- linear fluorescent light bulbs. The expansion will consolidate company currently employs tients’ daily medication into GE Lighting’s production from Canada and Hungary into the approximately 500 individuals single-dose packs. United States and will add 130 jobs over the next several years. throughout the state. The facility currently has approximately 160 employees. Arcadia recently reported its sixth consecutive quarter of sequential revenue growth with its DailyMed Pharmacy, the ■ Cincinnati-based Procter & Gamble has company’s proprietary medication compliance and adher- signed an agreement to acquire Natura Pet ence program that includes a drug packaging system that Products Inc., a privately held pet food busi- puts patients’ multiple prescription and over-the-counter ness headquartered in Davis, Calif. The medicines and vitamins into single-dose packs based on the acquisition positions P&G to expand into the time and date the drug should be administered. The pro- “holistic and naturals” segment of the pet gram is complemented by a medication therapy manage- food category. Natura’s brands include ment program administered by pharmacists and trained staff Innova, Evo, California Natural, Healthwise, Mother Nature and and is offered throughout the United States. Karma, and are sold in a limited number of pet specialty stores and through veterinarians, mainly in the United States and Canada. The company employs approximately 140 people. TENNESSEE: JACKSON NATIONAL LIFE TO HIRE 750 FOR NEW REGIONAL OFFICE TENNESSEE ■ Memphis-based International Paper has signed a definitive ACKSON National Life Insurance Co. has announced agreement to purchase SCA’s packaging business in Asia for plans to establish a regional headquarters in Franklin, $200 million in cash. “We’re buying good facilities at a good Tenn., that will employ up to 750 workers. price as well as gaining an excellent team of 4,500 employ- JJackson National has its national headquarters in Lans- ees,” said Paul Brown, president, IP Asia. “SCA’s facilities coming, Mich., and offers variable, fixed and fixed index annu- plement our existing converting system of 12 corrugated box ities and life insurance products through banks, plants, which are principally in China.” independent financial advisors, regional brokers and deal- ers, wire houses and independent agents. The company was ■ Loews Hotels will be locating a new ser vice center in down- founded in 1961 and was named after president and T en- town Nashville that will create approximately 200 new jobs. The nessean Andrew Jackson. The company has assets of nearly company’s new worldwide Share Service Center will provide $88 billion and operates in 10 locations across the United billing, accounting and IT services to 19 Loews properties. States with more than 3,700 employees. The company’s growth plans call for the company to ■ The massive flooding that enveloped Nashville last month occupy 90,000 s.f. of office space by Januar y 2011, adding has closed the Gaylord Opryland Resort & Convention Cen- 30,000 s.f. in 2012 and another 30,000 s.f. in 2013. ter, forcing dozens of conventions to relocate. The economic “Middle Tennessee has a large and well-educated workforce impact on Nashville is expected to be significant while the and is home to many institutions of higher learning,” said Jack- hotel remains closed: The hotel/convention center repre- son Vice Chairman and Chief Operating Officer Mike W ells. sents 10 percent of the total number of hotel rooms in the city “With several insurance and financial services companies located of Nashville and generates nearly 25 percent of the city’s total in and around Nashville, we expect to be able to attract numer- hotel tax revenue. ous experienced, qualified job candidates.”

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KENTUCKY INTELLIGENCER®

A sampling of economic development data

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CORPORATE MOVES New leadership for Kentucky businesses

BANKING FOOD SERVICE TELECOMMUNICATIONS ■ James H. Owen ■ Papa John’s Pres- ■ Stephen Lochmueller has been II has joined First ident and Chief named president of Louisville-based Citizens Bank as Operating Officer Lightyear Network Solutions. vice president/ Jude Thompson broker services and has been promoted UTILITIES financial advisor in to co-chief execu- ■ Samantha Villegas has been named vice the Elizabethtown tive officer. Thomp- president of communications and external bank’s Raymond son will ser ve affairs for the Eastern Division of Ameri - James Financial alongside founder can Water, the parent company of Ken- Services Office. James H. Owen II and Chairman Jude Thompson tucky American Water. Cheryl Taylor has John Schnatter. been named manager of production for ECONOMIC DEVELOPMENT Kentucky Ameri- ■ Deana Epperly Karem has been GOVERNMENT can Water, succeed- named executive director of the Old- ■ Jeffrey A. Brady has been named exec- ing Dillard ham Chamber & Economic Develop- utive director of the Governor’s Office of Griffin, who has ment agency. Electronic Health Information. been named manager of field opera- ■ Kathy Jacobs has been named execu- ■ The Kentucky Department of Parks tions. Susan tive director of the Prospect Area Cham- has announced new managers for the Lancho has been ber of Commerce. following Kentucky State Parks: Ron appointed external Sydnor – Jefferson Davis State Historic affairs manager for ■ Matt Belcher has been named eco- Site; Michael Schwendau – Blue Licks Kentucky Ameri- nomic development director for the State Resort Park; Curtis Gamblin – can Water. Samantha Villegas Lincoln County Industrial Authority. Mineral Mound State Park.

EDUCATION HEALTHCARE ■ Peggy Woods ■ Katherine S. has been named Love has been to the newly cre- appointed chief ated position of executive officer dean of student for Clark Regional employment at Medical Center in the University of Winchester. the Cumberlands. Cheryl Taylor Susan Lancho LEGAL ■ Dr. Michael Peggy Woods ■ Andrew DeSi- Katherine S. Love OTHER Tick has been mone has been ■ Bryan Sunderland has been named named dean of the University of Ken- named a partner in the Lexington law vice president of public affairs for the tucky College of Fine Arts. Tick comes firm of Sturgill, Turner, Barker & Kentucky Chamber of Commerce. Chad to the position from Louisiana State Moloney PLLC. Harpole has rejoined the chamber as University, where he was chair of the director of public affairs. Department of Theater. ■ Amy B. Berge has been named chair ■ Scott A. Stromer has joined Sullivan of Greenebaum University as director of food and bever- Doll & McDonald’s age operations. Intellectual Prop- erty Practice Group. ■ Stacey Varney Berge is also chair has been proof the firm’s Privacy moted to director Team. of sponsorships and promotions REAL ESTATE Amy B. Berge Bryan Sunderland Chad Harpole for Georgetown ■ Scott Toombs College. has been appointed regional director for Keller Williams Realty’s Ohio Valley ■ Herb Michelli has been appointed ■ Dr. James region. regional sales manager for Clark Mate- Klauber has been rial Handling Company’s South region. named president Stacey Varney PHARMACEUTICAL of Owensboro ■ Natasha Giordano has been named ■ Terry DeLuca has joined The Child Community and Technical College. president and CEO of Newport-based Care Council of Kentucky as director of Xanodyne Pharmaceuticals. community partners.

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ON THE BOARDS New leadership for Kentucky organizations

COMMUNITY FOUNDATION INTERNATIONAL FACILITIES the board of directors of the National OF NORTHERN KENTUCKY MANAGEMENT Association of State Credit Union Super- ■ Tony Berling, Robert Carlisle, John ASSOCIATION visors. Stewart is director of the financial Mocker, Lee Scheben and Greg Schrand ■ Gary Rahn, institutions division for the Kentucky have been named to the board of direc- principal and Department of Financial Institutions. tors of the Community Foundation of director of opera- Northern Kentucky, an organization that tions for the archi- NATIONAL COUNCIL ON works to enhance the health, social and tectural firm of COMPENSATION INSURANCE, INC. educational resources of the region. GBBN, has been ■ Michelle Landers, executive vice pres- Berling is a principal member of Berling elected president ident and general counsel for Kentucky Engineers in Ft. Wright; Carlisle is an of the Cincinnati Employers’ Mutual Insurance (KEMI), executive with Maxim Crane Works in chapter of the has been elected to serve on the Law Wilder; Mocker is president of Lally Pipe International Gary Rahn Committee for the National Council on and Tube in Taylor Mill; Scheben is sen- Facilities Manage- Compensation Insurance, Inc. ior vice president of Heritage Bank; and ment Association. Schrand is president of Garrard St. RURAL CELLU- Enterprises of Walton. MADISONVILLE LAR ASSOCIA- COMMUNITY COLLEGE TION ELIZABETHTOWN COMMUNITY ■ Gary E. Carver has been appointed to ■ Ron Smith, AND TECHNICAL COLLEGE the board of directors of Madisonville president of Blue- ■ John T. Isaacs and Claudio L. Monzon Community College. Carver, of Central grass Cellular have been appointed to the board of City, is an insurance agent with State Inc., has been directors for Elizabethtown Community Farm Insurance. elected chairman and Technical College. Isaacs, of Spring- of the board of field, is a self-employed dentist. Mon- NATIONAL ASSOCIATION OF STATE the Rural Cellular zon, of Elizabethtown, is a banker with CREDIT UNION SUPERVISORS Association. Ron Smith First Federal Savings Bank. ■ Kathy Stewart has been appointed to

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LANE ONE-ON-ONE Kentucky’s leaders express their opinions

LOOKING BACK INTO THE FUTURE tracks are certainly on a level with New York and California. But Kentucky tracks Publisher Ed Lane selects excerpts from past are desperately in need of money, and they are not able to give the customers One-on-One interviews with Kentucky leaders what they want. I’m referring to video lot- tery terminals and quality racing. BY ED LANE Government regulation in Kentucky is preventing local tracks from compet- ing financially with out-of-state tracks. Editor’s Note: Full interviews of these and other One-on-One interviews with Kentucky Victor Staffieri leaders are archived online at lanereport.com. E.ON U.S. (March 2008) The One-on-One interview excerpts here include comments from these Kentucky leaders: Ed Lane: E.ON, • Nick Nicholson, president of Keeneland headquartered in Association (November 2009) Düsseldorf, Ger- • Victor Staffieri, chief executive officer many, is one of the of E.ON U.S. (March 2008) world’s largest • John Long, chief executive officer of the investor-owned util- United States Equestrian Federation (October ity companies. 2009) E.ON acquired its • Dr. Thomas Clark, Kentucky Historian Because of gestation and training Kentucky-based Laureate (February 2005) periods, we can accurately forecast the utility companies in • Michael Muldoon, executive director of the size of our yearling market two years in Victor Staffieri 2002. Having been Health Enterprise Network (December 2009) the future. We now know we are going an employee of • Kathy Gornick, co-founder, president of to have fewer yearlings in 2011. E.ON and its predecessor owners since THIEL Audio Products Co. (December 2008) In 2010, except at Keeneland, I predict 1992, what has been the major impact of • David Williams, president of Kentucky you’ll see fewer race dates; this change is foreign ownership on the company? State Senate (February 2004) not necessarily negative. The supply and Victor Staffieri: E.ON is the largest demand curve needs to change on race investor-owner utility in the world. It is a Nick Nicholson days just like it does on horses. very large, very well capitalized, A-rated Keeneland Association (November 2009) company that benefits Kentucky’s con- EL: What is the general financial health sumers. E.ON borrows money at very low Ed Lane: The U.S. of Kentucky’s racetracks today? rates and has the ability to tap into world- economy has been NN: It’s not strong – precarious. In wide operations, engineering and expert- in deep recession my opinion, the reality is that Kentucky ise. In Kentucky, our management has a for about a year. racing is under a short-term, immediate, lot of flexibility in how we operate the What is the current serious threat. company, and we’ve been able to operate state of Kentucky’s The Kentucky breeding industry has dif- it in a way that benefits Kentucky con- horse industry? ferent issues, and they are not black and sumers – with the support of our owners Nick Nicholson: white; Kentucky racing issues are black and in Düsseldorf. The global and white. There’s a very real chance that if U.S. economies something is not done for Kentucky racing EL: Kentucky has one of the lowest elec- Nick Nicholson are having a seri- in the very near future, we will have tric utility rates in the United States. ous impact on Churchill Downs and Keeneland and that’s How has E.ON been able to keep Ken- equine sales. Equine investments are, for it. No other racetrack in Kentucky is in tucky’s rates so competitive? the most part, a luxury item. Horses are good shape. That doesn’t imply that VS: First and foremost, E.ON is a coal-based not a necessity, so buying another year- Churchill and Keeneland are in good power generation utility. Being in Kentucky ling is the kind of investment that can be shape; it just means they will survive. allows us to burn relatively inexpensive Ken- deferred. A second factor is the credit The Kentucky racing industry is tucky coal. Two, our company is a byprod- market. As the banks continue to consol- going to change quickly. The Kentucky uct of a regulatory program that allows us idate, they are becoming more cautious breeding industry’s downslide will not to minimize the cost of new construction. and the credit market for Thoroughbred be as dramatic or short-term. That’s very important because E.ON passes horses is suffering seriously. on those savings to its customers. On the other hand, the supply and EL: What changes are needed for Ken- Third, I would argue, is our ability to demand curve favors our industry. The tucky’s racetracks? manage the company very effectively – par- industry probably has been in an over - NN: If Kentucky was a free-market envi- ticularly in the wake of the mergers. We’ve production situation – both in the num- ronment and its racetracks could compete not only been able to look at our opera - ber of horses and number of race days. with those in Indiana, Illinois and West tions, re-engineer them and find better We are a capitalistic free market, and Virginia, Kentucky tracks would not only ways of doing things, but to also be mind- free markets do what they do: They survive, they would thrive. Kentucky does ful of customer service. E.ON has won 18 make self-corrections. racing better than any other state; our J.D. Power awards for business and resi-

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dential service. We’re very proud of win- and other companies in which electric The games need to be financially suc- ning those awards and being able to main- energy is involved. Kentucky has an advan- cessful as well. We’re receiving no direct tain low costs by incorporating the best tage over about every other state in the money from the state. The games will practices gained from our mergers. union in terms of low-cost power. For either be successful or not depending on example, I’ve been told a car built in how we operate them. Revenues are com- EL: What percentage of E.ON’s electric Louisville is approximately $200 less than a ing from ticket sales, hospitality, the vendor power generation uses coal? car built in Detroit, Mich., just because of fair and sponsorships. VS: E.ON is about 85 percent coal from the difference in electricity prices. The games also have to be successful a total capacity perspective. Gas-fired artistically from a cultural standpoint. generation, which is mostly for meeting John Long That means when the games are over peak demand purposes, represents per- United States Equestrian Federation and we look back and also look forward, haps 12.5 percent of total capacity (October 2009) we will see how our community has changed. Kentucky will have chief exec- EL: E.ON has a str ong interest in Ed Lane: What will utive officers from all over the world vis- recruiting new businesses that use elec- be the legacy of iting here. I hope to see those tric power. What types of companies are the World Games companies decide to open up new or good candidates for economic develop- in Kentucky? expanded operations in Kentucky. Also ment in Kentucky? John Long: The there will be a sense of accomplishment VS: E.ON views itself as a partner with the games are going to when Lexington pulls this event off, Kentucky Economic Development Cabinet be successful in showcases the region to the rest of the and local municipalities. Given our low-cost three very impor- world and does it in fine fashion. We will position, E.ON is a valuable economic tant ways. They build confidence and know we can suc- development weapon to lure companies to need to be techni- cessfully present a major international Kentucky. As you look around our com- John Long cally perfect, which event like this again. The Alltech 2010 monwealth, you see big stainless steel oper- means the buses FEI World Games should be a trans- ations, car manufacturers like Toyota and have to arrive on time, the tickets work and forming event for the Commonwealth Ford, plastic companies, aluminum plants the footing in the arenas is spectacular. of Kentucky.

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LANE ONE-ON-ONE

Dr. Thomas Clark, PhD EL: How important is the computer? The general public says Medicare’s Kentucky Historian Laureate (February 2005) TC: Let’s put computers in this context. administrative cost, which has nothing Think of the frame of reference of a 10- to do with profit, is only 3 percent. Ed Lane: You’re year-old boy in 1905 and a 10-year-old boy Whereas, if you look at a typical insurer, now over 100 years in 2005. There’s no comparison. A 10-year- the administrative cost is anywhere from old and have pro- old boy today with a computer on the 9 percent to the high teens. vided for yourself Internet has a source of knowledge that What’s going on here? Medicare for one centur y. far exceeds anything that his ancestors doesn’t really manage. When I speak to How hard has it ever dreamed of. audiences, I say excuse the double neg- been for you? ative but I want to make a point here: Thomas Clark: I Editor’s note: Clark passed away on June “Medicare don’t do nothing.” All came up in times 28, 2005. Medicare does is pay the claim. that were hard. If There’s a school of thought that Dr. Thomas Clark someone grew up Michael Muldoon there is a lot of fraud, waste and abuse on a cotton farm, Health Enterprise Network (December 2009) in Medicare. President Obama wants to you just assume that he had difficulty. get rid of anywhere from $500-560 bil- But I also came from a family that had a Ed Lane: What is lion in Medicare fraud, waste and sense of frugality and saving. Right from HEN’s perspective abuse, and that’s how he’s going to the moment that I began to earn a liv- on the federal gov- expand coverage to the uninsured. ing on my own, I tried to anticipate that ernment becom- Many people in the business commu- I might live a long time. I denied myself ing an insurance nity say, goodness, if you have an entity many things that the average person provider in com- that large that’s wasting that amount of might have spent money on. I never petition with pri- money, why would you wait for health accumulated great wealth, but I can vate insurers? reform to be enacted. take care of myself. Michael Muldoon: Physicians, like hospitals, are pretty First of all, HEN worried because what’s been talked EL: During your first 100 years, technol- Michael Muldoon doesn’t take posi- about is cutting their fees for services as ogy and innovation in the world acceler- tions on political well. Doctors may see more patients in ated rapidly. In your judgment, what issues because its members have different their practices, because under the U.S. were the most important developments interests. We endeavor to provide mean- House and Senate bills there are going during the last century? ingful information to all our members. to be more people insured and more TC: I could hardly overlook the introduc- The federal government getting patients over which to allocate the doc- tion of the automobile. It not only involved in healthcare is an issue we’ve tors’ overhead. The comment I often changed the whole pattern of transporta- been talking about a lot. The hospital make to the public is, if you think your tion, it changed the pattern of communi- industry would say it would be good to doctor does not spend enough time cation, it changed the organization of have more and more people insured. with you right now, buckle up, you are communities and, obviously, was the stim- Hospitals would probably see less bad in for a ride, because your doctor is ulant that brought about the construction debt come through their emergency going to spend even less time with you. of interstate, state, local, county and dis- rooms. The downside to the hospital If you’re a small employer, you are trict road systems. industry is, there’s going to be a reduc- probably very worried about the federal Another important thing that had a tion in the fees paid to hospitals for the takeover of healthcare. Businesses are marvelous effect on life was the intro- services they provide. already having a tough time meeting duction of rural electrification (REA). Let’s look at the insurance industry. A payrolls, and now Mr. Federal Govern- All the light my family had was perception that’s been sold to the public ment is saying that employers will have either a wood-burning fireplace or by the media is the insurance industr y is to provide insurance to employees. kerosene oil lamps. None of them shed one of the “bad dogs” that is making much light. We didn’t roam around a excessive profits and must be the cause of EL: Is it better to have a free-market sys- whole lot after dark – we went to bed. a lot of this healthcare trouble. tem or government-controlled health- When REA came along and the line The facts are different when you care systems? was extended out to my father’s farm, look at reports. Let’s take Investors Daily, MM: The person that put it the best he wired his barn and house. I went which did a big survey several months was Harvard professor Regina Her- down from the University of Kentucky ago. They looked at CIGNA, Humana, zlinger in her conversation with HEN’s to visit and he had ever y light on, and United Healthcare and Anthem; their board of directors. She essentially said, he was showing me with such glee that profit margins were from about 1 per - “Government feels that individuals are he had electricity. cent up to a whopping 4.4 percent. incompetent to determine their own Electricity introduced the possibility When you look at a more profitable care, that you are an idiot. Does the of getting running water in houses. segment of the insurance industr y like federal government need to tell you Thousands of houses had never had any- Medicare Advantage, which is one plan what is best for you, or do you feel you thing more than a bucket and a spring; that’s actually been saving money can determine what healthcare services now they had wells and the power to throughout the whole Medicare struc- are best for your own care?” That’s not pump water. A woman who had ture, again we are getting into the me talking; that’s the first tenured scrubbed away at the creek bank washing weeds. Medicare is nearing bankruptcy; woman at Harvard Business School say- clothes now had a washing machine. some already say it is in bankruptcy and ing the consumer needs to be in the Some had dishwashers, even. its finances will get worse and worse. driver’s seat.

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I predict there will be a healthcare EL: Are government incentives for eco- ness failures have happened throughout revolt as time goes on, because eventu- nomic development a good investment? our country’s economic history. ally people will say we are already paying KG: There is a huge moral hazard there. The market is amazing. It’s almost half of every dollar we earn in some Governments don’t know anything about like schizophrenia because an individ- form of taxes. Eventually they will say economic development; their area of ual is both a consumer and a holder of a enough is enough. expertise is not economics. I am all for job. A person can’t have the best, high- incentives from the standpoint of making quality, low-cost products made in the Kathy Gornik it easier for businesses to survive and pros- world and be able to keep the same job, THIEL Audio Product Co. (December 2008) per, but incentives should be blanket and probably, for their entire life. But peo- equal for all companies. ple say “Save my company. Let us keep Ed Lane: What is building this inefficient product.” But your position on EL: What is your view on bankruptcy, then they go buy a Toyota. defined-benefit pen- bailout and business failures? With changing technology, it is each sion funds for state KG: They are surely not the responsibil- person’s responsibly to refresh their skill and city government ity of the taxpayer. If businesses are sets and adapt to new employment employees? unprofitable, they should go out of busi- opportunities. Kathy Gornik: Guar- ness. A new company will come in and anteeing a fixed make the consumer happy. By the way, EL: Why are you such a strong advocate pension benefit is a it is the consumer who puts a company for small business, less government and very irresponsible out of business, so the consumer should the free-enterprise systems? Kathy Gornik act of our govern- actually be thrilled about this. KG: The only person I belong to is me. I ment leaders. To The bailout of Wall Street is despica- want no interference in my life. I consider continue along this path puts our chil- ble, immoral, disgusting and profoundly it a great violation for another group to dren’s future in jeopardy. It is remarkably threatening to our economy. I don’t say to me, “You have to live this way. You unfair to the citizens. The politicians are know how to adequately express my have to give us your money because we completely unaccountable and irresponsi- regret that our politicians have taken know better than you how to live.” ble. If I were to offer the kind of benefits this path. The requested loans for GM I was cursed or blessed with a great that government offers in my business, I and Chrysler should not be made. sense of being an individual human might be in jail because I couldn’t possibly There will be other automobile compa- being. I consider my life to be a great keep the promises. nies coming in to take their place. Busi- gift that comes with a huge responsibil-

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LANE ONE-ON-ONE

ity. The only way my life has any mean- David Williams Their retirement would be based upon ing is if I am in charge of it. I do not State Senate President (February 2004) their three highest salary years, and the want handouts. I want to suffer the con- state would guarantee life insurance and sequences of my own decisions. To me, Ed Lane: A recent retirement benefits for the rest of their life that is what the meaning of life is. article indicated – to be paid for by the citizens of the com- I loathe politics and politicians – the that a Kentucky monwealth. Under the current law, retired politicians know what is better for all of state employee, employees can go back to work immedi- us. The politicians have forgotten this with salaries, bene- ately under another, different retirement country was founded on the protection fits, retirement, plan or even the same retirement plan of minorities and private property etc., probably under a service contract. rights. Government should leave us costs the taxpayer At some juncture we are going to have alone – and get out of our money, busi- around $50,000 on to look at a personnel study. Should pay ness, bedrooms, diets and healthcare. the average per caps be set at certain levels that you reach David Williams year. One thou- at a particular job description? If someone EL: Are you concerned that President sand employees works in state government for 30 years and Obama and a more liberal U.S. Congress cost $50 million per year. receives incremental pay increases, they will erode the free-enterprise system? David Williams: All the various compo- could have job duties for which they are KG: Yes. Unfortunately, “Change I can nents of personnel costs – including paid far in excess of what the market believe in” tells me nothing. It is the most salary, benefits, retirement and insurance should support just because they’ve been vacuous of statements, and I cannot – are the greatest expense we have in state here for so long. believe how an entire country could be so government. And the state has an excited about a slogan in which there is extremely generous retirement plan that EL: Does Kentucky give annual pay no substance. So I have to wait and see. is unequaled in the private sector. For increases of 5 percent to employees? I’m only speculating at this point, because example, an individual could start work- DW: That is the law now. The General Mr. Obama essentially said very little ing for state government at age 18 and at Assembly has to suspend the law to give about what he was going to do. age 40, after having worked 22 years, an increase of less than 5 percent. ■ could buy five years and have a complete EL: What is your outlook for business 27-year retirement. He or she would, in Ed Lane (edlane @lanereport.com) is and economic conditions in 2009? effect, be paid from the time they are 13 chief executive of Lane Consultants, Inc. KG: Very tough. years old. and publisher of The Lane Report.

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COVER STORY Shaun Ring photo

Mira and Donald Ball, front, founded Ball Homes in 1959. It is operated today by their children, (rear, from left) Ray Ball, Lisa Sharp Ball and Mike Ball. Ball Homes’ headquarters in Lexington A Lot on the Ball Ball Homes manages to climb the national taged and discouraged improve their lives; Builder Magazine recognized him with a long-term community service award 11 Builder 100 list – up 41 spots in three years – years ago. Mira’s focus is education; she’s the present chair of during the worst downturn in generations the University of Kentucky Board of Trustees. The list of the couple’s leadership involvement in community service, professional, business, civic and charitable undertakings BY MARK GREEN is massive. Donald Ball ser ved a few terms in the state House in the 1960s and is a serious political campaign contributor. “It’s unbelievable what that man has ONSERVATIVE business practices during the mid- done for the community,” said Mac Craw- decade housing boom may have left money on the ford, who has operated his own specialty table for Ball Homes, but it also left the Kentucky homebuilding company in Lexington for homebuilder with a solid financial foundation 38 years and is president of the Home when the subsequent economic crisis fueled by Builders Association of Kentucky. “They Cbad-mortgage debt struck. As a result, Ball bounded up an are good all-around Americans who have impressive 41 spots on the Builder 100 list of top U.S. home made a great success story out of their producers during the depths of that crisis the past three years. lives, and have been good for our com- Sales volume is down sharply for Ball since 2004-05, the top munity and our country.” years for U.S. homebuilders. Its lesser-prepared peers, though, They live at Donamire Farm, a majes- Mac Crawford, president took much harder hits. tic 650-acre Thoroughbred operation of the Home Builders The Lexington-based builder ranks 47th nationally on the with slate-roofed stone barns. Association of Kentucky just-released 2009 Builder 100 list after tightening up opera - tions – except in marketing, where it became much more ‘They sharpen their tools quickly’ aggressive. Ball, family owned and operated since 1959, is sim- The Balls are a modest bunch, though. Ask them for an expla- ply an efficient, quality operation, according to obser vers in nation of their success and rather than bombast the reply does- the Kentucky homebuilding industry. n’t go much further than attributing it to a consistent focus on Donald and Mira Ball, now 74 and 76 respectively , founded satisfying the customer and conservative practices. and built the company, which today is operated by their children, “We trust each other internally,” said Ray Ball, president of D. Ray Jr., 53; Mike, 51; and Lisa Sharp, 47. Ball Homes buys and Ball Homes for 27 years. “Ever ybody works well together and develops property, designs its homes and apartments from floor- trusts one another. Everybody knows here the customer has to plan to materials, and manages all construction. Milestone Realty be satisfied.” markets the homes and conducts transactions. Walden Mortgage And they are good managers and business people. Group is the financing arm. Ball Realty manages the rental prop- “They sharpen their tools real quickly when things shift,” said erty, now numbering about 1,700 units. Crawford. “They read the market better than other people.” Beyond the business, there is very extensive civic and char- When the federal government enacted an $8,000 tax credit ity activity. Donald focuses on projects that help the disadvan- for first-time homebuyers as part of the Februar y 2009 emer-

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gency economic stimulus, “It wasn’t two days and they were While Ball Homes is down 47 percent from its 2004 peak, D.R. advertising it,” Crawford said. “They are on top of their game.” Horton, the enormous Fort Worth, Texas-based No. 1 home- Meanwhile, strong company finances and a good reputation builder in the nation, is down 65 percent from its top figure of provided an assist in “a tough market” where buyers are somewhat 51,383 homes sold in 2005. A big majority of the companies in the leery, according to Diana L. Oliver, immediate past president of Builder 100 saw significantly steeper sales drops than Ball. Collec- the Mortgage Bankers Association of the Bluegrass. tively, Builder 100 closings plunged 68 percent from 2005 to 2009. “They are well capitalized,” Oliver said. “Their reputation has ser ved them Picking the right markets well. If you give them a down payment Ray Ball does cite a couple of factors in his company’ s favor, (on a new house), they’ll not only finish partly arising from the Ball business plan and partly a charac- it, they’ll build it correctly and they will teristic of its sphere of operation. be in business in a year” should any issue “Our market of Lexington and Louisville is reasonably with the big purchase arise. strong compared to other areas,” he said. Kentucky builders Two other Northern Kentucky-based and bankers largely avoided the subprime mortgage financing homebuilders, Fischer Homes of that inflated the housing price and construction bubble, then Crestview Hills and The Drees Co. of cut the financial legs from under regions that indulged in the Fort Mitchell, rank even higher on the ephemeral boom. “The strength of our communities has Builder 100. Drees ranks 22nd nation- Diana Oliver, immedi- helped us to maintain levels of production.” ally and Fischer is 39th. Both have fared ate past president of However, Lexington and Louisville aren’t big or lucrative the Mortgage Bankers relatively well during the recession – Fis- Association of the enough markets to have attracted national home construction cher has climbed the Builder 100 list Bluegrass giants to compete against Ball Homes. also. However, the vast majority of both Ball said the company plans to stay in its “affordable” niche, companies’ operations are in out-of-state markets. building homes that sell for up to $300,000 – most for a quarter Ball’s developments are all in the Lexington and Louisville to a third less than that. Ball has moved away from larger , more markets. It is the largest player in Kentucky homebuilding. expensive homes. It operated in Knoxville, Tenn., for awhile in the For 2009, Ball Homes had 580 closings, according to Builder 1980s and 1990s, but prefers managing operations closer to its Lex- Magazine. The year marked the fifth consecutive year of ington headquarters, Ray Ball said. decreases in closings for Ball, which completed 1,108 closings In the past, the Balls also have tried owning and running a lum- in 2004; 1,074 closings in 2005; 847 closings in 2006; 695 clos- ber yard – Ray began his career in the family business there in the ings in 2007; and 583 closings in 2008. mid-’70s – as well as other operations related to homebuilding.

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COVER STORY

“We tried a little of several things,” said Donald Ball, “including plumbing and electrical and heating work. But in the end we decided rather than working in that aspect of it to hire a good contractor and maybe build an extra house or two as a result.” Donald Ball had no family background in building growing up in Western Kentucky and began learning the business when he took a part-time job as a student at UK in the mid-1950s. After having married in 1955, he and Mira incorporated Ball Homes in 1959 to build single-family homes.

‘It was a good balance’ “Dad has always been more of the risk taker, the planner, the thinker,” said Lisa Sharp. “Mom ends up having to pull it all Ball Homes photo A Ball Home in the Glasford development now being built in south Fayette together … taking care of the accounting part of it. When they County. More than 30 floorplans are offered at Glasford ranging from over started, it was a good balance.” 1,400 s.f. to more than 3,500 s.f. Mira Ball is the long-time chief financial officer. “We have tried to plan – and some people think builders In a news release regarding Ball Homes’ climb up the don’t do that much of that today,” Mira Ball said. “But espe- Builder 100 the past few years, Lisa, vice president for sales and cially when you are tr ying to get land and lots, you’ve got to marketing, cited careful management of inventory, ensuring a put a lot of planning into everything you do with building.” steady supply of homes available for quick occupancy. The Credit for Ball Homes’ success in recent years goes to Ray, company recognized buyers’ desire to move quickly to secure Mike and Lisa, Donald Ball said. the advantages of low interest rates, tax credits, competitive pricing and new homes’ energy efficiency – especially for the Kentucky’s Builder 100 Members most popular floorplans, locations and option packages. The company and its employees coped well, she said, with the Ball Homes Lexington ballhomes.com intense buying cycle created by the tax credit deadlines: contracts CEO: Ray Ball by the end of April, closing no later than the end of June. Markets: Lexington, Louisville The $8,000 first-time-buyer federal tax credit (and other incentives) did help sell homes, “but were maybe not as big as YEAR CLOSINGS REVENUE RANK 2009 580 $113 million 47 some think,” Ray Ball said. “People don’t buy houses just to get 2008 583 $114 million 54 tax credits. It’s more about family than credits.” 2007 695 $133 million 77 Activity has slowed since the credit ended, but he expects to 2006 874 $169 million 88 regain momentum later in the year. The fundamentals that ulti- 2005 1,074 $191 million 77 mately drive the housing market remain in place: a growing pop- 2004 1,108 $184 million 72 ulation and adults’ desire for their own home. Current high unemployment rates are forcing more young adults to live with their families, Ray Ball said, but this is creating a pent up demand. The Drees Co. Fort Mitchell dreeshomes.com CEO: David G. Drees Advertising kept business coming in Markets: Cincinnati; Cleveland; Dayton, Ohio; Indianapolis; Ball expects a “gradual recovery” in the economy. In 2010, he Nashville; Raleigh, N.C.; Frederick, M.D., Washington, D.C.; forecasts the company will have about the same level of sales Jacksonville, Fla.; Dallas; Austin, Texas. as 2009. “We will be ‘vital’ in a couple of years.” Having taken a conservative approach during the height of YEAR CLOSINGS REVENUE RANK the housing economy, Ball Homes had not grown as much as it 2009 1,500 $520 million 22 could have. “We did make some structural changes in the com- 2008 1,762 $628 million 25 pany in response to the economic downturn,” he said. “We did 2007 2,536 $947 million 27 not have to make painful cuts.” 2006 3,154 $1.16 billion 29 Ball increased its advertising “to keep the company busy” as 2005 3,038 $1.09 billion 32 the economy worsened. “We would have had to lay off 2004 3,062 $1.02 billion 29 (employees) had we not marketed as much.” In the meantime, a number of homebuilders have left the Fischer Homes Crestview Hills fischerhomes.com Kentucky market and Ball has been gaining market share. CEO: Henry Fischer The present remains a good time for qualified buyers, Markets: Cincinnati; Columbus, Ohio; Indianapolis according to Ray Ball. Mortgage interest rates are low , even dipping under 5 percent this year – “rates I never thought I’d YEAR CLOSINGS REVENUE RANK see in my life.” And because of the recession, competition 2009 696 $143 million 39 among contractors and suppliers helps keep costs down. 2008 603 $127 million 52 “People can afford more than before because of this,” Ball said. 2007 935 $198 million 61 Recent shifts in the market, however, are permanent in his 2006 1,310 $281 million 61 estimation. Smaller, energy efficient homes of quality con- 2005 1,150 $244 million 73 struction will be able to demand a premium. ■ 2004 1,083 $231 million 76 Mark Green is editorial director of The Lane Report. Source: Builderonline.com ([email protected])

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REAL ESTATE

Smith decided to go paperless for all the real estate forms associated with the purchase of her home. Instead of a folder jammed with papers, she received a thumb drive (jump drive) containing her offers and counteroffers, the appraisal, the actual contract to purchase the home, and the inspection, as well as other needed forms. “I knew I could put the small drive in my safe deposit box,” Smith said. “I wouldn’t have all those papers to keep up with.” Smith’s Realtor, Charlie Dieruf, an agent with Re/Max Creative Realty, says paperless is the wave of the future for all real estate transactions. Here’s how it works, according Charlie Dieruf, to Dieruf: Realtor, Re/Max Everything pro- ceeds as normal between the homebuyer and real estate agent until the buyer is ready to make an offer on a piece of property. The agent then pulls up a copy of an offer-to-purchase form on his or her computer and fills it out electronically. The buyer can be in the same room or anywhere else as long as the real estate agent has all the pertinent information. The agent sends the buyer a copy of the contract on his or her computer. Once everything is correct, the agent e-mails the form to the appropriate parties, who go through basically the same process. No special software is required for the buyer and seller. It all emanates from software purchased by the Lexing- Real Estate ton-Bluegrass Association of Realtors, the first Realtor association to adopt the digital sales format. The system generates an e-mail to Deals Go Digital those involved to register. It also generates an electronic signature for each person involved. Only that person – not Buyers and sellers can take a transaction up to closing even the real estate agents – has access to that “signature.” It also creates a pass- without handling, signing or crossing out any paper word for each person involved, which again is completely private. Each time there is a change, the system BY DEBRA GIBSON generates a correct, clean form. And the parties involved receive an e-mail that their electronic signature is needed for the HARON Smith doesn’t own a Louisville that requires a daily commute update. Unlike paper contracts, there is computer. Like many in their between Kentucky’s two largest cities. no marking through and initialing late 50s, she simply never had a Still, when she bought a home in changes. The parties also do not have to real need for one. Smith has Lexington recently, Smith was thrilled meet. The buyers and sellers can all sign precious little spare time any- with the idea of using the latest com- wherever they have access to a computer . Sway between her Fayette County family puter technology to purchase If someone wants to check on the his- and her job at General Electric in her home. tory of the transaction, they can click on a

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field in the digital form “I don’t know that individually that will Until then, the real estate agents and see all the save the world, but a million agents believe this system is a significant step changes that have across the world using a paperless sys- forward. been made – tem can make a significant dent.” “This is an example of using technol- kind of an Both Dieruf and de Movellan are wait- ogy wisely to do your job more effi- electronic look ing for one thing, however. They want to ciently,” Dieruf said. ■ back at the transac- see the closing attorneys and title compa- tion’s progress. And if you nies come on board with a paperless sys- Debra Gibson is a correspondent for The do need a paper copy of some- tem. That would eliminate the Lane Report. She can be reached thing along the way, getting it is as easy all-too-familiar process of signing form at [email protected]. as pushing the “print” button. after form after form at the closing. The benefits even extend into the future, according to Dieruf. “I had a client who listed and sold a house here in Lexington and then moved to Tennessee,” Dieruf recalled. “She called back when she was purchasing a home there and said she needed a copy of her HUD1 form from her sale here. With a few keystrokes, I was able to send her the form in a matter of minutes.” With his transactions, Dieruf said, there are three electronic versions saved: one on a backup drive he main- tains, another with the Web host, and yet another with the LBAR office. (A thumb drive is no longer needed.) If the parties are still uncomfortable with computers, or just prefer to see everything on paper, hard copies remain an option. Clearly, though, the trend is expected to tend toward digital.

Ease of use, and it’s green And the process just got better, said Anthony de Movel- lan, president of LBAR for 2010 as well as operations manager for Pru- dential de Movel- Anthony de Movellan, lan in Lexington. president of LBAR On June 1, the association officially went to a new Web-based technology called DotLoop. “The old system (called Instanet) had some cumbersome issues and did not get as widespread use as I believe this will,” he said. “It was basically a glorified typewriter that allowed the agent to get the process started electronically. It’s a little early to say (DotLoop) is the best thing ever, but it has some real advantages.” The greatest advantage is the ease of use, according to de Movellan. Others include speed, efficiency and clarity (all signatures and changes are legible). Dieruf adds one more: The system is green. “We are saving a lot of paper and ink that is not going into a landfill or getting into our groundwater,” Dieruf said.

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GREEN DEVELOPMENT

More than $6 million has been invested in historic structures in Winchester, one of the first Kentucky cities to create a downtown redevelopment program.

reported more than $350 million invested in downtowns, said Diane Comer with the Kentucky Heritage Council and State His- toric Preservation Office. These projects

James Mann/Winchester Sun photo created 1,971 net jobs in Main Street districts, 377 new businesses and rehabili- tated 417 downtown buildings. There was more than $127 million in public and $223 million-plus in private investment, along with nearly 81,000 volunteer hours. A variety of state and national programs help investors and developers undertake renovations. Tax incentives designed to encourage historic renova- tion development, especially for commercial buildings, help offset the otherwise high costs. In addition to Kentucky Main Street Turning Heritage and Renaissance on Main, programs include Save America’ s Treasures (SAT), Preserve America and Preserva- tion Kentucky. The Kentucky Heritage Council works with these organizations into Profit and more to create new economic development tools for communities Incentives help make rehabbing Kentucky’s historic buildings across the commonwealth. SAT investment from 1999 through pay off for developers, communities and taxpayers 2009 generated 16,012 jobs in the state, said Comer. BY MEREDITH LANE Kentucky also leads the nation in use of the Preserve America program, which complements SAT by helping local com- ITH the aid of state cent of the renova- munities develop sustainable management and federal incentives, tion cost in fully strategies and business practices for the historic preservation transferable tax continued preservation and use of heritage projects are proving to credits,” said Josh resources. Since 2006, Preserve America be good investments Marrillia, president has awarded $705,350 in grants to 10 notW just for developers but communities of Marrillia Design Kentucky projects; a required dollar-for- and taxpayers in Kentucky, which is a and Construction, dollar match puts that investment total national leader in historic preservation. which specializes in at more than $1.4 million. Hundreds of commonwealth proj- restoring historic Save America’s Treasures has awarded ects funded by a combination of properties in down- Kentucky $6.2 million for 24 projects, investor equity, mortgage debt, grants town Lexington. Josh Marrillia, president whose $7.8 million in matching funds puts and tax incentives are restoring historic Since its incep- of Marrillia Design that total investment at $14 million. Some buildings, creating jobs, enhancing tion in 2005, the and Construction 17 of these SAT projects created 171 jobs. tourism and increasing property values. Kentucky Historic Preservation Tax “The results of investment in preser- A 20 percent federal tax credit is Credit Program has awarded $9,270,604 vation speak for themselves. Preserva- available for certified rehabilitation in tax credits for 214 projects, with an tion is an extremely important expenses for income-producing proper- overall investment of $141.9 million. economic development tool,” said Mark ties. A Kentucky tax incentive can be Kentuckians are aggressive in utiliz- Dennen, executive director of the Ken- added to the federal program, with up ing federal and state incentives that pro- tucky Heritage Council and state his- to another 20 percent tax credit for mote historical preser vation. The toric preservation officer. commercial projects, and up to 30 per - commonwealth ranks fourth in the Meanwhile, a recent study by Jeffer - cent for owner-occupied residential number of National Register of Historic son County Property Valuation Admin- projects, the latter of which are not eli- Places sites and has the nation’s oldest istrator Tony Lindauer found properties gible for the federal credit. Main Street revitalization program. in historic neighborhoods increased in “The tax incentive program, both on value about 25 percent more than sur - the state and federal level, is a lengthy, Saving history, boosting the economy rounding non-historic areas. time-consuming process, but in the end, In 2009 alone, the Kentucky Main Street More than 80 Kentucky communities it can yield a building owner up to 20 per- and Renaissance on Main programs work with the Kentucky Main Street Pro-

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gram, the oldest statewide Main Street revitalization program in the nation. The Kentucky Heritage Council/State Historic Preservation Office administers the program. Since being established in 1979, more than $3.5 billion in public- private funding has been reinvested in the state’s economy.

National recognition In May, the National Trust for Historic Preservation issued its 2010 Great Amer- ican Main Street Award to Paducah Ren- aissance Alliance for its arts-driven revitalization strategy that has preserved and redeveloped the downtown and LowerTown neighborhoods. Danville was a 2001 recipient of the award. GAMSA recognizes revitalization of historic and traditional commercial districts Before and after photos of The Henry Clay, a using the proven Main Street Four-Point 1920s neoclassical building in downtown Louisville Approach: organization, promotion, whose $20 million rehabilitation by CITY Proper- design and economic restructuring. ties Group was aided by tax credits for historic Paducah Renaissance Alliance efforts preservation. are credited with creating 234 new businesses and 1,000 new jobs. YWCA when named to the National “Paducah boasts nearly $200 million in Register of Historic Places before falling yearly tourism income from its strong arts into disrepair. After a $20 million multi- Living and working downtown and cultural district. That’s an impressive use rehab, it now has 40,000-s.f. of event Winchester First is one of the oldest figure for a city of 26,000 people,” said space, 20,000-s.f. of office/retail, a the- downtown redevelopment programs in Doug Loescher, director of the National ater, 33 apartments and 11 condos, all of the state and has seen more than $6 mil- Trust Main Street Center. There is now “a which sold during construction. lion invested in its historic structures, ‘historically hip’ downtown filled with beau- Other major Weyland projects said Lara Thornbury, executive director. tiful buildings and exciting attractions.” include part of the Louisville Slugger An updated, well maintained store- Paducah’s Artist Relocation Program, Bat Factory and Museum at Eighth and front, she said, produces more customers emulated by many other cities, offers Main, anchoring the West Main Street and “you can guarantee an increase in artists from across the country attractive Historic District, and the Glassworks at rent – a huge incentive for the property financial incentives to rehabilitate historic the west end of the Market Street owner to invest in property.” homes and buildings for living and work- Gallery District. Thornbury and her husband own two ing space. The city now has a critical mass Beyond the 350,000 visitors the downtown Winchester buildings, a former of creative residents, galleries, arts-related buildings draw annually, Weyland said, saloon built in the late 1800s and a former businesses and an arts school. economic impacts include more than hotel built in 1860. They now live above In Louisville, Bill Weyland, managing 1,600 jobs and $40 million-plus in direct the former saloon and are renovating the director of CITY Properties Group, has construction and development spend- former hotel’s four apartments into a more than 20 restoration projects under ing, which lead to more than $100 mil- large, two-story home for their family. his belt. Prominent among them is The lion in additional construction in local Downstairs are a law firm, a ballet studio Henry Clay, a 1920s neo-classical struc- preservation districts. and other retail space. ture downtown. Built as an Elks Lodge, In Lexington, Marrillia Design and “Reusing historic buildings can be it became a hotel and in the 1970s was a Construction also focuses on historic considered a green project,” Thornbury preservation projects with an aim to foster said, “because you are saving a structure a more prosperous and sustainable busi- from being sent to a landfill and you are ness district with a diverse mix of business, not disturbing farm land.” residential and retail. Josh Marrillia said However, because rehabilitation is 20 to the sense of satisfaction from making a 40 percent more labor-intensive than new positive impact on the community is just as construction, the incentives are crucial. great as the financial rewards. “Unfortunately, without access to the “Cheapside Park, Dudley’s Restau- funds from the state and federal tax credit rant, Cheapside Bar & Grill’s patio, The programs, projects like these would not be 500s on Main, Newpast and the Vine feasible to undertake,” Weyland said. ■ Street Streetscape projects, just to name National Trust for Historic Preservation gave a a few, will all leave indelible marks on our Meredith Lane is a correspondent for 2010 Great American Main Street Award to city for decades, if not centuries, to The Lane Report. She can be reached Paducah Renaissance Alliance. come,” Marrillia said. at [email protected].

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GOING GREEN

BOTTOM LINE SUSTAINABILITY responsible (i.e., architect, general contractor, subcontractor) for achieving the A how-to guide to make it count when taking your operation green various points. Make this document an addendum to each of the contracts on the project. Select an experienced green BY ANGELA STEPHENS building team and consider clauses in their contracts affirming the contractor and/or subcontractor has read, under- Editor’s note: Going Green is a new monthly 69 points), Gold (60-79 points) and Plat- stands and will comply with the LEED or feature offering professional advice on finan- inum (80 points and above). There are green requirements. cially effective sustainability strategies. 100 possible base points, plus additional • Include a mutual waiver of conse- points for design, innovation and regional quential damages – Although many con- USINESS owners are “going green” priority credits. There are benefits for struction contracts include mutual waivers because of people (their employees redeveloping previously used property, of consequential damages, it is unclear and clients), the planet and profits especially near public transit, and smart whether courts would consider lost tax B(cost savings). Properly designed and vegetation use; for cutting water usage incentives and/or credits, decreased constructed green buildings make work- and runoff; for energy efficiency, espe- energy savings, decreased water bill sav- ers more productive and save energy cially energy generation; for reusing mate- ings, green grants or future development expense. For example, the owner of Tai- rials, using materials produced easily rights as consequential damages. They wan’s Taipei 101, touted as the world’s nearby and cutting waste; for natural and should be expressly included in the tallest green building, is spending $1.8 well-controlled lighting, avoiding later clauses waiving consequential damages. million in energy-efficiency upgrades but indoor emissions, and maintaining tem- • Don’t tie payments to achievement of expects them to yield $20 million in perate workspaces. certification – GBCI is a third party that annual energy savings. Projects require upfront application decides whether various points and levels since LEED assessment begins even of LEED Certification are achieved, and during design. Sustainable design and final determination can take up to a year construction raises unique legal issues after substantial completion. Don’t tie for all parties who touch the project. payments to achieving certification. Con- Here, however, are some strategies to sider a clause stating attainment of certifi- minimize the potential legal risks. cation shall not be a condition precedent • Don’t promise more than you can to progress payments or the final payment deliver – If you or your marketing on the project. materials promise or guarantee bene- • Include a notice and opportunity to fits that are not realized or disputed, cure – Green projects tend to use new the result can be a clash alleging fraud, materials and technologies that do not false advertising, breach of an express or have a long track record. Specify who implied warranty, or other claims. will bear responsibility for maintenance The key is to monitor your mar- of building components, and who will keting activities. Only prom- bear the risk if a manufacturer goes out ise what you can measurably of business or the component malfunc- deliver, and include clauses tions. Also incorporate a clause that the in your contracts that limit owner must give contractors notice and all warranties to those an opportunity to cure or correct any expressly provided in the alleged defects prior to withholding pay- contract. Do not guarantee the ments or hiring another contractor to level of certification on a project unless redo the work. The U.S. Green Building Council cre- required by law. These are only a few of the steps you ated the Leadership in Energy and Envi- • Identify participants, roles and can take to minimize the risks of green ronmental Design (LEED) Green Building responsibilities – Many disciplines are design and construction. To learn more Rating System in 1998, and it is the most involved in achieving a project’s green about ways you can maximize the impact recognized third-party certification system goals (whether LEED Certification or fol- of your green project while minimizing in the commercial world. “LEED certified” lowing Green Globes rating system guide- risks, contact a construction attorney with guarantees a building or community was lines). On most green projects, no one certified green expertise. ■ designed and built using strategies that party is in control of obtaining all the improve performance across all the met- points or goals. The parties must work Angela Stephens, rics that matter most: energy savings, water together, but most importantly everyone LEED AP, is an efficiency, CO2 emissions, indoor environ- must understand who is responsible for attorney with Stites mental quality, stewardship of resources, each aspect or goal. For example, if an & Harbison PLLC and sensitivity to impacts. owner wants a building with LEED Silver in Louisville. Using a highly defined scoring system, Certification, the parties should create a Contact her at structures can be LEED accredited at four version of the LEED 2009 scorecard that astephens@ stites.com. levels: Certified (40-49 points), Silver (50- clearly identifies which parties will be

32 JUNE 2010 KYBIZ.COM • THE LANE REPORT June Lane 18-44.qk:Layout 1 6/8/10 9:10 AM Page 33 June Lane 18-44.qk:Layout 1 6/8/10 8:40 AM Page 34

OPINION

A PLAN TO SAVE EUROPE At the time, the repo market for interbank loans was about $20 trillion, Loan guarantees would end Greek drama, stabilize markets vastly greater than the $1.2 trillion volume of subprime mortgages. And when the repo market was rescued through BY LAWRENCE KUDLOW the loan guarantees, the financial system gradually started to heal – although it took months. (An end to .S and world stock markets are The repo market for bank-to-bank mark-to-market accounting in March slumping as systemic risks from loans was the source of the credit freeze in 2009 aided the healing.) the Greek and European debt- the fall of 2008. While today’s funding risks Europeans must now embark on a Udefault contagion continue to spread. are not remotely as bad as they were back similar program. The EU/International Disciplinarian markets of stocks, bonds, then, liquidity stresses seem to be worsen- Monetary Fund rescue plan, which con- gold and currencies are signaling the ing. If these funding problems keep wors- sists of $1 trillion in loans and loan guar- inadequacy of European Union rescue ening, along with stock markets that keep antees for government sovereign debt, plans and global fear that economic declining, all hell will break loose. Another must be expanded to include a blanket recovery will be blunted. meltdown is possible. loan guarantee for all European bank Europe is the main source of the cur - So I have a thought. debt, short-term and long-term. rent upheaval. Specifically, the biggest In 2008, when financing markets com- A loan-guarantee program to back- issue right now is short-term funding. Key pletely froze up during the worst of the stop the banks in Europe and sovereign funding risk indicators, such as LIBOR credit meltdown, the FDIC guaranteed all debt would put an end to this crazy and various short-term swap spreads, are bank debt, from 30 days out to 30 years. In Greek drama that is pulling down mar - showing credit and liquidity stress in addition, the Fed and Treasury essentially kets and threatening the economic Europe. Interbank funding looks increas- guaranteed overnight lending in the repo recovery. As a free-market advocate, I ingly sloppy and worrisome. These are market and the commercial-paper market don’t like this sort of government inter- dangerous market signals. for bank debt. It worked. vention. But we’re talking emergency here. Systemic global emergency. In the U.S., the loan-guarantee blanket was a vastly more efficient and cheaper than the $700 billion TARP plan to inject money into the banks. Unlike TARP, which still lives on, the loan guarantees were removed in 2009. So the Europeans must be bolder and more aggressive with their financial safety net. And if a program like this were announced, in all likelihood the guarantees would never have to be funded, or wouldn’t really be necessary. The safety net will be a lot cheaper than simply pouring more loan subsidies into Europe’s welfare state. It may also be necessary to restruc- ture the Greek debt, with creditors taking a haircut. But a big-bang approach to backstop Europe’s banks and its bad- behaving, out-of-control-spending countries is, I believe, a necessary step in halting the contagion threats and restoring calm to the stock markets and financial system. ■

Lawrence Kudlow is CEO of Kudlow & Co., an economic and investment research firm in New York City.

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SALES

TAKE OFF THE CHICKEN SUIT • You let accounting handle collections, and damage your relationship. Fear of ‘no’ leads many sales people into habits that delay a sale • You don’t have the guts to tell someone “no,” when the situation just won’t work. BY JEFFREY GITOMER • You don’t do what’s best for the customer – a different product, a different service, even a different com- NE of the challenges all sales- • Will e-mail when you should call, pany – because you’re afraid to lose a people face is: What’s the best and wonder why it goes unreturned or sale or a commission. way? What is/are the way, the worse, unopened. Well, that’s enough evidence for Opath, the words, and the actions that • Will phone or e-mail when you you to change out of your chicken suit, will lead me to the promised land: The should visit. You think it’s “safe” when in and put on some designer clothes. sale. reality it’s delaying the sale. Look the part, act the part, prove the The one path that all salespeople want • Not using testimonials as final part, and you’ll get the part – and the to avoid is the one that leads to “no.” proof. order. ■ Sometimes, many times, they will actually And then there are the game chang- lose the sale by avoiding a situation where ing elements of a sale that require your “no” is a possibility. courage and intestinal fortitude. In no particular order, here are the • You won’t demand to be in on the Jeffrey Gitomer examples and pitfalls of the actions you final meeting – where the decision is (salesman@ take or omit to avoid “no.” And here are really made. gitomer.com) is the grim reality bites of what you will • You won’t call an angry customer the author of and won’t do: back – and pass the complaint off to The Sales Bible. • Try to please everyone, without fol- someone else, making the customer lowing the fundamental rules of sales- even angrier. manship. • Willing to give a proposal without demanding an exact time and place for a face-to-face follow-up meeting to go over it with all decision makers. • Won’t ask to change or modify the terms of a proposal that would put you in a more favorable condition (years in business, video testimonials to prove your claims, financial worth). • Failure to get to a decision maker for fear of going around or over the person you’re meeting with. • Won’t start higher up the ladder on a sale because you’re afraid to go beyond your comfort level of sales. • Accept the first no as a final answer and leave, rather than try to be rejected three or four times in the same call. • Reluctant on cold calls instead of being prepared with a value message and confidence based on deep belief that the customer is better off having purchased from you. • Reluctant on follow-up calls because you don’t want to get rejected. • Have five big customers but no ideas to call them with other than to ask for more business. So you don’t call (and you miss an opportunity that your competitor grabs). • Won’t call to confirm an appoint- ment for fear it will be canceled. • Won’t leave a voice mail. You know your call won’t be returned because you have/had nothing of value to say. June Lane 18-44.qk:Layout 1 6/8/10 8:40 AM Page 36

LEADERSHIP

LEADERSHIP EXPEDITION Louisville, Lexington delegations study Pittsburgh’s transformation

reater Louisville Inc. and Com- education, philanthropy’s ability to cre- merce Lexington Inc. teamed up ate change, retraining displaced work- to create a combined public and ers, funding new ideas, regional Gprivate leadership expedition May 10-12 partnering in Kentucky for change, and to Pittsburgh. Approximately 350 busi- innovations in K-12 education. Pitts- ness, professional, civic and government burgh is recognized for its transforma - leaders took charter flights from the two tion from an air-polluted steel town that cities and upon landing merged forces lost 100,000 jobs when the steel business Dr. James Ramsey (left), president, University of on the decks of Gateway Clipper for a collapsed in the 1980s into a high-tech, Louisville; Executive Vice President and Provost riverboat tour of Pittsburgh along the green city. Shirley Willihnganz, University of Louisville; and Allegheny, Monongahela and Ohio The co-chairs of the expedition Mayor Jerry Abramson, Louisville Metro Government. Rivers. The boat tour was followed by were Kim Menke, Toyota Motor Manu- presentations by Pittsburgh’s and Ken- facturing Kentucky, and Evelyn tucky’s leaders, and lunch at Heinz Field Strange, Advanced Electrical Systems. – home of the Pittsburgh Steelers. Chase Bank and E.ON U.S. were pres- Expedition members attended a entation sponsors. Hotel accommoda- broad range of presentations, including tions and meeting facilities were briefings on community redevelop- provided in the Westin Convention ment, the transforming force of higher Center Pittsburgh. ■

Kentucky state Rep. Ruth Ann Palumbo (left) of Lexington; Dr. Lee Todd, president, University of Kentucky; and Mary Michael Corbett, vice president of Norton Healthcare. Staff photos

Bruce Traughber (left), economic development View of downtown Pittsburgh from riverboat executive director, Louisville Metro Government; Gateway Clipper. and Jim Newberry, mayor of Lexington.

David Freibert, director of external affairs, E.ON U.S.; Ken Sagan, Stites & Harbison; Chris Hermann, senior vice president, E.ON U.S.; and Scott Brinkman, Stoll Keenon Ogden. Stephanie Apple (left), vice president, Preston Dan Barbercheck (left), CEO of red7e; Evelyn Osborne; Elizabeth Gaby of Alltech; Ryan Lisk, Strong, Advanced Electrical Systems; and Jack Lisk Associates; and Vitale Buford, marketing Will, The DREAM Foundation. director, Stoll Keenon Ogden.

Rusty Cheuvront (left), director of community affairs, Brown-Forman Corp.; Mary Pat Regan, Gina Greathouse, vice president of business devel- president, AT&T Kentucky; Michelle Ripley, Dudley Webb, chairman, Webb Companies; and Dave opment, Commerce Lexington; and Juli Gaworski president, Commonwealth Fund for KET; and Adkisson, CEO, Kentucky Chamber of Commerce. of Lexmark International. Tonya York Dees of York Management Inc.

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ECONOMIC DEVELOPMENT

Kentucky’s exhibit at McCormick Place.

Staff photos Kennedy Helm, left, chairman of Stites & Harbison; Kentucky Secretary of Economic Development Larry Hayes; and Dr. James Ramsey, president of the University of Louisville at the governor’s reception. BIO 2010 Kentucky looks for technology businesses at BIO in Chicago

HE 2010 BIO International Con- vention was held May 3-6 at McCormick Place in Chicago. The Tevent was managed and produced by the Biotechnology Industry Organiza- tion, which represents 1,200-plus biotech-related entities in the United Kentucky Secretary of Energy Len Peters, left; States and 30 foreign companies. Ken- Gov. Steve Beshear; Janet Craig, Stites & tucky fielded a delegation comprised of Harbison; and Secretary Larry Hayes. political, economic development, entre- preneurial, corporate, professional and BG Magazine editor Meredith Lane, left; Gov. academic leaders, each representing an Steve Beshear; Zahra Tavokoli M.D., Lexington Clinic; Eric Ostertag M.D., Ph.D., CEO of important segment of the state’s grow- Transposagen Biopharmaceuticals; and Vickie ing biotechnology industry. The four- Yates Brown, CEO of University of Louisville– day event presented special speakers, Nucleus at the governor’s reception. including former Presidents Bill Clinton and George W. Bush, breakout sessions, Kentucky’s pavilion at McCormick company presentations, networking Place, which had a very prominent loca- events and bio exhibits. tion, featured booths for Commerce Lex- Gov. Steve Beshear hosted a recep- ington, University of Louisville, University tion at the Chicago InterContinental of Kentucky, Kentucky Economic Devel- Hotel for biotech businesses conducting opment Cabinet’s Department of Com- Vice President Len Heller and Deb Weis, of the or interested in doing business in Ken- mercialization and Innovation and University of Kentucky Department of Commercial- tucky. Stites & Harbison law firm spon- numerous biotech companies doing busi- ization and Economic Development, at the UK sored the event. ness in Kentucky. ■ booth at Kentucky’s pavilion in McCormick Place.

Lauren Goralski, of the office of the University of Robert Brousseau, director of corporate David Mudd, marketing manager, left, and Mehdi Louisville’s vice president for Research, at the UofL communications, Peptides International. Yazdanpanah, Ph.D., founder/CEO of NaugaNeedles booth in the Kentucky Pavilion.

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STAFF

MEET THE PRESS Alma Kajtazovic Comptroller Alma Kajtazovic Meet the professional team who create The Lane Report joined The Lane and its associated family of publications covering Report two years Kentucky business and economic development ago. She is a native of Bosnia but a longtime Mark Green Dick Kelly Kentuckian and Editorial Director Associate Publisher has a bachelor’s Mark Green has Dick Kelly joined degree in busi- been with The The Lane Report in ness administration–finance from the Lane Report for 1999 with more University of Kentucky. She worked pre- three years. He is than 30 years of viously as a compliance manager for a a Kentucky native media experience. mortgage company in Lexington. and has a bache- He is an Indiana lor of journalism native and gradu- Jessica degree from the ated from Univer- Merriman University of Ken- sity of Notre Dame Creative Director tucky. He has 27 years of prior news- and Penn State University, having studied Jessica has been room experience in the newspaper journalism and communications. Kelly with The Lane industry in Brentwood and Tazewell, worked with Leo Burnett Advertising in Report for three Tenn., Ocala and Lakeland, Fla., and Chicago; with Peters, Griffin & Woodward years. She is a Thibodaux and Houma, La., spending in Chicago and in Detroit; with Gannett graduate of East- nearly 25 years with New York Times Co. broadcasting in Oklahoma City and ern Kentucky Regional Newspaper Group properties. Greensboro, N.C.; and came to Lexington University with a in 1992 to join WTVQ-TV. degree in com- Karen Baird puter electronic publishing. Jessica has Associate Editor Donna L. spent over 12 years in various positions Karen Baird has Hodsdon in the printing industry from designer been with The Associate Publisher to plant management. Lane Report since Donna Hodsdon 1996. Prior to has been with The Amy Owens joining the edito- Lane Report for Special Publications rial staff of Lane two years. A native Editor Communications of Annapolis, Amy Owens joined Group, she was a Md., she grew up Lane Communica- writer for The internationally. tions Group in Jan- Atlanta Journal-Constitution and She worked for 10 uary 2009. She worked for more than 10 years in Cor - years for the U.S. Chamber of Com- grew up in the St. porate Communications for Delta Air merce in Kentucky and West Virginia. Louis area and has Lines. Karen is a native of Lexington She attended Cal-Poly Pomona Univer- a bachelor’s degree and earned her bachelor’s degree from sity in California and studied in York- from the University Eastern Kentucky University. shire, England, for the British Horse of Missouri School of Journalism. She has Society BHSAI and II exams. spent much of her career writing and edit- Meredith Lane ing for publications that cover horse racing. Editor, Jim Curry Prep Magazine & Business Manager Jackie Olney BG, A way of life Jim Curry has been Executive Assistant Meredith Lane with The Lane Jackie Olney has been with The Report for a year joined The Lane Lane Report for and a half. He has Report five years three years. She is a bachelor’s degree ago. She is a a native of Lex- in finance. Before native of South- ington and has a joining The Lane ern California bachelor’s degree Report, Jim worked and has lived in in journalism from the University of as a color manager Kentucky 10 Kentucky. She has held news jobs with for R.R. Donnelly Corp., where he helped years. She previously worked as an exec- two Lexington television stations and is develop a process for accurate color view- utive assistant for Lexell Imaging Sys- a Realtor in Fayette County. ing of the CMYK color-space on RGB out- tems and USEF, and is working towards put devices. a degree as an advocate from University of Phoenix. ■

38 JUNE 2010 KYBIZ.COM • THE LANE REPORT June Lane 18-44.qk:Layout 1 6/8/10 8:41 AM Page 39

25TH ANNIVERSARY

WITH A LITTLE HELP FROM AD AGENCIES

HE staff of The Lane Report would headquartered in Lexington, with like to thank many of Kentucky’s offices in Frankfort and Louisville. top ad agencies for helping us cel- Tebrate the 25th Anniversary of publish- Bandy Carroll Hellige ing The Lane Report: 307 W. Muhammad Ali Blvd. Ad-Success Louisville, KY 40202 501 Darby Creek Road, (502) 589-7711 Lexington, KY 40509 bch.com adsuccess.com Advertising, public rela- (859) 263-1822 tions and digital agency “All we do is add success” with a mission to make via innovative market- clients famous. Estab- Mark Carroll, Partner ing, PR and Internet Shar Scanlon, lished in 1989, BCH programs & value-added CEO “immerses” itself with regional and approaches. Specializing national clients, including conducting pro- in new media, healthcare, travel, and gov- prietary research at an in-house focus ernmental/educational campaigns. group facility.

Peritus Red7e 200 South Fifth St., 37 W Main St Louisville, KY Louisville, KY 40202 (502) 585-3919 (502) 585-3403 perituspr.com Red7E.com Peritus is a communi- Red7e creates advertis- cations agency recog- ing that media con- nized for creating and sumers and clients Dan Barbercheck, implementing win- actually enjoy – by President/ECD ning solutions for embracing the chal- clients. We specialize lenge of problem-solving with a bias Timothy Mullow, in public relations, CEO toward unconventional solutions. public affairs, creative services and marketing. NewWest 950 Breckenridge Lane, CurrentMarketing Louisville, KY 40207 1324 E. Washington St., (502) 891-2500 Louisville, KY 40206 A full service agency, (502) 589-3567 our PR group ranks CurrentMarketing.com among the tops in the As a full service market- U.S. We design every- Becky Simpson, ing and advertising thing from award-win- CEO/Co-owner agency, CurrentMarket- ning advertising Rick Schardein, ing prides itself as a President campaigns to web site and coordinate leader in strategic inno- community events for thousands as well vation for the use of interactive and tradi- as gatherings for a few. tional media and on delivering energy to your brand. Meridian-Chiles 921 Beasley Street Preston-Osborne Lexington, KY 40509 450 Old Vine St., (859) 299-6999 Lexington, KY 40507 meridianchiles.com (859) 231-7711 Meridian-Chiles offers preston-osborne.com advertising, marketing, Preston-Osborne spe- branding, creative Lawrence Chiles, cializes in marketing, design, commercial Chairman public relations, opin- production, public Phil Osborne, ion research, public CEO relations, crisis management counsel- affairs management ing, integrated web development and and creative services. The company is search engine marketing. ■ June Lane 18-44.qk:Layout 1 6/8/10 8:41 AM Page 40

SPOTLIGHT ON THE ARTS News briefs on cultural events around Kentucky compiled by Lori Meadows

LexArt’s 2010 Fund for the Arts Raises Arts Events $930,000 to Benefit Arts Programs Around the State HE 2010 Fund for the Arts campaign for Francisco’s Farm Art Festival LexArts, Lexington’s cultural development, Midway College Tadvocacy and fundraising organization, was at June 26-27 $930,000 as of late May, on track to meet its goal of franciscosfarm.org $1 million by June 30. This includes $450,000 in Mayor Jim Newberry’s proposed fiscal 2011 budget, Pine Needle Gourd Baskets pending approval by the Urban County Council. Demonstrated by Lynn Horine LexArts programs and services integrate the arts Kentucky Artisan Center at Berea into daily life and include the Downtown Galler y 10 a.m.-3 p.m. Hop, ArtScene magazine and Arts Showcase Weekend. June 19 LexArts operates ArtsPlace and the Downtown Arts kentuckyartisancenter.ky.gov Center, which provide quality per formance space, (859) 985-5448 galleries, rehearsal and office space for nonprofit organizations. LexArts organizes visual art exhibi- Fifty Years of tions and performances showcasing regional talent. Contemporary Glass: Art, Craft, or Otherwise Horse Mania was a public art project that first filled Lexington streets with color in 2000. A new version of the project is being The Speed Art Museum, Louisville unveiled this summer to coincide with the World Equestrian Games. Through Aug. 1 Wednesday, Thursday & Saturday 10 a.m.-5 p.m. Art Glass Conference Enthusiasts Boost Friday 10 a.m.-9 p.m. Sunday noon-5 p.m. Local Economy in Louisville by $1 Million speedmuseum.org (502) 634-2700 ORE than 1,000 artists, collectors, scholars, students and educators from around the world attended Glass Berea Craft Festival MArt Society’s 40th annual conference in Louisville Indian Fort Theater June 10-12. Exhibits and events took place at nine museums, Berea 15 galleries, two restaurants, two universities and a church. 10 a.m.-6 p.m. Their attendance pumped some $1 million into the July 9-11 Louisville economy at hotels, restaurants and buying glass art bereacraftfestival.com and the conference exposed dozens of artists and high-end collectors from around the world to the city’s quality of life. Red River “The Louisville arts scene is very cutting edge, and that’s important for economic (narrative works of Edgar Tolson, development,” said Pamela Koss, GAS executive director. “We came to Louisville Carl McKenzie, Earnest Patton because the city is so supportive of glass art.” & Donny Tolson) The conference could have the added benefit of attracting artists to the state and bol- Kentucky Folk Art Center, stering Louisville’s already strong arts community. Koss said the layout of the Market Street Morehead arts district was a major selling point. “The glass scene although young, is really well located Through July 3 for us. Logistically, it is all within an 18-block line in downtown Louisville.” kyfolkart.org (502) 562-0100 Paintsville Native Appointed to American Want to know more? For details about art and cultural Folklife Center of the Library of Congress events and activities taking place in Kentucky, visit the Kentucky Arts HE U.S. Senate approved Jean Dorton of Paintsville to Council Web site at artscouncil.ky.gov. serve on the Board of Trustees of the American Folklife TCenter of the Library of Congress. Dorton, a graduate of Morehead State University and Pre- stonsburg Community College, is community and legislative liai- son and manager of advancement at Big Sandy Community and Lori Meadows is Technical College in Prestonsburg. executive director The American Folklife Center was created in 1976 by the of the Kentucky U.S. Congress to “preserve and present American folklife” and Arts Council. is one of the largest collections of ethnographic material from Jean Dorton the United States and around the world.

40 JUNE 2010 KYBIZ.COM • THE LANE REPORT June Lane 18-44.qk:Layout 1 6/8/10 8:41 AM Page 41

THE LANE LIST

HIGHEST PAID CEOs IN KENTUCKY By annual compensation; publicly held companies

COMPANY CEO OPTIONS EXERCISED ANNUAL PAY Yum! Brands (YUM) David Novak $66.3 million $4,390,000 Omnicare (OCR) Joel Gemunder $8.55M $4,020,000 Kindred Healthcare (KND) Paul Diaz $454,000 $3,500,000 Brown-Forman (BF-B) Paul Varga $705,000 $3,050,000 Humana Inc. (HUM) Michael McCallister $11.02M $2,820,000 Ventas (VTR) Debra Cafaro $0 $2,660,000 Ashland (ASH) James O’Brien $0 $2,320,000 David Novak Tempur-Pedic International (TPX) Mark Sarvary na $2,120,000 Yum! Brands Lexmark International (LXK) Paul Curlander $0 $2,080,000 Almost Family (AFAM) William Yarmuth na $1,920,000 Texas Roadhouse (TXRH) G.J. Hart $14,000 $1,800,000 General Cable (BGC) Gregory Kenny $1.71M $1,280,000 Papa John’s International (PZZA) John Schnatter $1.07M $1,220,000 NGAS Resources (NGAS) William Daugherty $0 $973,000 Industrial Services of America (IDSA) Harry Kletter na $822,000 Churchill Downs (CHDN) Robert Evans $0 $868,000 Boardwalk Pipeline Partners (BWP) Rolf Gafvert $221,000 $787,000 Sypris Solutions (SYPR) Jeffrey Gill na $668,742 S.Y. Bancorp (SYBT) David Heintzman $191,000 $505,000 Bank of Kentucky (BKYF) Robert Zapp na $453,006 Republic Bancorp (RBCAA) Steven Trager $0 $441,000 Paul Diaz ResCare (RSCR) Ralph Gronefeld Jr. $0 $440,000 Kindred Healthcare Community Trust Bancorp (CTBI) Jean Hale $0 $420,000 Farmers Capital Bank (FFKT) Lloyd Hilliard Jr. $0 $179,000

Sources: Yahoo Finance, Google Finance

STOCK PERFORMANCE OF KENTUCKY’S LARGEST PUBLICLY HELD COMPANIES Ranked by change in price from May 31, 2009 to May 31, 2010 James O’Brien Ashland COMPANY (TICKER) MAY 2009 MAY 2010 52-WEEK RANGE RETURN Sypris Solutions (SYPR) $0.81 $4.43 $5.05 - 22.90 546.7% Industrial Services of America (IDSA) $5.25 $16.87 15.61 - 30.00 321.3% Tempur-Pedic International (TPX) $11.03 $33.20 27.21 - 49.63 300.0% Lexmark International (LXK) $16.34 $37.55 14.91 - 26.99 229.8% Ashland (ASH) $26.80 $53.61 23.70 - 63.73 200.0% Ventas (VTR) $30.36 $46.95 19.80 - 26.57 54.6% Humana Inc. (HUM) $31.33 $46.05 0.72 - 4.97 47.0% Computer Services Inc. (CSVI.PK) $14.85 $20.75 10.14 - 23.00 39.7% Almost Family (AFAM) $26.56 $36.37 44.00 - 63.65 36.9% Boardwalk Pipeline Partners (BWP) $20.64 $27.85 21.90 - 44.12 34.9% Texas Roadhouse (TXRH) $11.63 $14.60 27.54 - 52.66 25.5% Brown-Forman (BF-B) $46.91 $56.83 30.00 - 40.92 21.1% Michael McCallister Yum! Brands (YUM) $34.63 $40.95 32.24 - 44.00 18.2% Humana Kindred Healthcare (KND) $13.13 $15.51 8.59 - 16.21 18.1% Community Trust Bancorp (CTBI) $27.53 $26.82 22.77 - 42.73 -2.6% Republic Bancorp (RBCAA) $24.25 $23.15 23.70 - 63.73 -4.5% S.Y. Bancorp (SYBT) $24.78 $23.44 10.70 - 20.00 -5.4% Omnicare (OCR) $27.03 $25.11 20.55 - 30.63 -7.1% Papa John’s International (PZZA) $27.10 $24.83 14.23 - 42.14 -8.4% Churchill Downs (CHDN) $38.93 $33.53 20.02 - 31.44 -13.9% General Cable (BGC) $38.24 $31.16 22.15 - 31.56 -18.5% ResCare (RSCR) $14.15 $11.25 9.27 - 16.20 -20.4% Bank of Kentucky (BKYF) $24.00 $16.00 10.04 - 36.29 -33.3% NGAS Resources (NGAS) $2.34 $1.11 6.59 - 27.11 -52.6% Farmers Capital Bank (FFKT) $21.85 $6.82 21.44 - 28.84 -68.8% Source: www.bloomberg.com;www.reuters.com Debra Cafaro Ventas

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EXPLORING KENTUCKY

Mary Todd Lincoln House on West Main Street, where the Todds lived from 1832 until 1849. Completed in 1806, the two-story Georgian dwelling boasts 14 rooms filled with period furniture, family por- traits and furnishings from the Todd and Lincoln families.

Waveland State Historic Site In 1847, Joseph Bryan, great nephew of Daniel Boone, built a gorgeous Greek Revival mansion, naming it Waveland, for the farm’s fields of gently waving hemp and grains. Here, the cream of Lexington society, including Henry Ashland, the Henry Clay Estate Clay, gathered to admire and wager on fine horses. “A lot of people are not aware that A Winning Quadruple Play Waveland was once the center of the horse industry in Fayette County,” said Ron Historic homes offer a fascinating peek into Central Kentucky’s past Bryant, site director and descendant of Joseph Bryan. “On its original 2,000 acres, BY KATHERINE TANDY BROWN the Bryans built two tracks, one a private family track and the other public, where both blooded trotting horses and flat ETWEEN 1800 and 1850, the fron- structed during Clay’s lifetime, an 18th Thoroughbred runners competed.” tier town of Lexington experienced century-style walled garden, tanbark walk- Though the property is now but 15 Bunprecedented growth and ing paths and a cozy outdoor café. acres, well-versed guides in hoop skirts became known as the “Athens of the recreate history for visitors in the dis- West.” During that time, many notable his- Hunt-Morgan House tinguished red-brick home that is filled torians, politicians, businessmen and Another handsomely restored Federal- with original family treasures, a her- horsemen found homes in the Bluegrass. style structure has graced a corner of itage garden and outbuildings that The Lexington Convention and Visi- antebellum Gratz Park since 1814. Origi- include an icehouse, smokehouse, 200- tors Bureau is now offering the oppor - nally named Hopemont, the Hunt-Mor- year-old log cabin and elaborate, two- tunity to tour four of these beautifully gan House was built by John Wesley story slave quarters. restored historic houses for only $15. Hunt, the first millionaire west of the “Waveland is the epitome of an ante- (The usual admission ranges from $7 to Alleghenies, and became home to two bellum Kentucky plantation,” Bryant said. $9 per home.) famous descendants: Civil War General “The house has a homey feel yet still has “So many people came through Cen- John Hunt Morgan and the state’s first that dignity. It looks like the South.” ■ tral Kentucky as the United States was Nobel Prize recipient, Dr. Thomas Hunt becoming a nation,” said Niki Heichel- Morgan, “the father of modern genetics.” Katherine Tandy Brown is a bech, communications manager for the Despite its amazing legacy, the struc- correspondent for The Lane Report. Lexington Convention and Visitors ture barely escaped a 1955 date with a She can be reached Bureau. “These homes truly recreate wrecking ball. at [email protected]. what life was like in 1800s Lexington.” “Saving the Hunt-Morgan House was the impetus for the founding of the Take a Peek Ashland, the Henry Clay Estate Blue Grass Trust for Historic Preserva- Arguably one of the greatest statesmen tion,” said Julie Good, the organization’s For a $15 ticket, contact the Lexing- ever, Henry Clay served the public for 46 executive director. “The home has such ton Convention and Visitors Bureau years, as a senator, speaker of the House of rich history.” visitlex.com, (800) 845-3959 Representatives, secretary of state and A second-floor Civil War Museum is Ashland, the Henry Clay Estate three-time presidential candidate. In 1806, partially maintained by the Morgan’s henryclay.org (859) 266-8581 “the Great Compromiser” built a Federal- Men Association, originally formed by Hunt-Morgan House style home with wings designed by Ben- soldiers serving under the Rebel general bluegrasstrust.org (859) 233-3290 jamin Latrobe, architect of the nation’s and their descendants. capitol. Half a century later, Clay’s son Mary Todd Lincoln House rebuilt the 18-room mansion, which was Mary Todd Lincoln House mtlhouse.org (859) 233-9999 completely restored in the early 1990s. Our country’s president during the Civil Waveland State Historic Site Today, the estate’s nearly 17 acres of War, Abraham Lincoln, witnessed slav- kystateparks.com/agencies/parks/ wooded grounds includes the Italianate- ery firsthand while visiting his wife’s wavelan2.htm (859) 272-3611 style house museum, six outbuildings con- family in Lexington at what is today the

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3501 Lexington Rd., Harrodsburg Upcoming Events across Kentucky Through Oct. 31 Woodford Reserve/Louisville CVB photo Kentucky’s fine bourbon is made on a (800) 734-5611x1545 distillery tour. Then tuck in your bib on shakervillageky.org the breezy porch for some fine vittles prepared by Midway’s Wallace Station. Enjoy a relaxing cruise through the high limestone cliffs of the scenic Kentucky Forecastle Festival River palisades. $10 for 13 years and up, Belvedere Festival Plaza, Waterfront Park $5 for 6-12, 5 and under free. Cruises Louisville daily at 2 and 4 p.m. Schedule subject to July 9-11 weather and river conditions. forecastlefestival.com “Floyd Collins” This event combines Midwest bands, J. Dan Talbott Amphitheatre emerging artists and progressive envi- Drama Dr., Bardstown ronmental organizations into a festival June 24-July 3 Picnic on the Porch all about music, art and activism. (800) 626-1563 Woodford Reserve Distillery Named “One of the Top 101 Things to stephenfoster.com 7855 McCracken Pike, Versailles Do in America” by Spin magazine, the Through Oct. 29 event was recently hailed by the Dis- A charming story of hope and dreams, (859) 879-1812 covery Channel as “the cream of the “Floyd Collins” is a musical that takes woodfordreserve.com crop” of Midwest festivals. place amid Central Kentucky’s hollows and creeks and is based on actual Hop in your car for a drive into Thor - Dixiebelle Riverboat events of the 1925 media frenzy that oughbred farm country to Woodford at Shaker Village occurred when a Kentucky cave Reserve Distillery, where you can see how Shaker Village of Pleasant Hill explorer was trapped underground.

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KENTUCKY PEOPLE

LEXINGTON: A GIFT FROM THE DESERT COVINGTON: N. KY TRI-ED RECOGNIZES OPENING RECEPTION AT KY HORSE PARK CREATION OF 1,286 JOBS IN REGION Northern Kentucky Tri-ED photo Skip Johnson/Courtesy of Kentucky Horse Park photo

Northern Kentucky Tri-County Economic Development Corporation (Tri-ED) recently recognized new and expanding businesses in the region and the economic impact they created in 2009 at the organization’s annual Northern Kentucky Gov. Steve Beshear and members of the Saudi Arabian royal family speak to Thoroughbreds luncheon and recognition event, held at the METS Center for media at the opening reception of the A Gift from the Desert exhibition at Corporate Learning. Tri-ED assisted 10 new or expanding companies, creating a the Kentucky Horse Park. Beshear, center, is talking to Prince Turki al total of 1,286 primary jobs in Northern Kentucky, in 2009. Representing the Faisal (back to the camera in traditional attire). To the right are Prince companies recognized at the event were (left to right) Rob Miller (ASTAR Air Faissal bin Abdullah bin Mohammed al Saud (in Western suit with grey tie), Cargo), Frank Genbauffe (PHD Diagnostics, a division of bioLOGIC), Rick Mills Prince Nawaf bin Faisal bin Fahd bin Abdulziz (in traditional attire) and (ACS, A Xerox Company), Sherry Foote (Convergys), Jake Hawthorne (Andrews Dr. Sadd bin Abdulaziz Al-Rashid (suit with red tie). Electronics), Larry Przybylski (DHL Express), and Jason Looman (Steinert US).

LOUISVILLE: GE CEO IMMELT PAYS A VISIT FRANKFORT: FORMER CHAMBER LEADERS TO COMPANY’S LOUISVILLE OPERATIONS GATHER TO DEDICATE RENOVATED HQ GE photo

General Electric Chairman and Chief Executive Officer Jeff Immelt (left) re- Kentucky Chamber of Commerce photo cently visited the company’s facilities in Louisville’s Appliance Park and talked Past chairmen of the Kentucky Chamber of Commerce posed at the dedication with Willie Lewis about GE’s new GeoSpring hybrid water heater, which will ceremony of the Chamber’s newly renovated and expanded facility in Frankfort. be produced in Louisville. In addition to the GeoSpring, the Louisville plant Pictured from left are Earl Fisher, Lynnwood Schrader, Jean Hale, Darby will also produce a new frontload washer and dryer, and the dishwasher and Turner, Nelda Barton-Collins, Billy Harper, Chaz Lavelle and Pete Rutledge. top-load washing machine platforms currently made at Appliance Park are The $3.2 million facility was funded in large part by donations and sponsor- being completely redesigned using “lean manufacturing” techniques. ships from members and features state-of-the-art technology that will enable the chamber to be linked to the state’s videoconferencing network.

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