kentucky
economic development guide businessclimate.com/kentucky
Proof of Success
Bourbon distillers lead robust food, beverage industry
Global Accent
The world knows Kentucky’s business
Powering the Revolution
State is research leader for electric vehicles
presented by the Kentucky Cabinet for Economic Development | 2012
Carroll County – Kentucky Centrally Located in the Golden Triangle of Louisville, Lexington and Cincinnati
Come join our diversified industrial base. Why Here? Available land and existing buildings Willing workforce with strong work ethic
High Quality of Life with Small-Town Charm
Electric rates among the lowest in the nation
Excellent schools, including Jefferson Community and Technical College, Carrollton Campus
Ohio River alluvial aquifer is abundant water source for a dozen industries
Quality hospital with award-winning occupational medicine department
Natural gas service owned by Carrollton Utilities Served by CSX Railroad On I-71, exit 44 Prime location at confluence of Kentucky and Ohio Rivers
Home of General Butler State Resort Park and the Kentucky Veterans Memorial 45 minutes from Louisville International Airport and Cincinnati/Northern Kentucky International Airport Less than 15 miles from Kentucky Speedway
Proactive local government
{
Contact Information: Harold “Shorty” Tomlinson, Carroll County Judge-Executive (502) 732-7000 • ccjudge@bellsouth.net www.carrollcountyky.com • www.carrollcountygov.us
}
24 Workstyle The Fast Lane
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Auto companies accelerate investment in Kentucky
Powering the Revolution
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State is a research hub for electric vehicle and advanced battery innovation
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Proof of Success
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Led by bourbon production, the Bluegrass State’s food and beverage industry is thriving
Big Ambitions
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Kentucky launches new programs to support small business
A Global Accent
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The world knows Kentucky’s business
One of a Kind
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New campaign showcases Kentucky’s unique attractions Table of Contents Continued on Page 7
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On the Cover Gov. Steve Beshear at the Wild Turkey Distillery in Lawrenceburg, Ky. Photo by Brian McCord
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Insight
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Overview
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Almanac
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Business Climate
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Photo Gallery
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Technology
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Transportation
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Health
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Education
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Livability
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Economic Profile
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Through the Lens
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All or part of this magazine is printed with soy ink on recycled paper containing 10% post-consumer waste.
Please recycle this magazine
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201 2 Edition , volum e 4 Content Director Bill McMeekin Proofreading Manager Raven Petty Content Coordinator Jessica Walker Staff Writer Kevin Litwin Copy Editor Jill Wyatt Contributing writers John Fuller, M.V. Greene, Dan Hieb, Bill Lewis, Betsy Williams Senior Graphic Designers Laura Gallagher, Janine Maryland, Kris Sexton, Vikki Williams Graphic Designers Rachael Gerringer, Taylor nunley Senior Photographers Jeff Adkins, Brian McCord Staff Photographers Todd Bennett, Antony Boshier color imaging technician alison hunter Integrated Media Manager Brandon Parker Ad Production Manager Katie Middendorf Ad Traffic Assistants Krystin Lemmon, Patricia Moisan Chairman Greg Thurman President/Publisher Bob Schwartzman Executive Vice President Ray Langen Senior V.P./Sales Todd Potter Senior V.P./Operations Casey Hester Senior V.P./Client Development Jeff Heefner Senior V.P./business Development Scott Templeton Senior V.P./Agribusiness Publishing kim holmberg V.P./business Development Clay Perry V.P./external communications Teree Caruthers V.P./Visual Content Mark Forester V.P./Content Operations Natasha Lorens V.P./travel publishing susan chappell V.P./Sales rhonda graham, herb Harper, Jarek Swekosky Controller Chris Dudley Senior Accountant Lisa Owens Accounts Payable Coordinator Maria McFarland Accounts Receivable Coordinator Diana Guzman Sales Support Coordinator Alex Marks Sales Support project manager sara quint system administrator Daniel cantrell Database Manager/IT Support Chandra Bradshaw Web Creative Director Allison Davis Web Content Manager John Hood Web project manager noy fongnaly Web Designer II richard stevens Web Development Lead Yamel Hall Web Developer I Nels noseworthy Photography Director Jeffrey S. Otto Creative Services Director Christina Carden Creative Technology Analyst Becca ary Audience Development Director Deanna Nelson Distribution Director Gary Smith Executive Secretary Kristy Duncan Human Resources Manager Peggy Blake Receptionist Linda Bishop
Kentucky Economic Development Guide is published annually by Journal Communications Inc. and is distributed through the Kentucky Cabinet for Economic Development. For advertising information or to direct questions or comments about the magazine, contact Journal Communications Inc. at (615) 771-0080 or by email at info@jnlcom.com.
For more information, contact: Kentucky Cabinet for Economic Development Old Capitol Annex, 300 W. Broadway • Frankfort, KY 40601 Phone: (502) 564-7670 • Fax: (502) 564-1535 econdev@ky.gov, thinkkentucky.com
Visit Kentucky Economic Development Guide online at businessclimate.com/kentucky ©Copyright 2012 Journal Communications Inc., 725 Cool Springs Blvd., Suite 400, Franklin, TN 37067, (615) 771-0080. All rights reserved. No portion of this magazine may be reproduced in whole or in part without written consent. Member Member
The Association of Magazine Media Custom Content Council
Digital Edition Big Ambitions Kentucky launches new programs to support small business
Story by Betsy Williams • Photography by Jeff Adkins
W
hen it comes to small business, Kentucky thinks big, with the launching of a major funding initiative that offers the state’s small businesses access to capital and a host of other programs geared specifically to small-business needs. The Kentucky Cabinet for Economic Development (KCED) has implemented three new credit enhancement programs to facilitate increased private lending to the state’s small businesses. Known as the Kentucky Small Business Credit Initiative, the programs open access to nearly $155 million in new loans to help the state’s small businesses with job creation. The programs cover capital access, collateral support and loan participation, says Mark Johnson, assistant director of the Small Business Services Division for the Kentucky Cabinet for Economic Development. MORE FUNDING OPTIONS “The initiative is designed to increase the amount of funding available to creditworthy, but difficult-tofinance, small businesses by reducing the participating lender’s associated risk,” Johnson says. “These programs will enable lenders to make loans to small businesses that they may not have otherwise been able to make. The more small businesses that gain access to the critical funding needed to start and expand their operations, the more new jobs they will be able to create.” More than 30 lender-training and general-public information sessions have been held since the initiative Left: Dr. Ira J. Bates at the Pinnacle View Inn, which he designed and built in Berea Right: Dr. Becky Naugle, state director of the Kentucky Small Business Development Center in Lexington
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kentucky
economic development guide businessclimate.com/kentucky
Proof of Success
Bourbon distillers lead robust food, beverage industry
Global Accent
The world knows Kentucky’s business
Powering the Revolution
Lifestyle Find out what it’s like to live in Kentucky and what makes the state such a special place to be.
State is research leader for electric vehicles
PReSented by the KentucKy cAbinet foR economic develoPment | 2012
Read the magazine on your computer, zoom in on articles and link to advertiser websites. Cool Companies >> Learn about the unique companies and fast-growth businesses that have found success in Kentucky.
Workstyle We put a spotlight on innovative companies that call the Bluegrass State home.
success breeds success >> Meet the people who set the pace for business innovation.
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Greensburg/Green County Industrial Foundation 110 W. Court St. Greensburg, KY 42743 (270) 932-4298 director@greensburgonline.com
www.GreensburgOnline.com
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Overview
Kentucky: Where Success is a Tradition The Bluegrass State puts business in the winner’s circle It is an incredibly exciting time in the Commonwealth of Kentucky. From a booming auto industry to an ever-expanding network of logistics companies to advances in R&D capabilities, Kentucky is thriving! It’s my hope that as you browse the 2012 Kentucky Economic Development Guide, you, too, will see why so many globally competitive companies have chosen to do business in the Bluegrass State.
We think you’ll agree that Kentucky’s business advantages can provide everything your industry needs to succeed. From industrial electricity costs that are consistently among the lowest in the nation to a tax structure that’s among the most competitive in the region, progressive financial programs, the lowest cost of living in the country and an ideal location within 600 miles of two-thirds of America’s population, Kentucky has it all.
Kentucky’s recent successes are many, including Ford Motor Co.’s $1.2 billion investment between its two assembly plants in Louisville; the decision by Flex Films, an India-based flexible packaging company, to construct its first U.S. manufacturing operation in Elizabethtown; and the multi-million dollar expansion of Tempur-Pedic’s global headquarters in Lexington. These are just a few of the thriving companies demonstrating their continued confidence in Kentucky.
Sincerely,
I invite you to tap into Kentucky’s energy. Let us help you write your own success story in the Commonwealth. Contact the Kentucky Cabinet for Economic Development today at (800) 626-2930 or email econdev@ky.gov. We are confident you’ll find the Bluegrass State has the winning tradition you’ve been seeking.
Steven L. Beshear Governor of Kentucky
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Almanac A Home Run for Louisville Kentucky made a successful pitch and landed a major sports association’s headquarters. The National Fastpitch Coaches Association (NFCA) will move into a 5,000-square-foot facility in Louisville, making more than a half-million dollar investment in the state. Louisville was selected over four other cities for the headquarters. The NFCA will add 12 employees to its full-time staff of eight, who are currently located in Mississippi, Texas and New Hampshire. All staff members are expected to relocate to Louisville. The NFCA was founded in the 1980s and includes high school coaches, travel ball/club coaches and other individuals with numbers totaling about 4,500 nationwide and 40 internationally. The organization coordinates relationships between team members, college recruits, coaches and governing national organizations such as the NCAA. The NFCA hosts clinics, conventions and regional meetings, and provides official publications to members. To learn more about the organization, go to www.nfca.org.
Taking a Seat Brown Jordan International, the largest outdoor furniture manufacturer in the United States, has designed and produced luxury leisure furnishings and accessories since 1945. The company, which offers more than 30 collections in various design styles, has located a new distribution center in Simpsonville in Shelby County. The project includes a nearly $4 million investment and the purchase of an existing 84,000-square-foot facility to handle direct customer sales, replacementparts fulfillment and returns. The project creates 12 jobs. Go to www.brownjordan.com for more.
Securing Jobs An expansion at Clopay Plastic Products Co. is securing 290 jobs at Bracken County’s largest employer. Clopay Plastic is a global leader in manufacturing specialty films, extrusion coatings, custom printing and engineered laminations. Its products can be found in numerous industries including hygiene, health care and protective apparel, to name a few. Clopay Plastic is investing nearly $12.3 million to expand its current 289,000-square-foot facility by 62,000 square feet. For more on the company, go to www.clopayplastics.com.
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Fun and Games is Serious Business One of the world’s leading online retailers of collectible games, TrollandToad.com started as a home-based business in Laurel County in 1993. Today, the company specializes in selling collectible card games, especially out-of-print Magic: The Gathering cards and is celebrating the expansion of its Kentucky operation. The project is initially creating 50 new jobs and promises to bring another 100 jobs to the 160-employee operation in the next two years. Troll’s online catalog includes collectible miniatures, board games and role-playing games, and the company strives to have one of every Magic card ever produced in stock at all times. In 2010, TrollandToad.com ranked on Internet Retailer Magazine’s Top 500 list.
They Document Success Anacomp, a leading document- and business-process management solutions company, has opened a new service facility in Somerset in Pulaski County. This facility represents a $2.4 million investment in the community and 200 new jobs. Anacomp offers document-conversion services to support a variety of business applications, including human resources, claims management, retirement benefits and health records. For more on the company, go to www.anacomp.com.
Driving the Economy Beta Tech opened its first U.S. manufacturing facility in Glasgow, Ky., in early 2012 because it recognized the value of the state’s workforce. The 80,000-square-foot facility, which operates under Beta Tech’s Fortis Manufacturing brand, manufactures precision tooling and stampings for the North American automotive industry. The automotive parts supplier’s location will entail a $5.1 million investment and create 100 new jobs over the next several years. Go to www.fortis-mfg.com for more.
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Sewing Up an Expansion Carhartt Inc. is a family-owned retailer and manufacturer of clothing and accessories that has operated in Kentucky for more than 80 years. Building upon this long-running relationship, Carhartt plans to invest $11 million in its Hopkins County plant to improve efficiency and energy conservation. The investment will add more than 150 jobs to the 550-employee operation. Carhartt plans to complete the upgrades to the Hopkins County facility by 2014. Go to www.carhartt.com for more.
LOGO Courtesy of Carhartt
a Message of Growth CMSText LLC is ramping up in a major way in Lexington. P h o t o C o u rt e s y o f G E A ppl i an c e s
The fast-growing company, which provides message-marketing services for several industries, is adding 135 jobs to its 19-person workforce in a $4.4 million expansion that will allow it to provide services to more regions of the country, as well as Canada. Go to www.cmstext.com for more on the company.
In Plenty of Hot Water Following through on a commitment the company made in 2009, GE Appliance has formally opened the GeoSpring Hybrid Water Heater manufacturing facility at its Appliance Park complex, the first of what the company says will be an $800 million investment in Louisville and the creation of more than 1,000 new jobs there by 2014. The new plant will produce the GeoSpring, a hybrid water heater that combines energy-saving heat-pump technology with traditional electric heating elements used in most conventional water heaters. The company opted to produce the GeoSpring in Louisville instead of in China, where an earlier version of the product was made. In March 2012, GE opened another new factory at Appliance Park to manufacture its French door bottom freezer refrigerator. The new line is a result of GE’s $250 million investment in bottom freezer technology and will create 600 jobs in Louisville. GE is using “Lean” manufacturing principles that employ a cross-functional team of employees to build both products. Go to www.geappliances.com for more.
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Growing One Click at a Time Boone County is helping an online retailer grow. Formerly known as CSN Stores, Wayfair.com is the second-largest retailer of home goods in the United States. Through its online stores, including wayfair.com, AllModern.com and JossandMain.com, it offers more than 3 million items from 5,000 brands. The company has opened a new distribution hub in Hebron that represents an investment of nearly $7.7 million and will deliver up to 105 new jobs to the Northern Kentucky region over the next few years. To learn more about the company, go to www.wayfair.com.
in the elite eight Kentucky is moving up the ranks of a highly regarded corporate site selection scorecard. rendering Courtesy of Scott Murphy and Associates
Packaged for expansion Montebello Packaging, a manufacturer of collapsible aluminum and laminate tubes, ink markers and aluminum aerosol cans, will add 26 jobs to its Marion County operation through a $24 million expansion. Montebello, which has operated in Kentucky for 13 years, has facilities in the United States and Canada. The company manufactures products for numerous industries including cosmetics, household goods, pharmaceuticals and food storage, and its products range in type from lipstick tubes to pharmaceutical-grade medicine containers. Montebello, which already employs 108 workers in Marion County, will expand the facility by 110,000 square feet to accommodate new production lines. Go to www.montebellopkg.com for more on the company.
In its highest rating ever, the Bluegrass State ranked eighth in the nation for new and expanded industry activity in 2011 on Site Selection magazine’s annual Governor’s Cup rankings. The ranking is based on a state’s total number of qualified projects as tracked by Conway Data Inc.’s New Plant database. “We’re thrilled to finish as one of the elite eight in the nation for business expansion activity during 2011,” says Gov. Steve Beshear. “This high ranking is even more impressive when one considers Kentucky has the smallest population of any state at the top of the list.” Qualified projects needed to meet at least one of three criteria: a capital investment of at least $1 million, creation of 50 or more jobs, or the addition of at least 20,000 square feet of new floor space. During 2011, Kentucky generated 198 projects that met the database requirements. In total, 326 location or expansion announcements were reported in the state resulting in 13,230 projected new full-time jobs and capital investment estimated at more than $2.6 billion. b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Business Climate
Smart Growth Story by Bill Lewis
S
mart individuals know the best investments they can make are in a brighter future for themselves. The same is true for Kentucky, which is investing in an aggressive economic development program and innovative incentives that promote private-sector growth and job creation. Those efforts spurred more than $2.6 billion in private-sector investment and the creation of nearly 13,300 jobs in 2011 alone, and new successes lie just over the horizon, says Larry Hayes, secretary of the Kentucky Cabinet for Economic Development. “One of the greatest drivers for Kentucky’s economic development success is its pro-business attitude. This begins at the top with the leadership of Governor Steve Beshear, who has made job creation his No. 1 priority. Through his leadership, we have taken unprecedented steps like the passage of the Incentives for a New Kentucky (INK) legislation, which has encouraged hundreds of companies to invest billions of dollars and create or retain tens of thousands of jobs,” Hayes says. Creating Jobs One of the program’s signature successes is the decision by Tempur-Pedic to build the company’s new global headquarters in Lexington, where the innovative sleep products company was founded in 1993. The company is investing approximately
Kentucky investments pay dividends in new jobs
Kentucky’s Economy Kentucky’s economic output during 2010 was more than $163 billion according to the U.S. Bureau of Economic Analysis. The five largest sectors were:
$28 billion Manufacturing
$27.1 billion Government
$14.9 billion Real Estate
$14 billion Health Care
$10.3 billion Retail Trade
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$18 million and expects to create 65 new jobs over the next five years. Before the expansion began, the company employed 237 people at its headquarters. “With us now being a global company, it’s nice that we will still be headquartered in Kentucky where it all began for us,” says Mike Mason, Tempur-Pedic director of brand development and integration. “We have a lot of corporate people who have come to Kentucky from a lot of different places around the country, and I think that I can speak for many of them by saying the quality of
life in Lexington is superior.” Tempur-Pedic is not alone. Invensys Rail Corp. is expanding its Jefferson County headquarters, creating 75 new engineering jobs and investing more than $3.2 million in the state. Invensys engineers control systems for railways and transit authorities. With more than 3,000 employees worldwide, the company services customers in 30 countries. The company can qualify for tax incentives up to $1.8 million through the Kentucky Business Investment program. Propulsys is making a nearly
$9.5 million investment in its Hopkinsville operation with assistance of up to $3 million in tax incentives through the Kentucky Reinvestment Act. The program is designed to assist companies that need to make significant capital investment in Kentucky facilities to remain competitive. The investment will facilitate upgrades to the company’s facility, improving product performance and allowing it to retain its existing workforce of 207 people. Propulsys is a leading manufacturer of low-speed,
Kentucky’s 2011 Fortune 500 Headquarters Revenue: $9 billion Fortune 500 rank: 272 Revenue: $33.9 billion Fortune 500 rank: 79
Revenue: $11.3 billion Fortune 500 rank: 214
Ashland Covington Humana Louisville Yum! Brands Louisville
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Revenue: $4.9 billion Fortune 500 rank: 465
General Cable Highland Heights
high-torque hydraulic motors. Established in 1983, the company’s Hopkinsville facility, which is also its headquarters operation, serves locations in China and Germany. “In the last five years, Propulsys has invested more than $15 million in its Hopkinsville facilities,” says Rich Maddux, Propulsys president and CEO. “Given the global competition for our jobs and investment, we are pleased that Kentucky recognizes that advanced manufacturing is important to its future and has partnered with us to expand our world-class production operations.” Forbes Praises Growth There are many examples of Kentucky’s success, Hayes says. They include:
• Kentucky and Ford Motor Co. earning the 2011 Economic Development Deal of the Year by Business Facilities. Ford is making a total of $1.2 billion in investments at its Louisville Assembly Plant and Kentucky Truck Plant, adding thousands of jobs. • The project also was named one of the top 15 corporate investment projects in the country by site selection magazine Trade & Industry Development. • Forbes boosting Kentucky’s business climate ranking 19 spots since 2008, the largest increase in the country. Forbes also placed Lexington, Louisville and Bowling Green among its 2011 Top Places for Business rankings. “Kentucky has a lot of momentum building, and we plan to continue to lead Kentucky toward economic growth,” Hayes says.
INKing the Deal Many of Kentucky’s most recent economic development successes have been made possible by the state’s Incentives for a New Kentucky (INK) programs, which provide tax incentives to businesses locating, expanding or reinvesting in the state. Kentucky Business Investment (KBI) Program: Provides income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies and non-retail service or technology-related companies that locate or expand operations in Kentucky. Projects in certain counties may qualify for enhanced incentives. Kentucky Reinvestment Act (KRA): Provides tax credits to any existing Kentucky company engaged in manufacturing and related functions that invests in eligible equipment and related costs of at least $2.5 million. Kentucky Enterprise Initiative Act (KEIA): Provides a refund of sales and use tax paid for building and construction materials permanently incorporated as an improvement to real property. It can also include sales and use tax refunds for eligible equipment used for research and development and data processing equipment. Kentucky Small Business Investment Credit (KSBIC): Designed to spur job creation by providing a nonrefundable state income tax credit to small businesses. State income tax credits range from $3,500 to $25,000 per eligible small business that creates, fills and maintains one or more new eligible jobs and invests at least $5,000 in qualifying equipment or technology. Most for-profit small businesses with 50 or fewer employees are considered eligible. Kentucky Environmental Stewardship Act (KESA): Provides tax incentives to new or existing manufacturing companies that manufacture a unique product that has a substantial impact on human health or the environment. Incentives for Energy Independence Act (IEIA): For companies engaging in the creation of new, alternative forms of energy, incentives may be available through the IEIA program, including corporate income tax credits, wage assessments, and reimbursement of sales and use taxes paid on tangible personal property over a period of time up to 25 years. Advance disbursement may also be available during the construction phase of an approved IEIA project. Kentucky also offers grants for customized business training programs, direct loans for fixed asset financing, small business loans, industrial revenue bonds and grants.
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Kentucky Economic Development Guide
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A Powerful Advantage Low electric rates spur investment Industries everywhere work hard to keep their costs down, but businesses in Kentucky have an advantage that is extremely powerful – electric power, that is. The Bluegrass State’s electric power rates are consistently among the lowest in the nation. Industrial users pay, on average, 25 percent less than the U.S. average. Manufacturers such as Ford, mini-mill Gallatin Steel, the General Motors Corvette plant and others benefit from electric power rates that were the fourth-lowest in the nation in 2010. In fact, Kentucky’s rates are the lowest when compared with states east of the Mississippi River, according to the U.S. Department of Energy’s Energy Information Administration. “Industrial electricity is cheaper than it was 20 years ago,” says Dennis Cannon, vice president of the Kentucky Association of Electric Cooperatives. Low electric rates give businesses in Kentucky a huge cost advantage over their competitors in many other states. And when it comes to competing for job creation and new industrial investments, the advantage goes to Kentucky. “If you’re looking for a site to locate a facility, you’re going to look
at all of the factors. One of those is electric rates,” Cannon says. Kentucky’s low rates are the result of good fortune and wise planning, he says. Because power generators have access to affordable and abundant supplies of Kentucky coal, it’s no surprise that about 90 percent of Kentucky’s electricity comes from that fossil fuel. In addition, state regulators have
established electric rates that benefit power users and power producers. “We’ve had a steady, conservative approach to regulation that has led to steady, low electric rates,” Cannon says. When industries are looking for a place to succeed and grow, it’s hard to miss Kentucky. After all, the state has left a light on for them. – Bill Lewis
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Driven to Success Auto companies accelerate investment in Kentucky
Story by Bill Lewis • Photography by Jeff Adkins
I
f three of the world’s largest automobile companies know a secret – there’s no better place than Kentucky to grow their business and introduce innovative new products – then it’s probably not a secret any longer. The word is out. Ford, General Motors and Toyota have invested billions of dollars and employ thousands of workers in Kentucky. They have been joined in the Bluegrass State by more than 440 automotive suppliers. 24
Kentucky Economic Development Guide
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Bowling Green is the only assembly plant where GM makes the iconic Corvette. Right: Ford is investing heavily in its Louisville Assembly Plant and Kentucky Truck Plant.
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Kentucky Economic Development Guide
Ford is significantly upping its investment in the Bluegrass State, pouring in $1.2 billion and creating 3,100 jobs at its two Louisville manufacturing operations. Helping to secure that investment was an incentive package from the state that built a solid business case for the automaker to expand in Kentucky. That partnership between Ford and Kentucky has earned national recognition. The project was named 2011 Economic Development Deal of the Year by respected national magazine Business Facilities. The project, which was selected by a judging panel of industry experts, emerged as the winner in a competitive field of 23 other big-ticket projects from across the country. Ford is spending $600 million to transform its Louisville Assembly Plant (LAP) into the company’s most flexible facility. It will manufacture the next generation of the popular Escape and will have the technology to simultaneously produce other models, such as the Focus, Fiesta and Fusion, as demand grows. “LAP will be capable of producing a variety of vehicles and a variety of platforms. It gives us the flexibility to put all of these vehicles down the same assembly line. It gives us the capability to switch product lines to meet demand and market changes,” says Marcy Evans, manufacturing communications manager for Ford Motor Co. Ford also is investing $600 million in its Kentucky Truck Plant, also in Louisville, for production of the next generation of its Super Duty F-series trucks. World-Leading Technology Ford is not alone in finding Kentucky a fast track for production. Together, Ford, GM and Toyota make so many vehicles that the Bluegrass State ranked fifth in the nation in 2011 for the number of light vehicles produced. And that ranking reflects the fact that Ford’s Louisville Assembly Plant was out of commission during most of the year for retooling. Now more vehicles – and more jobs, more
innovations and millions of dollars in new investments – are on the way. In 2011 alone, more than 70 automotive-related companies announced that they were opening or expanding in Kentucky. They are attracted by the unique advantages of doing business in Kentucky, including a skilled and productive workforce, a highly developed transportation network, a central location,
Auto Industry revs up Economy Kentucky is home to more than 440 automotiverelated facilities including four major auto-assembly plants operated by Ford, General Motors and Toyota. The industry’s impact on the economy would be hard to overstate. For example: • In 2011, more than 70 motor vehicle-related facilities located or expanded in Kentucky, representing more than $1.1 billion in investment, according to the Kentucky Cabinet for Economic Development. • Kentucky ranks fifth in the nation in car production. • More than 10 percent of the cars and trucks produced in the U.S. are made in Kentucky. • Nearly 17 percent of the state’s manufacturing workforce was employed in motor vehicles, bodies and trailers, and parts production in 2009. • Kentucky’s auotmotive industry strength results from a productive workforce, central location, low cost of business, highly regarded workforce-training programs and a pro-business government.
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the low cost of doing business, targeted incentives and partnerships with state and local officials that help them compete successfully in the global marketplace. In Bowling Green, the only place where it manufactures the Corvette, General Motors is investing more than $131 million and creating 250 new jobs to prepare for production of the latest version of its iconic sports car. An economic impact study by the Kentucky Cabinet for Economic Development shows that GM’s existing and new employment in Bowling Green is responsible for nearly 1,950 direct, indirect and induced jobs that will provide an annual $222 million boost to Kentucky’s gross domestic product. Made in Kentucky In a little more than two decades, Toyota has transformed empty fields at Georgetown into its largest production facility outside Japan, employing 7,000 team members directly and creating nearly 20,000 additional jobs in Kentucky and other states. Toyota announced at the end of 2011 that Camry sedans made in Kentucky are being exported to South Korea. Initially, 6,000 sedans will be shipped to South Korea annually, marking the first time the U.S.-assembled Camry has been exported outside of North America. “Kentucky and Toyota have a strong partnership,
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and together continue to create opportunities for Kentuckians,” says Larry Hayes, Kentucky Cabinet for Economic Development secretary. “Not only is the Toyota Camry the best-selling car in America, the Kentucky-made product is now being exported to international destinations.” The location of Toyota in the 1980s opened the door for hundreds of automotive suppliers, especially from Japan and Europe, to also make Kentucky their home. Today, Kentucky boasts over 440 motor vehicle-related companies that employ more than 68,000 people. In fact, Kentucky ranks third highest in auto industry-related employment as a percent of total state employment among the top motor vehicle producing states. Hitachi Automotive Systems Americas Inc. selected its Harrodsburg plant as the place where it will produce lithium-ion battery packs in North America. The company is investing about $12 million in the facility and will create 60 new jobs. Hitachi also announced last year that it would locate a new manufacturing facility in Berea, its third Kentucky facility, to produce motors that will power advanced hybrid electric-powered automobiles, including the Chevy Volt. In Marion County, Wilbert Plastic Services Inc. announced in December 2011 that it will create 150 jobs thanks to the addition of a new product line to
Attracting Lightning Megasites are ready for success to strike
make interior components and associated parts for the 2013 Ford Escape and other models produced at the Louisville Assembly Plant. GR Spring & Stamping, an automotive-parts supplier based in Michigan, is expanding its Richmond facility. The company will invest $1.7 million to add 30,000 square feet to its facilities and add 25 employees to its 103-person workforce over the next few years. In Hopkinsville, DENSO Air Systems recently located its newest auto parts manufacturing facility. The $4.2 million Japanese investment will add 105 new jobs over the next several years. The operation produces aluminum pipes, tubes and hoses for the automotive industry. “Not only do we look forward to expanding our North American operations, but we are also genuinely excited to become part of the Hopkinsville community,” said Jerry McGuire, DENSO Air Systems Michigan president. “We are confident we chose the right location for our third manufacturing facility in North America, and we have great confidence in the outstanding workforce in Kentucky.”
From left to right: Ford’s Kentucky Truck Plant in Louisville; Cars undergo final inspections at Toyota Motor Manufacturing in Georgetown, Ky.
With three certified megasites available for major industrial users, Kentucky is poised to enjoy megasuccess attracting automotive manufacturers and other companies that require a lot of space and a lot of infrastructure for their operations. Megasites certified by the Tennessee Valley Authority have already attracted more than $6 billion in investments to the Southeast by the likes of Toyota, Volkswagen and Dow Corning/Hemlock Semiconductor, among others. Those projects represent almost 6,000 direct jobs. With three megasites available, Kentucky is ready for economic-development lightning to strike. The 1,551-acre Glendale Megasite in Elizabethtown, bordered by Interstate 65 on one side and a CSX rail mainline on the other, is primed for a large-scale manufacturing operation. The site is just 40 miles from Louisville International Airport. “This site was actually a finalist in 2002 for a Hyundai automotive project,” says Richard Games, president and COO of the Elizabethtown/Hardin County Industrial Foundation. “Glendale has electric power, an industrialsized, 16-inch water line already installed, and construction for an updated interchange at exit 86 from I-65 will begin soon.” The megasite has already undergone geotechnical surveys, has been zoned for industrial use, undergone Phase I environmental work, and completed a jurisdictional waters determination, endangered species report and a full archeological review. Sewer line work should begin in the next 18 months. Megasites got their name because each one has to have a minimum of 800 to 1,000 contiguous, developable acres. They must have successfully completed all environmental and geotechnical testing, be close to an interstate highway and rail service, have utilities in place and have a plentiful workforce. Each site has to meet strict standards set by an independent consultant. “The megasites program has had a positive impact at the local, state and regional levels,” says John Bradley, TVA senior vice president of economic development. Kentucky’s megasites easily meet those standards. In addition to the Glendale site, Kentucky megasites include: The Hopkinsville I-24 Megasite, with 2,100 acres adjacent to Interstate 24. It provides fast access to I-65 and I-40. The West Kentucky Megasite (WKM) near Paducah, with 2,100 acres, is located near I-24 and the Purchase Parkway and has multiple rail-service providers. Tony Goodman, chairman of the WKM Board of Directors, says the fact that megasites are independently certified sends a strong signal to companies that might locate operations there. “Essentially this stamp of approval sends the message to those looking for large-acre sites that we are project-ready. It lets companies know that they can get started on their project right away,” Goodman says. “By going through this process, we have saved potential companies anxiety, time and money, making their location decision easier.” – Bill Lewis b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Powering the Revolution State sparks EV and advanced battery innovation 30
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The Testing Lab The Kentucky-Argonne Center’s brand-new research and development laboratory features a state-of-the-art assembly system that will be used to evaluate new cathode, anode and electrolyte materials used in lithium-ion (Li-ion) and other advanced batteries. The facility features: • A dry laboratory • Clean rooms • Wet laboratories • A furnace laboratory • A cycle testing lab • A materials analysis lab The research facility will evaluate 18,500 Li-ion batteries built by Argonne National Laboratory and provide testing for private companies like Hitachi and nGimat. Its goal is to identify new battery materials that are powerful and inexpensive to produce. For more information, visit www.kyargonne.org.
Story by Dan Hieb • Photography by Jeff Adkins
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efore the recession hit and before gasoline routinely settled in near $4 a gallon, two things were becoming clear: • Hybrid electric vehicles such as the Toyota Prius were in a position to revolutionize the auto industry. • The United States was trailing, badly, in the race to develop and manufacture the key component of these vehicles — advanced batteries using lithium-ion technology.
Kentucky Gov. Steve Beshear recognized early in his first term that the state, as the nation’s third-leading manufacturer of light-duty vehicles, could and “must become the epicenter for the advanced manufacturing technology that will produce the vehicles of tomorrow.” His vision led to the creation of the Kentucky Argonne Battery Manufacturing Research and Development Center in 2009, an effort to position Kentucky and
the United States as a leader in the advanced battery technologies market to support the state’s vibrant automobile manufacturing industries and create jobs. Kentucky: EV Research Hub The center is a partnership between Kentucky, the University of Louisville, the University of Kentucky and Argonne National Laboratory, which is based outside of Chicago. The University of Louisville and
A glove box is used to keep organic electrolytes dry at the Kentucky-Argonne Battery Manufacturing Research and Development Center.
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the University of Kentucky have strong programs in material development for advanced battery technologies for a range of applications, including vehicles and storage for grid-scale renewable energy such as wind and solar. Argonne is the federal government’s lead laboratory for applied advanced battery research and development. “This center is a unique partnership in Kentucky, and it will help us in our goals to enhance energy security, protect the environment, create opportunities for renewable energy resources and grow our economy by developing a domestic supply of advanced battery technologies for vehicle applications,” says Dr. Leonard Peters, secretary of Kentucky’s Energy and Environment Cabinet. A growing team of researchers at the center are testing different types of batteries to determine
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which mixtures of metals can produce a lot of power while being cheap to manufacture. The technology still has room to grow. “The battery center is the first national lab presence in Kentucky,” says Dr. Tony Hancock, special assistant to the secretary of the Energy and Environment Cabinet and director of business development for the battery center. “This brings an international team of battery material specialists to focus on the future of batteries for automotive applications. These batteries bear little resemblance to your father’s old flashlight batteries, but are high-tech electronic devices,” he adds. The battery center is set up to accelerate aging and perform failure analysis to continue improving the performance of these devices. The Kentucky-Argonne Center’s ability to test and improve those materials should give a technological boost to
Kentucky Economic Development Guide
manufacturers in the United States, which has helped draw companies to the state. Cranking Up the Economy For nGimat, the KentuckyArgonne Center provided an excellent chance to test one of its new nanotechnologies – a highly conductive lithium-ion powder. In 2010, the Atlanta-based company announced plans to open a Lexington laboratory that is expected to employ 18 high-tech workers within the next two years, then 50 more people in manufacturing and other roles. The Lexington facility is headed by Ganesh Venugopal, director of nanomaterials. Andrew Hunt, nGimat’s CEO and chief technology officer, says the company plans to infuse existing batteries with thin layers of “electrochemical materials that are exponentially better than other materials.”
The idea is to create super conductive pathways through which electricity can move quickly, allowing power to flow in faster for charging and flow out faster for power. Imagine an electric vehicle that could accelerate like a Corvette and recharge in minutes instead of hours. Big international players are also eyeing the Lexington facility. Japan-based Hitachi has been manufacturing in Kentucky for more than a quarter century. Since Gov. Beshear visited officials in Japan in 2009, $154.5 million in new investments have been announced at its Kentucky plants, adding 335 jobs. That includes Hitachi’s decisions to create electronics in Harrodsburg to regulate lithium-ion battery performance (which will add 60 jobs), and to build electric drive motors in Berea (which will add 130 jobs). Of the three major components of electric engines, that leaves only the inverter – and Doug Bowling, senior vice president and general manager at Hitachi Automotive Systems Americas, says the company is “optimistic about the opportunity” in the future to transfer inverter manufacturing from its Japan facility to Harrodsburg. Hitachi is working closely with the Kentucky-Argonne Center, Bowling says. The company’s Kentucky locations “have highly skilled employees, a strong technical staff [and] the infrastructure needed to support advanced technology,” he adds.
The Hitachi Automotive Systems Americas plant in Harrodsburg
Center of a Revolution Researchers all over the nation each year flock to Louisville for the annual national conference hosted by the National Alliance for Advanced Technology Batteries, or NAATBatt. The conference draws speakers from leading industry players, such as General Motors, Oak Ridge National Laboratory, Southern California Edison, Lux Research, Ford Motor Co. and Caterpillar.
Attendees come to learn about opportunities for U.S. manufacturers of electric vehicles, batteries and other energy storage technologies, and how these technologies can be used to help develop the nation’s electrical infrastructure of the future.
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Showing Proof
Spirited competition
19 Major distilling operations in Kentucky
95% U.S. bourbon production from Kentucky distilleries
$2.5B Value of shipments from Kentucky distilleries
3,100 Number of workers employed by Kentucky distilleries Source: Kentucky Distillers Association
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of Success Kentucky cultivates a robust food and beverage industry Story by Kevin Litwin
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entucky has a hearty appetite for the food and beverage industry. More than 185 food and beverage operations employ nearly 31,000 people in Kentucky, and the past five years have seen almost 100 food and beverage operations move into the state or expand there. All of that positive activity since 2007 has created 3,000 jobs. From Sister Schubert’s Homemade Rolls to The Laughing Cow cheeses and Sara Lee pastries to megabrands such as Pizza Hut and Papa John’s, the industry is active and growing in the state. Evidence of that strength includes the December 2011 announcement that Long John Silver’s and A&W Restaurants, which were sold by Kentucky-based YUM! Brands, would both keep their worldwide corporate headquarters and a total of 100 jobs in Kentucky.
growing by the barrel in Kentucky, bringing with it a major shot of economic investment and job creation. A study released in early 2012 by the University of Louisville found recent investments in new distilleries, warehouses, advanced manufacturing equipment and distillery visitor centers have translated into more jobs, increased exports and $338 million in additional tax revenue since 2008. More than 9,000 jobs in Kentucky are connected to distillery-related enterprise, generating payroll of $413 million and contributing nearly $2 billion in gross state product each year. One of the ways the world knows Kentucky is through its bourbon.
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In the Right Spirit One of Kentucky’s signature industries is one of the world’s signature beverages. Ninety-five percent of the world’s supply of bourbon is made in the Bluegrass State. In fact, the current 4.7 million barrels of aging bourbon outnumbers Kentucky’s population of 4.3 million. And bourbon production is
Shipments from Kentucky distilleries are valued at more than $2.5 billion each year. b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Among the more than 185 food and beverage operations with a Kentucky presence are the producers of some of the world’s most well-known brands.
Kentucky Proud Market Kentucky Proud Market (www.kentuckyproudmarket.com) is a store established in Lexington in 2009 to specifically sell items that are produced within the state. Kentucky Proud Market is located in The Shops at Lexington Center, in the downtown district adjacent to Triangle Park. The Lexington market sells wines, apparel, condiments, artwork, housewares and gift baskets. In addition to its retail location, Kentucky Proud market also sells its products online.
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More than 28.7 million proof gallons of bourbon were shipped to 126 different countries in 2010, up from 25 million gallons in 2008 and tops among all U.S. spirit exports. Bourbon distillers are meeting the increased demand with new investment in their Kentucky operations. Gruppo Campari plans to invest approximately $48 million and add 62 jobs for a new packaging facility at its renowned Wild Turkey Distillery in Lawrenceburg, where its roots date to the mid-19th century. In 2011 alone, distilleries in the state made some $170 million in new investments in their facilities. Fortune Brands’ Jim Beam spent $18 million to upgrade its visitor center and make other improvements at its Clermont plant to accommodate the increasing visitor traffic to
Kentucky Economic Development Guide
the six distilleries on the Kentucky Bourbon Trail. The company invested another $26 million to expand its bottling operation in Frankfort. Maker’s Mark, known for its iconic red wax seal, undertook a $54 million expansion to boost production, expand bottling capacity and make visitor center improvements at its operations near Loretto in central Kentucky. Setting the Table Kentucky-made products find their way into lunch boxes and on to dinner tables across the nation and around the world. A number of well-known food and beverage products are made in the Bluegrass State, from Hot Pockets and Lean Pockets, produced by Nestle Prepared Foods in Mt. Sterling, to Kellogg’s Snacks, which makes baked goods for Keebler in Florence
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Clockwise from top left: Restaurant operator Yum Brands! is based in Louisville; Ale-8-One Bottling in Winchester; Kellog’s makes Pop-Tarts in Pikeville.
and Pop-Tarts in Pikeville. J.M. Smucker Co. produces Jif peanut butter in Lexington. Bel Brands USA has operations in Leitchfield that produce The Laughing Cow cheeses. Sister Schubert’s makes more than 500 million rolls annually, and one of the company’s main bakeries is in Horse Cave. Other Kentucky-based operations include Tyson Foods chicken packaging in Henderson and Winchester Farms Dairy, which produces milk for Kroger supermarkets. Ale-8-One is a soft drink unique to the state that has been bottled in Winchester since 1926, and its sodas are sold in Kentucky, Ohio, Indiana, Tennessee, Georgia and Alabama. “A big reason for our success in Kentucky is customer loyalty,” says Fielding Rogers, president of Ale-8-One Bottling Co. “It’s like the loyalty shown to University of
Kentucky or University of Louisville basketball teams. Kentuckians back Kentucky products.” Farm Income Has Grown Kentucky’s food and beverage industry is supported by the state’s historically strong agricultural base, which includes more than 85,000 farms and nearly 14 million acres of farmland. The state supports a number of initiatives to promote Kentucky agriculture and value-added food production. “Kentucky Proud is the trademarked brand for Kentucky’s agricultural products that are grown and produced in our Commonwealth,” says Kentucky Agriculture Commissioner James Comer. “Our department markets Kentucky Proud products from delicious blackberry jam to mouth-watering country ham. Our label tells consumers they are supporting our local farmers and
they are buying the very best.” The mission of the Kentucky Department of Agriculture’s Office of Agricultural Marketing and Product Promotion is to ensure that Kentucky farmers are at the forefront of the marketplace. The office has seen great success in assisting farmers, agribusinesses and commodity groups with product promotion. “Kentucky’s farm income has grown every year since 2007, and agriculture has remained a bright spot in an otherwise gloomy economy,” Comer says. Kentucky ranks among the top five states in the country for number of farms. Farm sales in the Commonwealth average $5 billion a year. “Our programs at the Department of Agriculture help local food and beverage businesses diversify and expand,” Comer says. b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Big Ambitions Kentucky launches new programs to support small business
Story by Betsy Williams • Photography by Jeff Adkins
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hen it comes to small business, Kentucky thinks big, with the launching of a major funding initiative that offers the state’s small businesses access to capital and a host of other programs geared specifically to small-business needs. The Kentucky Cabinet for Economic Development (KCED) has implemented three new credit enhancement programs to facilitate increased private lending to the state’s small businesses. Known as the Kentucky Small Business Credit Initiative, the programs open access to nearly $155 million in new loans to help the state’s small businesses with job creation. The programs cover capital access, collateral support and loan participation, says Mark Johnson, assistant director of the Small Business Services Division for the Kentucky Cabinet for Economic Development. More Funding Options “The initiative is designed to increase the amount of funding available to creditworthy, but difficult-tofinance, small businesses by reducing the participating lender’s associated risk,” Johnson says. “These programs will enable lenders to make loans to small businesses that they may not have otherwise been able to make. The more small businesses that gain access to the critical funding needed to start and expand their operations, the more new jobs they will be able to create.” More than 30 lender-training and general-public information sessions have been held since the initiative Left: Dr. Ira J. Bates at the Pinnacle View Inn, which he designed and built in Berea Right: Dr. Becky Naugle, state director of the Kentucky Small Business Development Center in Lexington
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The Kentucky Small Business Development Center provides services that help existing business owners and potential entrepreneurs.
was launched in August 2011, and several projects have been submitted by participating lenders for funding assistance, Johnson says. The initiative is one more effort in a multipronged program to encourage small-business growth that also includes the Kentucky Small Business Investment Tax Credit program and the Kentucky Export Initiative, launched in late 2010 to increase exporting opportunities for small- and medium-sized businesses. Kentucky SBDC Assists Business Working in tandem with the Cabinet is the Kentucky
Small Business Development Center (KSBDC), which operates 15 service centers statewide and provides consulting and training services that help existing business owners and potential entrepreneurs. The KSBDC served almost 2,100 clients, 2,810 training attendees and nearly 15,000 individuals asking for information in 2011, says Dr. Becky Naugle, state director of the Kentucky Small Business Development Center. Naugle says she is especially pleased with the new loan participation and collateral support programs that are being offered through the KCED.
Kentucky Small Business Credit Initiative Provides Funding Access The Kentucky Cabinet for Economic Development has been approved by the U.S. Treasury Department to allocate federal funding to implement the Kentucky Small Business Credit Initiative, which includes the following components: • Kentucky Capital Access Program (KYCAP): Offers loan-portfolio insurance to private financial institutions, thus encouraging them to lend to creditworthy small businesses, by providing a matching contribution to a lender’s loan-loss reserve account when they extend credit to qualified small businesses. In the case of a loss, the lender may draw against the account to offset a loss.
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• Kentucky Loan Participation Program (KYLPP): Assists borrowers whose cash flow does not meet a lender’s coverage requirements by allowing the Cabinet to purchase (or participate in) a portion of the loan from the lender and offer the borrower, on that portion, a payment-free grace period up to 24 months. • Kentucky Collateral Support Program (KYCSP): Provides a pledged asset (cash) to a lender for consideration in making a loan to a small business, thereby enhancing the lender’s ability to underwrite the loan. For information on all three programs, visit www.thinkkentucky.com/smallbizlending.
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One-Stop Shop Kentucky helps business cut through red tape
“We are working hard to support the Cabinet’s exporting and credit initiatives by getting the word out to business owners, lenders and other service providers,” she says. “We are talking to our KSBDC clients about the programs and helping them assess which programs are a good fit for them.” Many small-business sectors are experiencing increased activity, including those in the automotive industry, health care, technology-focused firms and “green” businesses. Kentucky’s efforts to encourage small business and entrepreneurship are paying dividends. In the annual Kauffman Index of Entrepreneurial Activity report released in March 2012, Kentucky tied for the eighth-highest number of new start-up companies in 2011 and increased entrepreneurial activity by 27 percent from the prior year. A Green Lodge Working closely with the Eastern Kentucky University (EKU) SBDC, Dr. Ira J. Bates turned his dream of owning a “green” home into a green lodging establishment, opening the Pinnacle View Inn near Berea in May 2010. Now receiving top marks from Trip Advisor, the certified five-star energy lodge provides a unique alternative to local area hotels with its eco-friendly setting and gourmet-style breakfasts. “The Pinnacle View Inn would not have been possible without the extensive assistance of the EKU Small Business Development Center,” Dr. Bates says. “I faced many technical problems along the way that were critical to my success. The EKU SBDC was a wonderful resource.”
Small-business startups account for more than 70 percent of all new jobs, and facilitating new business creation is an important part of economic development. Kentucky has launched a one-stop business website to help businesses start and operate in a more efficient way. The Kentucky Business One Stop – onestop.ky.gov – is an interactive website designed to provide faster, friendlier, more reliable and cost-effective state government services to businesses. A multiagency effort with private support, Kentucky Business One Stop was created to help entrepreneurs move easily through the myriad regulations and requirements of the small-business owner, with a business startup checklist, government forms and specific contact information. The interactive website provides 24/7 centralized access and secure applications for registrations, payments to the Secretary of State and communication to businesses. Because agencies dealing with small businesses are working together through One Stop, the Commonwealth can identify and potentially eliminate inefficiencies between agencies, thus lowering the cost of government for all citizens and helping entrepreneurs create wealth and jobs in the state. Kentucky Business One Stop provides a statewide clearinghouse of information for starting or maintaining a business in Kentucky and allows new businesses to register with the Secretary of State and Department of Revenue through a single online application. It also offers a number of interactive walkthroughs for planning a business, choosing a structure and writing a business plan, and hosts a series of dynamic searches and guides for operating permits and licenses, local requirements and general startup requirements. – Betsy Williams b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Toyota Motor Manufacturing in Georgetown
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A Global Accent
The world knows Kentucky’s business
Story by M.V. Greene • Photography by Jeff Adkins
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entucky is a state that understands the value of global business in spurring investment, expanding the state’s tax base, creating jobs and spreading the word that the Bluegrass State is a friendly place to do business. “Today we live in a global economy,” says Erik Dunnigan, commissioner of business development with the Kentucky Cabinet for Economic Development. Cultivating international business through foreign direct investment and exports from Kentucky companies are linchpins of the state’s economic-development efforts. “If you cannot compete on a global scale, you will not be successful creating opportunities for your citizens, generating wealth within your economy and, ultimately, generating commerce within your business community,” Dunnigan says. Through 2011, Kentucky counted some 400 foreign-owned facilities employing nearly 76,000 workers from one end of the state to the other, including some of the world’s most important global brands, such as Toyota, Hitachi, DHL and Nestle. Foreign direct investment coming to the state was valued at more than $28 billion in 2007, the most recent year when statistics were calculated. “Numerous entities from India,
Europe, Japan, China and places around the world have invested billions of dollars establishing new operations or growing existing footprints within North America,” Dunnigan says. “Kentucky is positioning itself to capitalize on these global markets to help our business community grow and ultimately create job opportunities for our citizens.” International Presence To help facilitate investment, Kentucky maintains international offices in China, Japan, Mexico and Germany. These offices provide on-the-ground, in-country support for the purpose of luring business and developing relationships in foreign markets. Some recent foreign direct investment successes include Flex Films, a company from India that is building its first North American flexible-packaging facility in Elizabethtown in an eventual $180 million investment designed to create 250 jobs. The project came together following a trip to India by Gov. Steve Beshear in the fall of 2010 to promote foreign direct investment in Kentucky. The company made its first site visit to Kentucky in January 2011 and finalized its decision to locate in Elizabethtown after meeting with Gov. Beshear on his second visit to India in the spring of 2011.
Kentucky Foreign Direct Investment 2007 By Leading Countries’ Value of Gross Property, Plant and Equipment
Japan - $11.25 billion
Germany - $8.5 billion
United Kingdom $1.2 billion
France - $1.0 billion
Total - $28.2 billion
Source: Kentucky Cabinet for Economic Development b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Top 10 Kentucky Foreign-Owned Employers (By Total Full-Time Employment) Toyota Motor Corp., Japan, 10,742 J&F Participações S/A, Brazil, 2,700 Akebono Brake Industry Co. Ltd., Japan, 1,888 Itochu Corp., Japan, 1,831 Marfrig Alimentos SA, Brazil, 1,532 Hitachi Ltd., Japan, 1,529 Acerinox SA, Spain, 1,355 Toyota Tsusho Corp., Japan, 1,319 Nestle SA, Switzerland, 1,232 Source: Kentucky Cabinet for Economic Development
Sumitomo Corp., Japan, 1,201 0 The company’s parent, UFLEX Ltd., is a global leader in manufacturing polyester chips, specialty films, coated and metalized film, laminates, pouches, holographic films, gravure cylinders, flexographic
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plates, inks and adhesives for packaging and printing/ converting machines. Kentucky joins company operations in Dubai, India, Mexico, Egypt and Poland. At Flex Films’ October 2011
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groundbreaking in Elizabethtown, CEO Pradeep Tyle told attendees that it had long been “our cherished ambition to set up a premium manufacturing facility in the heartland of the USA, which is the world’s
Jumpstarting Global Business Battery company is a Kentucky exporting success In the rural hamlet of Russell Springs in south central Kentucky, Superior Battery Manufacturing Co. Inc. has made quite a name for itself – especially with its approach to exporting its products. In fact, many people who live near the company’s plant are amazed that Superior, which has 175 employees, ships its battery products to some 20 countries around the globe, says Ray Goodearl, vice president of international sales and marketing. “When you are telling people in the community that our products being built by the local workforce are being shipped all over the world, they kind of do a double take,” Goodearl says. The 30-year-old company, which manufactures batteries for uses in industries that include automotive, commercial, marine and recreation, and lawn and garden, received a
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2011 Exporter of the Year award in March 2011 in the automotive category from ThinkGlobal Inc., publisher of Commercial News USA, the official export promotion magazine of the U.S. Department of Commerce. And in 2010, Superior received the Kentucky World Trade Center’s Governor’s Award for International Trade Excellence. Kentucky companies exported more than $20 billion in goods during 2011, and exports added $5.3 billion to the state’s gross domestic product and created 48,700 jobs. Products including transportation equipment, chemicals, machinery and computer and electronic products make their way from Kentucky factories to markets around the world. Goodearl says Superior Battery made the timely decision in 2007 to diversify its business model to
Kentucky Economic Development Guide
include international sales. Its first market was the Dominican Republic, where the company sells its Superlex golf cart battery. Dominican homes and businesses use the product for alternative power because the nation’s power grid is unstable. Goodearl calls Superior’s exporting strategy a “home run” and praises Kentucky for having the infrastructure for assistance. The state encourages companies of all sizes to engage in global business through programs such as the Kentucky Export Initiative, which provides a number of export-related services. Details on the program can be found at kyexports.com. “If you are willing to put in the work, the tools are there to help make a small business successful,” Goodearl says. – M.V. Greene
largest and most advanced packaging market.” The state’s burgeoning automotive industry cluster is also attracting foreign companies. German-owned ZF Steering Systems is expanding its Northern Kentucky operations in a $95.8 million project that includes the construction of two new buildings and creation of 374 new full-time jobs. The company, a subsidiary of ZF Lenksysteme GmbH, has been located in Kentucky since 1994 and makes steering components for passenger cars and SUVs. Japanese automotive parts manufacturer Daicel Safety Tube Processing is opening a new facility in Beaver Dam, creating 25 new jobs and joining two existing Daicel plants for a total Kentucky employment of 525 workers.
Toyota is one of some 400 foreign-owned companies with Kentucky operations.
FDI Magnet Michael C. Randle, editor and publisher of Birmingham, Ala.based Southern Business & Development, which reports on economic-development opportunities in the South, says aggressively pursuing foreign direct investment has been a wise move by Kentucky and helped states with job creation even during the recession’s downdraft. The South’s share of foreign direct investment averages 43 percent of the total U.S. share – a considerable percentage with the automotive industry as the backbone, Randle says. Japanese automaker Toyota maintains its largest North American plant in Georgetown and its North American headquarters in Erlanger. International companies find Kentucky to be business friendly with lower operating costs than other parts of the country, a bevy of economic incentives and a favorable workforce. Kentucky, says Randle, has “defied the odds when it comes to recruiting manufacturers and especially those in the auto industry.”
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One of a Kind New campaign showcases Kentucky’s unique attractions Story by Kevin Litwin
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rom the Kentucky Derby’s home at Churchill Downs to Red River Gorge to the Louisville Slugger Museum, travelers and their dollars make a major impact on Kentucky. Tourism is the state’s thirdlargest industry, a rich and diverse experience that stretches well beyond horses and bourbon to include outdoor wonders, underground exploration, and unique museums and cultural attractions. In Butcher Hollow, there’s the childhood home of
country music singers Loretta Lynn and Crystal Gayle. Nature’s amazing Cumberland Falls produces a nighttime rainbow – or “moonbow” – whenever the moon is full and the sky is clear. Tourism accounts for more than an $11 billion annual economic impact for the state, and 170,000 Kentuckians are currently employed in the tourism industry. “About $1 billion in taxes are raised each year, all because Kentucky is home to many unique places and attractions that can’t be
found anywhere else,” says Hank Phillips, Kentucky Department of Travel deputy commissioner. There’s Only One The Kentucky Department of Travel’s new There’s Only One campaign promotes 31 designated attractions that can only be seen and experienced in the Bluegrass State. More “only ones” will be designated in the future. “For example, there’s only one Kentucky Derby, only one Birthplace of Bluegrass Music
Below: Churchill Downs in Louisville, home of the Kentucky Derby Right: Statue of Pee Wee Reese at the Louisville Slugger Museum
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photo by Antony Boshier
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Kentucky Tourism By the Numbers
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$1 billion
Kentucky’s annual economic impact from the tourism industry
Number of Kentuckians who work at tourismrelated businesses
Tax revenue generated by tourism in the state
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and only one My Old Kentucky Home,” Phillips says. “Kentucky is also home to Mammoth Cave National Park, the longest cave system in the world, and is the birthplace of Lincoln, which can be experienced at Abraham Lincoln’s Birthplace National Historic Site in Hodgenville.” The Department of Travel began heavily marketing the There’s Only One campaign with several TV ads beginning in spring 2012. “The TV ads are 10 seconds long and highlight experiences that a visitor can have nowhere else in the world, except Kentucky,” Phillips says. “For example, one ad might show Bourbon Country, along with the Red River Gorge in Eastern Kentucky, and the Kentucky Horse Park in Lexington. The ads really resonate and have received high marks from the state’s travel industry.” Colonel Sanders’ Restaurant Kentucky offers a full range of unique sites and attractions that includes the National Quilt Museum in Paducah, the birthplace of bluegrass pioneer Bill Monroe in Rosine and the Sanders Cafe in Corbin, Colonel Sanders’ original restaurant and the birthplace of Kentucky Fried Chicken. Owensboro is home to the annual International Barbecue Festival and the International Bluegrass Museum. “We are the cradle of bluegrass music, located only 30 miles from where Father of Bluegrass Bill Monroe was born,” says Gabrielle Gray, International Bluegrass Museum executive director. “We are the only museum in the world that showcases the true international story of bluegrass.” The museum is marking the 100th anniversary of Monroe’s birth with a special exhibit that runs through Sept. 13, 2012. Louisville’s Museum Row includes the Frazier International
Frozen Niagara at Mammoth Cave National Park in Cave City p h o t o b y ant o n y B o s h i e r
History Museum, which has an exclusive agreement with British Royalty Armories to be the only location outside of Great Britain to display items owned by England’s royal family. “If you can’t get overseas to Leeds or the Tower of London, come to our museum to see amazing British treasures,” says Krista Snider, Frazier History Museum director of public relations. The museum also houses artifacts such as Theodore Roosevelt’s big stick, Daniel Boone’s family Bible and
a permanent exhibit devoted to Mary Todd Lincoln. “We tested the campaign with out-of-state focus groups, and we were told two wonderful things: First, that the participants came away with new specific reasons to visit Kentucky, and two, that they gained a new perception of the state as being more special and unique than they had previously realized,” Phillips says. “As Kentuckians, we know how special Kentucky is. Now we have a campaign that conveys that to the rest of the world.”
Rock Solid BuSineSS oppoRtunitieS ...
poWell countY, kY Home to two of the world’s natural rock wonders, Natural Bridge and the Red River Gorge, Powell County, Kentucky is also home to rock solid industrial and business development opportunities. AvAilABle lAnd: Clay City Business Park and Stanton Industrial Parks AcceSS: Powell County, Kentucky is located approximately 40 miles east of Lexington via I-64 and the Mountain Parkway. Located immediately off the four-lane Mountain Parkway, Powell County blends small-town charm with easy access to larger cities. Transportation is further enhanced with a local UPS hub and airport. FinAnciAl incentiveS And WoRkFoRce: Kentucky’s best financial incentive programs along with Powell County’s qualified workforce and strong rural work ethic provide a rock solid basis for business success. contAct: Powell County Economic Development P.O. Box 10 • Stanton, KY 40380 • (606) 663-2156 www.naturalbridgeredrivergorge.com
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Attractive Attractions From Corvettes to crooners, kentucky has it all The Kentucky Department of Travel’s There’s Only One campaign is promoting 31 designated attractions that can only be seen and experienced in the Bluegrass State. Here are a few:
My Old Kentucky Home Federal Hill is a former plantation built in 1812 that eventually came to be known as “My Old Kentucky Home,” and today is a tourism destination at
My Old Kentucky Home State Park in Bardstown. When famed composer Stephen Foster visited the site in 1852, the property inspired him to write My Old Kentucky Home – the official state song.
Lost River Cave Lost River Cave in Bowling Green offers a unique underground boat tour. Nestled on the floor of the
scenic valley, unseen from above, the Lost River disappears from view as travelers board the boat on the river that Ripley’s Believe It or Not maintains is the shortest and deepest in the world. With the temperature a constant 57 degrees year round, the tour offers a look into the largest cave system in the area.
Muhammad Ali Center The 2.5-story center in Louisville features interactive exhibits and multimedia presentations that carry on the legacy of the famed heavyweight-boxing champion. Highlights include a five-screen orientation film, historical Civil Rights-era media footage, and a timeline of Ali’s life and highlights of his boxing matches. There are also paintings by LeRoy Neiman, a children’s Hope and Dream wall, an Ali Center retail store and a café.
National Corvette Museum
In Bowling Green, the huge showcase to America’s iconic sports car features more than 70 modern and vintage Corvettes. The museum is also next to the world’s only Corvette assembly plant, which offers tours. The museum displays one-of-a-kind prototypes, racetrack champions, and wonders of engineering and design.
Rosemary Clooney House
The famed singer and actress grew up in Augusta, and many memories of her career are on display at her childhood home. Among the memorabilia are original dresses that Clooney wore in the movies and on stage, plus a large private collection of costumes and props from White Christmas, a landmark 1954 movie that starred Rosemary along with Bing Crosby and Danny Kaye. There is also a room dedicated to Clooney’s famous nephew, George. – Kevin Litwin Clockwise (from top): The Four Roses Distillery in Lawrenceburg; National Corvette Museum in Bowling Green; Muhammad Ali Center in Louisville; Harland Sanders Cafe & Museum in Corbin
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P h o t o C o u rt e s y o f www. k e nt u c k y t o u r i sm . c o m
P h o t o C o u rt e s y o f www. k e nt u c k y t o u r i sm . c o m
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Gallery
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Horses at Shadwell Farms near Lexington Photo by Jeff Adkins
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A Hot Brown, one of the signature dishes at The Brown Hotel in Louisville. Photo by Brian McCord
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Leeds Center for the Arts in Winchester Photo by Todd Bennett
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Paducah Harbor Staff Photo
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The Old Bridge Golf Club in Danville is located next to Herrington Lake. Photo by Jeff Adkins
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Technology
Home to Big Ideas Kentucky programs support innovative businesses Story by Dan Hieb
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amie Heistand was a tow-truck driver with a vision of a mechanical marvel. Michael Hartman was an online-role-playing-game guru who didn’t realize the full value of his own creations. And Scott Allen was a retired military man whose work had already transformed standard forensic methodologies but who needed guidance to create his own business. When it comes to world-changing ideas, genius doesn’t discriminate, and neither does Kentucky. The state has a range of programs and a network of advisers and facilities to help promising young companies thrive. Working through the Kentucky Science and Technology Corporation (KSTC) and the state’s High-Tech Pools and Commonwealth Seed Capital fund, Kentucky has helped infuse start-up technology companies with the funding they need to bring ideas to market. The state also supports a network of technology-business incubators that offer free expert advice and low-cost office space to entrepreneurs. “We look for and try to invest in innovation-
driven companies that have the potential for real growth,” says Kris Kimel, president of KSTC. “We don’t specify just one or two industries. We let the market potential speak for itself.” A $30,000 grant from KSTC assisted Murray-based Wisdom Tree Technologies, which has grown from three employees in 2009 to 20 at the end of 2011 and expects to double again in size by the end of 2012. The company helps train government and private-sector organizations nationwide about how to uncover illicit financial activities. Hooked Up to Innovation Jamie Heistand was driving his tow truck when he had an epiphany – an idea for a device that would make it much easier to recover a wrecked vehicle from the side of the road, even when the vehicle was on the other side of a guardrail and at a difficult angle. The Henderson resident made a prototype and did some research to see if his invention was unique. It was, so he filed for a patent, then went to work refining the device. A new piece of tow-truck equipment might not
A typical highway accident can require two tow trucks working for two hours to recover a vehicle and get it out of the way. With truck driver Jamie Heistand’s device, the same job can often be done by one truck in 15 minutes … 60
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Michael Hartman and his wife, Pang, run Lexington-based Frogdice Inc.
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Michael Hartman works on Frogdice Inc.’s latest game release, Coin ‘N Carry.
seem too sexy as far as tech investments go. But consider: a typical highway accident can require two tow trucks working for two hours to recover a vehicle. With Heistand’s device, the same job can often be done by one truck in just 15 minutes, saving time and money, minimizing accident-related traffic jams and improving safety, Madison Silvert of the Greater Owensboro Economic Development Association and Jeff Hook of Kentucky’s Central Region Innovation and Commercialization Center connected him to a program put together for Kentucky inventors to help them get their products to market. Heistand says he didn’t think ideas like his were likely to get funds, but KSTC awarded him a $30,000 Rural Innovation Fund grant and “the next thing I know, I’ve got the governor coming to town.” He formed American Innovative Metal Solutions to build his EZ Extractor devices, which will sell for about $2,000. He expects to employ 12 people to make the product. “The way this thing has come together, and all the people who have come together – it has been nothing short of a miracle,” he says. Keeping Talent in Kentucky Michael Hartman, president and CEO of Lexingtonbased Frogdice Inc., created his first online game, a text-based role-playing game called Threshold, in 1996.
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Playing the game allowed him to meet people from around the world. His wife, Pang, is one of them. In 2010, the couple was eager to expand the company’s scope. They made plans to move to Austin. There was just one problem. They loved Lexington. Was there some way to fulfill their ambitions without giving up the Bluegrass State? Pang Hartman, Frogdice vice president, decided to explore venture capital options. After seeing Gov. Steve Beshear give a speech about venture funding, she got in touch with Dean Harvey of Bluegrass Angels, who connected the Hartmans with the state’s local business incubator and innovation center. They also got advice from the Lexington Venture Club. Between investments from family and friends, private venture capital, a $30,000 Kentucky Enterprise Fund grant from KSTC and an $80,000 grant from the Cabinet for Economic Development’s High-Tech Pools, they were able to create a new game, Coin ‘N Carry, which takes advantage of social media technology. They have also been hiring, adding an artist from Maryland to their team last year, and they employ a part-timer who they hope to hire and bring to Lexington – from Austin. “We didn’t realize how much we had to offer until we started getting involved with other people who told us ‘Wow, what you guys are doing is pretty awesome,’” Michael Hartman says.
Coming Home
Regional Business Innovation Center
A KSTC grant helps Wisdom Tree take root After retiring from the Air Force in 2009, Scott Allen knew that he wanted to turn his expertise into a business. The former military officer helped create tracking methods and mechanisms that the government uses to trace illicit funding sources. Allen, who has also helped manage Fortune 1000 companies, showed others how to follow the money to find illicit entities and disrupt their activities. Allen grew up as a Navy brat, but he went to elementary school and high school in Kentucky, as well as the University of Kentucky for undergraduate school. “I wanted to stimulate the economy in my home state instead of somewhere else,” he says. With help from the state’s regional business incubator at Murray State University and a $30,000 grant from Kentucky Science and Technology Corporation, he has been able to grow Wisdom Tree Technologies from three employees in 2009 to 20 at the end of 2011. He expects the staff to double again by the end of 2012. The Murray-based business helps train government employees nationwide about how to find clues that can reveal illegal funding activities. The tracking methods are applicable to private businesses, too, Allen says, where
P h o t o C o u rt e s y o f M s . L o r e tta D an i e l , D i r ec t o r , R eg i o nal B u s i n e ss Inn o vat i o n C e nt e r , M u rray S tat e Un i v e rs i t y
they can help identify hidden patterns. He has taken advantage of office space at the state-funded Murray incubator, which is run by Loretta Daniel, as well as a wealth of advice. “Any entrepreneur that thinks the economic times are hard, what they should realize is that the Kentucky Small Business Development Center and the state are supportive and want to help people build jobs,” he says. – Dan Hieb
UPS Worldport facility in Louisville
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Transportation
On the Map Global cargo hubs create distribution mecca in Kentucky Story by John Fuller
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ith excellent air, highway, rail and river assets, Kentucky is an important link in the world’s distribution chain. Kentucky has two major air-cargo delivery hubs operated by DHL and UPS, and a host of distribution companies that have located in the state to capitalize on its unique worldwide access. In fact, Kentucky ranked third in the nation for air cargo shipments in 2010.
Along with those important air links, the state also has an excellent highway network and superior river access, both linking the state and its businesses to U.S. and world markets. UPS’ Worldport at Louisville International Airport is the largest fully automated package-handling facility in the world. The operation currently turns over 130 aircraft daily, processing an average of 1.5 million packages a day. The facility has undergone
several expansions and now measures 5.2 million square feet, with a perimeter of 7.2 miles. “UPS chose to locate Worldport, its global logistics hub, in Louisville based on several important factors,” says Mitch Nichols, UPS Airlines president. “The first was the city’s proximity to population centers – Louisville is within a two-hour flight of 75 percent of the U.S. population and a four-hour flight of 95 percent. We also examined capacity at
Kentucky Transportation Facts Location – Within 600 miles of two-thirds of U.S. population
Major Interstate Highways – I-24, I-64, I-65, I-71, I-75
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Accessibility – 117 industrial sites with 50 miles of commercial airport, 63 sites with rail service, 139 sites within 10 miles of interstate highway or state parkway, 19 sites within 10 miles of a public riverport
Major Railroads – CSX, Canadian National, Norfolk Southern
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Louisville International Airport, the airport’s strong record for staying open in inclement weather, the community’s quality of life, and the willingness of city and state government to work with us.” Economic development Magnet More than 140 companies have located in Kentucky to be close to Worldport, representing about 10,000 jobs and $290 million in payroll. Technology and logisticsbased companies that have located include Zappos, Chegg.com and Geek Squad. Zappos currently occupies three facilities in Kentucky. DHL, a worldwide logistics company, has its U.S. hub at Cincinnati/Northern Kentucky International Airport (CVG) in Northern Kentucky. Fresh off a $22 million expansion of the hub in November 2011, DHL in March 2012 broke ground on a 193,000-square-foot sorting facility in Erlanger. The $47 million project creates 120 full-time jobs. Upgrades are
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also planned for DHL’s existing 520,000-square-foot facility. “DHL will continue to expand at CVG as we accommodate the growing needs of our importing and exporting customers,” says Travis Cobb, vice president of DHL Americas’ hubs, network control and gateways. “It’s a strategic location for our North America and Central America network.” The expansion at the Northern Kentucky facility was fueled by the company’s growth and optimism for the future, Cobb says. The hub handles about 90 percent of the DHL shipments that enter the United States. DHL Express U.S. specializes exclusively in international shipping for importers and exporters, employing more than 2,000 workers at the northern Kentucky airport, where 78 flights operate daily, connecting shipments across the United States and around the globe. Cobb notes four key partnerships in Kentucky that
Rivers, Roads, Rail Kentucky has seven major operating river ports with access to the Ohio, Mississippi, Tennessee and Cumberland rivers. These riverports have important access to major Great Lakes, Mexican and South American markets. The Hickman-Fulton County Riverport serves as the only public port on the east side of the Mississippi River in Kentucky. With only a nine-day journey to the port of New Orleans, the riverport has some distinct advantages. “We think we have some competitive advantages over other areas of the country in our ability to transport goods inexpensively and quickly to market,” says
Greg Curlin, port director of the Hickman-Fulton County Port Authority. The state is also a major rail center for CSX, Canadian National and Norfolk Southern railroads. These rail lines have links to major Great Lakes markets and the Gulf of Mexico. Kentucky has five major interstate highways and nine major parkway/highways. The superior transportation network has drawn many distribution centers to the state. Late in 2011, Brown Jordan International, the largest outdoor-furniture maker in the U.S., said it would locate a new distribution center in Simpsonville, creating 12 new jobs. Clark Associates also announced it would open a distribution center in Madisonville to serve the company’s e-commerce business, WEBstaurantStore Inc. The facility, which will distribute food-service equipment, will employ 95 workers.
Kentucky Public Riverports
Kentucky Commercial Airports
Owensboro-Daviess County Airport Expands
• Hickman-Fulton County (Mississippi)
• Cincinnati/Northern Kentucky International Airport (CVG)
Owensboro-Daviess County Regional Airport (OWB) will undergo an expansion of its terminal, significantly increasing the size of the waiting area, along with the baggage-handling and pick-up areas. Since the time of the airport’s 1993 Master Plan Update, several runways have been extended and the airport now boasts the third-longest runway in Kentucky. The improved airfield was a major factor in OWB’s attraction of Allegiant Airlines in February 2009. Allegiant, which offers flights to and from Orlando, recently announced a new passenger service from OWB to Las Vegas. The Kentucky Economic Development Finance Authority approved the airport for a no-interest loan to help facilitate the improvements. In addition, the Department for Local Government awarded $500,000 in multicounty coal severance funds to Daviess and Ohio counties to help complete the terminal expansion and improvement project at OWB.
• Paducah-McCracken County (Tennessee) • Eddyville (Cumberland) • Henderson County (Ohio) • Owensboro (Ohio) • Louisville-Jefferson County (Ohio) • Greenup-Boyd County (Ohio) Source: Kentucky Association of Riverports
have played a significant role to DHL and its growth at the CVG hub – the Northern Kentucky Chamber of Commerce, the Cincinnati/Northern Kentucky International Airport, the TriCounty Economic Development Corp. and state government.
• Louisville International at Standiford Field (SDF) • Blue Grass Airport, Lexington-Fayette County (LEX) • Barkley Regional Airport, Paducah (PAH) • Owensboro-Daviess County Airport (OWB)
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Feel the Power Kentucky utilities help generate economic development activity Kentucky energy providers meet the needs of companies and citizens around the state with affordable and reliable electric offerings. But these utilities, including East Kentucky Power Cooperative (EKPC), Louisville Gas & Electric/Kentucky Utilities (LG&E KU), Tennessee Valley Authority (TVA), Duke Energy and Big Rivers Electric Corp., also lend their expertise to Kentucky’s economic development efforts. TVA promotes its megasites program to spur large-scale manufacturing at locations certified as ready for development, including those with proximity to highways, railways, labor and infrastructure. LG&E KU - as do all of the state’s energy providers offers economic development incentives to qualifying new and expanding customers. EKPC directly promotes economic investment, expansion and job creation in regions served by its 16-owner systems.
low-cost, reliable energy as a premier spot to establish or expand a business. “Our company works directly with local, regional and statewide economic development professionals, assessing their needs and opportunities for partnerships,” says Alan McGinnis, manager, Economic Development and Major Accounts for LG&E KU.
“We act as the ‘go to’ specialists for corporate decision makers and site selection consultants, partner with state professionals on outreach missions to market the state and offer energy forums to existing customers.” “We want every consultant and business to experience our customer commitment,” McGinnis adds. – M.V. Greene
Incentives spur investment “No project is too large or too small for our economic development capabilities,” says Rodney A. Hitch, corporate manager, economic development at EKPC, formed 70 years ago and now serving 520,000 customers in 87 Kentucky counties. “We are in some of the fastest-growing areas of the state providing assistance in recruitment, retention, expansion, promotion, incentives, skills and education training currently available,” Hitch says. Economic development is one of eight key objectives in the cooperative’s strategic plan, with an increase in its 2012 investments for development assistance and activity. At LG&E KU, the economic development team strategically markets Kentucky with its
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Health
Committed to Care Bluegrass State hospitals gain national recognition Story by John Fuller • Photography by Jeff Adkins
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entucky hospitals are vital resources to their communities, but they are also building a growing reputation for excellence in health-care treatment and research. The state’s 130 hospitals treat more than 600,000 patients annually and are important contributors to the state’s economy. Those health-care institutions provide employment to more than 79,000 workers and contribute more than $3.69 billion in wages. A host of Kentucky hospitals have garnered national awards for quality care and treatment in a number of specialty areas.
Pediatric Care Leader Kosair Children’s Hospital, based in Louisville, was ranked among the top children’s hospitals nationwide in eight of 10 specialty areas, according to rankings by U.S. News & World Report. “We are proud to have the full array of pediatric health-care services at Kosair, and we are equally blessed to have outstanding and dedicated professionals,” says Thomas D. Kmetz, president of Kosair. Kosair’s main hospital is located
in the downtown Louisville Medical Center, where it serves as the pediatric teaching facility for the University of Louisville’s School of Medicine. The institution also operates Kosair Medical Center in Owensboro and Kosair Children’s Outpatient Centers in Bowling Green and Owensboro. Kosair announced in August 2011 that it would create a new women’s and children’s hospital at the Norton Suburban Hospital location in Louisville. The capital investment involved in transforming the new hospital is expected to be between $60 million and $80 million. Kosair also plans $50 million to $60 million in capital improvements to its existing downtown facility over the next three to four years. Kentucky’s superior quality of life is one reason that the hospital has successfully recruited and retained skilled medical professionals, Kmetz says. “We have a very low turnover rate; once they move here they stay here,” he says. The University of Kentucky Albert B. Chandler Hospital in Lexington is a 489-bed acute-care hospital that has undergone some
Doctors demonstrate new technology being used at the University of Kentucky Albert B. Chandler Hospital in Lexington.
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University of Kentucky Albert B. Chandler Hospital
dramatic physical expansion. The hospital draws upon the resources of six UK colleges: medicine, nursing, health resources, dentistry, pharmacy and public health. UK Chandler has been ranked by U.S. News & World Report among the 50 best hospitals in the U.S. in several specialty areas. In May 2011, a 12-story patient-care pavilion was unveiled. Lexington-based St. Joseph Health System is a 1,012-bed, eight-facility health-care system that spans central and eastern Kentucky. St. Joseph has served the region for more than 130 years. St. Joseph has two hospitals in Lexington and facilities in
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Berea, London, Mount Sterling, Martin and Bardstown. All of the system’s hospitals were recently recognized for outstanding inpatient performance by J.D. Power and Associates’ Distinguished Hospital Program. Focus on Rural Care Kentucky rural communities also offer outstanding care. Flaget Memorial Hospital, a St. Joseph affiliate in Bardstown, Jackson Purchase Medical Center in Mayfield and King’s Daughters Medical Center in Ashland were named among the nation’s 65 Great Community Hospitals by Becker’s Hospital Review.
Kentucky Economic Development Guide
Flaget and Appalachian Regional Healthcare Hospital in Harlan, Ky., were named Top Small Community Hospitals by Thomson Reuters in 2011. With six major facilities and more than 7,300 employees, St. Elizabeth Healthcare is the largest health-care provider in Northern Kentucky and is continually recognized as one of the nation’s best. For the past five years, St. Elizabeth was named both one of America’s 50 Best Hospitals by HealthGrades and a 100 Top Hospital by Thomson Reuters. Founded in 1861, St. Elizabeth Healthcare has major facilities in Covington, Edgewood, Falmouth,
Kentucky Hospital Facts Hospitals 130
Florence, Ft. Thomas and Grant County – as well as dozens of smaller, specialized service locations, spanning four northern Kentucky counties. Michael T. Rust, president of the Kentucky Hospital Association, notes that Kentucky hospitals have taken the lead in voluntarily sharing information to help consumers make important health-care decisions. “The Kentucky Hospital Association was the first organization in the Commonwealth to provide both pricing and quality information on Kentucky hospitals for the public’s use,” he says.
Licensed Beds 18,054
Employees 79,000 Capital Investments $1.2 billion
Annual Admissions 616,377
Wages and Salaries $3.69 billion
Outpatient Visits 7.2 million
$
Share of Total State Wages 5.2 percent
Statistics based on 2009 figures or later • Source : Kentucky Hospital Association
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Education
Linked to Discovery Initiative advances Kentucky schools, research capabilities
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Story by Betsy Williams • Photography by Jeff Adkins
A Story by Betsy Williams Photography by ???????
unique initiative is putting more technology into Kentucky schools and also allowing researchers access to vast computing power. Dataseam is a catalyst for change in education that supports Kentucky workers, schools and research institutions as they strive to be among the most competitive in the nation. “Dataseam focuses on economic development with next-generation research and industry creation and workforce development. We are committed to doing our part to build capacity for the future,” says Dataseam founder and CEO Brian Gupton. The Kentucky state legislature has designated part of the state’s coal tax to support education and economic development in coal producing counties. Some of those dollars, and a $2 million grant from the Kentucky Cabinet for Economic Development, have helped Dataseam provide more than 15,000 computers to 48
school districts, primarily in eastern Kentucky. The school computers are linked together into one of the nation’s largest computing grids to support cutting-edge research at state universities. Enhancing Cancer Research Today, Dataseam computers bring powerful computing capacity to the University of Louisville’s James Graham Brown Cancer Center, which boasts the nation’s largest pipeline of potential cancer drugs. The Dataseam grid helps researchers shave years and dollars off of the drug-discovery process and in part allowed the center to grow its cancer targets (for chemotherapy treatment) from eight to 80. With the expanded capacity, university researchers identified 26 targeted compounds for potential cancer-treatment drugs, licensed three for further research and anticipate one drug using these methods to advance to human trials in 2012. Dataseam is deeply committed to
Apple Flavored
The Dataseam grid in use at the James Graham Brown Cancer Center
Dataseam is the only Apple Certified Training Provider in Kentucky. Due directly to the company’s educator- and technical-training programs, Kentucky has the nation’s largest per-capita number of people certified to support and utilize Apple technology.
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Public Colleges & Universities • Eastern Kentucky University • Kentucky State University • Morehead State University • Murray State University • Northern Kentucky University • University of Kentucky • University of Louisville • Western Kentucky University
Technical Colleges • Ashland Community and Technical College • Big Sandy Community and Technical College • Bluegrass Community and Technical College • Bowling Green Technical College
Dataseam founder and CEO Brian Gupton, left, and chief operating officer G. Henry Hunt
• Elizabethtown Community and Technical College • Gateway Community and Technical College • Hazard Community and Technical College • Henderson Community College • Hopkinsville Community College • Jefferson Community and Technical College • Madisonville Community College • Maysville Community and Technical College • Owensboro Community and Technical College • Somerset Community College • Southeast Kentucky Community and Technical College • West Kentucky Community and Technical College
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educating students in STEM (science, technology, engineering and math) disciplines and is doing its part to ensure a workforce is in place to fill the jobs of the future – jobs in health care, energy, medical research and computer sciences. With its education partner Morehead State University, Dataseam works to change the way teachers use technology in the classroom to prepare students for new opportunities and advanced careers. Morehead State produces 90 percent of the teachers in eastern Kentucky. The university and Dataseam have collectively trained more than 5,000 educators. “With just under 45,000 educators in the state, over 5,000 educators who have taken the time to improve their skills through Dataseam training are transforming Kentucky’s workforce,” Gupton says. “We are ready to be a part of making Kentucky the most competitive state in the nation for job creation and education.” The technology provided by Dataseam supports the change from the “stand and
Kentucky Economic Development Guide
deliver” teaching model of the past to the facilitator method in today’s classrooms, says Robbie Fletcher, principal in the Martin County School System. “It’s more of a professional learning community rather than a simple classroom, especially because of the integration of technology,” Fletcher says. “From the students you see more enthusiasm and creativity with a digital storytelling-type project. They become more involved.” Teacher workshops, embedded professional-development programs, industry-standard professional certifications, student projects and college scholarships all help create a different way of teaching and advance learning environments in the state, says G. Henry Hunt, Dataseam chief operating officer. “More graduates in these disciplines are critical to Kentucky’s economic competitiveness, and these scholarships are a way for Dataseam to open the doors of opportunity for Kentucky kids,” Hunt says.
For Your Information Informatics program at NKU shapes technology knowledge Fortune magazine says nine of the 20 fastest-growing professional jobs in the next decade will be in the field of informatics. Northern Kentucky University (NKU) has established a College of Informatics that offers several programs of study dealing specifically with the information field. Nearly 2,000 students are studying informatics-related courses associated with eight bachelor’s degree and five master’s programs, with all courses taught in the new $53 million Griffin Hall on the NKU campus. The program is one of just a handful like it at any American university. “Informatics is a new term in the U.S., encompassing a broad academic field that is all about information, communication and computation,” says Kevin Kirby, College of Informatics dean. “Students can enroll in curriculums that can lead to careers such as protecting businesses from computer hackers, health-information technology involving electronic health records, or producing a highly advanced digital newscast.”
Kirby says the College of Informatics has a young faculty and up-to-date course offerings, and students are guaranteed to learn about technology that will help take their chosen careers to the next level. “Students develop technology
skills across a range of disciplines, and a degree from this college means being well-versed in manipulating information and communicating the results,” he says. “Informatics is growing, and NKU is on the ground floor of this exciting field.” – Kevin Litwin
Students Developing Apps The bachelor’s degrees offered at the college are in business informatics, communication studies, computer science, computer-information technology, electronic media and broadcasting, journalism, library informatics and public relations. “For example, many of our students are developing iPhone apps these days, which is actually driving a lot of our curriculum,” Kirby says. “NKU students recently developed a mobile app for a fire department in California, and we have been busy with apps ever since.”
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The marquee of the Grand Theatre in Frankfort
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photo by Antony Boshier
Livability
The Three R’s Kentucky downtowns: restored, renovated and revitalized
Story by Jessica Walker
historic infrastructure through revitalization. From major urban areas such as Louisville and Lexington to smaller cities and rural communities, Kentucky downtowns offer unique retail, homegrown businesses, cultural distinctiveness and even residential options. Capital Ideas Frankfort, Kentucky’s capital city, is home to a bustling downtown that attracts residents
and newcomers alike thanks to its array of attractions. Visitors can enjoy historic aspects such as the Kentucky Military History Museum and the Old State Capitol, which was the state’s capitol building from 1830 to 1910. Other historic attractions include the Buffalo Trace Distillery, the Thomas D. Clark Center for Kentucky History and the Capital City Museum. The city’s downtown also features the Grand Theatre. Built in 1911, the venue was originally a 135-seat
Buffalo Trace Distillery in Frankfort
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entucky offers a wealth of attributes – from a low cost of living to natural splendor to a wealth of arts, culture and recreation – that give the Bluegrass State an outstanding quality of life. An integral part of the state’s desirability as a place to live are its efforts to promote and preserve its historic downtowns. Kentucky has been a leader in downtown preservation efforts for more than four decades and provides a range of resources to preserve
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p h o t o s b y J e ff A dk i ns
vaudeville house; today, after various renovations, the theater can accommodate as many as 428 individuals and offers both performing and visual arts. “There’s a good energy here right now,” says Brittain Skinner, executive director of Downtown Frankfort Inc. “Everyone is very excited.” Elizabethtown in Growth Mode Elizabethtown’s downtown saw major growth in 2011, with 60 businesses setting up shop in the district. “Our downtown is a mix of retailers, offices and restaurants,” says Heath Seymour, executive director of the Elizabethtown
Heritage Council. “It’s a great location because we’re close to the interstate and the Western Kentucky Parkway; we get a lot of traffic.” The city’s downtown also offers historic attractions including the Hardin County History Museum, where visitors can learn more about how the Civil War impacted the area. Another downtown museum, the Brown-Pusey House, was built in 1825 and includes a genealogical library and an outdoor garden. Those seeking entertainment can find it downtown, too: The State Theater, built in 1942, features classic movies, concerts, comedy shows and theatrical performances.
Paducah Creates Renaissance After Paducah’s Kentucky Oaks Mall opened in 1983, the city’s downtown began to lose its appeal. However, thanks to some hard work by local leaders, that has changed. “The leaders in the community decided to really invest in the area,” says Lisa Mullins Thompson, executive director of the Paducah Renaissance Alliance. “It was a goal to help restore and revive the historic district.” Today, Paducah’s downtown is thriving with museums, independent retailers, restaurants and entertainment options. It also includes the LowerTown Arts District, which is home to several galleries and studios.
Above, left: Fountain Square Park in downtown Bowling Green Middle: Capitol Arts Theatre in Bowling Green Right, top and bottom: Downtown Paducah thrives with museums, independent retailers, restaurants, entertainment options and an arts district.
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Photo Courtesy of the Paducah Renaissance Alliance Photo Courtesy of the Paducah Renaissance Alliance
Popular in Pikeville Eastern Kentucky’s Pikeville is also home to a popular downtown that has seen an increase in activity. To see all the area has to offer, visitors can enjoy the Historic Downtown Pikeville Walking Tour. The self-guided tour spans 2 miles and includes more than 50 historic buildings and homes, and five districts. Additionally, Pikeville’s downtown features the Eastern Kentucky Exposition Center, which seats 7,000 individuals and has hosted Tim McGraw, Martina McBride and other famous acts. Bowling Green Located in the heart of the city, Bowling Green’s downtown district features both businesses and events that keep the area fresh and flourishing.
The district is anchored by Fountain Square Park, which was home to the city’s courthouse during the 19th century. Today, it is downtown’s focal point and is surrounded by various restored and renovated structures including the popular Capitol Arts Theatre. Fountain Square Park also serves as one of the sites where Concerts in the Park takes place, drawing more than 25,000 attendees. Organized and offered by the Downtown Redevelopment Authority of Bowling Green, spectators can enjoy live music during the months of June, July and August each year. Additional events in downtown Bowling Green include the Duncan Hines Festival, the International Festival and Second Saturday Street Fairs. b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Mixing Business With Pleasure Lexington and Louisville invigorate their downtowns C’mon downtown. The Lexington community has put a specific focus on enhancing its downtown, while Louisville has created a district that is alive with museums, sports, entertainment and food options. “Our downtown is only a mile long, which makes it easy to buy groceries, walk to work and walk to several events,” says Brandi Berryman, Lexington Downtown Development Authority urban designer. “We recently redid our streetscape along Main Street, Vine Street and South Limestone, and debuted an ice rink that is open during the winter months at Triangle Park.” Berryman adds that a recently opened Fifth Third Bank Pavilion in Cheapside Park has become a big draw for concerts as well as a Lexington Farmers Market on Saturdays. “Our downtown is also bookended by the University of Kentucky to the south, and Transylvania University to the north,” she says. “And soon, Bluegrass Community and Technical College will be in the district. As a result of these three schools, we’re also looking to drive more student traffic to downtown Lexington.”
Waterfront Park that is a scenic jewel,” says Alan DeLisle, executive director of the Louisville Downtown Development Corporation. “The district also has a strong office market presence, and young professionals are starting to live downtown.” DeLisle adds that the district is also building a national research
reputation thanks to the University of Louisville School of Medicine being located there. “Our next step is putting a major emphasis on attracting good retail, and we’re starting to see results,” he says. “There is a huge potential for retail sales in the Louisville downtown district.” – Kevin Litwin
Louisville: Possibility City
Fourth Street Live, the premier entertainment and retail district in the heart of historic downtown Louisville
B r i an M c C o rd
As for downtown Louisville, its possibilities seem endless. The district has developed a Fourth Street Live entertainment destination as well as a Museum Row that includes the Muhammad Ali Center. There are also sports facilities such as KFC Yum! Center and Slugger Field. “The district also houses an arts district called NuLu that has exploded with activity and creativity, plus there is an 86-acre Louisville
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economic profile Business snapshot
population
4,369,356 Population (2011)
38.1
Kentucky boasts industrial electricity costs that are consistently among the lowest in the nation, a tax structure that’s among the most competitive in the region and an ideal location within 600 miles of two-thirds of the U.S. population. The Commonwealth is home to nearly 400 international companies and thousands more domestic companies. Kentucky generated economic output in 2010 totaling more than $163 billion. The state is a major center of automotive production. More than 400 automotive-related manufacturing facilities operate in Kentucky.
Median Age
transportation
population centers (2010)
Water
Louisville-Jefferson: 597,337 Lexington-Fayette: 295,803 Bowling Green: 58,067 Owensboro: 57,265 Covington: 40,640 Hopkinsville: 31,577 Richmond: 31,364 Florence: 29,951 Georgetown: 29,098
Louisville Regional Airport Authority www.flylouisville.com
Seven public riverports operate facilities at Henderson, Hickman, Louisville, Lyon County, Owensboro, Paducah and Wurtland.
Owensboro-Daviess County Regional Airport www.owb.net Barkley Regional Airport www.barkleyregional.com
workforce sectors
Railroads Burlington Northern Santa Fe Railway, bnsf.com Canadian National, www.cn.ca CSX, www.csx.com
Henderson: 28,757
Norfolk Southern, www.nscorp.com
Frankfort: 25,527
Union Pacific, www.up.com
Income
Paducah and Louisville Railway www.palrr.com
$41,236 Median Household Income (2010 U.S. Census Bureau)
Ten short-line carriers
Commercial Airports
education
$32,376
Cincinnati/ Northern Kentucky International Airport www.cvgairport.com
Per Capita Income (2010 Bureau of Economic Analysis)
Blue Grass Airport www.bluegrassairport.com
STAMP OUT BREAST CANCER WITH YOUR FEET.
As % of total employment (2010) Services: 47.8% Trade, Transportation & Utilities: 21.8% Manufacturing: 12.2% Public Administration: 5.6% Financial Activities: 5.0% Construction: 4.0% Information: 1.7% Mining: 1.3%
High School Graduate +: 81.7% Bachelor’s Degree +: 21% Advanced Degree or More: 8.5% Sources: bls.gov, census.gov, Kentucky Transportation Cabinet, thinkkentucky.com
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One Hour from Nashville International Airport Home of 2,100-Acre TVA-certified Megasite Home of 101st Airborne Division – Fort Campbell, KY
Hopkinsville – Christian County Economic Development Council 2800 Fort Campbell Blvd. Hopkinsville, KY 42240 270.885.1499 www.hopkinsvilleindustry.com
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Through the Lens
Get the Story Behind the Photo Now that you’ve experienced Kentucky through our photos, see it through the eyes of our photographers. Visit throughthelensjci.com to view our exclusive photographers’ blog documenting what all went in to capturing those perfect moments. From Our Photo Blog: Kentucky When I was a kid, I always wanted a Corvette. I would probably own one today if I had enough extra cash to buy a “weekend car.” But I guess the next best thing is being able to visit the plant where Corvettes are built from start to finish. The GM Bowling Green Assembly Plant in Bowling Green, Ky., is the only place in the world where the cars are made. A lot of care is taken while putting these cars together. You can see that employees care about the product they are producing by the attention to detail they give to each and every car. From welding the frame to installing the powerful engine to the final inspections, visitors can tour the plant to see how these classic American cars are made. If only I could have driven one home, I would have been a happy guy.
Posted by Jeff Adkins
More Online
See more favorite photos and read the stories behind the shots at throughthelensjci.com.
Corvette Logo
Bowling Green Assembly Plant b u s i n e ss c l i m a t e . c o m / k e n t u c k y
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Ad Index
6 Blue Grass Airport
1 Bowling Green Area Chamber of Commerce
C2 Carroll County Fiscal Court
81 City of Monticello
23 Commerce Lexington
68 Crounse Corporation
45 Denham-Blythe Company
4 East Kentucky Power
9 Elizabethtown/Hardin County Industrial Foundation Inc.
6 Gray Construction
77 Greater Louisville Inc. 2 Greater Owensboro Economic Development Corporation
11 Greensburg/Green County Industrial Foundation
86 Hopkinsville Christian County Economic Development Council
86 Jeffersontown Economic Development Authority
C4 Kentucky Cabinet for Economic Development
C3 Kentucky Department of Travel
82 LG & E and KU
69 Logan Economic Alliance for Development
52 Marshall County Economic Development
22 Meade County/ Brandenburg Industrial Development Authority
Ad Index (cont.)
22 Muhlenberg Alliance for Progress Inc.
46 NE Regional Industrial Park
10 Northern Kentucky TRI-ED
51 Powell County Industrial Development Authority Inc.
63 Regional Business & Innovation Center at Murray State University
85 Scott & Murphy & Daniel LLC
84 Shelby County Industrial & Development Foundation Inc.
12 Stites & Harbison PLLC 8 University Kentucky Commercialization & Economic Development
visit our
advertisers Blue Grass Airport www.bluegrassairport.com
Kentucky Department of Travel www.kentuckytourism.com
Bowling Green Area Chamber of Commerce www.southcentralky.com
LG & E and KU www.lge-ku.com
Carroll County Fiscal Court www.carrollcountygov.us
Logan Economic Alliance for Development www.loganleads.com
City of Monticello www.monticelloky.com Commerce Lexington www.commercelexington.com Crounse Corporation www.crounse.com Denham-Blythe Company www.denhamblythe.com East Kentucky Power www.ekpc.coop Elizabethtown/Hardin County Industrial Foundation Inc. www.eifky.org Gray Construction www.gray.com Greater Louisville Inc. www.greaterlouisville.com Greater Owensboro Economic Development Corporation www.owensboro.com Greensburg/Green County Industrial Foundation www.greensburgonline.com Hopkinsville Christian County Economic Development Council www.hopkinsvilleindustry.com Jeffersontown Economic Development Authority www.jeffersontownky.com Kentucky Cabinet for Economic Development www.thinkkentucky.com
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Marshall County Economic Development www.opportunitymarshall.com Meade County/Brandenburg Industrial Development Authority www.meadecountyky.com Muhlenberg Alliance for Progress Inc. www.mafp.us NE Regional Industrial Park www.boydcountyky.gov Northern Kentucky TRI-ED www.northernkentuckyusa.com Powell County Industrial Development Authority Inc. www.naturalbridgeredrivergorge.com Regional Business & Innovation Center at Murray State University www.startupwestky.com Scott & Murphy & Daniel LLC www.scottmurphydaniel.com Shelby County Industrial & Development Foundation Inc. www.scidf.com Stites & Harbison PLLC www.stites.com University Kentucky Commercialization & Economic Development www.uky.edu
Kentucky Economic Development Guide