Creating Jobs & Prosperity

April 2023

Lexington is well-established as the Horse Capital of the World, and that title plays a large part in creating jobs and prosperity. There is a storied past, a thriving present, and a promising future associated with the many horse farms that call Lexington home. Many people choose to live in or visit Lexington because of the beautiful greenbelt of farms and the equine-related entertainment, yet there are also a myriad of other draws like the University of Kentucky, Bourbon and Brewgrass Trails, wineries, restaurants, healthcare, schools, and so many other attractions that bring residents and visitors to the area. Many businesses also choose to locate in Lexington for these same livability reasons, and Imagine Lexington seeks to capitalize on opportunities to build on these existing strengths. Lexington is a city with a diverse economy, providing many employment options. That diverse economy is led by the Healthcare and Social Assistance industry, which accounts for the largest quantity of jobs and provides the most payroll tax revenue.

The Retail Trade and the Accommodations and Food Services industries follow with the second and third most jobs, while the Professional, Scientific, and Technical Services and the Construction industries provide the second and third highest payroll tax revenue (County Business Patterns 2020). Maintaining that diversity in industries and occupations, while increasing opportunities for higher wages, will help provide long-term sustainability as markets and the global economy change. Continuing to recruit employers, especially industries with higher paying jobs, will be beneficial to Lexington’s revenue flow and should provide upward mobility opportunities for employees in industries with lesser paying jobs. Lexington continues to appear on “top-ranked city” lists for everything from, “Best City to Buy a House” to “Best City for New College Grads.” It is important for Lexington to leverage this momentum and take the city to the next level as far as desirability is concerned.

During a series of Commerce Lexington community roundtable discussions, local business and industry stakeholders highlighted several economic development challenges as Lexington emerged from the COVID-19 pandemic. The foremost concern being the attraction and retention of skilled employees Many local employers found it difficult to attract a competitive in-person workforce against larger national companies willing to offer work-from-home policies. Employment woes were compounded by a large number of employees retiring or exiting the workforce due to demographic shifts Other factors, such as the rapidly increasing cost and reduced availability of childcare is further constraining the pool of available labor.

In November of 2021, Amazon opened a new 141,000 square foot fulfillment center on Newtown Pike, hiring around 500 full and part-time employees. Clearly the evidence points toward Lexington being poised to take the next step in creating an even more desirable place to live, work, and visit. As more employers look to livability and quality of workforce in their locational criteria, this city will continue to be an attractive option to bring businesses of all sizes and industries to the area.

Summary of Changes:

• Included reference to 2021 Amazon development and employment

• Updated County Business Pattern data

• Updated city media recognitions

Agriculture

Fayette County’s Rural Service Area (RSA) makes up 200 square miles of the 285.5 square mile county. In the Rural Land Use Inventory, Fayette County, Kentucky report (June 6, 2017), by Lynn Roche Phillips, PhD., AICP, and Priyanka Ghosh, PhD., University of Kentucky, Department of Geography, roughly 86% of Fayette County’s rural lands are used for agriculture and more than 50%, or 101.43 square miles, are dedicated to equine only operations (59.2 sq. mi.), and combined equine and crop operations (42.23 sq. mi.). This 2017 inventory resulted in a total of 108,248 acres being utilized for agricultural uses within the RSA.

By land mass, agriculture is the dominant land use in Lexington; it embodies local heritage and provides a world-renowned sense of place, but it is also a key component in the Lexington economy. According to the May 2017 report, The Influence of the Agricultural Cluster on the Fayette County Economy, by Alison Davis, PhD., and Simona Balazs, MS, with the Community and Economic Development Initiative of Kentucky, College of Agriculture, Food, and Environment, University of Kentucky:

“1 out of every 12 jobs [in Fayette County] is directly or indirectly associated with the Ag Cluster.”

“… the Ag Cluster contributes approximately $8.5 million to the local tax base through the 2.25% occupational tax rate.”

“the Ag Cluster generates approximately $2.3 billion in output annually and $1.3 billion dollars in additional income, profits, and dividends.”

The “Ag Cluster,” as defined in this report, includes standard agricultural production impacts, as well as a variety of supporting operations such as feed mills, breweries, private riding schools, tourism, etc. Each of these are vital components of the Cluster and play a role in Lexington’s overall economy. The report provides a comprehensive look at the impacts of this portion of the economy. Another key resource in inventorying and discussing the rural area is the Rural Land Management Plan, completed in 2017 as an element of the 2013 Comprehensive Plan, and

carried over to Imagine Lexington

Nearly everyone equates Lexington with horses, and while horses are not the only thing that define this city, they are a critical component of the economy and a primary driver of why many choose to live in and visit Lexington. Lexington’s picturesque farmland adds to the livability factor that attracts people and businesses to the city. Every effort should be made to ensure continued support of the equine industry.

As important as the agricultural economy is, it is also particularly vulnerable to volatility related to climate change. Agricultural industries will have to adapt as more frequent climate extremes, flooding, drought, and increased temperatures occur, and bring with it reduced production and quality, and more pest and weed problems. The Fourth National Climate Assessment (NCA4) in its chapter on “Agriculture and Rural Communities” finds that as climate change continues in the future, it is expected that there will be reduced agricultural productivity, degradation of soil and water resources, and health challenges to rural populations and livestock. It is ultimately in the best interest of the agricultural community to address and mitigate the land use and transportation factors that lead to climate change, and recommendations for doing so are found throughout Imagine Lexington 2045.

Summary of Changes: