2015
Plus:
Top Stories of 2015
and
DECEMBER 2015
$3.00 Volume 28 Number 4
Wellmont, Mountain States financial reports Photos by Adam Campbell at Carnegie Hotel Online at bjournal.com
December 2015 | The Business Journal of Tri-Cities TN/VA
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I could handle almost anythIng. then I got cancer. People around here are blessed with a quiet, inner strength that defies hard times. But cancer is something else. This time, you’re facing a physical, emotional, intellectual and financial challenge that can overwhelm the best of us. But not the best of us, working together. Triumph Cancer Navigators puts a highly-trained medical professional at your side, to help you every step of the way — from initial diagnosis through doctor visits and treatments. So don’t go it alone. Reach out. Take our hand. To learn more about this free service for cancer patients in Northeast Tennessee and Southwest Virginia, or to have a navigator assigned to you, call 877-77-TRIUMPH or visit My-Triumph.org.
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In partnership with: American Cancer Society · Mountain States Health Alliance East Tennessee State University James H. Quillen College of Medicine · Susan G. Komen for the Cure, Tri-Cities · Vanderbilt Health The Business Journal of Tri-Cities TN/VA | December 2015
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INSIDE THIS EDITION
Business Journal The
of Tri-Cities Tennessee/Virgina
Office 423.854.0140 Publisher William R. Derby bderby@bjournal.com 423.979.1300 Co-Publisher Jeff Derby jderby@bjournal.com 423.306.0104 Managing Editor Scott Robertson srobertson@bjournal.com 423.767.4904 Associate Editor Jeff Keeling jkeeling@bjournal.com 423.773.6438 Staff Writer Sarah Colson news@bjournal.com 423.854.0140
The 2015 Class of 40 Under Forty. Photo by Adam Campbell.
| COVER STORY
14 40 Under Forty This year’s class of rising stars in the Tri-Cities business community.
| FEATURES
10
Mountain States, Wellmont release financial statements
38
Women’s Professional Training
How each system fared in what they hope will be their last full year of operations as stand-alone companies.
Director of Business Development and Marketing Jeff Williams jwilliams@bjournal.com 423.202.2240 Sales & Marketing Beth Collier bcollier@bjournal.com 423.470.2009 Robin Williams rwilliams@bjournal.com 423.794.6938 Creative Derby Publishing, LLC Graphics Director / Judd Shaw jshaw@bjournal.com 423.833.2726
The chief business officer of the Vanderbilt Medical School keynotes the final session of the expert-led, female-focused professional training series.
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The Business Journal’s Newsmakers 2015 From the healthcare merger to the Alpha bankruptcy to Dentsply staying and CSX leaving, 2015 had its share of highs and lows.
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7 From the Editor
9 FYI
8 Trends: Residential
50 On the Move
Real Estate
51 Awards & Achievements
54 The Last Word
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The Business Journal of Tri-Cities TN/VA | December 2015
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| FROM THE EDITOR
Palaces of the market I
n recent years, as free trade agreements have created a world marketplace, some economists have speculated that true capitalism will be increasingly undermined by worldwide monopolies and cartels. When there is no place on Earth where a new company can start up and have time to grow before being bought or driven out of business by existing behemoths of industry, the theory says, where will the new ideas come from to create the competition that will drive markets? There’s merit to this view. But we’re far from having stagnant worldwide markets yet. I saw a wonderful example of the market driving change in the way an industry operates just this month. I visited the new Marquee Cinemas in Bristol. It’s fascinating (at least to me) to see how the movie theatre business has corrected for the realities of the current marketplace. Since the new Star Wars movie is coming out this month, let’s use that franchise as our timeline. When I was 10 years old, my father took me to see the original Star Wars movie at a theatre that had only one screen. It was a huge screen, probably 70 feet or so. The now-iconic opening shot of the movie in which George Lucas used scale to blow the audience’s collective mind within a minute of the opening fanfare was so much more effective on a huge screen. That was 1977. Very soon after that, the industry shifted. Theatre owners realized they could cut their screen sizes and show multiple titles at the same location. The multiplex was born. The advantage for movie-goers was that more films could be screened at the same time. If you lived in a small town that had only one or two screens before multiplexes, you had grown up having to see a movie the week it came out (perhaps longer for a huge title like Jaws). Afterward, that particular movie was gone from your life until 18 months later when one of the three television networks aired it as a Movie of the Week, complete with four commercial breaks per hour. So the multiplexes multiplied. Like rabbits they multiplied. Soon Americans were consulting their local newspapers
Online at bjournal.com
to see which of six or eight or 12 or 14 titles they would watch at the theatre Friday night. But movie-goers were watching on smaller and smaller screens, with smaller and smaller seats in smaller and smaller rooms. And so long as the rest of the world remained the same, everybody put up with it, even as ticket and concession prices continued to rise. But the rest of the world didn’t stay the same. Changes came. Like rabbits on aphrodisiacs they came. Cable, satellite and video created a home market for movies. Then 50-inch flat-screen televisions became the norm. Then widespread broadband made it possible for consumers to stream movies into their homes. Today, a family of four can pay $48 plus concession costs to go to a theatre and watch a first-run movie, or that same family can wait three months, order the same movie on Netflix or Amazon Prime, and watch it on a 50-plus-inch screen in the comfort of their own home, for under five dollars. It’s not surprising then, that movie-goers have become movie-streamers. And the multiplexes have been struggling to deal with the competition. The free market’s a bear when you don’t keep up. The Marquee Cinemas in Bristol is the first sign in the TriCities that the movie theatre owners are starting to play catchup. The place is reminiscent of what my colleague (and fellow movie buff) Judd Shaw refers to as “the old movie palaces.” The lobby has comfortable seating areas reminiscent of high-priced hotel lobbies. The theatre seats are luxurious. I don’t mean that in terms of being luxurious compared to other movie theatre seats, which can make economy class airline seats seem comfy by comparison. I mean luxurious, period. They’re recliners, complete with footrests. And they’re wide. Where a multiplex that size might have 2,400 seats, this place has 1,400. The rows, which are 48 inches deep in multiplexes, are 76 inches, allowing foot traffic to pass without bothering seated movie-goers, even with their footrests extended. And two of the screens are 70-plus feet, in rooms with more than 50 speakers, each on a separate Dolby channel. The motion picture theatre industry realized the market was passing it by. It responded by making an effort to make movie-going a special experience again. And when I see the new Star Wars movie this month, I can legitimately hope for an experience that rivals that night back in 1977. With apologies to old Ben Kenobi, that’s a feeling I haven’t had for a long time. A long time.
December 2015 | The Business Journal of Tri-Cities TN/VA
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| TRENDS
October home sales cool down, still at record pace Tri-Cities home sales saw an expected seasonal cooling in October but are still on a recordsetting pace. The Northeast Tennessee Association of Realtors reported 469 closings on single-family homes last month. That’s 31 more than the same month last year. So far this year 4,455 closings are on record in the 11-county region NETAR’s Trends Report monitors – 362 more than the total from the first nine months of last year. Last month’s sales were 7.1 percent better than October last year. The average single-family home sold during October was on the market for 164 days.
HOME SALES
OCTOBER 2015 HOME SALES
- 10 EXISTING HOMES
SEPTEMBER 2015 HOME SALES
OCTOBER 2014 HOME SALES
TRI-CITIES
469 / Average Price $154,734
495 / Average Price $159,901
438 / Average Price $158,735
WASHINGTON COUNTY, TN 124 / Average Price $185,687 115 / Average Price $193,698 119 / Average Price $179,607
SULLIVAN COUNTY 133 / Average Price $154,909 151 / Average Price $169,575 125 / Average Price $175,991
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The Business Journal of Tri-Cities TN/VA | December 2015
CARTER COUNTY
GREENE COUNTY
WASHINGTON COUNTY, VA
46 / Average Price $132.845
53 / Average Price $159,490
26 / Average Price $134,417
41 / Average Price $116,636
53 / Average Price $143,614
47 / Average Price $171,675
34 / Average Price $135,324
42 / Average Price $134,143
34 / Average Price $188,758 Online at bjournal.com
| FYI
&Downs
Ups
A quick check of the conventional wisdom on who’s going what direction in Tri-Cities business
Local Retail – It started with the American Express-led notion of Small Business Saturday on Thanksgiving weekend. Now local chambers and downtown organizations are working to get shoppers to continue shopping at locally owned small businesses for the remainder of the holiday season. We can’t champion this idea enough. Dollars that are spent with locally owned businesses instead of big box retailers or online sites are far more likely to stay in the local economy, helping provide jobs in Northeast Tennessee and Southwest Virginia. Whether it’s beer, food or that special gift for that certain someone, buy local!
Eastman’s community involvement – The chemical company is putting its money where its mouth is in emphasizing environmental stewardship, education, empowerment and economic development. Case in point came at a recent Johnson City Chamber breakfast at which Eastman sponsored a program delivered by Sylvia Crum of Appalachian Sustainable Development. The company is working to make a difference in all its communities, but it’s always good to see a powerful economic engine realize that giving back starts at home. Faith in the Future – If you’re starting to sense a holiday theme to this edition of Ups and Downs, you’re right. The annual awards ceremony, held in Johnson City last month, honored businesses that show faith in their own future to their employees and to the rest of the business community. Said keynote speaker Rev. Lester Lattany, “Faith is not a blank check. God is not your cosmic Santa Claus. Faith includes that you are wise in your stewardship of the resources that have been laid at your hands.” Amen. Congratulations to honorees including the Boys & Girls Club of Elizabethton/Carter County, Free Service Tire Co., General Shale, Marketing Mel, Mitch Cox Companies, Mountain States Volunteer Auxiliary, the Office of Professional Development at ETSU and WebCoUSA. The event is sponsored by CenturyLink and several area Chambers of Commerce.
The Falls – We hate to say this so soon after the Bristol, Va., shopping development opened its first store, but the Reuters-reported talks between Bass Pro Shops and Cabela’s is not good news for the citizens of Bristol, Va. Those folks have already massively overpaid to allow their local government to get into the commercial development business, only to find out now there are risks they were never told about. They should be praying for a different buyer to step up. Cabela’s is interested in selling, as multiple public statements from major shareholders indicate. Those statements would have the share price somewhere from the low $50s to the low $70s, which would be great for Cabela’s shareholders, but not so great for Bristol. Moody’s had already downgraded Bristol, Va., from A3 to Baa2 negative, and it said in September that construction on The Falls Phases II and III is underway. The second store in the development isn’t even open yet, much less the second phase. Moody’s also said the city is not expected to benefit financially from Phase I of the development until fiscal 2030. And that was before the Bass Pro/Cabela’s talks started. Online at bjournal.com
December 2015 | The Business Journal of Tri-Cities TN/VA
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| FEATURES
Despite challenges, MSHA, Wellmont post better financials By Jeff Keeling
Wellmont Health System and Mountain States Health Alliance recently released their audited financials for the fiscal year that ended June 30. The Business Journal reviewed those documents, then met separately with Wellmont CFO Alice Pope and MSHA Corporate Treasurer and Chief Operating Officer Marvin Eichorn to discuss the year’s results and the various trends that are affecting the systems’ financial performance and outlook.
P
ick any recent fiscal year, and Wellmont Health System and Mountain States Health Alliance have been buffeted by health care’s winds of change. That said, it’s arguable that few if any could stack up against the fiscal year ended June 30. The 12-month period was marked by continuing federal changes brought on by the Affordable Care Act. The systems joined statewide efforts to advocate for Tennessee and Virginia to avail themselves of the Marvin Eichorn federal Medicaid expansion, an eventuality that would have helped their bottom lines. That effort failed. Both systems continued adjusting to the overall trends, fewer acute hospital admissions and more preventive and outpatient care, and to the reforms that are transforming the business model from fee-for-service to value-based reimbursements. A marked increase in high deductible insurance plans created new challenges, too, as growing numbers of patients encountered difficulties paying their share of medical bills, leading to an overhang of accounts receivable. As Wellmont noted in its management discussion and analysis at the end of the fiscal year, “we continue the transition to value based payments while facing the challenge of Alice Pope increasingly prevalent high deductible health plans in our area.” The system also noted its opening of more urgent care centers as reflecting, “the health system’s goal to increase health care access points in the area and reshape the way the region receives care in lower cost outpatient settings.” If all that weren’t enough, the systems dealt with a great deal of organizational uncertainty, as Wellmont’s “strategic 10 The Business Journal of Tri-Cities TN/VA | December 2015
options process” was flipped on its head by a local movement that first went public in August, pressing for it to merge with Mountain States rather than an outside entity. That process almost certainly played into Wellmont CEO Denny DeNarvaez’s departure in September, and reached “the end of the beginning” when the two systems officially announced in April they would seek approval for a highlyregulated merger. They were in early stages of that process when the fiscal year drew to a close. Somehow, through all of that, both systems not only ended the year in the black but saw healthy increases in net patient service revenue. Wellmont’s total was up 6.4 percent, from $743 million to $791 million; MSHA’s increased 7.1 percent, from $924 million to $989 million. Each system also saw its overall net revenues – excluding investment income – increase from 2014. Wellmont’s income from operations (net) increased by 38 percent, from $4.84 million to $6.69 million. MSHA’s net operating revenue, ex-investments, was up nearly tenfold, from $2.42 million to $24.2 million. The systems arrived at their end results in somewhat different ways. Wellmont’s acute inpatient volumes declined by 3.8 percent overall, though a 13 percent increase in “observation patients” more than offset that, putting so-called “patients in bed” up by 1.2 percent. Surgeries at Wellmont declined 2.3 percent overall, 3.2 percent in inpatient and 2 percent in outpatient. Wellmont completed integration of a 100 percent acquisition of Wexford House, a long-term care center, and increased its ownership of Holston Valley Imaging Center from 75 percent to 100 percent. Both acquisitions, Wellmont CFO Alice Pope said, aided the bottom line and should do so going forward. “It’s part of having integrated services, an integrated network, and having what we need to provide a continuum of care.” MSHA’s patient volumes told a different story. The system’s acute inpatient volumes increased by 8.8 percent. Observation patients, on the other hand, were down by 3.3 percent, with “patients in bed” up 5.2 percent overall. MSHA Online at bjournal.com
also saw its surgery volume increase by 3.9 percent overall – with the inpatient total up 2.7 percent and outpatient up 4.5 percent. “It’s probably going to be February 2016 before we know really what market share gains we had for our fiscal year, but our perception is that we did gain market share during the year on inpatient,” Eichorn said. Eichorn said the change in trend with respect to acute admissions versus observation patients came following a concerted effort. Medicare, insurance companies and other payers have driven part of the trend toward more patients being classified under observation status, which comes with significantly lower reimbursements for providers. At times, the conventional wisdom suggests, doctors and other providers have classified legitimately acute inpatient cases as observation patients fearing retributive audits by payers – or, Eichorn said, simply by failing to document thoroughly enough. “We did reach out to our doctors and educate them about what really is an observation patient versus what really is an admission,” Eichorn said. “We dramatically improved our documentation.” He said patients, often coming through the emergency department, have multiple chronic conditions, “and maybe some of those conditions are playing with each other to cause some of the issues that patient’s having. If you don’t get those other things in your documentation, it may result in it being classified as just an observation.”
The serenity to accept the things one cannot change … Two major factors relating to insurance and patient revenues provided some headwinds to both systems. One was the failure of either state in which the systems operate to reverse course and accept the proffered federal Medicaid expansion, which would increase the number of very low income people eligible for the federal insurance. “We would have had less self-pay and less bad debt if we had Medicaid expansion, clearly,” Pope said. Eichorn, who noted that the Tennessee Hospital Association members, including MSHA and Wellmont, offered “skin in the SEE FINANCIALS, 48 Online at bjournal.com
MSHA Net Debt Paydown Decrease in Long Term Debt
Fiscal year-by-year net change in debt of Mountain States Health Alliance, 2011-2015. Bar above the baseline represents millions of dollars in decrease of debt. Below the line represents debt increase. At June 30, 2011, MSHA's debt stood at $1.041 billion. At June 30, 2015 it was $1.032 billion.
50
2011
2012
2013
2014
2015 44m
40 30 20 10
15m
14m
0 -10
8m
-20 -30 -40
42m
-50
Note: Per MSHA Corporate Treasurer Marvin Eichorn, the system projects it will make additional (above scheduled) debt payments of $190 million through 2020.
A Shifting Model Wellmont Health System's percent change from prior year in physician office visits (blue) and acute hospital discharges (red)
25 20
2011 20.3%
15
2012 15.9%
2013
2014
16.4% 10.5%
10 5 0
2015
2.6%
1.7%
-5
-4.6%
-10
-5.1%
-3.8%
-9.3%
-15
Five-year Total: 83.8%
Five-year Total: 20.1%
Note: Over the past five years, Wellmont's inpatient discharges decreased from 41,380 in fiscal 2010 to 33,045 in fiscal 2015, a 20.1 percent total decline. Physician office visits rose over the same period from 258,263 to 474,762, an 83.8 percent increase.
December 2015 | The Business Journal of Tri-Cities TN/VA
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We are making a difference together. CeeGee McCord
At Eastman, people are at the heart of our business. With more than 15,000 employees worldwide and serving customers in 100 countries, we know the importance of working together with our team members, communities and organizations to identify issues that matter to us all. Eastman’s Corporate Social Responsibility team is dedicated to focusing on the right projects and initiatives with the greatest collective impact. Whether that is advancing educational efforts around science, technology, engineering, arts and math (STEAM); promoting environmental stewardship; supporting community development and infrastructure efforts; or empowering workforce diversity, our community investments reflect the rich heritage of Eastman’s men and women around the world. “As we move forward together, we are building and strengthening strategic partnerships and challenging ourselves to enable the most positive change,” says CeeGee McCord, Eastman’s director of global community affairs and corporate social responsibility. “With an innovative and diverse perspective, our team focuses on environmental stewardship, education, empowerment and economic development. In addition, we also prioritize broader issues such as weather predictability, limited resources and an evolving workforce.” Corporate social responsibility is more than just philanthropy. It shapes how we operate.
EMN-GR-247 | 11/15
12 The Business Journal of Tri-Cities TN/VA | December 2015
environme
commu
teamwo Online at bjournal.com Chrissy Idlette
Maranda Demuth
David Golden
innovation
d
Etta Clark
mentor
ment
munity
empowerment Pin-Chia Murphy
Tanya Foreman
education
work Online at bjournal.com
December 2015 | The Business Journal of Tri-Cities TN/VA
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Scott Emerine (left), class of 2007, delivered the invocation. Mitch Walters was keynote speaker.
Katie Baker poses with Nikki Niswonger.
Michelle Lee receives her trophy from Business Journal Publisher Bill Derby.
Bill and Gena Prince celebrate with Brad Adams.
Honorees (back row, left to right) Kevin Morrison, Bo Wilkes, B.J. Smith, John Jeter, Brian Dawson, (front row, left to right) Corinne Allen, Morgan May, and Kelli Heins.
Nancy Dishner socializes with Scott Niswonger during the reception.
Photos by Adam Campbell 14 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Photo by Adam Campbell
40 Under Forty Honors Business Community’s Rising Stars A crowd of more than 300 members of the Tri-Cities business community gathered Oct. 2 to fete this year’s class of young professionals at the 23rd Annual 40 Under Forty Gala at the Millennium Centre in Johnson City. “These remarkable young individuals have distinguished themselves not only with their business acumen, but also with their drive to lead, and their commitment to serve the communities in which they live and work,” said Scott Robertson, managing editor of The Business Journal of Tri-Cities, TN/VA, who introduced the honorees at the event. “Whether they be working their way up a corporate ladder, going it alone as hungry entrepreneurs, or crafting careers in the medical or not-for-profit sectors, these 40 men and women show the business community it will be in good hands in the future. At the same time, they serve to inspire other young professionals to pursue success throughout the region.”
Online at bjournal.com
Mitch Walters, founder of the Friendship Automotive Group was keynote speaker for the event. Walters told the class they are at precisely the right time in their lives to be bold and aggressive in pursuit of their dreams and ambitions. Among other things, Walters joked, “you’ll never be as young – or as good looking – as you are today.” The Business Journal wishes to thank the Tri-Cities-based businesses that supported the event through sponsorship: NN Incorporated sponsored the reception preceding the event. Special thanks also go out to the Carnegie Hotel, which served as host for the 40 Under Forty photo shoots and interviews. Nominations for the 2016 class of 40 Under Forty will be taken beginning in late spring at the 40under.com website. Watch The Business Journal and our sister publication, Johnson City News & Neighbor for details.
December 2015 | The Business Journal of Tri-Cities TN/VA
15
Brad Adams
40UNDERFORTY HONOREE
In talking with Adams’ boss at Johnson Commercial Development in Bristol, 40 Under Forty asked in what aspect of the creation of The Pinnacle development Adams played a critical role. The answer was, “Every aspect.” Adams has been involved in the development of more than $125 million of commercial space in the Tri-Cities, while also having held the title of president of Bristol Regional Speech and Hearing Center, and serving on the vestry at Emmanuel Episcopal Church.
Corinne Allen
40UNDERFORTY HONOREE
Dr. Allen is Washington County director of Pharmacy Services for Mountain States Health Alliance. She oversees more than 100 pharmacy team members and manages the budget, strategic planning and quality of service for six facilities. She also serves as a clinical preceptor for several schools of pharmacy including the Gatton Gollege of Pharmacy at ETSU. Dr. Allen has also helped manage the Northeast Tennessee Dispensary of Hope and has done volunteer work for the United Way, the Dragon Boat Festival and the Childhood Apraxia of Speech Association.
Shawna Armstrong
40UNDERFORTY HONOREE
As treasurer at Holston Medical Group, Armstrong is responsible for oversight, financial management and analysis for 14 separate entities with combined revenue of more than $97 million. In addition, she is responsible for the financial management and analysis for several other companies that HMG manages and operates. Armstrong also was instrumental in the creation of the local Cooper’s Race, a fund-raising event dedicated to supporting research into mitochondrial disease.
Robbie Atkinson
40UNDERFORTY HONOREE
Atkinson could not attend the 40 Under Forty gala this year, as he was out of state, working on formalizing the paperwork related to his firm’s acquisition of a $615 million engineering firm. Atkinson is treasurer and director of investor relations at NN Inc. Having served NN as its banker for several years, he was in a strong position to make an immediate impact on the financial management of Johnson City’s only multi-national public company. As the youngest member of senior management, his influence on the company’s financial structure and management practices has been dramatic.
16 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Congratulations to Wellmont’s 40 Under Forty winners. These co-workers might be young, but they’re making major positive changes in their workplaces and community. With talented, high-achieving employees like these, you can rest assured Wellmont Health System will continue to provide leading, compassionate care well into the future. Jeremy Mikles
Holly Rinehart
Director of critical care and trauma Bristol Regional Medical Center
Clinical resource manager Wellmont Health System supply chain
Since he began his service at Bristol Regional, Jeremy has excelled and received positions of increasing responsibility, including clinical leader and director of emergency services. After significantly enhancing the emergency department, he was quickly promoted to his current job.
Jeremy is also credited with having great communication and organization skills and excellent rapport with staff members, and he’s collaborated with physicians to enhance hospital processes and developed creative ways to make beneficial changes.
Online at bjournal.com
Message your doctor.
Holly has led several initiatives that have resulted in major savings for Wellmont, such as a successful collaborative Wellmont entered with Vanderbilt University Medical Center that enabled the health system to lower supply, pharmaceutical and purchased services costs. She also worked on a product conversion that saved Wellmont’s radiology departments hundreds of thousands of dollars.
Rinehart is also a dedicated community servant, who, along with other members of her family, hosts the annual Run Like a Princess 3K in memory of her niece, who died at age 1. She has also been involved with Children’s Miracle Network Hospitals, the Juvenile Diabetes Research Foundation and the Make-A-Wish Foundation.
MyWellmont.org December 2015 | The Business Journal of Tri-Cities TN/VA
17
Katie Baker
40UNDERFORTY HONOREE
Dr. Baker stands alone in Washington County, Tennessee, or at least on its county commission, where she is the lone female commissioner of 25. The former high school valedictorian is a doctor of public health at ETSU. From her earliest days as a member of the Greene County Youth Leadership Program, Dr. Baker has demonstrated a clear commitment to community. An alumna of the Niswonger Scholars program, Baker’s work at the university also involves her spending at least 20 percent of her time in public service, which is fortunate, because that happens to be her passion in life.
Will Barrett
40UNDERFORTY HONOREE
Barrett, who is currently Washington and Unicoi market president for Bank of Tennessee, knew early on he wanted to be a banker. In fact, he was on the teller line when he was 16 years old, growing up in Kingsport. From those beginnings, he grew professionally through credit, special assets, operations and commercial lending – even helping oversee the combination of Bank of Tennessee and Carter County Bank. Barrett is the treasurer and incoming vice-chair at Hands On! Regional Museum.
18 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
The
CONGRATS, 40 UNDER FORTY HONOREES! FOCUS IN LEADERSHIP, HEALTHCARE, OR OPERATIONS ONE-SATURDAY-A-MONTH FOR 14 MONTHS GMAT NOT REQUIRED IF GPA 3.0+ COMPLETE PRE-REQS VIA ONLINE MODULES
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December 2015 | The Business Journal of Tri-Cities TN/VA
19
Jason Berry
40UNDERFORTY HONOREE
The County Administrator for Washington County, Virginia is one of those come-backers who realizes the blessings of living in this region after starting a career elsewhere. In Berry’s case, that somewhere else was the Pentagon and the White House. He served as a civilian budget analyst for the Army, then moved to the White House Military Office in that same capacity. The Eagle Scout then moved back home to Abingdon, where he was elected to the town council before accepting the position of Washington County Administrator.
Rob Bunch
40UNDERFORTY HONOREE
Bunch has achieved success doing something few of his colleagues in mainstream media have been able to do over the last decade – really monetize the Internet. Starting at TV11, Bunch grew his career at Media General to the point where he became director of Digital Operations, managing 17 stations and markets and a digital budget of more than $13 million. He has since moved on to High Road Digital here in the Tri-Cities, building a team that has increased top line revenue ten times over in the first year. He also serves on the boards of the Capital Theatre and Dawn of Hope.
Congratulations David Greene It is truly a pleasure to work with you!
20 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
For every pillow propped, every test given. For every question answered, every call taken. W E ’R E G R AT E F U L FO R A L L YO U D O.
Great patient care doesn’t just happen. It takes all of us—physicians, lab technicians, nurses and every other team member— working together. Every hour, every day of the year, our Mountain States team members are providing exceptional healthcare to the patients and families we serve. So for all the big—and little—things our team members do throughout the year, we want to say thank you.
People. Trust. Experience. MountainStatesHealth.com
Online at bjournal.com
December 2015 | The Business Journal of Tri-Cities TN/VA
21
Sidney Burns
40UNDERFORTY HONOREE
In just five years, Burns rose from marketing intern to a role in non-profit management at the YWCA of Bristol. She oversaw special projects from the Turkey Trot 5K and the annual Tribute to Women, which has become a regional institution, to the creation of a brand identity for the Bristol Bridal Station after she became director of the Bristol Train Station earlier this year. Burns increased bookings at the train station by more than 90 percent and tripled the reach of its marketing and advertising. She recently accepted a marketing director position with Chick-fil-A in Bristol.
McKenzie Calhoun
40UNDERFORTY HONOREE
Dr. Calhoun has been a student, resident and faculty member within the Gatton College of Pharmacy at ETSU, and has been a standout and a leader at every level. Since joining the faculty, Calhoun has been instrumental in making curricular changes, and in establishing a clinical practice with ETSU Family Physicians in Kingsport that has garnered national attention for its positive patient outcomes. She has served as the chair of the Membership Council and as a board member in the Johnson City Chamber of Commerce and is an active member of the Chrysalis Community.
Wesley Combs
40UNDERFORTY HONOREE
Combs is chief information officer for Holston Medical Group. As CIO of the OnePartner Health Information Exchange, he is responsible for the secure functioning of a system that shares patient information between thousands of physicians, including both major hospital systems. That duty includes leading the information and data integrity of more than 45 clinics, 150 mid-level and physician providers and more than 750 employees. He has served on the Leadership Kingsport Council and as an elder at First Presbyterian Church in Kingsport.
Philip Cox
40UNDERFORTY HONOREE
Philip Cox has carved out a niche in commercial real estate development in the Tri-Cities by focusing on the hospitality industry. Since Cox focused his energies in that direction, Mitch Cox Companies has acquired and now operates 17 properties in North America, and is currently developing another new hotel in Johnson City. Cox’s nominators credit his strong work ethic, skill set and innate leadership qualities for his success.
22 The Business Journal of Tri-Cities TN/VA | December 2015
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December 2015 | The Business Journal of Tri-Cities TN/VA
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Matthew Crowder
40UNDERFORTY HONOREE
Crowder started his own company, Higher Ground Technologies, at the age of 14. That company now manages IT services for global firms, handling consulting, installation, telephony, networking, management and support. Though faced with all the challenges of being an entrepreneur, Crowder takes the attitude that he has been blessed with success, so he should help others be blessed as well. To that end, he has paid the bills for equipment rental, sound systems, and other items for public charity events in the region.
Rebecca Davis
40UNDERFORTY HONOREE
Davis manages not only the operations of the Washington County Economic Development Council, but four other organizations under the same umbrella: the Johnson City Industrial Development Authority, the Public Building Authority, the Downtown Johnson City Foundation, and the Johnson City Industrial Development Board. In total, she manages around $5 million in budgets. Any time you see a story about something good happening in economic development in Washington County, said one nominator, you can count on the fact it wouldn’t have happened without the work of Rebecca Davis.
Brian Dawson
40UNDERFORTY HONOREE
Dr. Dawson serves on the Johnston Memorial Hospital Board of Trustees, where he has been named chair of the Board Quality Committee. In addition to his work at Johnston, he has created a foundation called, “Choose a Need” that identifies and meets the needs of disadvantaged people worldwide. Also an entrepreneur, Dr. Dawson established the company Briley Innovations with another ER physician, providing process consulting and software solutions for emergency medicine.
Whitney Dillard
40UNDERFORTY HONOREE
Dillard joined Saratoga Technologies as financial manager back in 2007, and within three years had taken the role of chief financial officer for the company, earning a seat on the board of directors. The stated reason for the promotion was the profound impact Dillard had on the growth of Saratoga, which was expanding from just being a Johnson City company to having locations in Abingdon and Knoxville as well. Her nominators credit her for improving processes and increasing the company’s productivity on a consistent basis.
24 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Congratulations
Brad Adams on being selected for 40 Under Forty!
Online at bjournal.com
December 2015 | The Business Journal of Tri-Cities TN/VA
25
Larry Durham
40UNDERFORTY HONOREE
Durham’s nominators describe him as laser-focused. And he has to be. As director of human resources at Nuclear Fuel Services, he’s responsible for more than 700 employees with payroll and benefits exceeding $50 million. He’s tasked with recruitment and retainment in a company in which 43 percent of the workforce is slated to retire within the next five years. Yet his colleagues say he never breaks focus from the values of accountability, safety, quality and personal excellence. An Elder in the Tri-Cities Baptist Church, he has been on four foreign missions and two in the U.S. and participates regularly in food box distribution programs.
Mark Ewing
40UNDERFORTY HONOREE
If you attend the Quality Forum every year in Kingsport, be sure to say thanks to Ewing. He’s instrumental in putting it on, passionate about the ideas behind it, and pleased that it helps so many businesses improve. Ewing started at Eastman in the statistics group five years ago, but moved into business analytics, where he has excelled, becoming group leader and bringing advanced analytics to the fore. He constantly works to encourage others at the company to expand their understanding by establishing the Data Visualization Community of Practice.
Keisha Gould
40UNDERFORTY HONOREE
Gould is director of sales at Courtyard by Marriott in Bristol, Va., where she has consistently exceeded revenue goals while building relationships within the community. She serves on the board of the Bristol Chamber of Commerce, where she is co-chair of the Bristol Chamber Ambassador program. She also serves on the steering committee for LEAD Bristol, where she won the 2014 Volunteer of the Year award.
David Greene
40UNDERFORTY HONOREE
Greene is a senior trust officer at First Covenant Trust & Advisors, where he works on everything from complex trust issues to long-term company planning. He is seen as something of a wunderkind in that business, earning the respect of peers who have been in the field for many years. He has also garnered attention not just for the quantity of his good works in the community, but also the quality. Greene invests his time in exceptional high school students by working as a mock trial coach. In 2013, his team placed 7th in the nation in that competition.
26 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
CONGRATULATIONS 40 UNDER 40
Honorees
every family has a story. what will yours say? Set deep within the Virginia Highlands, The Virginian is a private, residential community with a deep heritage. Now, your family can be a part of this history. Experience the best of quiet, country living with a Tom Fazio-designed course, fly fishing, horseback riding, mountain biking, tennis and more. To learn about life here, visit TheVirginian.com. Homes from $450k.
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December 2015 | The Business Journal of Tri-Cities TN/VA
27
Christopher Hall
40UNDERFORTY HONOREE
Though only 27 years old, Hall has earned the responsibility for all marketing and branding at Bristol Virginia Utilities. He reports directly to the CEO and manages BVU’s key accounts program working with other local CEOs, VPs and top executives, and managing all TVA partner programs. Hall fits the definition of rising star in the business community to a tee. He has served on the Bristol Chamber board, the advisory council of the Regional Industrial Development Association, the Bristol United Way and the Bristol Convention and Visitors Bureau.
Kelli Heins
40UNDERFORTY HONOREE
If you’ve had the pleasure of meeting Heins, you know her credo is, “I may be only one person, but I can be one person who makes a difference.” As marketing coordinator for CrestPoint Health, Heins is officially tasked with marketing and advertising functions, but she’s the heart behind the majority of the firm’s community service projects. Her work was crucial to creating the Crestpoint Crusaders running series, and she also volunteers with local organizations including the United Way and Alzheimer’s Association.
With tuition that is roughly one-third that of Virginia’s public four-year universities and more than $6 million in financial aid awarded annually, Virginia Highlands Community College is an affordable option for quality higher education in our region. Students can choose between Career & Technical Programs that lead to immediate entry into the workforce or Transfer Programs that provide the first half of a bachelor’s degree. For added flexibility, we also offer online classes and a series of 10-week classes that provide quality content in a compressed format. VHCC is a great place to learn, thanks to the expert faculty and staff members who provide one-on-one assistance to students every day. We’re proud of our team and proud to salute Counselor Michael McBride, a 2015 recipient of the Business Journal’s 40 Under Forty Award.
Enroll now for Spring Semester. Classes start January 11. www.vhcc.edu • (276) 739-2400 Si necesita ayuda en español, marque el número 276-739-2561 VHCC is an EEO/AA Institution
28 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Drew Hembree
40UNDERFORTY HONOREE
Hembree has learned the grocery business from the bottom up at K-VA-T Food Stores, parent company of Food City. He started as a courtesy clerk in the summer of 1998 while attending Abingdon High School. He interned in merchandising and marketing, completed assistant manager training, became an assistant manager, then social media manager, site analyst and category manager. Hembree currently holds the role of director of advertising. He serves on the Virginia Highlands Small Business Incubator board and is a member of the Abingdon Rotary Club.
John Jeter
40UNDERFORTY HONOREE
Jeter is assistant vice president and chief financial officer/assistant administrator for the Northeast Market at Mountain States. His nominators cite his leadership, vision and forward thinking in his rapid rise from controller to CFO. Outside the office he has served several roles for the William King Center for the Arts in Abingdon and is treasurer for Abingdon’s Trail Life Troop. He also serves on the Milligan College president’s council.
Online at bjournal.com
December 2015 | The Business Journal of Tri-Cities TN/VA
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Lacey Johnson
40UNDERFORTY HONOREE
When Eastman was up for reaccreditation with the Cambridge Institute for Behavioral Studies, Johnson was tasked with creating the documentation for the review, and assisted with the site visit. She also plays a role in management and coordinator training at Eastman, but it is her community work that set her apart in the eyes of the 40 Under Forty judges. One of her nominators referred to her work with Lacey on the YWCA Junior Board by crediting her with bringing a new dimension to fundraising. Johnson also coordinates the local Meals on Wheels golf tournament, raising enough money to serve more than 1,000 meals.
Chris Kimmons
40UNDERFORTY HONOREE
At Merrill Lynch, Kimmons is a key member of a team that is responsible for $800 million in assets. He has not one, but two professional designations, CFP and CIMA, and is on the board that writes the exams for CFP candidates. He is a frequent beta tester of new tech platforms and concepts for Merrill Lynch corporate because of his breadth of knowledge. Kimmons has been recognized as a community All-star on a national level by Bank of America and is a driving force locally behind Head Start.
30 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Brook Lambert
40UNDERFORTY HONOREE
H
Abingdon native Brook Lambert rose from a start in television to excel in marketing. An Emory & Henry Mass Communications alumna, Lambert moved from WCYB TV first to Johnston Memorial Hospital, where she became marketing director and eventually held that title for three hospitals, and now to The Leverage Group, an ad agency where she helps her clients develop marketing strategies. Outside the workplace she assists with travel sports teams.
Jennifer Ledford
J
K
40UNDERFORTY HONOREE
Dr. Ledford came to the region from Nacogdoches, Texas by way of Philadelphia. She has always been dedicated to community service, from her work with the Gamma Sigma Sigma service sorority when she was in college to today, when her work as an eye doctor with Carson & Associates in Johnson City allows her to have held multiple offices in the Junior League of Bristol, TN/VA and a seat on the board of the Crisis Center of Bristol.
B
B
Congratulations to
Will Barrett
E
40 Under Forty honoree
G
Bank of Tennessee is excited to honor Market President Will Barrett for being named to the Business Journal’s 40 Under Forty for 2015! We are proud of Will’s experience and accomplishments in the world of banking, his contributions to the community and his commitment to Bank of Tennessee customers.
E
Phone: 866.378.9500 BankofTennessee.com
Online at bjournal.com
December 2015 | The Business Journal of Tri-Cities TN/VA
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Michelle Lee
40UNDERFORTY HONOREE
Michelle is one of those rare individuals who is the perfect fit for her career. As Employee Concerns Program manager at Nuclear Fuel Services, she does her job with a great smile, a bendable ear, and a kind heart. One of the founding members of the ombudsman team at NFS, she is credited by one nominator as being, “the kind of leader that strengthens any organization. She moves through each day with positive energy – inspiring colleagues with her optimism, her strong work ethic and her endless willingness to pitch in and help get the job done – and done right.”
Morgan May
40UNDERFORTY HONOREE
May is one of those valuable people in health care who speaks the languages of both the care provider and administrator, while earning the trust of both. She began her career as a nurse at Sycamore Shoals in 2006, and within a few years was managing the surgery department there. She was recruited to take the same responsibility at Johnson City Medical Center and without missing a beat was promoted to director of Perioperative Services, making her accountable for surgery outcomes and the activity of more than 200 team members.
Congratulations Dr. Katie Baker and Dr. McKenzie Calhoun on being named to The Business Journal’s 40 Under Forty for 2015 Dr. Katie Baker
Dr. McKenzie Calhoun
College of Public Health
Bill Gatton College of Pharmacy
32 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Michael McBride
40UNDERFORTY HONOREE
McBride is director of the Governor’s School at Virginia Highlands Community College, where he is also an academic counselor. He has had a role in bringing many young people from disadvantaged areas of Southwest Virginia who would not have had the wherewithal to attend or finish college, do so. McBride teaches everything from orientation classes to soft skills and job interviewing techniques, and he serves on no fewer than 16 boards in the community.
Michael McCool
40UNDERFORTY HONOREE
McCool is a partner at Cary Street Partners in Abingdon, where he works as a financial advisor. Together with a partner, Mike manages around a quarter billion for individuals, families and institutions. When he’s not helping his clients manage their portfolios, he’s helping the community manage its foundations, serving on the Washington County Library Foundation, the Johnston Memorial Hospital Foundation and the Washington County Schools Education Foundation, in addition to the William King Arts Museum board and the Virginia Highlands Small Business Incubator.
Our goal is to help you pursue yours. It’s that simple. Your goals are what really matter. That’s why we’ll take the time to understand what’s most important to you: your family, your work, your hopes and dreams. Then we can help you get ready for the future with a financial strategy that’s just for you.
J. Chris Kimmons, CFP®, CIMA® Financial Advisor 423.282.7528
Merrill Lynch SMITH CONKIN DIXON Wealth Management Group 206 Princeton Rd, Johnson City, TN 423.282.7524 fa.ml.com/SCHGROUP
Life’s better when we’re connected® Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value The Bull Symbol, Life’s better when we’re connected and Merrill Lynch are trademarks of Bank of America Corporation. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® in the U.S. CIMA® is a registered certification mark of Investment Management Consultants Association, Inc. © 2015 Bank of America Corporation. All rights reserved. AR3XQDFQ | MLWM-102-AD | 470949PM-0315 | 03/2015
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December 2015 | The Business Journal of Tri-Cities TN/VA
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Jeremy Mikles
40UNDERFORTY HONOREE
Mikles is director of critical care and trauma at Bristol Regional Medical Center. He has quickly earned more and more responsibility at Wellmont, moving up from clinical leader and director of emergency services. His colleagues credit him for taking the time to continually examine how care is given, seeking to improve quality and efficiency of care provided. The effectiveness of his leadership is evident in both patient satisfaction scores and employee retention, both of which have markedly risen since Mikles joined the leadership team.
Kevin Morrison
40UNDERFORTY HONOREE
Morrison is chief financial officer at Norton Community Hospital in Norton, Va., and Dickenson Community Hospital in Clintwood, Va., and at 28 years old is quite likely to be the youngest CFO anywhere in Mountain States history. Moving to MSHA from a stint as a credit manager for Wells Fargo, he quickly climbed the corporate ladder, improving finances and overseeing a $45 million master facility plan. Outside work he donates his time to the Second Harvest Food Bank of Northeast Tennessee and the Annual Grace Fellowship Joy Prom.
34 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Chris Rehm 40UNDERFORTY HONOREE Chris is head of school at Sullins Academy in Bristol, Va., where he has brought a world of experience despite his relative youth. Prior to starting at Sullins, Rehm previously worked at the American School in Switzerland. His work overseas helped him develop a philosophy that includes infusing the native culture of the area around a school into education. To that end, he has brought players from Barter Theatre and other local artists into Sullins Academy. Outside the school he has taken part in Wellmont’s community leaders program and LEAD Bristol.
A
CHAMBER D
Matthew Rice 40UNDERFORTY HONOREE Rice is an Erwin native who returned to his hometown to work at Erwin Utilities in 2009. His title is director of Water and Wastewater. He recently directed the water and sewer construction of phases one and two of Erwin’s downtown revitalization project. He also serves as chair of the Unicoi County Memorial Hospital Vision Committee, vice-chair of Love Chapel Christian Church’s board, and is a member of the American Water Works Association’s Tennessee Water Advisory Committee and Small Systems Committee. In his spare time, Matthew works on the renovation of a historic downtown Erwin building he recently purchased.
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INNER
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December 2015 | The Business Journal of Tri-Cities TN/VA
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Holly Rinehart
40UNDERFORTY HONOREE
As the system clinical resource manager for Wellmont Health System’s corporate supply chain, Rinehart plays an integral role in the organization’s delivery of high quality care at the lowest possible cost. She was also a key leader in achieving savings in the most recently adopted budget and led a team that drove a product conversion that saved Wellmont’s radiology departments hundreds of thousands of dollars. Her nominators refer to her as, “a change leader,” who is passionate, dedicated, hard working, innovative and focused on the betterment of others.
B.J. Smith
40UNDERFORTY HONOREE
Dr. Bert “B.J.” Smith is Mountain States Health Alliance’s vice president for hospital-based programs and service line development. As such, he oversees hospital-based programs for anesthesiology, pathology, radiology, hospitalists, and emergency medicine. Before he became an executive at Mountain States, Smith was a hospitalist as well as a medical director of the hospitalist program for Mountain States Medical Group. Dr. Smith serves on the board for the Buccaneer Athletic Scholarship Association at East Tennessee State University and on the Appalachian Emergency Physician board.
36 The Business Journal of Tri-Cities TN/VA | December 2015
Online at bjournal.com
Bo Wilkes
40UNDERFORTY HONOREE
As assistant vice-president for corporate operations at Mountain States, Wilkes has been deeply involved in the oversight of all activities related to Mountain States’ proposed merger with Wellmont and with the Certificate of Public Advantage required for that merger in both Tennessee and Virginia. Previously, he developed and oversaw Mountain States’ social responsibility plan, including HEAL Appalachia, and oversaw governance of MSHA’s board of directors and other boards. Outside work he has been heavily involved in United Way, the Remote Area Medical Clinics in Wise, Va., and the Tri-Cities, and the Northeast Tennessee Dispensary of Hope.
John Williams
40UNDERFORTY HONOREE
When asked about Williams’ worth to Erwin Utilities, one of his nominators simply replied, “immeasurable.” Williams went to work at EU as a fiber optic engineer in 2012, and since then has directed the build-out of the EU’s fiber-optic backbone, with the goal of bringing fiber service to all the utility’s customers for the first time, bringing one of Tennessee’s most mountainous and rural counties fully into the information economy.
CONGRATULATIONS
PHILIP COX
On being selected as one of The Business Journal’s
40 UNDER FORTY
Congratulations to
DREW HEMBREE AND ALL THE HONOREES SELECTED TO THE 2015 TRI-CITIES TN/VA
Business Journal’s
40 UNDER 40.
“We are extremely proud to have another member of our dedicated team of Food City associates inducted into the prestigious 40 under 40 class. Drew is a tremendous asset to our company and a great example of the bright future Food City has because of its associates. Congratulations Drew on this well deserved honor – we couldn’t be prouder!”
Steve Smith, Food City President/CEO
(423) 282-6582 • mitchcox.com Create Opportunities for Others to Succeed®
Online at bjournal.com
Drew Hembree Director of Advertising/Marketing K-VA-T Food Stores, Inc. December 2015 | The Business Journal of Tri-Cities TN/VA
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| FEATURES
Left to Right: Aimee Libke Davis, Aundrea Wilcox, Denise DePriest, Rebecca Duncan Beck, Cathryn Rolfe, Brenda White Wright. Photo by Sarah Colson.
Emerge Conference: If you can’t have it all, have the best By Sarah Colson One-hundred-and-seven businesswomen from across the region—some just starting their careers, some experienced professionals, and every stage in between— met Nov. 20 at the Kingsport Center for Higher Education for YWCA Bristol’s Emerge conference on women in the professional world. Cathryn Rolfe, chief business officer at JD Vanderbilt Medical School of Health Sciences Education, and Aundrea Wilcox, businesswoman, speaker and author, were the keynote speakers for the event aimed at empowering women not only in the business world but in all areas of their lives. Rolfe has been in the professional realm for more than 25 years after graduating from the University of Tennessee College of Law which led her into a private practice, a stint as an in-house attorney, a start-up healthcare company, and perhaps her proudest role as the mother of two children only 15 months apart in age. She said that 100 years ago, women all over the world were getting together in kitchens to cook, at the river to do laundry or in 38 The Business Journal of Tri-Cities TN/VA | December 2015
“segregated female places where we did all these chores together.” Now with the rise of women in the workplace, she said, the female relationship dynamic has shifted dramatically. “Even though I’m glad we’re not doing all those chores together, I think we lost an opportunity as women to be together and to share and for older women to share their pearls of wisdom with younger women,” she said. “A series like this gives us a chance to get together and have conversations.” Those conversations included challenges women face when it comes to overcoming the guilt associated with being both a family person and a professional and learning how to become a “superwoman” in every area of life. Rolfe said that when she was just starting out in her marriage and her career, she had to overcome all of the competing visuals she had in her mind about everything she could be. Particularly on TV with shows like The Cosby Show and The Brady Bunch, Rolfe was seeing women
who had it all—successful careers, adoring children and a delicious, well-rounded dinner on the table every single night. “I had all these competing visuals in my head,” Rolfe said. “My dad had his own business, worked on the city council, was doing all these great things and I wanted to be like him. Then I had this mother who was this typical ‘50s housewife, college educated, but there were not these opportunities for her. But I wanted to be like her too. All these things are there and then reality hits. You’re married, you’re working, you have a baby and there’s no road map.” To conquer that, Rolfe said she’s learned a few things over the course of her career. Mainly that, “you can’t have it all— but you can have the best parts.” When trying to be both a family person and a professional, she said, one must determine what the most important things are and strive for excellence in those things. “There tend to be three or four competing things in your life at one time,” she said. “Each of us has to figure out Online at bjournal.com
which part of us is our center. We have to find that core. We have to find that balance. And we can sway back and forth with it; we’re not going to stop the imbalance, but we have to learn to do the sway and more importantly we have to learn to enjoy the sway.” Once you’ve discovered what’s important, Rolfe added, successful women are able to get rid of the guilt. “Either make the homemade brownies for your child or buy them,” Rolfe said specifically to the mothers in the room. “But don’t feel guilty about the one that you choose. Either leave your child or don’t. Go do the things you want with your child’s school but don’t feel guilty about leaving your employer. It’s not your employer’s job to balance your life. It’s your job. You’ve got to let go of the guilt because if you don’t, it will drown you.” Once Rolfe set the stage for realistic expectations, Wilcox told the audience how to achieve goals that are within reach. Ultimately, she said, it’s about having S.M.A.R.T.S, or, Solving, Maximizing, Activating, Realizing, Transforming and Strengthening. And then, she said, women need to start helping one another out in the workplace. “If you’re in a position to help a qualified woman,” said Wilcox, “I’m not saying any woman, but if the woman is qualified for a job interview at a high level executive decision or you have that power and they’re qualified, why not help them? Why not help change the status quo? Because that’s the only way it’s going to change is if we do something about it. The guys do that. And what do we say? ‘That’s not fair.’ Well, we should be doing that also. We should be helping others and that’s the only way we’re going to move the needle and change the status quo. My mantra: Get smart. Get busy. Get it done. Splash the water around, do something and get your stuff done.” Some of the “stuff” Wilcox said she wants to see “get done” is to see the percentage of women who have a Bachelor’s degree rise from the current 50 percent in the region, to 100 percent and the percentage of women who say they might run for political office from the current 10 percent to rise exponentially. Other speakers at the event included a panel composed of Wilcox and Rolfe plus Rebecca Duncan-Beck, president of Hawkins County Memorial Hospital and Hancock County Hospital; Janice Gilliam, president of Northeast State Community College; and Denise DePriest, senior financial advisor and assistant vice president at Merrill Lynch; all of whom noted the importance of females supporting females in the Tri-Cities region. Duncan-Beck said supporting female leadership in the region could lead to solving the massive issue of a “lack of treatment and services we have readily available in regards to mental issues and substance abuse. That is drastically increasing,” she said, “especially for women in their 20s and 30s. It’s ever growing in our population and we can see that with babies born in our NICU.” Rolfe raised the concern of domestic violence issues in our area, which she claimed is “as much or more important than any other women’s health issue out there.” To close, DePriest ended by encouraging the audience to “never apologize for being a girl or being feminine.” “I believe that bringing the feminine touch is where my field is going,” she said. “We should recognize we have a place and the industry is changing to allow for it.” The next Emerge Conference will be held March 18, 2016. To learn more, visit ywcabristol.org. Online at bjournal.com
Retirement Planning… Without the Stress You’ve worked hard your entire life and now you’re nearing retirement. But, how can you be sure you’re really prepared? Will your assets last throughout your retirement? And, how do you plan ahead for unforeseen healthcare costs as well as market fluctuations and inflation? At Cary Street Partners, we understand that retirement planning can be confusing and complex. We’re here to help. Together, we help you develop a personalized plan and a diversified income strategy to manage your assets while meeting both your current and long-term needs and objectives. We offer the guidance and support you need throughout the process, assist you in estate planning strategies and help you make informed decisions about Social Security and Medicare. We then offer to monitor your progress and adapt your plan as needed throughout your retirement. Most importantly, we ensure you avoid the pitfalls of retirement planning allowing you to stretch every hard-earned dollar for your future. Start planning for the future you deserve: Contact Cary Street Partners
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December 2015 | The Business Journal of Tri-Cities TN/VA
39
2015 IMPACT
Cheap Fuel
AWARDS BASS PRO SHOPS | BILL GREENE | HERITAGE GLASS | NETWORKS SULLIVAN PARTNERSHIP AND THE WASHINGTON COUNTY (TENN.) ECONOMIC DEVELOPMENT COUNCIL | NN INC. | ONEPARTNER HIE | NORTHEAST STATE RED WHITE & FOOD | TUPELO HONEY | WELLMONT HEALTH SYSTEM
The Wellmont – Mountain States merger in-depth
Multi-family’s growing market share
Can prices stay relatively low for an extended period? And what do low fuel costs mean for trucking, air travel, construction and other key sectors?
Ten Who Made a Difference
Exclusive C-Suite Roundtable: Levine, Hove, Pope and Eichorn on plans for the new company
High end apartments filling new niche in residential construction
Plus: The Changing Face of Healthcare: Winter 2015
and
Plus:
Why East Tennessee State is Going Out-of-State
and
Noland on the third leg
The New Brews in the Old Depot
Why the COPA is key
Economic Developers Unite
JANUARY 2015
FEBRUARY 2015
$3.00 Volume 27 Number 5
Alan Levine, Mountain States Health Alliance CEO and Bart Hove, Wellmont Health System CEO April 2 at Meadowview. Photo by Adam Campbell.
Mitch Cox of Mitch Cox Companies and Shane Abraham of Universal Development and Construction. The site is the Villas at Lavinder Lane in Bristol, Tenn.
$3.00 Volume 27 Number 6
Patrick Wilson, executive director of Tri-Cities Regional Airport doesn’t foresee airlines cutting fares just because fuel prices have dropped.
Plus:
MARCH 2015
Dentsply agreement reached
$3.00 Volume 27 Number 7
Local, family-owned business: John Tickle and Strongwell
Photo by Adam Campbell BJournal.com | January 2015 | The Business Journal of Tri-Cities TN/VA
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APRIL 2015
$3.00 Volume 27 Number 8
and
BJournal.com | March 2015 | The Business Journal of Tri-Cities TN/VA
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BJournal.com | April 2015 | The Business Journal of Tri-Cities TN/VA
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Newsmakers The Business Journal’s 2015
Tennessee Reconnect Governor Bill Haslam pitches his plan to use colleges of applied technology to raise the quality of the state’s adult workforce.
Plus: A New Offer for the Model Mill
and
Big Changes Coming in Residential Real Estate Closings
Bill Haslam with Elizabethton TCAT Director Dean Blevins. Photo by Adam Campbell.
MAY 2015
$3.00 Volume 27 Number 9
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Path to Prosperity: Business Backs Healthy Kingsport
Plus: Bristol Country Club Changes Hands
and
Heather Cook, executive director Healthy Kingsport walks with Perry Stuckey, Eastman Chemical Co., vice president on Kingsport’s Greenbelt. Photo by Jeff Keeling
Mountain States, Wellmont Seek Public Input on Merger
On the next several pages you’ll find a year’s worth of relevant news, market intelligence and data from the pages of The Business Journal of Tri-Cities, TN/VA’s 2015 editions. You’ll certainly remember some of it – but you’ll be back for more when you’re trying to remember that thing you read, but can’t remember where you originally read it. This is Newsmakers 2015, in which we look back at the stories that had not only the greatest impact on our region’s business community, but also were the best read and most widely discussed. The heart of Newsmakers is the heart of The Business Journal: the individuals, organizations and companies that shape not only the business community, but the lives of everyone in the region. Whether growing or shrinking the tax base and employment level; interacting with government on a local, state or federal level; or creating trends that will drive the economy into 2016, its likely these Newsmakers affected your business in some way. So enjoy these abbreviated versions of the biggest stories of the year, with, where appropriate, updated information.
Walters, Harmon enter JA Business Hall of Fame
Plus: Worthington Industries Expands
and
Levine, Wykoff among those representing region at Corridor Summit
Mitch Walters and Roy Harmon at the Junior Achievement Tri-Cities, TN/VA Business Hall of Fame Induction Celebration
JUNE 2015
$3.00 Volume 27 Number 10
BJournal.com | June 2015 | The Business Journal of Tri-Cities TN/VA
Familiar Face:
Plus: Alpha Natural Resources Files for Chapter 11
Beth Rhinehart takes the helm at the Bristol Chamber
and
K-VA-T Food Stores Buys Into Chattanooga
and
Healthcare Heroes 2015
Beth Rhinehart at Bristol Chamber headquarters. Photo by Adam Campbell.
JULY 2015
AUGUST 2015
$3.00 Volume 27 Number 11
The Business Journal of Tri-Cities TN/VA | July 2015 | bjournal.com
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$3.00 Volume 27 Number 12
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The Future is Now:
bjournal.com | August 2015 | The Business Journal of Tri-Cities TN/VA
Sultans Salve:
Accepting the Challenge
of
Cabela’s, The Falls’ first retailer, prepares to open its doors
Crown Laboratories on a revenue growth roll TCRA moving dirt for aesthetics and economic development
College football in Johnson City and Bristol
Buying local in the IT suite
2015
Bristol’s Emphasis on Manufacturing
Plus:
Plus:
How the MSHA-Wellmont COPA will be implemented
1
and
and
Plus:
Hopping on the Craft Beer Wagon
Crown Laboratories CEO Jeff Bedard, right, with Director of Finance Nick Crowe, center, and General Counsel James R. Lawrence III.
T.J. Foy, general manager, Cabela’s, Bristol, Va. Photo by Scott Robertson
and
Q & A: Bart Hove
Photo by Adam Campbell
SEPTEMBER 2015
OCTOBER 2015
$3.00 Volume 28 Number 1
NOVEMBER 2015
$3.00 Volume 28 Number 2
Touring students from Virginia High and Tennessee High observe Ashley Roberts, a cell operator at Bristol Compressors.
DECEMBER 2015
$3.00 Volume 28 Number 3
$3.00 Volume 28 Number 4
Photo by Scott Robertson
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40 The Business Journal of Tri-Cities TN/VA | December 2015
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November 2015 | The Business Journal of Tri-Cities TN/VA
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Systems, ETSU announce plans to create ‘health improvement organization’ By Jeff Keeling and Scott Robertson
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he region’s two major health systems announced during an April 2 press conference their plans to merge. The merger of Mountain States Health Alliance and Wellmont Health System, which envisions a major role for East Tennessee State University, was agreed in principle with the signing of a term sheet between the two systems’ leaders. They said they hoped for regulatory approval by the state of Tennessee and Commonwealth of Virginia by the end of 2015 for an arrangement that, while it would essentially eliminate competition in the regional market, would benefit patients and payers. During its search, Wellmont had discussions with a number of suitors from outside the region. It was one of those suitors, said Wellmont board chairman Roger Leonard, who helped move the needle toward a local option. “One of the CEOs pulled me aside and said, ‘as much as we would like to merge with you, you have 20 percent overutilization in your market … you’re really going to have to address that inside the market. We can’t come in from the outside and address that.’ “Through these savings that are going to be generated,” Leonard added, “we’ll be able to reinvest resources into new programs, into new services that we’re not addressing right now.” Mountain States chair Barbara Allen said the new system – the name of which has not been announced – will be, “among the best health systems in the nation.” In addition, Allen said, rather than proving a detriment to consumers and patients, the elimination of competition will help unleash better quality and allow for more favorable cost structures. “We will be known as a high-value system, committed to not only decreasing the growth in cost of health care, but in becoming a system that consistently performs as one of America’s most highly reliable, high quality health care systems,” she added. Online at bjournal.com
Proposed to lead that system at the highest management level are Mountain States CEO Alan Levine as executive chairman and president; Wellmont interim CEO Bart Hove as CEO; Mountain States Chief Operating Officer Marvin Eichorn as COO; and Wellmont Chief Financial Bart Hove discusses future plans as Alan Levine listens during the April 2 Officer Alice Pope news conference announcing the merger plans. Photo by Adam Campbell. as CFO. ETSU President Dr. Brian Noland would serve the benefits of the plan outweigh disadas an ex officio member of the new board, vantages presented by lack of competiwhich would include six representatives tion. The COPAs would be regulated selected by each of the two current boards, for compliance, and would also prevent and two additional at-large community federal anti-trust action unless either members. state were to decide the arrangement An “integration council” that includes wasn’t delivering on its goals. significant physician representation will Update: In the November issue, work toward a “definitive agreement” of Wellmont CEO Bart Hove told The merger. ETSU will lead a health assessJournal the original state approval goal of ment this summer and fall that will help “the end of 2015 would not be met. “ We define the system’s goals and structure. still intend to file the COPA applications Levine said “getting ahead of” the region’s in the fall, which I guess gets us up until manifold health problems at the commumid-December or so,” Hove said. “We’re nity level will be a major strategy as health working; our joint board task for integracare reform continues to shift payment tion council’s working on by-laws for the models in a way that discourages overreli- new system, policies about how we would ance on hospitalization. operate in general, reviewing the consul Levine said the goal is to create tancy reports, some of that information something, “that is designed to meet the has to be put into the COPA application triple aim that’s been adopted nationally, so that COPA application will be put out of improving the health of the population, for public view and so we look forward to secondly, improving individual outcomes the input that the public would have as for our patients, and third, reducing the we get ready to file that application in the overall cost of care for the employers and fall…There is a clock once the application the community.” is complete and it’s 120 days in Tennessee In the end, the proposal will go to and 150 days in Virginia...So sometime the states, with the systems seeking two after we file I’m sure we’ll get a request for “Certificates of Public Advantage” (COPA) more information before the clock starts based on the states’ determination that running.” December 2015 | The Business Journal of Tri-Cities TN/VA
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Alpha Natural Resources files for Chapter 11 Bankruptcy By Scott Robertson
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eaving many observers surprised at how quickly the action was taken, Bristol, Va.-based Alpha Natural Resources voluntarily filed for Chapter 11 bankruptcy protection Aug. 3. As late as four months prior, the coal mining company had reported having $476 million in cash. Immediately after filing, Alpha began assuring customers and vendors it plans to continue to conduct “business as usual” as the restructuring unfolds over the course of the next year to year-and-a-half. A statement to those companies which Alpha published online said, “We expect to continue operating, paying employees, suppliers and vendors, and delivering high-quality service to our customers. We’re committed to maintaining safe, compliant and productive operations.” Alpha was scheduled to repay a convertible bond at the beginning of August, but chose to file for Chapter 11 protection instead. In the meantime, Alpha has secured an 18-month Debtorin-Possession financing package totaling up to $692 million through Citigroup, led by a group of both its first and second lien lenders. That package, the company said, will allow Alpha to continue to meet its current contractual obligations and to enter into new contracts with, “no interruption of service or deliveries.” In an online communication to vendors, the company noted, “Alpha has more than sufficient liquidity to pay for all goods and services received during the restructuring process.” Alpha has hired Kurtzman Carson Consultants LLC to act as its claims agent regarding goods and services received before Aug. 3. As for whether or not petitioners will be paid the entire amount Alpha owed before filing, the company said, “Payment of pre-petition claims will be subject to the terms of Alpha’s final plan of reorganization. At this time, it is impossible to estimate what value a general unsecured claim will have in the company’s Chapter 11 cases.” Vendors of goods (but not services) 42 The Business Journal of Tri-Cities TN/VA | December 2015
received by the company within the last 20 days before the filing must, by law, be paid in full before general unsecured creditors receive payment. The day after the filing, the courts gave Alpha the okay to continue paying employee compensation and to honor medical and other benefits. Chairman and CEO Kevin Crutchfield issued a letter to employees stating, “We are not shutting our doors and going out of business. While certain types of
Kevin Crutchfield
bankruptcy can involve liquidating assets and closing the company, that’s not what this restructuring is about. During our proceedings, we will keep mining and selling coal, delivering high-quality service to our customers, and providing employee wages and benefits, all on an uninterrupted basis.” At its peak, Alpha employed 8,800 workers in five states. But the entire coal industry has been hit hard by a negative confluence of regulatory challenges, declines in natural gas prices, and declining demand worldwide. The company has had several layoffs in response, and Crutchfield’s letter said the company
would continue to do whatever it takes to reposition itself to succeed in the future. “We’ve experienced dramatic and adverse shifts in recent months, and I believe there’s been more change in the past three years than the last three decades combined,” Crutchfield said. “In many ways, we’ve seen a perfect storm of economic, competitive and regulatory factors converging to impose incredible stress on the industry. And, it is important to note that Alpha is not alone in this plight; in fact, no coal company is immune. I believe it is likely that we’ll see other coal companies choose a similar path in the coming months. “The industry must go through significant restructuring and consolidation to find success within the sector’s contracted market share,” Crutchfield continued. “While the landscape will change, our country and economies around the world still need coal for both power and infrastructure—and the silver lining in this storm is the significant opportunity available to the companies that take timely, strategic action. Our goal is to realize those opportunities, and we see reorganization as the first step in positioning ourselves to help shape this evolving industry landscape. “Though the toll on our business—and that of many others—has been unmistakable, these conditions won’t last forever. They never do. While producers will have to adapt to these factors in order to survive, I personally believe an eventual improvement in the market is inevitable because coal is not going away.” Neither are Crutchfield or his top brass. The release announcing the filing said the current management team is expected to remain in place to lead the company through the bankruptcy process. Said Crutchfield, “I can assure you that we arrived at the decision to pursue reorganization only after extensive consideration and analysis over the course of many months determined it was the best path forward at this time for Alpha.”
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Cabela’s becomes first store to open at The Falls By Scott Robertson
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eplete with a deli that serves wild game sandwiches, a fudge shop and a full array of powersports offerings, Cabela’s opened its long-anticipated 82,000-square-foot store at The Falls development in Bristol, Va., Oct. 1. The store is a mid-size Cabela’s, known as a NextGen store. It employs around 190, according to T.J. Foy, general manager. “As the company expands, from a business standpoint, the legacy stores (the older, larger stores) work very well when you don’t have any other stores within four or five hours drive from them. They draw from four hours away. We also have outposts, which are smaller stores, and I think we’ve learned that some of them were almost too small. This is the compromise between the legacy and outpost formats. “If you were to take this floorplan,” Foy
Online at bjournal.com
said, “add a mezzanine and about 60,00070,000 square feet of libraries and museums, you have a legacy store. So essentially, if you look at the downstairs portion of a legacy building, that’s what you have here.” When asked what the store is expected to gross, Foy said, “I know what I want to do. We still haven’t really finalized a 2016 budget yet. I personally would like to see $800,000 to $900,000 a week. Is that doable? I don’t know, but that’s my personal goal.” Update: Within six weeks of the Bristol Cabela’s opening, rumors began to swirl regarding a possible sale of Cabela’s to Bass Pro Shops. Reuters ran a story confirming talks between the two companies Nov. 5. The nearest Bass Pro Shops location to the Bristol Cabela’s is in Bristol, Tenn., five miles away.
T. J. Foy
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Baker doubles down on downtown By Jeff Keeling and Scott Robertson
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he entrepreneur who restored two centuryold railroad depots in downtown Johnson City hopes to do the same to the 106-year-old former General Mills building nearby, though a deal for the property has yet to be formalized. Joe Baker made an offer on the 4.8-acre, Chamber of Commerce Foundation-owned mill property April 24. The offer included invitations to both the Chamber of Commerce Serving Johnson City, Jonesborough and Washington County and East Tennessee State University’s arts programs to be tenants at the renovated mill, essentially rent-free. “We’ve had an interest in the mill for some time now and believe we have laid out a vision that creates long-term benefits for Johnson City and preserves an important piece of our history,” Baker told The Business Journal. Baker made the offer after a previous agreement between the Chamber and another
developer fell through. That deal would have resulted in the razing of the old mill to make way for an apartment complex targeted toward ETSU students. Baker already has a track record of success with downtown redevelopment in Johnson City. In 2012 he purchased the former Carolina, Clinchfield and Ohio Railroad depot, where Tupelo Honey opened in 2014. Baker then redeveloped the former East Tennessee & Western North Carolina Railroad depot across State of Franklin Road, creating Yee-Haw Brewing Company in the process. Baker is currently redeveloping two other historic buildings, the former Sherwood Chevrolet building and the former Free Service Tire headquarters, both next door to Yee-Haw Brewing Company. Meanwhile, the deal between Baker and the Chamber Foundation remains a work in progress.
Joe Baker
CSX to shutter Unicoi County operations By Scott Robertson
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nicoi County Mayor Greg Lynch put it succinctly. “The soul of Unicoi County has been ripped out.” CSX, an intermodal transportation company best known for operating rail lines announced Oct. 15 it would significantly reduce the scope of its operations in Erwin, Tenn. The railway plans to close a locomotive service center, project shop and car shop, and eliminate switching operations at the Erwin yard. Roughly 300 CSX employees who work at the facilities and in support roles are affected. The company has offered effected employees at least 60 days pay and benefits and is working with the union to see that employees with greatest seniority are offered positions elsewhere in the company. Still, the effect of losing 300 relatively high paying jobs will come as a significant blow to the local economy. Bureau of Labor Statistics showed Unicoi County as having an employment level of 4,788. “This is more than 300 jobs we’re talking about,” said Congressman Phil Roe. “It’s 44 The Business Journal of Tri-Cities TN/VA | December 2015
closer to 1,000. Look at the Ford dealer down the road. How much business do you think this will cost that car dealer? The trickle-down effect is devastating. And 60 days will pass very quickly.” Roe was one of several government officials brought together at the behest of State Senator Rusty Crowe and State Representative John Holsclaw Oct. 30 at Erwin Town Hall. Key among the officials in attendance was Randy Boyd, Tennessee’s Economic and Community Development Commissioner. “We’re going to find a way to fix this,” Boyd said. “What affects Unicoi County affects all Tennessee, and we’re all in this together.” Boyd immediately suggesting using Rural Development Initiative resources to help address the damage to the community. “The state is looking for areas that could be developed where we can be a partner to start helping develop sites. That is convenient for this situation.” Boyd also pointed out CSX has, “a lot
of property that could be put back into the community.” An economic development site in Northeast Tennessee with on-site rail plus easy-off, easy-on interstate highway access and a good deal of flat ground is a rarity, and could be used to bring in another employer to help replace the jobs CSX is ending. And we’re looking at the quickest ways we can help,” said Sterling Van Der Spuy of the Labor Department. “Whether it’s training into higher education or training into other business in the region.” To that end, a career center will open in Unicoi County, on property owned by East Tennessee State University, said Kathy Pierce of the Northeast Tennessee Workforce Investment Board. “We have had several companies, though I won’t mention them by name, contact us to let us know they are interested in these highly skilled individuals who have an excellent work ethic.”
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Dentsply keeps 189 jobs in Washington County, Tenn. By Scott Robertson
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he Washington County Industrial Development Board (IDB) in March approved a payment-in-lieu-of-tax agreement with JCM International Inc., a holding company for Tulsa Dentsply, that would keep the company’s 189 local jobs in place, while obligating the company to create 25 new jobs and make a taxable capital investment of $16.6 million over the course of a new 15-year lease. The county will put $700,000 into the agreement, but will recoup that through facility rental payments, said Mitch Miller, CEO of the WashMitch Miller ington County Economic Development Council. Dentsply, a publicly-traded multinational company, currently operates locally in the building at 608 Rolling Hills Drive in Johnson City. Under the terms of the agreement, the county would, through the IDB, grant $700,000 to purchase the building. The company will then pay rent to the county beginning in the fourth year of the 15-year lease. Should the company be within 80 percent of its stated goals for job creation and capital investment through the end of year four, the company will begin paying $2,100/month in rent. Each year after that, through the 11th year, rent will rise by $1,000/month. In the 12th year, rent will peak at $10,000/ month, where it will remain through the course of the lease. The county is also protected by penalties that automatically kick in should the company fail to meet its stated goals for new job creation and capital investment. Should the company fail to reach either of those goals by the end of the fifth year, the rent rises dramatically, almost doubling in year six and reaching the $10,000/month mark in year eight. Online at bjournal.com
Should the company cut jobs to half the stated goal rather than creating new jobs, or should the capital investment be less than half the stated goal of $16.6 million after five years, the rent would immediately jump to $10,000/month and continue rising to $11,487/month by year 15.
At the end of the 15-year lease, the company has the option to purchase the property from the county for one dollar, provided it has come within 80 percent of its goals for job creation and investment and guarantees it will not cut jobs at the facility within the next five years.
December 2015 | The Business Journal of Tri-Cities TN/VA
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TVA outlines Boone Dam repair plan
Opportunities for local business touted By Scott Robertson
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he Tennessee Valley Authority held a series of meetings July 30 to announce its plan to address seepage issues at Boone Dam. After meeting with elected officials and the media, John McCormick, TVA vice president of Safety, River Management and Environment told a crowd of just over 300 at a public information session in Johnson City, “We have benchmarked this project. We have looked at many dams that have gone through this kind of repair, and the benchmark for this type of operation is about five and seven years to perform.” After a few seconds of catcalls from disappointed attendees, McCormick continued, “It’s also going to cost in the neighborhood of between $200-300 million to install, but I will tell you, this is a permanent repair for this reservoir. This is doing it right.” Many residents and businesspeople whose properties abut the lake have been adversely affected by TVA’s decision to lower the lake level to take pressure off the earthen portion of the dam. TVA has been studying the extent of, and potential solutions for the seepage problem since it was discovered in the earthen portion of the dam last October. Investigation of a sinkhole at that time led to the discovery of a series of underground geological pathways allowing water “piping” to cause internal erosion. If left uncorrected, McCormick said, the erosion could eventually lead to the failure of the dam. “We looked at many, many options,” McCormick said. “We had to. We are required by law to look at many options. Our long-term fix is to insert a concrete cutoff wall in the earthen dam. That concrete wall will go in in three stages. “Stage one will require us to drill multiple columns and multiple rows from the concrete structure all the way past the beach area,” McCormick said. “About 500 borings will have to be done. We will drill down into the epikarst and
46 The Business Journal of Tri-Cities TN/VA | December 2015
insert low-mobility grout. To help you see low-mobility grout in your mind, think of cold toothpaste.
John McCormick
John Kammeyer Photos by Scott Robertson
“Stage two will also require us to put multiple borings into the earthen dam,” McCormick said. “In this case, there will be three across the entire length of the dam. This will go 250 to 300 feet down into bedrock. Again, the intent of drilling down and inserting this low mobility grout, which
will harden under the surface of the earth, is to stop the water flow. “The third and final stage is putting in this ‘concrete’ – and it’s not actually concrete, it’s a composite that acts like concrete – cut-off wall. This wall is going to go from the top of the crest down as far as 250 feet. It will be multiple feet thick. And again, it will run the entire length of the earthen dam.” “We had other options,” McCormick said. “We could do it faster. But we would find ourselves in the very same position we are today again. (Doing it faster) is not a permanent, or even a long-term repair. This is a permanent repair that puts us in a position to deal with sinkholes that come up in the future without having to take that water level down.” While several businesses already have been, and will continue to be adversely affected by the drawdown of the lake level, the long repair time, limited space and number of workers will likely create opportunities for other local businesses. The owner of a lakeside apartment complex, Kevin Beckett, approached TVA officials at the public information session about the possibility of housing workers. “When the lake was up, (my apartments were) 100 percent full. I’m currently at 50 percent occupancy, and after the announcement today, I’m almost sure I’m going to lose more. So my question is not for a handout or help. What I would like to do is possibly…set up some kind of contractual agreement for housing for your workers. That will help me and you.” Vish Patel, owner of The Boone Store, a gas station across Highway 75 from the Boone Dam turnoff, also sought a contract with TVA. In his case, it would be for provision of fuel for the trucks that will be delivering materials to the dam. Kammeyer told Patel, “There’ll be opportunity for a lot of local business growth, new business, so yes, absolutely.”
Online at bjournal.com
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Food City heads southwest with BI-LO acquisition By Jeff Keeling
K
-VA-T Food Stores, parent company tan area of Tennessee, with good growth of Interstate 81 near Abingdon, creating of Food City, this summer announced – they’ve got the Volkswagen plant and new trucking and warehouse jobs. The its intention to acquire 29 BI-LO suother associated industries that are com- corporate office in Abingdon also will be permarkets in the Chattanooga market. ing in because of that.” adding new jobs in accounting and other The purchase (terms are undisclosed) The growth will ripple into the Triareas to support the growth. “This is increases the Abingdon, Va.-based Cities as well, Smith added. Distribution going to create between 60 and 90 jobs at company’s store count by nearly a third, for the newly acquired stores will move to our distribution center,” Smith said. from 93 to 122. Food City’s distribution center at Exit 22 The July 23 announcement listed 21 Tennessee stores and eight in Georgia, totaling 1.2 million square feet and employing 2,000 people. Most are Steve Smith former Red Food stores, a company for which current Food City COO Jesse Lewis previously worked and which BI-LO’s then-parent company Find out how quick and easy it is to express purchased in 1994. yourself with a bath transformation from Food City CEO Steve Smith said his company – which is part employeeBath Planet. A full palette of colors, patterns owned – planned to retain BI-LO Ge workers, honor their years of service, and in and accessories await you. Get that stylish bath invest about $40 million in upgrading the Fin BI-LO stores. you’ve always dreamed of now! Contact your Smith said the former Red Food Get the Bathroom of your you dr Ba stores have seen numerous owners since ® installed in as little as a day Get the Bathroom of your dreams Get the Bathroom of you local Bath Planet dealer at bathplanet.com/ first being sold more than 20 years ago. installed a installed in as little as a day!in as little asan Find out how quick and easy it is toyou ex “They’ve almost been like a foster child tricities . Find out how quick and easy it is yourself with bath transformation loc fro that’s bounced from family to family, and Find out how quick and easy ita is to express yourself with a bath transformatio now they’re going to get a permanent Planet. A full from palette of colors,tric pa yourself with aBath bath transformation Bath Planet. A full palette of colo home.” CallPlanet. nowAfor FREEofand shower door Bath fullapalette colors, patterns and accessories await you. Get that accessories await you. Get st “It gives us a lot of opportunity to always dreamed of Conta now! C and accessories await you.you’ve Getdreamed that stylish you’ve always ofbath now! upgrade with a complete bath dealer at bathp local Planet grow (between those points) and on up you’ve always local dreamed of Planet now!Bath Contact your remodel* dealer at bathplane Bath tricities . the Sequatchie Valley. There’s a lot of dealer at bathplanet.com/ local Bath Planet tricities . Call now for a FREE shower door county seat towns up there that need Call now for a FREE shower tricities . bath upgrade with adoor complete good grocery stores. I think there’s room Call now for a FREE door remodel* upgrade withshower a complete bath FOR AS LONG AS YOU OWN YOUR HOME for us to build at least 10 or 12 supermarupgrade with a complete bath remodel* *Includes product and labor; bath or shower and wall surround. kets in the not-too-distant future.” Smith remodel* Bath Pl Cannot be combined with any other offer. Mention promo code: BPTWINS. EachYOU dealership independently and operated. ©2015 Bath Planet, Tri-C FOR AS LONG AS OWN YOUR owned HOME said there could also be independent LLC. BP-AIP-FPAD. (423) 21 ONG ASstores YOUwilling OWN YOUR HOME Bath Plane to sell in that corridor. Bath Planet of Tri-Cities FOR AS LONG AS YOU OWN YOUR HOME Regardless of any such eventualities, Tri-Cities FOR AS LONG AS YOU OWN YOUR HOME (423) 217-43 bor; bath or shower and wall surround. BP_STY_FPAD_02_2015_ƒ.indd 1 *Includes product and labor; bath or shower and wall surround. Smith sounded bullish on the opportunity (423) 217-4348 Cannot combined with any offer. Mention promo code: BPTWINS. h any other offer. Mention promo code: BPTWINS. MADE *Includes product and be labor; bath or shower andother wall surround. Each dealership independently owned and operated. ©2015 Bath Planet, for revenue growth in the 29 stores being Cannot be combined with any other offer. Mention promo code: BPTWINS. MADE dently owned and operated. ©2015 Bath Planet, LLC. BP-AIP-FPAD. Each dealership independently owned and operated. ©2015 Bath Planet, IN USA IN USA acquired. “It’s another major metropoli- LLC. BP-AIP-FPAD.
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December 2015 | The Business Journal of Tri-Cities TN/VA 2/18/15 4712:58 PM
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| FEATURES FINANCIALS, CONTINUED
game” as part of a Tennessee expansion, and that an expansion, “would help us and it would help the people who became eligible. Neither system is budgeting for such a scenario, though. “Our planning in the short run has to be that it hasn’t happened and it may not happen, so we have to be more diligent than we even normally would about being very cost effective,” Eichorn said. Pope said that in Wellmont’s projections, “we’re assuming it’s not going to happen,” though she and Eichorn both mentioned a sliver of a silver lining. Pope called it “the woodwork effect.” In states that haven’t expanded Medicaid, the attention generated has led to an uptick in people who are eligible for Medicaid (TennCare in Tennessee) but weren’t signed up, signing up. “That has helped some,” Pope said. “It would have been better if we had had Medicaid expansion, but we didn’t and it’s just something we have to work with.” Another thing the systems have to work with is that rise in the number of patients on high deductible plans mentioned early in this story. More and more working families with insurance, and incomes in the $40,000 to $75,000 annual range, have high deductible plans. Pope said she believes such plans represent a step in the right direction toward consumers becoming more involved in and knowledgeable about their health care, but she and Eichorn both said the transition is creating some bumps. And some of those bumps are hitting the systems’ bottom lines. For instance, MSHA’s “allowance for doubtful accounts” as a percentage of
48 The Business Journal of Tri-Cities TN/VA | December 2015
its accounts receivable increased by more than a third in 2015. Employees need to contribute to paying for their care, Pope said – “when someone else is paying for something and there’s no individual responsibility, that’s when spending does kind of get out of control” – but she added that too many high deductible plans don’t cover 100 percent of important preventive services. That’s the type of health care that, when accessed, can prevent the need for much more expensive care later. “There should be a benefit plan redesign to encourage that,” Pope added. The end result of the high deductible plans is many more patients with $3,000 to $5,000 deductibles who just can’t come up with that kind of money. “It used to be in the commercial world there were very low deductibles, and we always had some kind of writeoffs, but it was $300, $400,” said Eichorn, who called the trend “very worrisome. It’s something that’s a challenge in terms of running our organization, but these are real people, too, who are in our community.” He and Pope both said their systems are doing all they can to work with families in these cases. Wellmont, Pope said, has become more flexible in its debt writedown and writeoff approach to help citizens cope with the trend. But she said getting people accessing preventive care remains a key. “The worst thing that can happen is if they defer the services they need because of financial concerns and then they end up getting much sicker,” she said.
And the strength to change things one can In counteracting those things that are out of their control – Medicaid expansion, high deductible plans and, according to Eichorn, steeply rising pharmaceutical costs – Eichorn and Pope both said their systems were quite successful in FY 2015. Where the rubber really meets the road – the ratio of patient revenues to expenses – both systems saw improvements, and both Eichorn and Pope lauded the overall effort to control expenses. Wellmont’s net patient revenues as a percentage of total expenses increased from 96.7 to 98.1. MSHA’s rose even more markedly, from 92.9 percent to 96 percent. (Both systems have additional operating revenues that put them in the black, with MSHA’s CrestPoint insurance revenues – and related expenses – impacting its numbers.) “We work with our employees and our physicians to make significant improvements in the money that we spend on medical supplies, on drugs,” Pope said. “We’re always wanting to make sure that we manage our employee resources, that we’re appropriately staffed. We also have a strong balance sheet, and that has allowed us to lower our cost of debt … those are really the primary things that we do every day to try and improve our financial performance.” Eichorn had similar things to say about operations at MSHA. He also said MSHA is adapting to the transformation from fee for service to value based payments by, for instance, participating in the Medicare Shared Savings Program (MSSP). Systems able to lower growth in Medicare fee-for-service costs, while meeting performance standards on
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quality of care can qualify for MSSP incentive payments. In 2014, participants were measured simply on their reporting of metrics. In 2015, “we actually had to achieve certain quality measures,” Eichorn said. The program netted MSHA $5.42 million in 2014, and $2.86 million in 2015. Eichorn said the measuring stick will continue to get tougher. But programs like the MSSP, he said, are critical to transitioning the U.S. – providers and patients alike – to a wellness-oriented health care model and a value-based payment system. “With what we were able to do, we improved quality and saved the federal government money at the same time. And as we were able to work with these folks to where they didn’t need to use services as much, it saved the people money, too.” Pope had much the same to say about another major factor in health care reform: electronic health records. The federal government has provided “meaningful use” incentive payments to help offset the cost of implementing those systems, though those payments are tapering off and will cease within a couple years (MSHA’s were $18.3 million in 2014 and just $1.9 million in 2015; Wellmont’s were $7.2 million in 2014 and $3.2 million in 2015). Pope believes the expense will prove to have been worth it, saying, “the future of health care really is dependent upon an electronic health record. That is where a lot of our redundancy and our inefficiencies come. Right now, to a certain extent doctors rely on what patients tell them and then they follow that up with testing and diagnosing and all that. The future state is that this electronic health record is shared amongst all the providers so that we have better information and we can avoid that duplication and provide much better patient care.” The return on investment won’t be immediate, Pope said. “Anything that disruptive to an industry will take time to prove out the benefit. I don’t think we’ll be able to judge that in 12, 18, 24 months, but we can all agree that there is value in having better information through an electronic means as opposed to a paper health record.”
Whatever the future may bring While pleased with MSHA’s inpatient volume growth and cost containment in 2015, Eichorn said both those accomplish-
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ments aren’t easy to duplicate, or to sustain indefinitely – particularly given health care and demographic trends. “We’re up about 6 percent through the first four months of this fiscal year (through Oct. 30), but we’re not going to be able to continue with that pace,” Eichorn said. “For one thing, folks in our market use inpatient care at a much higher rate than the national average, so we’ve already got this pressure to reduce that.” And on the expense side, Eichorn said, “you eventually run into diminishing returns once you’ve reached a certain level of efficiency.” Those factors are among the reasons MSHA has embarked on an aggressive debt paydown strategy. The system incurred high debt levels as it grew and purchased hospitals through 2009. Debt ratios have been the biggest impediment to an improvement in MSHA’s BBB-plus credit rating. Last year, it sliced $44 million off its debt partly by paying extra when days cash on hand exceeded a set level. MSHA should see its debt go below $1 billion by the end of fiscal 2016. The system will be eligible to refinance some of its higher-interest bonds over the next few years, and Eichorn said, “you’re going to see over the next three to four years a very substantial amount of our debt (potentially $190 million above scheduled payments) get paid down.” Debt isn’t as much of a factor for Wellmont, which has no plans to pay extra, Pope said. MSHA’s long-term debt at June 30 was 97 percent of its 2015 revenues, excluding investment income. Wellmont’s debt, at $480 million, was just 59 percent of its revenues. Regardless of what things may look like at June 30, 2016, when both Pope and Eichorn hope the systems will be facing the future together, the situation for the foreseeable future will involve plenty of reformdriven uncertainty. “It’s like having one foot on the dock and one foot on the boat,” Pope said. “That is a weird world. It would almost be better if you could just snap your fingers and we go completely from pay for volume on Monday to getting paid for value on Tuesday. Because now, we’re living in both worlds, and that’s where as an industry it’s tough going through all these transitions.”
December 2015 | The Business Journal of Tri-Cities TN/VA
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| DEPARTMENTS ON THE MOVE Advertising and Public Relations Creative Energy, the region’s largest locally owned advertising, marketing and public relations firm, has added talent to its roster and promoted from within the company to meet the demand of a rapidly expanding client base. To support the firm’s existing cadre of art directors, Creative Energy has staffed a team of studio artists who are experts in graphic design. Senior Art Director Alice Salyer was promoted with the additional title of Studio Manager to oversee the team of four new studio artists. To date, one studio artist, Isaac Caraway, has been hired as a full-time studio artist. Meara Bridges, a Greeneville, Tenn., native and graduate of ETSU, has been promoted to Junior Art Director. Newly hired Junior Account Executive Jessica Lambert provides support services to the firm’s account executives handling major accounts. Juanita Vaughn has joined Creative Energy as Traffic Coordinator.
Front row: Isaac Caraway, Jessica Lambert. Back row: Juanita Vaughn, Alice Salyer, Meara Bridges.
Banking and Finance Highlands Bankshares, Inc. and its subsidiary, Highlands Union Bank (HUB), recently announced that the boards of
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50 The Business Journal of Tri-Cities TN/VA | December 2015
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Wellness recently announced that K-VA-T Food Stores Inc., parent company for Food City, has Eastman honored by AIChE for Excellence in been named a 2015 Healthier Tennessee WorkAdvancing Process Safety place for its commitment to encouraging and The American Institute of Chemical Engienabling employees to live a healthy lifestyle both neers (AIChE) honored Mark J. Costa, chairman at work and at home. and CEO of Eastman Chemical Company “Food City has created a culture of wellness (NYSE:EMN), for Excellence in Advancing Prothat encourages and enables employees to be cess Safety in the Specialty Chemicals Industry. healthier, more productive, and more satisfied The award was presented by AIChE at an awards with their jobs. It’s good for business, and it’s gala last month in New York City. Eastman was good for Tennessee,” Rick Johnson, president honored for its distinguished, global achievements and chief executive officer of the Governor’s in environmental, health, safety and security Foundation said. performance, along with the company’s strong “The health and wellbeing of our associates is commitment to continuously improving its vital to our company. We’re proud to have develpractices. oped a comprehensive program to help educate, In accepting the award, Costa said, “The support and enable our associates to live full and commitment to design, operate, and maintain productive lives, both personally and professionour facilities in a safe manner is far more than a ally,” said Steve Smith, Food City president and business objective. We consider it an obligation of chief executive officer. our company and each of our employees. It is an expectation that is woven into our culture and is Bristol’s Strongwell wins award for part of our DNA.” Composites Excellence Bristol, Va.-based pultrusion company Governor’s Foundation recognizes Food City as a Strongwell won the Infinite Possibility for Market Healthier Tennessee Workplace Growth Award from the American Composites The Governor’s Foundation for Health and SEE AWARDS & ACHIEVEMENTS, 50
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| DEPARTMENTS AWARDS & ACHIEVEMENTS, CONTINUED
Manufacturers Association (ACMA) during the 2015 Composites and Advanced Materials Expo (CAMX) in Dallas, Texas. CAMX, produced by ACMA and the Society for the Advancement of Material and Process Engineering (SAMPE), is the premier conference for composite material products, solutions, networking, business, and advanced industry thinking. This year, the conference was attended by nearly 7,500 people.
Pal’s Business Excellence Institute claims top award for Performance Excellence in Tennessee Pal’s Business Excellence Institute (Pal’s BEI) was recently awarded the Excellence Award from the Tennessee Center for Performance Excellence (TNCPE). Excellence Award recipients are outstanding examples of high-performance organizations, exhibiting high sustainable results and world-class processes that serve as role models for others. Pal’s BEI provides training and consulting, based on the world-class practices of Pal’s Sudden Service, a regional quick-serve restaurant chain and winner of the Malcolm Baldrige National Quality Award. “We are honored to join the ranks of the outstanding organizations that have previously been recognized at the Excellence Award level over the past 23 years,” says David McClaskey, Pal’s BEI president/co-founder. “The TNCPE and Baldrige processes are at the center of both what we teach and how we manage for excellence.”
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December 2015 | The Business Journal of Tri-Cities TN/VA
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| THE LAST WORD
Reality check: It’s cheaper to buy than rent, and there’s help for buyers By Sharon Duncan
T
he first major holiday that marks year’s end is finished. And, as you polish off the leftover turkey here’s a couple housing market considerations for those who sat back and watched the best year since 2008 slip past. I totally agree with Millennials who think buying a first home is scary. But the best way to come to terms with that is to stop looking in the rear view mirror and reliving the bruising years of the Great Recession and a snail’s pace recovery. That was then and now is now. Knowing what’s happening with the local economy can soothe some of yesteryear’s fears and put you in the right frame of mind to face the future. Remember that bad news will always get more attention than good news. While a layoff gets a prime spot on TV and a big front-page headline, the bigger picture about job and employment gains gets far less – if any – regular attention. The reality is in October there were 3,200 more nonfarm jobs in the Tri-Cities than there were during October of last year. Wages are also improving. More jobs, better wages and lower gas prices mean retail sales are increasing. Although the numbers are not in yet, in all likelihood, home sales will move past the 12-month total from last year in November. That’s a reality check from reliable sources that contradicts a story making the rounds that the local economy is slowing down. With that reality in hand focus on a few other speed bumps on the road to home buying. In a perfect world every buyer would have a 20 percent down payment. Twenty percent is a best-case lending industry benchmark. Some lenders would also like to see the 30-year mortgage go away, but we don’t live in a perfect world. Locally the average down payment is in the range of 10 to 15 percent, and most mortgages are written for 360 months. Some potential buyers are sitting on the fence because they think buying a home costs too much. Granted, you can find examples of homes with seven-figure price tags in the Tri-Cities. It’s also true that prices start in the $225,000 and up range in many of the new home developments. But it’s also true that that’s not the norm.
54 The Business Journal of Tri-Cities TN/VA | December 2015
In October $165,750 was the median price of a previously owned, single-family home in Johnson City. In Kingsport it was $140,000, and it ranged lower in all local major city markets except Erwin where it was $145,000. In fact, 63 percent of the Tri-Cities homes on the market this month are in the $200,000 and below price range. There are many programs to help buyers and they’re not all for first-time buyers. According to the group at Down Payment Resource, 73 percent of the homeownership programs have no first-time buyer requirement. Programs are available in urban and rural settings. And you might be surprised that you don’t have to get very far from the city limits to be considered rural. This is the reason potential buyers need to shop homeownership programs to find one that fits their needs. Resources include Realtors, local agencies like Eastern Eight Community Development Corp. and the Tennessee Housing Development Agency. The U.S. Department of Housing and Urban Development, the U.S. Department of Agriculture and Veterans Administration can also be added to the list. Down Payment Resource recently pointed out in an article that there are more than 2,400 programs available across the country and 85 percent have funds available for homebuyers. “It’s important for new buyers to seek homeownership education. It’s often a requirement for down payment programs and it gives buyers confidence with the home buying process, financing options, including down payment programs, and budgeting.” According to the most recent Census data almost half (49.5 percent) of renters in Tri-Cities are paying 35 percent or more of their income on housing. Compare that to the largest share of homeowners with a mortgage. In the fourcounty Kingsport-Bristol Metropolitan Statistical Area (MSA) comprising Sullivan, Hawkins, Scott and Washington Co. Va., 47.1 percent were paying 20 percent or less of their income on housing. For the three-county Johnson City MSA (Washington, Carter and Unicoi counties) the number was 46 percent paying 20 percent or less. It doesn’t take an advanced degree in economics to see the advantage of buying a home instead of renting in the Tri-Cities. Sharon Duncan is the 2015 president of the Northeast Tennessee Association of Realtors. The real estate education and trade group is the voice for real estate in the Tri-Cities and has more than 1,000 local Realtor members and almost 60 affiliates.
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56 The Business Journal of Tri-Cities TN/VA | December 2015
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