Monday Business Briefing: Aetna-Humana merger faces further headwinds; Butchertown development boom continues; new hotel planned; and more
Welcome to the March 7 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Researchers: No evidence that health care mergers increase innovation
More headwinds for the proposed Aetna-Humana merger: Two researchers said “there is no evidence” that more concentrated insurance markets result in greater innovation.
Hartford, Conn.-based Aetna wants to buy Louisville-based Humana for $37 billion.
The merger has been approved by shareholders of both companies but is still being scrutinized by the U.S. Department of Justice, which wants to make sure the merger does not substantially lessen competition.
The companies have said their proposed merger would “drive better value and higher-quality health care by reducing administrative costs, leveraging best-in-breed practices from the two companies … and enabling the company to better compete with more cost effective products.”
However, consumer and health organizations, including the American Medical Association, have said they expect the merger would reduce competition and increase costs for consumers.
Aetna and Humana also have said the proposed merger would build “on each company’s respective efforts to provide innovative, technology-driven products, services and solutions to build healthier populations, promote higher quality health care at lower cost, and offer greater transparency and convenience for consumers.”
But new research by Northwestern University professors Leemore Dafny and Christopher Ody suggests that consolidation in the health care industry is unlikely to serve as a catalyst for change and innovation.
The industry in general has struggled to innovate, the researchers wrote.
“After all, insurance plans today can be described using virtually the same terms as 35 years ago: deductibles, coinsurance rates and limitations on certain services.”
“The ‘innovation’ of today — ‘limited,’ ‘narrow,’ or ‘high-performance’ networks — is actually a variant on the well-worn strategy of ‘selective contracting.’ Identifying the most effective and efficient providers, negotiating favorable terms with these providers, and providing financial incentives to patients to utilize these providers are tried and tested tactics in insurers’ toolkits,” the professors wrote.
Work begins on Louisville advisory firm’s long-planned expansion in Butchertown
Two and a half years after buying the property and securing state tax incentives, banking advisory firm White Clay is ready to move forward with its expansion.
White Clay, headquartered at 1515 Story Ave., is renovating and adding on to the 100-year-old building next door at 1509 Story Ave., where it plans to add new offices.
In 2013, the Kentucky Economic Development Finance Authority approved nearly $50,000 in state tax incentive for the $1.85 million project, according to state records, and the company bought the property for $160,000, according to county property records.
However, company leaders took awhile to decide exactly how they wanted to lay out the new building and how to make the puzzle pieces fit into the old building, according to White Clay co-owner Mac Thompson.
In the meantime, the company has added 13 jobs, for a total of 30, he said. “We are kind of packed into where we are. We have plans to further grow.”
White Clay provides services and software to small and regional banks that help improve the customer experience, collect performance data and drive sales. The company has a new line of products that Thompson said will allow it to continue growing.
The historic building is about 12,000 square feet and the addition, which will provide a modern twist, is about 2,500 square feet, Thompson said, more than doubling its current 10,000 square feet of office space.
The 100-year-old building will look much the same from the outside, and it will be connected to the addition via a glass hallway and courtyard, Thompson said. “(The new building is) almost like three shotguns put together with a very modern aesthetic.”
Renderings of the new building weren’t available, but Thompson said he thinks it melds well with surrounding properties.
“It was really trying to ensure we could create a space that would fit the community as well as provide what we need,” he said.
Architect Ted Payne and construction company Kiel Thomson Co. are working on the project.
Thompson said he hopes to move into the new spaces by late summer. However, the restoration of the historic building may push that back.
“Once you get the wall open,” he said, “you realize you have a whole new set of problems.”
Venture Sharks applications due soon
Venture Connectors has upped the ante for this year’s Venture Sharks. This year’s winner will get double what previous winners received — a whopping $20,000 in cash and services. That’s a good chunk of change for an early-stage company. And the “Shark Tank”-style pitch competition already has 20 applicants, according to VC president Tendai Charasika.
The contest is done in two rounds. The finals will take place during the May Venture Connectors Luncheon. Applications are due March 16. Read more about the competition here. —Melissa Chipman
No, David Alan Grier won’t appear as Col. Harland Sanders
When comedian and actor David Alan Grier tweeted that KFC tapped him to play Col. Harland Sanders, people who believe anything they read on the Internet and take everything literally believed Grier.
It was clear (to some) that Grier was joking when he wrote “Breaking News: David Alan Grier has been cast as the first African American Colonel Sanders in the new KFC ad campaign. #KFC.”
Since rebooting its Colonel-focused advertising last year, comedians Norm MacDonald, Darrell Hammond and Jim Gaffigan have portrayed Sanders. All have a similar pale pallor as the real Sanders.
Hiring Grier would be quite the departure.
Kevin Hochman, chief marketing officer for KFC U.S., released a statement to the New York Daily News saying there is no new Colonel. At least for now, Gaffigan holds onto the job.
However, that doesn’t mean Grier couldn’t have a future in a KFC commercial. Hochman’s statement went on to say: “We are very excited to learn that Mr. Grier is such a big fan of KFC and The Colonel. We’re a big fan of him as well. We hope to continue the conversation with him over a $5 Fill Up.”
It wouldn’t be a complete surprise if Grier showed up in future advertising and maybe his joke will become reality. We’ll have to wait and see if he’s given a supporting role or if KFC doubles down its sometimes odd and often meta advertising and debuts a Colonel of color. —Caitlin Bowling
Fast-casual Vietnamese restaurant moving to Butcherblock
The new Butchertown development Butcherblock is filling up fast.
Insider Louisville broke the news last year that developer Andy Blieden was renovating nine properties in Butchertown, four that he plans to rent as apartments and five that will house new businesses. As of the New Year, Blieden had signed lease agreements with the owners of a home goods boutique and interior design company, a professional photographer, and the owner of a specialty food and arts and crafts store.
Butcherblock can now add a fast-casual Vietnamese restaurant to the list. Called Pho Ba Luu, the restaurant fills a 2,200 square foot space at 1019 E. Main St., according to a news release.
“As I learned more and more about their concept, I became more and more certain that Pho Ba Luu was the right fit as the anchor for this development,” Blieden said in the release. “And now, after seeing the design that they have put forward, and now tasted the food for myself, I can’t imagine anything else in the space.”
Blieden told IL back in August that he thought the former service station was perfect for a restaurant.
Pho Ba Luu is the brainchild of Mimi Ha, managing partner of August Moon Chinese Bistro, and Jessica Mach, who will act as managing partner of Pho Ba Luu.
“I’ve been blessed to be part of August Moon for over 25 years,” Ha said in the release. “It’s so exiting to now collaborate with Jessica on the food of my childhood with our new venture together.”
Once it opens this summer, the restaurant’s hours of operation will be 11 a.m. to 10 p.m. every day. It will seat 75 inside and 40 on an outdoor patio.
The menu will include chicken and beef pho, banh mi sandwiches, imperial rolls, spring rolls and vermicelli bowls, among other items, according to the release. All entrees will include house-made bread and dessert.
Ha, Mach and Blieden collaborated on the design with architect Ted Payne; Chris Burgin, lighting and scenic director at Louisville-based audio visual company Axxis Inc.; and Scott Rudd with Louisville-based commercial kitchen equipment supplier Chef Supply.
“We let the menu lead the design of the open kitchen with the intention of maximizing efficiency and speed of service,” Mach said in the release. “Likewise, we let the building, and what we were calling the ‘Butchertown aesthetic,’ guide our design choices in the overall interior space and patio.
New hotel planned near Louisville International Airport
Downtown isn’t the only place where new hotel projects are cropping up in Louisville.
Documents filed with Louisville-Jefferson County Metro Government last week reveal plans for a new four-story, 95-room hotel near the Louisville International Airport.
The hotel will operate under the Towneplace Suites flag, a division of global hotel company Marriott International. Towneplace Suites are extended-stay hotels, with in-room work spaces and fully-equipped kitchens.
The Towneplace Suites proposed at 6601 Paramount Park Drive will including 95 parking spaces and an outdoor pool, according to the documents filed with the city.
The owner is Salina Enterprises, which is based out of the Country Inn & Suites on Kentucky Mills Drive, according to the documents. Rajesh Patel, who filed the paperwork, is vice president of operations at Virginia-based SINA Hospitality, which runs the aforementioned Country Inn & Suites.
AMC Theatres to acquire Carmike Cinemas, including Stonybrook
AMC Theatres plans to buy rival Carmike Cinemas in a $1.8 billion deal. This means that AMC, which is owned by China’s richest man, will become the nation’s largest movie theater chain.
The closest AMCs to Louisville are Cincinnati and Bloomington, Ind. Stonybrook is currently a Carmike property.
The purchase price per screen is approximately $376,000, which puts the value of the Hurstborne Lane property at just over $7.5 million.
The transaction was approved by both Boards of Directors of AMC and Carmike and should be completed sometime in 2018.
Carmike has 276 theatres with 2,954 screens in 41 states and is a leader in digital cinema and IMAX technology. Carmike Cinemas are mostly located in the Midwest and South.
In a news release, AMC stated that they sought to acquire Carmike to add geographic diversity to their holdings. Currently, most of AMC’s theaters are in urban centers.
It is unclear whether Carmike Cinemas will become AMC Theatres or whether they will keep their name, but film-buying will fall under one entity.
AMCs are well known for their luxury cinemas, frequent coupons and deals, and for attracting screenings of live and exclusive events.
Stonybrook was previously owned by Rave Cinemas, which sold the property to avoid a monopoly when it was acquired by Cinemark. —Melissa Chipman
Consumer Reports names F-150 ‘Top Pick’
Consumer Reports has named the redesigned Ford F-150 as the best pickup on the market.
The F-Series Super Duty is made at the Kentucky Truck Plant in Louisville.
The consumer organization lauded the F-150’s “fuel economy, quiet and spacious cabin and much-improved infotainment system.”
“By eschewing traditional steel body panels, Ford created a pickup that weighs less, enabling it to be quick off the line and fuel-efficient,” CR wrote.
It was Ford Motor Co.’s first win in the category since 1999.
Consumer Reports’ 2016 Top Picks list also includes the Mazda MX-5 Miata, Kia Sorento, Toyota Sienna, Toyota Camry, Lexus RX, Subaru Forester, Subaru Impreza and Honda Fit.
Free training for people looking for sales jobs offered by KentuckianaWorks
Turns out Louisville has a glut of un-filled sales job. Are you unemployed or underemployed or looking for a career change to sales? The city wants to help.
Louisville Sells is a new hybrid online-offline program for people who want to go into sales.
Potential students take four online course at Lynda.com (available for free with a library card) and then take a test. Submit your application and if accepted, you’re eligible to take two, full-day in-person workshops. The next workshop is March 21 and March 28, 9 a.m. to 4 p.m.
McConnell Center to host documentary filmmaker
A documentary filmmaker will provide insights into how the 1789-99 Kentucky resolutions inform modern debates on issues including the war on terror, state’s rights and civil liberties.
Kent Masterson Brown will present the public lecture at 6 p.m. today in the Chao Auditorium, on the lower level of the Ekstrom Library. Brown’s presentation is part of the McConnell Center’s “Citizens & Statesmen” lecture series.
Brown has made documentaries on the history of his native Kentucky and was appointed by George H. W. Bush as the first chairman of the Gettysburg National Military Park Advisory Commission.
The McConnell Center was created in 1991 to prepare the state’s undergraduate students to become leaders. It also “offers civic education programs for teachers, students and the public; and conducts strategic leadership development for the U.S. Army.” —Boris Ladwig
Calendar check: Heroes Comics and Gaming grand opening bumped
In Friday’s The Closing Bell, we told you about two new businesses opening on Baxter Ave. After TCB posted, the folks at Heroes Comics and Gaming moved their grand opening day from March 19 to April 2.
The Facebook event page reads: “Heroes Comics & Gaming will officially open its doors next Wednesday, March 9th. We had originally planned to hold our Grand Opening Celebration on March 12th, but due to scheduling confilcts with the St. Patrick’s Day Parade and the Rhodes 10k run we are moving the Grand Opening Celebration to Saturday, April 2nd.”
Probably a smart move due to those event conflicts. We’ll have more on Heroes next week. —Melissa Chipman