The Closing Bell: How LouCity investors are already ahead; what’s next for B Corps; Taco Bell and KFC in top 25 retailers list; and more
Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.
United Soccer League franchise fee spikes 2000 percent in five years
While Louisville’s professional soccer club has suffered an operating loss in its first two seasons, the value of the franchise has skyrocketed.
A United Soccer League franchise was available for $250,000 in 2012. This year, it costs $5 million, the league told Insider via email.
Franchises that are changing hands in the private sector are going for as much as $21 million, according to Forbes. And the Sacramento Republic FC, which, like Louisville City FC, has its eyes on an eventual first division spot, said its franchise is worth $78 million, according to insideworldfootball.com.
The rising value of the franchises dwarfs the more than $2 million in operating losses LouCity has incurred in the last two years.
LouCity board member Mike Mountjoy told Insider this week that the club’s increasing market value was a reason the 41 owners do not regret their investments into LouCity, which, so far, have reached nearly $7 million.
“We’re not unhappy with what we’ve spent,” he said.
And they plan to pump at least another $10 million into the venture, to help finance a $40 million, 10,000-seat stadium in Butchertown. Club officials announced the location on Wednesday.
The league’s promotion to Division II status this year, a growing number of teams and more exposure on television and radio also has allowed teams to generate better broadcasting and advertising deals. Just this week, LouCity announced that it had signed Republic Bank as a new sleeve sponsor. —Boris Ladwig
Be good: Entrepreneurs consider private benefit corporation status
Now that HB-35 has been signed into law by Governor Matt Bevin, making public benefit corporation status a possibility in Kentucky, what’s next for companies considering pursuing that status?
IL dropped by the Facilities Management Services HQ on the corner of 15th and Lytle and talked to president Scott Koloms. His company and the mobile volunteer manager app, MobileServe, are the only to companies in Louisville to have been certified as B Corp by the nonprofit B-Labs.
“What are we hoping for?” Koloms asked. One answer: He wants the city “to set a goal to have a certain number of B Corps by a certain date” and to develop the strategy to achieve that. The obvious “low-hanging fruit” are businesses that already have a social mission.
Koloms also said that his company owns the building in Portland, and while it’s 90,000 square feet total, the company only uses around 20,000 square feet. He said he would like to see other B Corps set up shop in the building and to also have businesses that can provide services to the resident companies. Having these “like-minded” people all in one place makes it possible for them to help mentor and perhaps incubate startups and young entrepreneurs.
Most important, Koloms said, the businesses that will pursue the public benefit corps status will collect data to share with the community. To evangelize B Corps to the business community, supporters need to be able to prove that there is a benefit to companies that embrace the social mission.
Koloms was studying to be a professor when his father passed away and he inherited the company. “So you know I’m not in this for the money,” he said. But he called the growth that has benefitted FMS “slow, steady and sustainable.” B Corps build “long relationships thriving on the success of everyone.”
For some companies, that may be too much of a paradigm shift but they may have a harder time hiring workers. Koloms said that young workers prioritize working for a business that has a social component. —Melissa Chipman
Office leasing activity positive in first quarter despite a dip in net absorption downtown
The amount of office space leased in Louisville during the first quarter leaped almost 42 percent compared to the first quarter of 2016, according to a report from commercial real estate firm CBRE.
Businesses leased 440,515 square feet during the first three months of this year, up 130,000 square feet from the same period a year ago, CBRE data states. Stock transfer company Computershare, for example, took over another 45,000 square feet in Meidinger Tower.
“As the demand for more office buildings increases, we will continue to see strong leasing activity in the market,” David Hardy, managing director of CBRE in Louisville, said.
It also will send the average leasing rates higher. During the first quarter, CBRE reported, the average rate in Louisville rose $0.16 per square feet to $17.52 per square feet.
While the leasing activity is positive, at the same time, the vacancy rate increased slightly to 12.7 percent, up 10 basis points — a result of net absorption in the Central Business District declining because of some corporate downsizing, Hardy said.
Downtown offices saw a negative absorption rate of 191,862 square feet. That is to say that square footage was occupied at the beginning of the quarter but was not at the end of it. In suburban areas, however, the picture is brighter with a net absorption of 100,805 square feet.
Analysts previously told Insider Louisville that downtown’s office market is expected to remain strong and steady this year but noted that downtown’s numbers will be impacted by PNC Bank consolidating all of its operations in National City Tower. Humana also has downsized its operations in some downtown office buildings. —Caitlin Bowling
Two Yum Brands companies make top 25 consumption list
At least once a year, 62 percent of U.S. consumers buy something from Taco Bell, according to a new study from The NPD Group.
The consumer research group looked at millions of online and in-store receipts from consumers across all retailers and restaurants to figure out the answer to one question: “What percentage of all U. S. consumers bought at each store or restaurant?”
Taco Bell made the top 25, as did its sister company KFC. According to The NPD Group, 43 percent of consumers buy something from KFC at least once a year.
Somewhat unsurprisingly, Walmart topped the list with 95 percent of consumers visiting the store. It is followed by McDonald’s at 83 percent.
“The battle for every consumer dollar is heating up, and we must shift from studying what consumers purchase to how they spend their money,” Marshal Cohen, chief industry analyst at The NPD Group, said in a news release about the results. “Consumers spending on experiences is overlapping with their purchases of products, making every item and visit so important to competing in today’s rapidly changing marketplace.” —Caitlin Bowling
Guinness record-breaking robotics tournament is bringing thousands to Louisville
A robotics competition is headed to the Kentucky Exposition Center, and it’s big. Last year, the event broke the Guinness World Record for the largest robot competition.
The VEX Robotics World Championship runs April 19-25 and is expected to draw 15,000 students to Louisville with an estimated economic impact of $1.7 million.
The competition has 1,100 teams of students, from elementary school to college age, battling it out to build the best robots. The challenges revolve around overcoming engineering obstacles.
City of Jeffersonville encourages businesses to make facade improvements
With visitors pouring into Jeffersonville, Ind., from the Big Four Bridge, the city is looking to give businesses a reason to keep their storefronts in tip-top shape.
The city is accepting applications from business owners for its Storefront Improvement Program. Business owners can receive up to $10,000 in matching grant funds to improve their facades by adding new signs, repainting and installing awnings, among other upgrades.
“We want to see the businesses here thrive and the architectural fabric maintained,” Jay Ellis, executive director of Jeffersonville Main Street, said in an announcement about the program. “This program helps achieve that by creating great benefits in both economic development and historic preservation.”
The city also recently started taking applications from homeowners in downtown Jeffersonville who are looking to make exterior upgrades to their houses. —Caitlin Bowling
Architecture firm renamed following partner’s retirement
Tucker Booker Donhoff + Partners Architects is now Donhoff Kargl Nall Architects (DKN).
The change was prompted by the retirement of founding member Bob Booker. The new name reflects the current ownership group of Robin L. Donhoff, Thomas Kargl and Patrick Nall. Co-founder Elbert Tucker died in 1984.
“Our clients past and present will notice no other changes in our well-respected and recognized architectural business and staff,” Donhoff said in an announcement about the name change.
Thorntons CEO named chair of the Greater Louisville Foundation
Thorntons Inc. CEO Matt Thornton has been elected chair of the board of the Greater Louisville Foundation, the nonprofit part of GLI. Thorntons is Kentucky’s largest privately held corporation. It owns 196 gasoline and convenience stores in Kentucky, Illinois, Indiana, Ohio, Tennessee and Florida.
Cissy Musselman has been named vice chair. She serves as a director of the Louisville Regional Airport Authority and is former chair of the Louisville Convention and Visitors Bureau.
The Greater Louisville Foundation has recently been raising funds for GLI’s talent attraction initiative. —Melissa Chipman